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Bhargav v First Trust Limited

Bhargav v First Trust Limited

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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.

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.

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Details

Case: [2024] NZHC 1054
Decision Date: 2 May 2024

CaseChat Overview and Summary

The High Court of New Zealand considered the case of Bhargav v First Trust Limited, where Ameet Bhargav and Renu Khajuria purchased a leaky property from First Trust Limited (FTL), led by Davinder Singh Rahal. The plaintiffs sought damages for breach of contractual warranty and misleading or deceptive conduct under the Fair Trading Act 1986 (FTA). The court addressed several issues, including the liability of FTL and Mr Rahal for misleading and deceptive conduct and the appropriate measure of damages for both the breach of contract and the FTA.

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.

Orders