J B Aubin Realty Ltd v Hinton - [2011] NZCA 465

IN THE COURT OF APPEAL OF NEW ZEALAND

CA491/2009
[2011] NZCA 465

BETWEEN J B AUBIN REALTY LIMITED
First Appellant

AND EDWIN ALEXANDER DONNITHORNE
Second Appellant

AND RODGER CLARENCE HINTON AND RAEWYN JULIE HINTON
First Respondents

AND SELWYN THOMAS SMITH AND NANCY LOIS SMITH
Second Respondents

CA486/2009

AND BETWEEN SELWYN THOMAS SMITH AND NANCY LOIS SMITH
Appellants

AND RODGER CLARENCE HINTON AND RAEWYN JULIE HINTON
First Respondents

AND J B AUBIN REALTY LIMITED
Second Respondent

AND EDWIN ALEXANDER DONNITHORNE
Third Respondent

Hearing: 1 June 2011

Court: Ellen France, Harrison and Wild JJ

Counsel: S R J Hamilton for First and Second Appellants in CA491/2009 and Second and Third Respondents in CA486/2009
S L Robertson for First Respondents in CA491/2009 and CA486/2009
M D Branch and K A Lomas for Second Respondents in CA491/2009 and Appellants in CA486/2009

Judgment: 16 September 2011 at 2.30 pm

JUDGMENT OF THE COURT

AThe appeals are dismissed.
BThe Hintons are entitled to costs in the High Court, to be fixed by that Court if agreement cannot be reached.
CThe appellants in CA491/2009 and CA486/2009 must pay the Hintons costs in this Court for a standard appeal on a band A basis and usual disbursements in the following proportions: the agents 65 per cent and the Smiths 35 per cent.

REASONS OF THE COURT
(Given by Ellen France J)

Table of Contents

Para No.

Introduction  [1]
The issues  [6]
Factual background  [9]
The pleadings  [20]
The High Court judgment  [27]
Was there reliance?  [35]
Reasonableness of reliance  [45]
Apportionment of responsibility  [55]
         A full indemnity for the Smiths?  [56]
         The approach to the apportionment of responsibility  [71]
Result  [79]
Costs  [80]

Introduction

After his retirement as a race horse trainer in 2005, Rodger Hinton and his wife, Raewyn, (the Hintons) sold their property in Ruakaka and purchased land in Pukekohe. They began looking for an investment property. Through a neighbour, Mr Hinton became aware that two units in the Twin Peaks Motel complex in Taupo were for sale. The units were both owned by Selwyn and Nancy Smith (the Smiths). The real estate agency acting for the Smiths on the sale was J B Aubin Realty Limited (Aubin). Edwin (Eddie) Donnithorne was Aubin’s real estate agent who negotiated the eventual agreement between the Hintons and the Smiths in relation to the two units.
Throughout the relevant period the units have been owned by individual investors who obtain strata titles and become members of a body corporate. A management company, MontDore, receives the gross rentals paid by guests renting the units. MontDore’s fees comprise 15 per cent of gross rental received. In addition, MontDore recovers servicing expenses like cleaning, laundry and a charge for gas and electricity. The unit owners pay rates and body corporate levies.
As part of the negotiations leading up to their purchase of the units, the Hintons sought and received some information about the rate of return on the units. Mrs Smith provided a handwritten note to Mr Donnithorne about the gross income…

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: [2011] NZCA 465
Decision Date: 16 September 2011

CaseChat Overview and Summary

- Parties: The case involves J B Aubin Realty Limited (Aubin) and Edwin Alexander Donnithorne (the agents) as appellants, and Rodger Clarence Hinton and Raewyn Julie Hinton (the Hintons) as respondents. The Smiths, who own the units, are also involved.
- Nature of Dispute: The Hintons seek to cancel the sale of two units based on alleged misrepresentation by the agents regarding the rate of return on the units.
- Court: The Court of Appeal of New Zealand.
- Issues: The key issues are whether the Hintons relied on the agents' misrepresentation, the reasonableness of such reliance, the apportionment of responsibility for the loss, and the entitlement of the Smiths to a full indemnity from the agents.
- Reasoning: The Court found that the Hintons did rely on the misrepresentation and that such reliance was reasonable. The Court upheld the Judge's apportionment of responsibility, finding no error in the Judge's assessment of the respective contributions to the loss.
- Outcome: The appeals are dismissed, and the Smiths are awarded costs in the High Court and in the Court of Appeal. The agents and the Smiths are ordered to pay the Hintons' costs in the Court of Appeal in the proportions of 65% and 35%, respectively.

Orders