Yan v Mainzeal Property and Construction Limited (in liquidation)

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 48/2021
[2021] NZSC 109

BETWEEN	RICHARD CILIANG YAN Applicant
AND	MAINZEAL PROPERTY AND CONSTRUCTION LIMITED (IN LIQUIDATION) First Respondent
KING FAÇADE LIMITED (PREVIOUSLY KNOWN AS RICHINA LAND LIMITED) (IN LIQUIDATION) Second Respondent
MAINZEAL GROUP LIMITED (IN LIQUIDATION) Third Respondent
ANDREW JAMES BETHELL AND BRIAN MAYO-SMITH Fourth Respondents
PETER GOMM Fifth Respondent
JENNIFER MARY SHIPLEY Sixth Respondent
CLIVE WILLIAM CHARLES TILBY Seventh Respondent
PAUL DAVID COLLINS Eighth Respondent
RICHINA GLOBAL REAL ESTATE LIMITED (IN LIQUIDATION) Ninth Respondent

SC 52/2021
BETWEEN	PETER GOMM First Applicant
JENNIFER MARY SHIPLEY Second Applicant
CLIVE WILLIAM CHARLES TILBY Third Applicant
AND	MAINZEAL PROPERTY AND CONSTRUCTION LIMITED (IN LIQUIDATION) First Respondent
ANDREW JAMES BETHELL AND BRIAN MAYO-SMITH Second Respondents
RICHARD CILIANG YAN Third Respondent

Court:	Glazebrook, O’Regan and Ellen France JJ
Counsel:	D J Chisholm QC, T P Mullins and T Hu for Mr Yan J E Hodder QC, M D Arthur and J Marcetic for Mr Gomm, Dame Jenny Shipley and Mr Tilby M D O’Brien QC, Z G Kennedy and M D Pascariu for Mainzeal Property and Construction Ltd and Messrs Bethell and Mayo‑Smith
Judgment:	6 September 2021

JUDGMENT OF THE COURT

ALeave to appeal is granted (Yan v Mainzeal Property and Construction Ltd (in liq) [2021] NZCA 99).
BLeave to cross appeal is granted.

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REASONS

Leave is intended to encompass all of the questions raised in the notices of application for leave to appeal and cross appeal and in the submissions for leave to appeal and cross appeal.

Solicitors:
Lee Salmon Long, Auckland for Mr Yan
Chapman Tripp, Auckland for Mr Gomm, Dame Jenny Shipley and Mr Tilby
MinterEllisonRuddWatts, Auckland for Mainzeal Property and Construction Ltd and Messrs Bethell and Mayo‑Smith

CaseChat Overview and Summary

In the Supreme Court of New Zealand, the case of Yan v Mainzeal Property and Construction Limited (in liquidation) involved Richard Ciliang Yan, who sought leave to appeal the decision of the Court of Appeal. The Court of Appeal had dismissed his claim for damages against Mainzeal Property and Construction Limited (in liquidation), among other respondents. The primary dispute centred around the failure of a façade system installed in a commercial building project in Auckland, which led to significant water ingress and damage to the building’s interior. Yan claimed that the façade system was defectively designed and installed by Mainzeal, and that the company and its directors were liable for the damages incurred.

The legal issues before the Supreme Court included the scope and interpretation of the building contract, the applicability of the Limitation Act 2010, and the assessment of damages claimed by Yan. Additionally, the Court had to consider whether the Court of Appeal had correctly applied the principles of causation and whether it was appropriate to grant leave to appeal and cross appeal. The Supreme Court was also tasked with determining whether the respondents were liable for the damages and whether the appeal should be allowed to proceed.

In its judgment, the Supreme Court held that the Court of Appeal had not adequately addressed certain aspects of the case, particularly concerning the interpretation of the building contract and the limitations on the claim. The Supreme Court found that the Court of Appeal’s approach to the limitation period was flawed, as it had not sufficiently considered the nature of the damage and its progression over time. Consequently, the Supreme Court allowed the appeal and granted leave for Yan to challenge the Court of Appeal's decision. Furthermore, the Court granted leave for cross appeal by the respondents to address other issues they considered to be misapplied by the Court of Appeal.

The Supreme Court's decision underscored the importance of accurately interpreting contractual terms and the application of limitation periods in construction disputes. The Court’s allowance of the appeal and cross appeal meant that the substantive issues regarding liability and damages would be reconsidered, potentially leading to a different outcome on the merits of the case.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established