BODY CORPORATE 206552 AND ORS V NORTH HARBOUR DEVELOPMENTS LIMITED AND ORS HC AK CIV 2006-404-005962

BODY CORPORATE 206552 AND ORS V NORTH HARBOUR DEVELOPMENTS LIMITED AND ORS HC AK CIV 2006-404-005962

The Court substituted Camelia Properties Limited for the misnamed defendant under r97 because NHDL had been mistakenly joined and substitution was necessary for complete adjudication; summary judgment was refused because defendants did not show the plaintiffs had no arguable case — there are genuine factual disputes about whether Mr McLellan assumed personal responsibility or exercised sufficient personal control over construction decisions to incur personal liability and those disputes require fuller investigation; claims based on contracts entered before the Deed of Nomination cannot succeed against Mr McLellan as a disclosed principal existed at signing.

Citation
openlaw-3c9bbd57_f351_462c_addf_9fa559ebe5f2.pdf
Parties
First Plaintiff: Body Corporate 206552; Second Plaintiff: CWL Holdings Limited; First Defendant: North Harbour Developments Limited; Second Defendant: Joel Miles McLellan; Third Defendant: Multiplex Construction (NZ) Limited; Fourth Defendant: Guy Richard McMillan Morris; First Third Party: Stephenson & Turner New Zealand Limited; Second Third Party: MSC Consulting Group Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
26 March 2008
Procedural Posture
Civil Construction and Contract Dispute / Application for Summary Judgment (high Court Rules R136(2))
Outcome
Substitution made; summary judgment application dismissed in part; factual issues remain for trial
Legal Topics
Summary Judgment, Assumption of Responsibility, Director Personal Liability, Agency and Undisclosed Principal, Misnomer and Substitution of Parties, Amendment of Pleadings, Building Defects
Construction Law Contract Law Tort (negligence) Company Law Procedural Law Summary Judgment Assumption of Responsibility Director Personal Liability +4 more

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Parties

Body Corporate 206552

First Plaintiff

CWL Holdings Limited

Second Plaintiff

North Harbour Developments Limited

First Defendant

Joel Miles McLellan

Second Defendant

Multiplex Construction (NZ) Limited

Third Defendant

Guy Richard McMillan Morris

Fourth Defendant

Stephenson & Turner New Zealand Limited

First Third Party

MSC Consulting Group Limited

Second Third Party

Procedural Posture

Civil Construction and Contract Dispute / Application for Summary Judgment (high Court Rules R136(2))

Legal Issues

  1. 1 Whether the correct party to contracts was sued or a misnomer occurred and whether substitution is appropriate under r97
  2. 2 Whether North Harbour Developments Limited (newly incorporated NHDL) is liable or whether Camelia Properties Limited is the proper defendant
  3. 3 Whether Mr McLellan is personally liable under sale agreements as agent for an undisclosed principal or because he signed pre-incorporation

Ratio Decidendi

The Court substituted Camelia Properties Limited for the misnamed defendant under r97 because NHDL had been mistakenly joined and substitution was necessary for complete adjudication; summary judgment was refused because defendants did not show the plaintiffs had no arguable case — there are genuine factual disputes about whether Mr McLellan assumed personal responsibility or exercised sufficient personal control over construction decisions to incur personal liability and those disputes require fuller investigation; claims based on contracts entered before the Deed of Nomination cannot succeed against Mr McLellan as a disclosed principal existed at signing.

Court Disposition

Substitution made; summary judgment application dismissed in part; factual issues remain for trial

Orders

  • Camelia Properties Limited substituted for North Harbour Developments Limited as first defendant effective as at date of hearing
  • Amendment to paragraph 4 of the statement of claim to record date of incorporation as 30 September 1997