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Magee v Mason

Magee v Mason

Case [2017] NZCA 502 8 November 2017

Misrepresentation

Inducement to Contract

Reliance

Contract Law

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA69/2017
[2017] NZCA 502

BETWEEN	ANDREW HAMILTON MAGEE AND SHARON LEE MAGEE Appellants
AND	STEVEN PHILIP MASON AND KATHARINE MARY MASON Respondents

Hearing:	29 August 2017
Court:	Miller, Courtney and Gendall JJ
Counsel:	M Freeman for Appellants DJS Parker and J T Wollerman for Respondents
Judgment:	8 November 2017 at 10.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe judgment in the High Court is set aside.
CThe respondents must pay the appellants costs for a standard appeal on a band A basis and usual disbursements.
DCosts in the High Court are to be fixed in that Court in light of this judgment.

____________________________________________________________________

REASONS

Miller and Gendall JJ [1]
Courtney J (dissenting) [57]
MILLER AND GENDALL JJ

(Given by Miller J)

TABLE OF CONTENTS

The negotiations and contract[7]

The house and the parties[7]
Pre-contractual negotiations[10]
Contract and settlement[16]

Defects[19]
The claim[21]
The result below, and the appeal[22]

Misrepresentation[26]

What is the misrepresentation?[28]
What is the evidence?[32]
Was the statement fairly capable of bearing the alleged meaning?[36]

Inducement to contract[41]

Did the ABI report preclude inducement?[44]
Did the Masons reasonably rely upon the representation for meaning 3?[51]

Result[55]

Sharon Magee twice stated, when asked by an intending purchaser, Katharine Mason, that her house at 13 Karekare Rd, Raumati South, was not a leaky building.
Mrs Magee’s statement was honestly made and true at least in part. She and her husband, Andrew Magee, had purchased the house in 2009, some six years after it was built, in their two years of ownership it had not revealed weathertightness defects, and she had no reason to believe that its design and construction made it prone to leak.
However, the house was in fact prone to leak, the result of a number of original design and construction defects, and it subsequently did leak. The parties agree that it is a “leaky building” as that term is commonly understood.
In the High Court the Magees were found liable for a pre-contractual misrepresentation that induced Mrs Mason and her husband, Steven Mason, to buy the property.[1]
[1]Mason v Magee [2017] NZHC 51.
The principal question on appeal is whether Mrs Magee’s statement conveyed a misrepresentation about the building’s design or construction. It is said that her statement conveyed only that it had not leaked while she owned it, and perhaps that she knew of no facts establishing that it was prone to do so; further, if the statement conveyed anything about its propensity to leak this was an opinion from which no representations of fact about design or construction were or could reasonably be taken.
A secondary question is whether the statement induced the Masons to buy the house. The statement was not reduced to writing and incorporated into the agreement for sale and purchase, but the agreement was conditional on the Masons obtaining a building report to their…

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 Magee v Mason

Details

AGLC: Magee v Mason [2017] NZCA 502
Case: [2017] NZCA 502
Decision Date: 8 November 2017 at 10.30 am

CaseChat Overview and Summary

The appeal was heard by Miller, Courtney, and Gendall JJ, with Freeman appearing for the appellants and Parker and Wollerman for the respondents. The central issue was whether Mrs Magee's statement that her house was not a leaky building constituted a misrepresentation under the Contractual Remedies Act. The High Court found in favour of the respondents, awarding damages for misrepresentation. The Court of Appeal allowed the appeal, holding that the statement did not amount to a misrepresentation as it did not convey that the house was not prone to leak through design or construction. The Court found that the statement only conveyed that the Magees had not experienced weathertightness problems during their ownership and had no reason to believe the house was prone to leak. The Court also found that the Masons did not reasonably rely on the statement for this meaning. The appeal was allowed, and the High Court judgment was set aside. The respondents were ordered to pay costs for the appeal and usual disbursements, with High Court costs to be fixed in light of this judgment. Justice Courtney dissented, finding that the statement did amount to a misrepresentation.

Orders