Westland District Council v York - [2014] NZCA 59

IN THE COURT OF APPEAL OF NEW ZEALAND

CA774/2013
[2014] NZCA 59

BETWEEN

WESTLAND DISTRICT COUNCIL
Appellant

AND

PETER CHARLES YORK
First Respondent

ALPINE GLACIER MOTEL LIMITED
Second Respondent

Hearing:	17 February 2014
Court:	Wild, Miller and Dobson JJ
Counsel:	D J Neutze for Appellant J E Bayley for Respondents
Judgment:	10 March 2014 at 11.00 am

JUDGMENT OF THE COURT

AThe appeal is allowed. The claim is struck out as having no prospects of success.

BThe respondents must pay the appellant costs in this Court for a standard appeal on a band A basis.

____________________________________________________________________

REASONS OF THE COURT

(Given by Miller J)

Introduction

In September 2005 the respondents settled the purchase of a motel at Franz Josef, having first obtained from the appellant Council a Land Information Memorandum (LIM). The LIM is said to have been negligently prepared, in that it omitted information known to the Council about the location of the Alpine Fault, the damage that the town might suffer from a large earthquake, and a Government suggestion that local authorities should create fault avoidance zones along fault lines. The respondents say that not before November 2010, when the Council first mooted such a zone, did they discover these omissions. A zone was formally notified in 2012. It would affect the motel.
The respondents sued in July 2012. The Council met them with an application to strike the claim out on limitation grounds. David Gendall J dismissed the application, and the Council now appeals.[1]
[1]York v Westland District Council [2013] NZHC 2918.
The respondents say they suffered economic loss through diminution in the motel’s market value. The appeal turns on when they suffered it. The Council says, accepting the pleaded facts for present purposes, that they must have suffered loss by 30 September 2005, when they paid more for the motel than it was worth. If so, the six-year limitation period in the Limitation Act 1950, which still governs this case, bars their claim.[2] The respondents say that they suffered no loss until the property market responded to the information omitted from the LIM, and that did not happen until, at earliest, November 2010. If so, they brought their claim within time.

The pleadings

[2]The Limitation Act 2010 does not apply since the Council’s alleged omission occurred before 1 January 2011: Limitation Act 1950, s 59.

The amended statement of claim pleads that: Mr York bought the motel as agent for Alpine Glacier Motel Ltd, which had yet to be formed, and later nominated it as purchaser; the price was $2,400,000 for the land and buildings and, under a separate but collateral agreement, $800,000 for the business; the land sale agreement was conditional upon a LIM, which the Council provided on 19 August 2005; under the heading “Special Land Features” the LIM stated “no information located”; and the transaction settled on 30 September 2005.
The notion of special features doubtless came from s 44A(2) of the Local Government Official Information and Meetings Act 1987, which…

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.

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Details

Case: [2014] NZCA 59
Decision Date: 10 March 2014 at 11.00 am

CaseChat Overview and Summary

Westland District Council sought to appeal a decision of the High Court, which dismissed an application to strike out a claim brought by the respondents, Peter Charles York and Alpine Glacier Motel Limited. The respondents alleged that the appellant, Westland District Council, was negligent in the preparation of a Land Information Memorandum (LIM) for the purchase of a motel. They claim that the LIM omitted information about the location of the Alpine Fault, the potential damage from an earthquake, and a recommendation for fault avoidance zones, causing a significant loss in the property's value. The appeal turned on the limitation period for the respondents' claim, with the appellant arguing that the claim was statute-barred.

The Court of Appeal held that the limitation period was a question of law to be decided by the court, not a question of fact for the High Court. The Court found that the respondents' cause of action accrued when they committed to purchasing the motel at a price exceeding its worth due to the Council's omission of information in the LIM. This was on 30 September 2005, when the respondents paid for the motel. As the respondents brought their claim more than six years after this date, their claim was time-barred.

The appeal was allowed, and the claim was struck out as having no prospects of success. The respondents were ordered to pay the appellant's costs in the Court of Appeal for a standard appeal on a band A basis.

Orders