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Mitchell v Murphy

Mitchell v Murphy

Case [2019] NZHC 3262 11 December 2019

Unconscionable Conduct

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-965

[2019] NZHC 3262

BETWEEN
HOWARD BRENT MITCHELL AND LYNNE MARY MITCHELL

Plaintiffs

AND

CLARE DIANA MURPHY as trustee of the VICTOR SYDNEY TRUST

First Defendant

IAN BRUCE KEMP
Second Defendant

BARFOOT & THOMPSON LIMITED

Third Defendant

Hearing: 14-18, 21-22, 30 October and 1 November 2019

Appearances:

S Wroe and M Ibram for the Plaintiffs D Collecutt for the First Defendant

No appearance by or on behalf of the Second and Third Defendants

Judgment:

11 December 2019

JUDGMENT OF GORDON J

This judgment was delivered by me
on 11 December 2019 at 4.00 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Rainey Law, Auckland
Ganda & Associates, Auckland

Counsel: S Wroe, Auckland
D Collecutt, Auckland

MITCHELL v MURPHY as trustee of the VICTOR SYDNEY TRUST [2019] NZHC 3262 [11 December 2019]

TABLE OF CONTENTS

Introduction [1]

A preliminary matter [12]

Background [20]

Construction of the townhouses  [20]
Ownership and occupation of units 6 and 7  [23]
Leaks in units 1 to 6  [27]
Unit 7 — leaks prior to sale to the Mitchells  [66]

Work in unit 7 prior to sale [89]
Sale to the Mitchells [94]

First cause of action — s 35 CCLA [117]

What representations were made to Mr Mitchell? [124]

Were the representations actionable? [131]

Discussion [136]

Were the representations false [153]

Is unit 7 a leaky home? [153]

The alleged defects [166]

Alleged defect 1(a) — metal pipes buried within the top plaster surface of
the balustrade  [167]
Alleged defect 1(b) — metal parapet cap buried within the top parapet
surface of the balustrade to the ensuite balcony  [174]
Alleged defect 1(c) — apron flashings inserted into the Duraplast cladding
with limited/no turnouts  [177]
Alleged defect 1(d) — failing membrane on the surfaces of the decks
combined with defective drain outlet installation  [182]
Alleged defect 1(f) — poorly conceived/detailed pipe penetration and pipe
through the balustrade of the ensuite balcony  [187]
Alleged defect 1(g) — generic failure of the flashing system on doors and
windows  [188]
Alleged defect 1(h) — defective membrane/cladding detailing at balcony
doors  [194]
Alleged defect 1(i) — inadequate and failing waterproofing in the shower in
the ensuite bathroom.  [195]
Was unit 7 built with extra care?  [201]
Inducement  [202]
Did Mrs Murphy intend that Mr Mitchell would be induced by the
misrepresentation to enter into the SPA?  [202]
Did Mrs Murphy use language that would induce a reasonable person in the
same circumstances to enter the contract?  [206]
Did the Mitchells rely on the misrepresentations?  [207] Was it reasonable for Mr Mitchell to rely on the representations?  [224] Is it fair and reasonable that cl 22 be conclusive between the parties?  [225] Section 50 of the CCLA  [239]
Discussion  [224]

Second cause of action — Fair Trading Act 1986 [257] Is Mrs Murphy guilty of misleading and deceptive conduct? [269] Did the misleading conduct cause the Mitchells’…

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 Mitchell v Murphy

Details

AGLC: Mitchell v Murphy [2019] NZHC 3262
Case: [2019] NZHC 3262
Decision Date: 11 December 2019

CaseChat Overview and Summary

Howard Mitchell and his wife Lynne Mitchell brought claims against Clare Diana Murphy, Barfoot & Thompson Limited, and Ian Bruce Kemp. The Mitchells claimed that Murphy, the original developer of a block of townhouses, had made misleading representations about unit 7 in the block. The Mitchells claimed that Murphy said unit 7 was not a leaky home, had been built with extra care, and had superior features. The Mitchells also claimed that Murphy’s real estate agent, Jocelyn Goodall, made these same representations. The Mitchells claimed that these representations were false and that they relied on them when entering into a sale and purchase agreement. The Mitchells also brought claims under the Fair Trading Act 1986 against Murphy, Barfoot & Thompson, and Ian Kemp, a building inspector. The Mitchells claimed that Kemp’s report gave a false impression of the condition of unit 7. Murphy denied any liability and claimed that the sale and purchase agreement contained an “as is, where is” clause that precluded the Mitchells from relying on any pre-contractual representations. Murphy also argued that whatever representations were made by Goodall were merely opinions, not statements of fact. The Mitchells settled with Barfoot & Thompson before the hearing. Kemp did not appear at the hearing. The Court found that Goodall’s representations were statements of fact and that they were false. The Court held that the Mitchells were induced to enter into the sale and purchase agreement by these misrepresentations. The Court also held that the Mitchells were entitled to recover their full loss from Murphy. The Court apportioned liability between Murphy and Kemp at 80:20. The Court awarded the Mitchells damages against Murphy of over $500,000 and against Kemp of over $100,000. Costs were reserved.

Orders