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Forbes v Townsend

Forbes v Townsend

Case [2023] NZHC 2578 15 September 2023

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-665

[2023] NZHC 2578

UNDER the Contract and Commercial Law Act 2017

BETWEEN

GRANT DAVID FORBES, JENNIFER LEE FORBES and STEPHEN LAWRENCE

GALLAUGHER as trustees of the Assurer Trust
Plaintiffs

AND

SARAH CAROLINE TOWNSEND and

FREDERICK MUIR WARD as trustees of the Erskine Trust

Defendants

Hearing: 4 September 2023

Appearances:

S C Price and R G Muston for Plaintiffs P C Murray for Defendants

Judgment:

15 September 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 15 September 2023 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

FORBES v TOWNSEND [2023] NZHC 2578 [15 September 2023]

Introduction

[1] The first named plaintiff, Grant Forbes, entered into an agreement to purchase a residential property at Remuera, Auckland from the defendants. Before settlement, Mr Forbes nominated the plaintiffs as purchasers, and they settled and took title. Subsequently, leaks and consequential damage were identified at the property and the plaintiffs undertook repairs.

[2] The plaintiffs’ claim is advanced on the basis the defendants misrepresented that there had been no leaks or watertightness issues at the property. The plaintiffs say there were significant leaks and watertightness issues of which the defendants were aware. They seek damages under s 35 of the Contract and Commercial Law Act 2017 (CCA) to recover the costs of the repairs. The application before me seeks summary judgment on the claim as to liability only.

The defendants deny liability. They say that:

(a)as nominees, the plaintiffs cannot bring a claim for an alleged pre- contractual misrepresentation under s 35 of the CCA;

(b)the representation made was not false;

(c)Mr Forbes was not induced to enter into the agreement by the representation, and, if he was, his reliance upon it was not reasonable; and

(d)the issues of liability and quantum are so interlinked that summary judgment is not appropriate in any event.

Background

[4]The plaintiffs are the trustees of the Assurer Trust.

[5] The trustees of the Erskine Trust were the owners of 93 Victoria Avenue, Remuera, Auckland from November 2010 until 24 January 2020. The house was built

in around 1994. The property was occupied by the first named defendant, Sarah Townsend, as her home.

[6] While the property was owned by the defendants, there were leaks and other watertightness issues with the property. Ms Townsend acknowledges this but recounts steps she took to repair and maintain the property, including steps taken to ensure it was fit for sale.

[7] In late 2019, the property was put on the market for sale by auction. Mr Forbes and his wife inspected the property. They also engaged Whats Up House Inspections Ltd to provide a builder’s report.

[8] The auction was brought forward to 8 November 2019 because the defendants had received an offer from another interested party. Between 4 November 2019 and 8 November 2019, Mrs Forbes had email correspondence with the…

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 Forbes v Townsend

Details

AGLC: Forbes v Townsend [2023] NZHC 2578
Case: [2023] NZHC 2578
Decision Date: 15 September 2023

CaseChat Overview and Summary

The case of Forbes v Townsend involves a dispute between the plaintiffs, trustees of the Assurer Trust, and the defendants, trustees of the Erskine Trust. The plaintiffs claim damages under s 35 of the Contract and Commercial Law Act 2017 for alleged misrepresentations made by the defendants regarding the condition of a residential property in Remuera, Auckland. The plaintiffs seek to recover the cost of repairs undertaken after settlement due to leaks and watertightness issues at the property.

The legal issues before the court were whether the plaintiffs, as nominees, could claim damages for pre-contractual misrepresentations under s 35 of the CCA, whether the representation made by the defendants was false, whether the plaintiffs were induced to enter into the agreement by the representation, whether the reliance was reasonable, and whether the issues of liability and quantum could be determined separately.

The court held that the plaintiffs, as nominees, could not claim damages for pre-contractual misrepresentations under s 35 of the CCA. It found that the representation made by the defendants was false, but the court could not determine whether it was reasonable for the plaintiffs to rely on the representation in entering into the agreement. The court also found that the issues of liability and quantum were not cleanly divided, making it unsuitable for a liability-only judgment.

The plaintiffs' application for summary judgment was dismissed, and the case was to proceed to trial. The court reserved the issue of costs and directed that the case be called for case management purposes.

Orders