The Court of Appeal has reversed the High Court decision in DTB Construction Limited v Raymond Henry Dobbe & Anor as Trustees of EMW Trust [2026] NZCA 492.

This article explores the different positions in the High Court and Court of Appeal, and why the Court of Appeal judgment sends an important message for both principals and contractors.

Background

The respondents (EMW Trust) engaged the appellant (DTB) to build a warehouse and a concrete yard. The concrete yard failed after a 36-tonne fork hoist was operated on it.

EMW Trust said that DTB was aware that the yard must be able to support a 36-tonne fork hoist that could regularly stack containers up to five high. EMW Trust alleged that DTB had agreed to deliver a yard meeting these requirements by way of a partly written and partly oral contract.

High Court decision

EMW Trust brought a claim against DTB for breach of contract and against one of DTB’s directors (Douglas Taylor) for breach of a tortious duty of care.

Whata J rejected EMW Trust’s claim that DTB had agreed to build a concrete yard that a 36-tonne fork hoist could be operated on, or that there had been such a variation to the contract. Instead, the Judge found that DTB had agreed to construct a yard that was based on a design that could accommodate a 12.5-tonne fork hoist. This particular design was agreed between the parties by way of a documented variation.

The Judge also noted that, despite EMW Trust having later received from a design consultant, a design capable of accommodating a 36-tonne fork hoist (which would have involved major excavation and works), there was no written agreement or variation instructing DTB to build that design.

Despite this, Whata J accepted EMW Trust’s argument in closing submissions that the pleadings supported an alternative claim that DTB had breached the contract because the yard was not even capable of supporting a 12.5-tonne fork hoist. It was held that EMW Trust had presented sufficient evidence to establish liability on DTB’s part for such a breach. The Judge was also satisfied that Mr Taylor had assumed personal responsibility for the works, such that a duty of care on his part was established.  Damages were awarded to EMW Trust on this basis.

Court of Appeal

The Court of Appeal upheld Whata J’s finding that DTB had not agreed to construct a yard capable of accommodating a 36-tonne fork hoist, and that the alternative ’12.5-tonne’ claim was “sufficiently foreshadowed” on EMW Trust’s pleadings, despite describing the pleadings as “unduly complex and prolix”.

However, in allowing DTB’s appeal, the Court of Appeal held that EMW Trust’s expert evidence was insufficient to discharge its onus of proving that the yard failed to meet the contractual 12.5-tonne standard. Accordingly, the High Court damages award was set aside, and EMW Trust was ordered to pay DTB’s costs.

The Court of Appeal also overturned Whata J’s finding that Mr Taylor personally owed EMW Trust a duty of care. The Court of Appeal found that even if Mr Taylor had assumed personal responsibility in respect of the design and construction of the yard, the scope of the duty of care owed could only have been to ensure compliance with the building code (based on previous case law addressing the same issue). Mr Taylor did not owe a tortious duty of care to ensure the yard met the contractual 12.5-tonne standard, as this would amount to a duty of care to ensure compliance with the contract. Such a duty does not exist in New Zealand.