SPARGO V FRANKLIN HC TAU CIV-2010-470-000091

SPARGO V FRANKLIN HC TAU CIV-2010-470-000091

On appellate review the Court found MCL was the developer; the Spargos acted as directors of MCL and were not personally developers; they did not assume the requisite personal control or responsibility to incur a non-delegable duty or personal director liability for the building defects; the works were caused or...

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Citation
openlaw-ee0b6033_831e_42ab_86a0_942441e195e9.pdf
Parties
Appellants: Lynn Spargo and Merilyn Spargo; First Respondents: David Alfred Franklin and Diane Holroyd Franklin; Second Respondent: Ngaire Ann Sherwin as trustee of the Kereopa Whanau Trust; Second Respondent: HTT2003 Limited as trustee of the Kereopa Whanau Trust
Court
High Court
Jurisdiction
New Zealand
Judgment Date
9 November 2011
Procedural Posture
Appeal Under the Weathertight Homes Resolution Act 2006 (s 93–95) / High Court Appeal Judgment (final Disposition)
Outcome
Appeal allowed; Tribunal finding that appellants were personal developers set aside; cross-appeal dismissed; orders against appellants quashed; costs to appellants
Legal Topics
Developer Non Delegable Duty, Directors' Personal Liability, Negligent Misstatement Vs Negligence, Breach of Vendor Warranty (sale of Land), Unit Title Development, Tribunal Investigative Powers
Tort Contract Property Law Company Law Trusts Administrative/tribunal Procedure Statutory Appeals Developer Non Delegable Duty +5 more

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Parties

Lynn Spargo and Merilyn Spargo

Appellants

David Alfred Franklin and Diane Holroyd Franklin

First Respondents

Ngaire Ann Sherwin as trustee of the Kereopa Whanau Trust

Second Respondent

HTT2003 Limited as trustee of the Kereopa Whanau Trust

Second Respondent

Procedural Posture

Appeal Under the Weathertight Homes Resolution Act 2006 (s 93–95) / High Court Appeal Judgment (final Disposition)

Legal Issues

  1. 1 Whether appellants were personal developers owing a non-delegable duty
  2. 2 Whether appellants owed a personal duty of care as directors (assumption of responsibility/control)
  3. 3 Whether appellants as trustees/vendors were personally liable for breach of contractual warranty cl 6.2(5)

Ratio Decidendi

On appellate review the Court found MCL was the developer; the Spargos acted as directors of MCL and were not personally developers; they did not assume the requisite personal control or responsibility to incur a non-delegable duty or personal director liability for the building defects; the works were caused or permitted by MCL so the trustees who sold unit 11 were not personally liable under the vendor warranty for works carried out by MCL; therefore the Tribunal's findings of personal developer liability were set aside and cross-appeal dismissed.

Court Disposition

Appeal allowed; Tribunal finding that appellants were personal developers set aside; cross-appeal dismissed; orders against appellants quashed; costs to appellants

Orders

  • The Tribunal's determination that Lynn and Merilyn Spargo were developers and personally liable is set aside
  • The cross-appeal by the respondents is dismissed