Thompson v DD Construction Limited - [2017] NZHC 516

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-1319 [2017] NZHC 516

BETWEEN
IAN ALLEN THOMPSON

Plaintiff

BODY CORPORATE 167241
Second Plaintiff

AND

DD CONSTRUCTION LIMITED First Defendant

DARRYL RICHARD MONTGOMERY Second Defendant

TURNER HOPKINS Third Defendant

Hearing: 12 December 2016

Appearances:

Mr W McCartney for Plaintiff
Mrs S Grant for Defendants

Judgment:

21 March 2017

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
21.03.17 at 3.30 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

THOMPSON & Anor v DD CONSTRUCTION LIMITED & Ors [2017] NZHC 516 [21 March 2017]

Background

[1] In this proceeding, the defendants have sought summary judgment under r 12.2(2) of the High Court Rules. It arises from repairs carried out to an apartment building in Auckland. The plaintiffs, having paid for the repairs, consider that they were subject to excessive charges and seek to recover the alleged excess. The detailed causes of action which the plaintiffs rely upon are discussed further on in this judgment.

[2] The following statement of the background of the case is taken from the submissions which counsel for the defendants, Mrs Grant, filed. The plaintiffs do not challenge the substantial accuracy of that statement of background which, with some alterations, was to the following effect:

a) The Development is an eight-unit townhouse development in Grey Lynn.

The Development suffered significant damage from water ingress due to defects in the construction of the building.

b)In mid-2013, the owners of the unit titles resolved to address the defects and undertake substantial remedial works on the Development. The works included recladding the exterior and interior of each unit.

c) Mr Montgomery, the second defendant and director of the first defendant company DDC, agreed that DDC would complete the remedial works. Mr Montgomery’s domestic partner, Mr Martin, who is a solicitor, was the chairman of the Body Corporate. They both lived together in a unit in the Development.
d)Mr Thompson, the first plaintiff, was the owner of two units in the Development. He was a member of the management committee. The Body Corporate is the second plaintiff in the proceedings.

e)At the outset, contemporaneous documents establish that a quantity surveyor was asked to prepare “budget” figures for the repair costs for each of the units. For the two units which the first plaintiff owned, units five and six, they were approximately $247,000 and $246,000 respectively.

f) On 27 May 2013, the Body Corporate held its annual general meeting (AGM). Mr Montgomery was physically present, and Mr Thompson was linked in via telephone.1 All of the unitholders in the Development in attendance knew Mr Montgomery worked as the director of DDC.2 In that capacity, Mr Montgomery made statements about the approximate cost and time of carrying out the remedial works, as the works were then understood. The minutes of the meeting record, inter alia:3

Aaron [Martin] and Darryl [Montgomery paid DDC’s quantity surveyor to put together a budget figure for…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Thompson v DD Construction Limited

Details

AGLC: Thompson v DD Construction Limited [2017] NZHC 516
Case: [2017] NZHC 516
Decision Date: 21 March 2017

CaseChat Overview and Summary

This is a case concerning a dispute over the repair of a building in Auckland. The plaintiffs, Ian Allen Thompson and the Body Corporate, allege that they were misled by the defendants, DD Construction Limited and Darryl Richard Montgomery, regarding the cost and time required to complete the repair work. The defendants sought summary judgment, arguing that the plaintiffs' claims were unlikely to succeed. The court considered the principles of summary judgment and the specific provisions of the building contract, which were a "cost and margin" contract rather than a fixed price contract. The court found that the defendants were not entitled to summary judgment on the Fair Trading Act claims because it could not be inferred that the defendants' estimates were honestly held and reasonably based. The court also dismissed the claim for breach of statutory duty against the third defendant, Turner Hopkins. The court concluded that the summary judgment applications brought by the first and second defendants were dismissed, while the summary judgment application brought by the third defendant was granted.

Orders