York v Westland District Council - [2013] NZHC 2918

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

CIV-2012-418-000092 [2013] NZHC 2918

BETWEEN PETER CHARLES YORK First Plaintiff

ALPINE GLACIER MOTEL LIMITED Second Plaintiff

ANDWESTLAND DISTRICT COUNCIL Defendant

Hearing: 9 September 2013

Appearances: S P Rennie and J E Bayley for Plaintiffs
D J Neutze for Defendant

Judgment: 5 November 2013

JUDGMENT OF D GENDALL J

Introduction and background

[1] In August 2005 the first plaintiff, Peter Charles York (Mr York), entered into a written agreement (the land agreement) for the purchase of land at 17 Cronz Street, Franz Joseph (the land) on which a motel stands. The purchase price for the land was $2.4 million. The purchase was conditional on Mr York obtaining a satisfactory Land Information Memorandum (the LIM) by 25 August 2005.

[2] At the same time, the land agreement was entered into, Mr York also completed as purchaser a written agreement for the purchase of the motel business which was operating from the land (the motel agreement).

[3] On 18 August 2005 Mr York applied to the defendant (the Council) for a LIM

and on 19 August 2005 the Council issued this LIM.

YORK v WESTLAND DISTRICT COUNCIL [2013] NZHC 2918 [5 November 2013]

[4] On 25 August 2005, in reliance on the LIM, Mr York confirmed both the land agreement and the motel agreement as unconditional and nominated the second plaintiff (Alpine Motel) as purchaser.

[5] Settlement under both the land agreement and the motel agreement was completed on 30 September 2005. Payments of $2.4 million for the land and
$800,000 for the motel business were made to the vendor.

[6] Mr York and Alpine Motel contend that omitted from the LIM was certain critical earthquake risk information held by the Council at the time concerning the land and the motel business. This was to the effect that the Franz Joseph township straddled the Alpine Fault Line, that potentially significant earthquake issues arose with respect to this and other properties in Franz Joseph and the Ministry for the Environment had recommended to local authorities that a Fault Avoidance Zone be established by creating a buffer zone of a minimum of 20m either side of any known trace fault, such as the Alpine Fault Line.

[7] Mr York and Alpine Motel allege that it was only from about late November

2010 that they first discovered the pleaded omissions in the LIM and suffered economic loss. They maintain that the true value of the land and motel business, if the LIM had included all the material information at settlement, was $775,000 rather than the total price paid of $3.2 million. Accordingly, they sue here for damages for what they say is the loss in value of the land and the motel business totalling $2.85 million.

[8] In response, in the present application before me, the Council seeks to strike out this proceeding on the basis that the Council says it is statute-barred and therefore cannot succeed. The Council maintains that any loss to Mr York and…

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: [2013] NZHC 2918
Decision Date: 5 November 2013

CaseChat Overview and Summary

In York v Westland District Council, the High Court of New Zealand was asked to decide whether a claim for damages resulting from the omission of critical earthquake risk information from a Land Information Memorandum (LIM) was statute-barred. Peter Charles York and Alpine Glacier Motel Limited (the plaintiffs) sued the Westland District Council (the defendant) for the loss in value of land and a motel business, alleging that the Council negligently omitted critical earthquake risk information from the LIM provided in August 2005. The plaintiffs claimed that the true value of the land and motel business, if the LIM had included all the material information, was $775,000, but they paid a total of $3.2 million, resulting in an economic loss of $2.85 million. The defendant argued that the claim was time-barred under the Limitation Act 1950, as the alleged loss occurred when the plaintiffs settled the purchase in 2005. The plaintiffs, however, argued that the economic loss only occurred when the market discovered the omissions in the LIM around November 2010, when the value of the land and motel business fell.

The court held that the defendant's application to strike out the claim must fail, as it was not clear whether the cause of action accrued at the time of the purchase or later when the market became aware of the omitted information. The court noted that the distinction between when the loss occurred might be a fine one and that the matter was one where it was difficult to determine when the loss had been suffered. As such, the court could not determine at the strike out stage whether the plaintiffs' claim was statute-barred and found that the plaintiffs' cause of action was not so clearly statute-barred that their claim should be struck out. The court also awarded costs to the plaintiffs on a category 2B basis together with disbursements as fixed by the registrar.

Orders