Maketu Estates Ltd v Robb - [2014] NZHC 2664

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2013-470-000496 [2014] NZHC 2664

BETWEEN
MAKETU ESTATES LTD

Plaintiff

AND

S J ROBB
First Defendant

PGG WRIGHTSON REAL ESTATE LIMITED

Second Defendant

Hearing: 18 - 26 August 2014

Appearances:

G Brittain and A R Scott for the Plaintiff
H Smith and S Caradus for the Defendants

Judgment:

29 October 2014

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Wednesday, 29 October 2014 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Counsel:
G Brittain, Barrister, Tauranga

Solicitors:
Mackenzie Elvin, Tauranga
Duncan Cotterill, Christchurch

MAKETU ESTATES LTD v S J ROBB [2014] NZHC 2664 [29 October 2014]

Introduction

[1] On 15 November 2012, the plaintiff, Maketu Estates Ltd (Maketu), entered into a written agreement for the sale and purchase of a kiwifruit orchard to Paul Jones or his nominee. The sale price was $3.8 million. The plaintiff claims there was a third party willing to pay more, but the first defendant, Mr Stan Robb, a real estate agent engaged by PGG Wrightson Real Estate Limited (Wrightsons), the second defendant, failed to properly advise it of that third party interest. The plaintiff claims that the market value of the orchard was $4.9 million and, accordingly, it has lost $1.1 million. The defendants counter-claim for the commission on the sale, which the plaintiff has refused to pay.

Statement of claim

[2] There are three causes of action set out in the statement of claim. The first claim is against Mr Robb under the Fair Trading Act 1986 for misleading and deceptive conduct while acting in trade. The plaintiff alleges that Mr Robb failed to disclose the third party’s level of interest in purchasing the property and wrongly advised the third party that the orchard was no longer available for sale. In addition, the plaintiff alleges that Mr Robb told its directors that Mr Jones was the only buyer.

[3] The second claim is against Wrightsons under the Fair Trading Act 1986 for misleading and deceptive conduct while acting in trade. It relies upon the same particulars as the first claim.

[4] The third claim is an alternative claim against Wrightsons for breach of fiduciary duty. The plaintiff alleges that Wrightsons owed it a duty to disclose the existence of any prospective purchaser and the extent of the interest expressed by the prospective purchaser, which it breached. Again, the plaintiff relies on the same particulars as the first claim.

[5] In their joint statement of defence, both Mr Robb and Wrightsons admit that Mr Robb was the agent of the Wrightsons and that Mr Robb was acting within the scope of his actual or apparent authority so that the conduct of Mr Robb is deemed to

have been engaged in also by Wrightsons. They also both admit that they were acting in trade.

The law

[6] The parties agree on the applicable law. Section 9 of the Fair Trading Act

1986 provides:

9 Misleading and deceptive conduct…

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: [2014] NZHC 2664
Decision Date: 29 October 2014

CaseChat Overview and Summary

Maketu Estates Ltd sued S J Robb, a real estate agent engaged by PGG Wrightson Real Estate Limited, for misleading and deceptive conduct under the Fair Trading Act 1986. Maketu claimed that Robb failed to disclose a third party's interest in purchasing its kiwifruit orchard, resulting in a lower sale price. The court found that Robb misled the third party about the status of the sale, finding that Robb told the third party that the sale was "all put on hold" when in fact an agreement in principle had been reached to sell the orchard. The court held that Robb's conduct was misleading or deceptive as it was likely to mislead or deceive the third party. The court also found that Robb breached his duty of loyalty as the plaintiff's agent by failing to act in the plaintiff's best interests. The court ordered the defendants to pay the plaintiff $1,101,375 plus interest, and dismissed the defendants' counterclaim for commission.

Orders