BFMG Ltd v Speirs - [2014] NZHC 2503

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-2370 [2014] NZHC 2503

BETWEEN
BFMG LIMITED

Plaintiff

AND

DAVID JOHN CAMERON SPEIRS First Defendant

GEORGE SPEIRS Second Defendant

Hearing: 22-23 September 2014

Counsel:

A J Knowsley with N J Manuel for Plaintiff
D G Dewar with M Freeman for Defendants

Judgment:

13 October 2014

RESERVED JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is
3.30 pm on the 13th day of October 2014.

Solicitors: Rainey Collins, Wellington, for Plaintiff
Thomas Dewar Sziranyi Letts, Lower Hutt, for Defendants

BFMG LTD v SPEIRS [2014] NZHC 2503 [13 October 2014]

The claim

[1] This is a claim by the owner of a property for specific performance of a contract to sell the property to the defendant. The defence is that the contract was cancelled under s 7 of the Contractual Remedies Act 1979 for misrepresentation.

Background narrative

[2] The property in issue is a house situated at 6 Palliser Road, Roseneath, Wellington. It was built in about 1920/30, and has been owned by the plaintiff company for about 12 years. The house was let to a tenant. Ms Deborah Marris, the managing director of the company, lives in Sydney. In 2013, Ms Marris listed the property for sale through Harcourts. There were a number of quite severe earthquakes in Wellington in July and August 2013 and these prompted Ms Marris to ask the Earthquake Commission (EQC) to inspect the property to ensure there had been no damage. She spoke to EQC on or around 5 September 2013. On
7 October 2013 Ms Di Austin from Harcourts met with EQC representatives on site and they inspected the property. Ms Austin reported by email to Ms Marris on that visit.

[3] On 24 October 2013, Ms Miroula Fakas, a selling consultant with Harcourts, was asked by the defendant Mr David Speirs to arrange a viewing of the property. Ms Fakas arranged for that to take place the following morning, 25 October 2013. She and Ms Austin met Mr Speirs at the property so that he could view it. What was said in the course of that viewing is of critical importance. I discuss that fully later, and do not address it in this background narrative. At the end of the viewing Mr Speirs told Ms Fakas that he wanted to make an offer on the property. They went to Harcourts’ office where an offer was prepared on the REINZ/ADLSI form (ninth edition 2012). Mr Speirs made an unconditional offer of $1,100,000. The vendor counter offered at $1,375,000. Mr Speirs responded with a final offer of $1,300,000 which was accepted on the afternoon of Friday 25 October 2013.

[4] That afternoon, Ms Austin sent an email to Ms Fakas congratulating her on the sale. She attached the contract and asked Ms Fakas to forward that to the

purchaser and arrange for payment of the deposit. That email contained some further background information, including the following:

The vendor had the property inspected…

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 BFMG Ltd v Speirs

Details

AGLC: BFMG Ltd v Speirs [2014] NZHC 2503
Case: [2014] NZHC 2503
Decision Date: 13 October 2014

CaseChat Overview and Summary

In the High Court of New Zealand, the plaintiff, BFMG Limited, sought specific performance and damages against the defendants, David John Cameron Speirs and George Speirs, for breach of a contract of sale of a residential property. The defendants argued that the contract should be cancelled due to a misrepresentation made by the plaintiff's agent. The court had to determine whether a misrepresentation was made and, if so, whether it induced the defendants to enter into the contract. The court found that no misrepresentation was made and, accordingly, the defendants' claim for cancellation must fail. The court granted specific performance and awarded the plaintiff damages, including interest at the contractual rate from the due date for payment until settlement, rates and encroachment licence fees, gardening costs, and insurance costs.

The court rejected the defendants' evidence that a misrepresentation was made by the plaintiff's agent during a property inspection on 25 October 2013. The court found the defendants' evidence implausible and unconvincing, and accepted the evidence of the plaintiff's agents that no such representation was made. The court held that if there had been a statement to the same effect as the post-contractual communication to the defendants, that statement was not a misrepresentation. The court concluded that the defendants were not induced to enter into the contract by any misrepresentation made on behalf of the plaintiff.

The court awarded the plaintiff specific performance of the contract for the sale of the property, as well as damages, including interest at the contractual rate from the due date for payment until settlement, rates and encroachment licence fees, gardening costs, and insurance costs. The court held that the contractual provision for payment of interest until payment amounted to a contractual provision for payment of interest after judgment, and awarded interest at the daily rate from 25 January 2014 until the date on which settlement takes place. The court declined to award damages for interest on loan repayments on the plaintiff's borrowings secured against the property, as the award of interest for late settlement would compensate the plaintiff for being out of its money, including any borrowed money, for the relevant period. The court awarded the sums claimed for rates and encroachment licence fees, gardening costs, and insurance costs, as these costs would not have been incurred if settlement had taken place on due date, and are costs additional to the loss which is compensated for by the award of interest. Costs were reserved, and the parties were directed to submit memoranda if they were unable to agree.

Orders