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Civil litigation results

Terms sheets, MOUs, LOIs and Heads of Agreement: How enforceable are they?

Tower Insurance Limited v Nicon Limited [2019] NZCA 332 raised two fundamental issues relating to a Heads of Agreement (which may also be known as a terms sheet, memorandum of understanding (MOU), letter of intent (LOI), or similar). First, was the Heads of Agreement effective in the absence of a statement it was intended to be legally binding? Secondly, what was the meaning of the Agreement? The Court of Appeal answered “Yes” to the first question and held that the document was drafted in a way that it required Tower/Stream to treat Nicon as an exclusive contractor, not simply one of a panel of approved demolition contractors, in all but limited circumstances. The case shows that there are risks with entering into a Heads of Agreement. ..

Vendor liability for innocent misrepresentation and undiscovered weathertightness defects – Grant v Ridgeway

Whether vendors should be liable for innocent misrepresentation and undiscovered weathertightness defects in the sale of existing homes is a controversial question currently eliciting differing responses in the Courts. The question typically arises after a buyer settles a house purchase and then discovers error in the information provided by or on behalf of the vendor, or major weathertightness and/or other defects in the property. In a recent case, Grant v Ridgeway Empire Limited [2018] NZHC 2642, a buyer succeeded in a case against the vendor when post-sale expert investigations revealed extensive weathertightness defects and damage.  ..

Legal Update - Clauses preventing oral modification of contracts are enforceable – UK Supreme Court

Parties to commercial contracts should review their contracts to check whether they contain “no oral modification” (NOM) clauses, and if they do, ensure they are complied with, following the UK Supreme Court’s decision in Rock Advertising Ltd v MWB Business Exchange Centres Ltd [2018] UKSC 24, in which the Supreme Court held that a NOM clause was enforceable. ..

Legal Update - Buyer beware: assignment of full replacement insurance claims

When selling their house, is a homeowner entitled to assign their ongoing insurance claim to the purchaser? Not for the full replacement value of their insurance policy and not without the insurer’s consent, according to the recent Court of Appeal decision of Xu & Diamantina Trust Limited v IAG New Zealand Limited [2018] NZCA 149 (11 May 2018). ..

Legal Update - Joint owner-occupiers awarded general damages of $35,000

In a recent High Court decision, Thomas J awarded joint owner-occupiers of a unit in a leaky complex $35,000 in general damages for stress and anxiety arising from the discovery of leaky issues with their unit and the resulting litigation. This is an increase above the previous level of general damages for owners of leaky buildings. Amy Davison, Senior Associate, and Zoe Hollander, Law Clerk, discuss.   ..

Legal Update - Removal of trustees – two recent cases

The Courts have both statutory and inherent jurisdiction to remove trustees and recent cases indicate they are now more willing to use this power. The recent decisions in McCallum v McCallum and Burnside v Burnside are illustrative in this context. Stuart, Dalzell, Partner, and Amy Davison, Senior Associate, discuss. ..

Access to justice and efficiency key to representative (class action) orders: Cridge v Studorp Limited [2017] NZCA 376

Leaky building owners can now join the class action against James Hardie under a five month “opt-in period” granted by the Court of Appeal in Cridge v Studorp Limited [2017] NZCA 376. The Court of Appeal found that issues of duty, breach of duty and Fair Trading Act breach were sufficiently common to all owners to justify a representative or class action. Therefore, the claim had been properly brought as a representative case, stopping time “permanently” for limitation purposes for both the named plaintiffs and represented class members. The later coming into force of the 15-year limitation period under the Limitation Act was not a reason to limit the opt in period. Parker & Associates acted for the successful owners. *Stuart Dalzell, Partner, discusses the decision ..

Mental injury claims: do plaintiffs need to show a recognizable psychiatric illness to succeed?

Stuart Dalzell, Partner and Jackie Frampton, Associate, discuss the recent decision of the Supreme Court of Canada in Saadati v Moorhead 2017 SCC 28, in which the Court held there is no requirement to demonstrate a “recognizable psychiatric illness” supported by expert opinion. ..

Pre-sale report disclaimer no defence for building inspector’s misleading report

In Steel v Spence Consultants Limited & Another (identified as [2017] NZHC 398), the High Court rejected a building inspector’s argument that his liability was limited by the disclaimer clause attached to the original report, and found him personally liable for losses. ..

Leaky home purchasers succeed in misrepresentation claim against Vendors

Parker & Associates acted for the successful plaintiff purchasers, Mr and Mrs Mason, in Mason v Magee [2017] NZHC 51. The decision is an important one for both buyers and sellers of ‘leaky homes'.