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Armstrong v Mitchell

Armstrong v Mitchell

Case [2018] NZHC 3431 20 December 2018

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-3005

[2018] NZHC 3431

BETWEEN ANTHONY JOHN RICHARD ARMSTRONG
Appellant

AND

MICHAEL WILLIAM MITCHELL and EMMA MARIE MITCHELL

Respondents

Hearing: 18 July 2018 with further submissions on 16 and 29 October 2018

Appearances:

K D Puddle and P Shanahan-Pinker for the Appellant H K Gladwell for the Respondents

Judgment:

20 December 2018

JUDGMENT OF PALMER J

(Reissued after being recalled)

This judgment is delivered by me on 20 December 2018 at 2.00 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Solicitors:
K3 Legal Limited, Auckland Insight Legal Limited, Auckland

ARMSTRONG v MITCHELL [2018] NZHC 3431 [20 December 2018]

Summary

[1] In 2017, Mr Michael Mitchell and Mrs Emma Mitchell bought a property in Mangawhai, Northland, from Mr Anthony Armstrong. Before settlement, they discovered two bays of the four-car garage, a water-tank and a fence may encroach onto a neighbour’s property. They sought compensation and $25,000 was withheld at settlement. They subsequently sued for pre-contractual misrepresentation and Mr Armstrong counterclaimed for the $25,000. Mr Armstrong sought summary judgment on the basis the Mitchells elected not to requisition the defect in title and are deemed to have accepted title under the standard form sale and purchase agreement (the Agreement). He was unsuccessful in the District Court and appealed.

[2] I consider it is arguable that the Mitchells objected to a defect in title under the Agreement and that, irrespective of that, the Mitchells can pursue their claim for pre- contractual misrepresentation in any case. The case should be examined in the full factual context of evidence at trial. I am not satisfied the Mitchells’ claims cannot succeed or that Mr Armstrong’s counterclaim must succeed. I decline the appeal.

What happened?

Negotiation for sale and purchase

[3] Mr Armstrong, a builder, bought a two-acre property at 56 Atkin Road, Mangawhai, in 2013. He bought it when it was being subdivided and without surveying its boundaries. It had a house and four-car garage on it and a concrete water tank used for garden irrigation. Mr Armstrong replaced a wire fence, on what he says he thought was the boundary, with a wooden fence.

[4] In October 2016, Mr Armstrong listed the property for sale on TradeMe. The description included the four-car garage. Mr and Mrs Mitchell inquired about the listing through text exchanges. They viewed the property, by themselves. The garage was attractive to them as Mr Mitchell is a mechanic. By 16 December 2017, by text exchange, the Mitchells had agreed they would make a formal offer at $585,000.

[5] Over December 2017 and January 2018, there were continued texts. Mr Armstrong’s lawyers prepared a draft sale and purchase agreement in the ninth edition 2012 (5) of the Real Estate Institute of New Zealand (REINZ) Auckland District Law Society (ADLS) standard form contract. The Mitchells’ lawyers amended it. The purchase price was to be $585,000 with settlement on…

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.

Continue reading Armstrong v Mitchell

Details

AGLC: Armstrong v Mitchell [2018] NZHC 3431
Case: [2018] NZHC 3431
Decision Date: 20 December 2018

CaseChat Overview and Summary

The appeal before the High Court was brought by Mr Anthony Armstrong against a decision of the District Court in relation to proceedings brought by Mr and Mrs Mitchell against Mr Armstrong in respect of the sale of a property in Mangawhai. The central issue for the Court was whether the District Court had erred in declining Mr Armstrong's application for summary judgment. The Mitchells had sued for pre-contractual misrepresentation and Mr Armstrong counterclaimed for the $25,000 withheld at settlement. The Court found that it was arguable that the Mitchells had objected to a defect in title under the sale and purchase agreement and that, irrespective of that, the Mitchells can pursue their claim for pre-contractual misrepresentation. The Court was not satisfied the Mitchells' claims could not succeed or that Mr Armstrong's counterclaim must succeed and therefore declined the appeal. The Court noted that the arguments relating to whether the Mitchells had effectively objected to the defect in title, whether a notice of objection could be served by text and whether the Mitchells had waived their rights under the contract were factual matters which should be examined in the full factual context of evidence at trial.

Orders