Mitchell v Zhang - [2017] NZHC 3208

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-000864 [2017] NZHC 3208

BETWEEN
ALAN RICHARD MITCHELL AND

LYNDA LOU MITCHELL Plaintiff

AND

LEI ZHANG Defendant

Hearing: 21, 22 November, 13 December 2017

Appearances:

R O Parmenter for Plaintiff
E St John and D Liu for Defendant

Judgment:

19 December 2017

JUDGMENT OF VENNING J

This judgment was delivered by me on 19 December 2017 at 11.30 am, pursuant to Rule 11.5 of the
High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Daniel Overton & Goulding, Auckland
Yu Lawyers, Auckland

MITCHELL v ZHANG [2017] NZHC 3208 [19 December 2017]

Counsel: R O Parmenter, Auckland
E St John, Auckland

[1] This case primarily concerns the obligations of disclosure owed by a vendor of land to a purchaser.

[2] Ms Zhang made an unconditional offer to buy the Mitchells’ property for $5.8 million on the same day she first inspected it. Later that day Ms Zhang learnt that the Auckland Unitary Plan showed an indicative road running through the eastern boundary of the property.

[3] Ms Zhang says the Mitchells should have told her about the indicative road. She also says the agent misrepresented the property to her. Ms Zhang has refused to settle and seeks to be released from the contract. The Mitchells seek specific performance of the contract.

The issues for determination

[4] The case raises the following issues:

(a) What is the extent of a vendor’s obligations under cl 7.1 of the standard form Agreement for Sale and Purchase of Real Estate Ninth Edition
2012 (5) (the ASP)?

(b) Was Ms Zhang entitled to cancel the agreement for misrepresentation?

(c) Is the Fair Trading Act 1986 (FTA) engaged, and if so, have the

Mitchells engaged in misleading and deceptive conduct?

(d)Have the Mitchells accepted Ms Zhang’s repudiation so that specific performance is unavailable?

Factual background

[5] Mr and Mrs Mitchell have owned the property at 85 Pararekau Road, Karaka for approximately 15 years. It is a lifestyle block of approximately one hectare.

[6] 85 Pararekau Road was identified as part of the Hingaia special housing area on 13 December 2013 pursuant to an order made under the Housing Accords and Special Housing Areas Act 2013.1

[7] The Mitchells joined with a number of other residents in Karaka to form a landowners’ association. The aim was to achieve a plan change to enable development of their land. The plan change request was lodged in March 2015. Ultimately that led to plan variation 7 (PV7) which was incorporated in the Auckland Unitary Plan.

[8] At the hearing stage of the plan change request, a council officer recommended that PV7 incorporate a local road. The PV7 decision established a precinct known as the Hingaia 3 Precinct. 85 Pararekau Road is within the Hingaia 3 Precinct and is zoned as Mixed Housing Suburban. The relevant planning maps show 85 Pararekau Road with an indicative road running through it. The road is annotated as “local…

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 Zhang

Details

AGLC: Mitchell v Zhang [2017] NZHC 3208
Case: [2017] NZHC 3208
Decision Date: 19 December 2017

CaseChat Overview and Summary

In Mitchell v Zhang, the Court considered the obligations of a vendor of land to a purchaser. Ms Zhang made an unconditional offer to purchase the Mitchells' property for $5.8 million, but later discovered that the Auckland Unitary Plan showed an indicative road running through the eastern boundary of the property. Ms Zhang alleged that the Mitchells should have disclosed this information and sought to cancel the contract. The Mitchells sought specific performance of the contract. The Court considered the extent of a vendor's obligations under cl 7.1 of the standard form Agreement for Sale and Purchase of Real Estate, whether Ms Zhang was entitled to cancel the agreement for misrepresentation, whether the Fair Trading Act 1986 was engaged, and whether the Mitchells had accepted Ms Zhang's repudiation. The Court found that the Mitchells were not required to disclose the proposed road, there were no actionable misrepresentations, the Fair Trading Act 1986 did not apply, and the Mitchells had not accepted Ms Zhang's repudiation. The Court ordered specific performance of the contract, with settlement to occur within six weeks of the judgment or 10 working days of Ms Zhang notifying the Mitchells that she is ready, willing and able to complete settlement. The Mitchells were to have costs on a 2B basis plus disbursements.

Orders