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OHL Limited v Premier Property Developments Limited

OHL Limited v Premier Property Developments Limited

Case [2024] NZCA 422 5 September 2024

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA486/2023
[2024] NZCA 422

BETWEEN	OHL LIMITED Appellant
AND	PREMIER PROPERTY DEVELOPMENTS LIMITED Respondent

Hearing:	14 May 2024
Court:	Thomas, Fitzgerald and Osborne JJ
Counsel:	J D McBride and E A Gambrill for Appellant S E Wroe and T J M Ashley for Respondent
Judgment:	5 September 2024 at 11.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed. The High Court judgment is set aside and judgment is given for OHL in the sum of $400,000 plus accrued interest calculated pursuant to the Interest on Money Claims Act 2016 from 8 February 2019 to the date of this judgment.
BThe respondent must pay the appellant costs for a standard appeal on a band B basis, discounted by 10 per cent, together with usual disbursements. We certify for second counsel.
CCosts in the High Court are remitted back to the High Court for reconsideration in light of this judgment.

____________________________________________________________________

REASONS OF THE COURT

(Given by Thomas J)

Table of contents

Introduction [1]

Background [4]

The basement [12]
Back to the sale [17]

The High Court decision [41]

Contractual warranties [47]
Loss or damage [50]

The Fair Trading Act claim [53]

Were the Representations misleading or deceptive?  [55]
Was OHL misled or deceived by the Representations?  [62]
Was OHL’s own conduct an operative cause of its loss?  [70]

Contractual warranties [79]

The air conditioning warranty claim [84]

What losses did OHL suffer? [91]

The evidence  [98]
Scenario A  [107]
Scenario C  [109]
Scenario E  [111]
Our assessment  [112]

Did OHL fail to mitigate its loss when it declined the rent guarantee? [122]

Costs [129]

Result [131]

Introduction

In February 2019, the appellant, OHL Ltd, settled its purchase of one of two units (Unit A) of an Auckland 14-storey unit-titled development from the respondent, Premier Property Developments Ltd (Premier). By agreement, $692,000 (the Retention) was held in a stakeholder’s account pending resolution of OHL’s claim against Premier for breach of the warranties contained in the agreement for sale and purchase (the ASP).
In July 2021, Premier commenced proceedings seeking the release of the Retention. OHL counterclaimed for damages under the Fair Trading Act 1986 and for breach of warranty. The High Court rejected the Fair Trading Act claim but held that Premier was liable to OHL for breach of warranty. However, OHL had unreasonably refused Premier’s offer of a rent guarantee which was a reasonable mitigation measure. This refusal eliminated any loss arising from the breach.[1] Premier was therefore entitled to recover the Retention.
[1]Premier Property Developments Ltd v OHL Ltd [2023] NZHC 1962, (2023) 16 TCLR 625 at [66] and [68].
OHL appeals.

Background

The intensely factual background, which is largely not in dispute, was comprehensively recorded in the judgment under appeal.[2] We therefore use that background supplemented by matters identified by the parties in our description below.
[2]At [3]–[36].
The subject building at 2 Kitchener Street, Auckland is divided into two units.…

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 OHL Limited v Premier Property Developments Limited

Details

AGLC: OHL Limited v Premier Property Developments Limited [2024] NZCA 422
Case: [2024] NZCA 422
Decision Date: 5 September 2024 at 11.30 am

CaseChat Overview and Summary

In the appeal of OHL Limited v Premier Property Developments Limited, the Court of Appeal allowed OHL's appeal against the High Court judgment. OHL, having purchased Unit A from Premier, sought damages for breach of warranty and misleading or deceptive conduct under the Fair Trading Act 1986. The High Court found that Premier had breached a warranty in the agreement for sale and purchase (ASP) by failing to disclose that it had given a waiver to the tenant in the basement, Buza, allowing it to pay no rent. The court rejected OHL's claim for misleading or deceptive conduct, finding that OHL had not been misled or deceived by Premier's representations. Instead, the court found OHL had unreasonably refused Premier's offer to underwrite Buza's rent, which would have eliminated any loss arising from the breach of warranty.

The Court of Appeal disagreed with the High Court's findings. It found that Premier had engaged in misleading or deceptive conduct by failing to disclose that Buza was not paying any rent at all. The court held that OHL was misled and deceived by these representations and that Premier's conduct was an operating cause of OHL's loss. The court also found that Premier had breached the air conditioning warranty, but OHL had failed to establish the extent of the loss. The court assessed OHL's loss at $400,000, discounting the capitalisation rate from 6.4 per cent to 6.8 per cent to reflect the changed risk profile of the property. The court held that OHL was not required to accept Premier's offer of a rent underwrite, which would not have put OHL in the position it would have been in had the breach not occurred. The appeal was allowed, and the High Court judgment was set aside. OHL was awarded $400,000 plus interest and costs. The issue of costs in the High Court was remitted to that Court.

Orders