IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-1260
[2024] NZHC 1054
BETWEEN AMEET BHARGAV AND RENU KHAJURIA
Plaintiffs
AND
FIRST TRUST LIMITED
First Defendant
DAVINDER SINGH RAHAL
Second Defendant(continued next page)
Hearing: 9, 10, 13–17 November 2023
Memorandum dated 18 April 2024 as to removal of First Trust Ltd from Companies Register
Counsel:
S Wroe and G Grant for Plaintiffs
G P Blanchard KC and A Grant for First and Second Defendants
Judgment:
2 May 2024
JUDGMENT OF HINTON J
[redacted version]
This judgment was delivered by me on 2 May 2024 at 3.30 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………….
Solicitors: Grant & Co, Auckland
BHARGAV v FIRST TRUST LTD [2024] NZHC 1054 [2 May 2024]
METSONS (NZ) LIMITED (Discontinued) Third Defendant
VINAY MEHTA (Discontinued) Fourth Defendant
LOCAL REALTY LIMITED (Discontinued) Fifth Defendant
GURBIR SINGH BAL (Discontinued) Sixth Defendant
VIVEK PUNJ (Discontinued) First Third Party
HOVERD & CO LIMITED (Discontinued) Second Third Party
SAMAR CONSTRUCTION LIMITED
(Discontinued)Third Third Party
MANPRIT SINGH (Discontinued) Fourth Third Party
[1] In May 2020 Ameet Bhargav and Renu Khajuria purchased a property at 1/5 Ribbonwood Crescent, Goodwood Heights, Auckland (the property). The property transpired to be a leaky home.
[2] First Trust Ltd (FTL), the first defendant, sold the property to the plaintiffs. At all material times Mr Rahal, the second defendant, was director and shareholder of FTL, along with his wife.
[3] The plaintiffs brought claims against the first defendant for breach of contractual warranty (that any work on the property requiring building consent had received the required consent) and against the first and second defendants for misleading or deceptive conduct under s 9 of the Fair Trading Act 1986 (FTA). There were also claims against the other defendants and various third-party actions described below, which were all discontinued prior to the fixture in November 2023.
[4] This judgment was to issue in mid-April 2024, but FTL had been removed from the Companies Register for non-filing of an annual return. I made an order for reinstatement on 30 April 2024 under CIV-2024-404-963 and the company was restored to the Register on 1 May 2024.
Procedural history
[5] On 11 August 2021 the plaintiffs served their statement of claim on six defendants:
(a)FTL;
(b)Mr Rahal;
(c)Metsons (NZ) Ltd (Metsons) (a building inspection company that provided a pre-purchase inspection report on the property);
(d)Mr Vinay Mehta (a building inspector and director-shareholder of Metsons);
(e)Local Realty Ltd (a real estate agency who acted on the sale to the plaintiffs); and
(f)Mr Gurbir Bal (director-shareholder of Local Realty Ltd and the agent involved in the sale).
[6] On 16 September 2021 the fifth and sixth defendants filed a statement of defence in accordance with the High Court Rules 2016. The fourth defendant acknowledged service via text message but did not file a statement of defence, nor did the first to third defendants. They took no steps thereafter.
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- Case
- [2024] NZHC 1054
- Decision Date
CaseChat Overview and Summary
The court found that FTL was liable for misleading and deceptive conduct under the FTA by presenting the property as newly renovated rather than a leaky home needing extensive repair. Mr Rahal was also found liable either as a principal or as an accessory for knowingly participating in FTL’s misleading and deceptive conduct.
Regarding damages, the court concluded that the cost of repair was the appropriate measure for the breach of contractual warranty because the plaintiffs intended to retain the property and the property was not readily substitutable. For the FTA breach, the court assessed damages on the tort measure, resulting in a damages award of $270,000. The plaintiffs were also awarded consequential losses, general damages, and interest. The final orders directed the plaintiffs to submit calculations for the cost of repair, consequential losses, and the form of final orders, with the defendants to respond within specified timeframes.
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