MacFarlane v Informed House Inspections Limited

[2023] NZHC 934

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-49

[2023] NZHC 934

BETWEEN

ROSEMARY FENWICK MACFARLANE

Plaintiff

AND

INFORMED HOUSE INSPECTIONS LIMITED

First Defendant

MARK WARRANT SEWELL

Second Defendant

Hearing:	16 March 2023
Appearances:	E S K Dalzell and S Smith for Plaintiff No appearance for First Defendant Second Defendant in Person
Judgment:	26 April 2023

JUDGMENT OF McQUEEN J

MACFARLANE v INFORMED HOUSE INSPECTIONS LIMITED & SEWELL [2023] NZHC 934 [26 April 2023]

Table of Contents

Para Nos

The requirements of formal proof  [3]

Procedural background  [6]
Decision to proceed with formal proof hearing  [13]
Ms MacFarlane’s claim  [23]
Evidence in support of Ms MacFarlane’s claim  [31]
Ms MacFarlane’s affidavits  [31]
Affidavit from Mr Viatos  [48]
Affidavit from Mr Lyttle  [49]

Affidavit of Mr Symon  [51]

Affidavit of Mr Wutzler  [56]
Affidavit of Mr Jenkinson  [59]
Affidavit of Mr Wakeling  [60]

The defendants’ response  [62]

Fair Trading Act claims  [71]
Negligent misstatement  [88]
Conclusion and relief  [100]
Damages for cost of remediation and alternative accommodation               [104]

General damages  [113]
Interest  [119]

Costs and disbursements  [120]

Conclusion  [121]

Result  [123]

[1]    The plaintiff, Ms MacFarlane, is suing the first and second defendants, Informed House Inspections Ltd (IHI) and that company’s sole director and shareholder, Mark Sewell. Ms MacFarlane claims that she suffered loss as a result of acquiring in May 2019 a residential property at 7/21 McBain Grove, Lower Hutt (the Property). She says that she bought the Property in reliance on a report prepared by IHI (through Mr Sewell) and verbal advice from Mr Sewell about the condition of the Property, only to discover that significant defects with the Property were not identified. Essentially, she claims for the cost of rectifying these defects.

[2]    The defendants are not and have never been represented. I describe below the manner in which the defendants have responded to the claim. The hearing before me proceeded as a formal proof hearing, for reasons discussed in more detail below.

The requirements of formal proof

[3]    Rule 15.9 of the High Court Rules 2016 provides for the formal proof of claims. This occurs where the defendant does not file a statement of defence in accordance with the timeframe required by the notice of proceeding and the plaintiff seeks judgment by default for other than a liquidated demand. After a proceeding is listed for a formal proof hearing, no statement of defence may be filed except with the leave of a Judge granted on the ground that there will or may be a miscarriage of justice if judgment by default is entered.

[4]    When assessing whether to exercise the discretion to grant leave to file a statement of defence, the following considerations are relevant:1

(a)whether the defendant has a substantial ground of defence;

(b)whether the delay is reasonably explained; and

(c)whether the plaintiff will suffer irreparable injury if leave to defend is belatedly granted, or judgment set aside.

[5]    The plaintiff must, before or at the…