Penney v Ng - [2014] NZHC 1486

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-5790 [2014] NZHC 1486

BETWEEN
STEPHEN JOHN PENNEY AND

MACUSHLA EILEEN BURNS Plaintiffs

AND

DANNY NG First Defendant

STUDORP LTD (previously JAMES HARDIE BUILDING PRODUCTS LTD) (discontinued)

Second Defendant

JAMES HARDIE NEW ZEALAND LTD (discontinued)

Third Defendant

HARCOURTS GROUP LTD (discontinued)

Fourth Defendant

HOBSONVILLE REALTY LTD Fifth Defendant

EILEEN TAUA Sixth Defendant

GRAHAM LEWIS Seventh Defendant

Hearing: 10 and 11 February 2014

Counsel:

AJ Thorn and M Bullivant for Plaintiffs
No appearance by or on behalf of First Defendant
PJ McDonald and MC Donovan for Fifth, Sixth and Seventh
Defendants

Judgment:

30 June 2014

JUDGMENT OF BREWER J

PENNEY & BURNS v NG [2014] NZHC 1486 [30 June 2014]

This judgment was delivered by me on 30 June 2014 at 4:00 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Introduction

[1] In 2007 the plaintiffs bought a house from the first defendant. It is built using the monolithic cladding system which is notorious for leaking. Some three years after the purchase the plaintiffs discovered that their house leaks. They sue for redress.

[2] The first defendant, the vendor, is bankrupt. He did not take part in the trial, notwithstanding the Court has given leave to the plaintiffs to continue their claim against him.1

[3] The claims against the second, third and fourth defendants have been discontinued.2

[4] The last defendants standing are the fifth, sixth and seventh defendants (“the agents”). The fifth defendant is the real estate company which marketed the house as agent of the first defendant. It employed the sixth and seventh defendants as sales people, and it was they who dealt with the plaintiffs as prospective purchasers.

The claims against the agents

[5] The plaintiffs’ claims against the agents arise from representations made in marketing the house. Advertising described the house as:

(a) Situated amongst prestigious quality dwellings;

(b) A meticulous home; and

1 Teleconference Minute of Venning J, 29 January 2014. The same leave was granted to the fifth, sixth and seven defendants in relation to their cross-claim against the first defendant.
2 A set-off of $17,414 is available as a result of settlements with the second and third defendants.

(c) Constructed with treated timber.

[6] The “treated timber” representation was contained in an internet sales webpage.3 It did not appear in other advertising, nor in the listing card put into evidence.4 The evidence of the sixth defendant is that when filling out the listing authority form5 with the first defendant, he told her that the house was built using a cladding called Harditex and that the framing was treated timber. The sixth
defendant noted those representations on the form, which was signed by the first defendant in two places. The first conferred an exclusive and sole agency. The second included a warranty that “the listing details of the property as set out herein are a fair and accurate description of the property”.

[7] The plaintiffs gave evidence that the representation that the house was…

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 Penney v Ng

Details

AGLC: Penney v Ng [2014] NZHC 1486
Case: [2014] NZHC 1486
Decision Date: 30 June 2014

CaseChat Overview and Summary

In the High Court of New Zealand, the plaintiffs, Stephen John Penney and Macushla Eileen Burns, sued the first defendant, Danny Ng, and others for misrepresentation and breach of contract related to the sale of a house. The plaintiffs claimed that they were misled into purchasing a house that was built using a cladding system notorious for leaking. The first defendant was bankrupt and did not participate in the trial. The remaining defendants were the real estate agents who marketed the house. The plaintiffs' claims against the agents centred on representations made in marketing the house, including that it was built with treated timber, which was not true. The agents argued that the plaintiffs did not rely on the misrepresentation, which was necessary for the claim to succeed. The court found that the plaintiffs did see the webpage advertisement that contained the treated timber representation before signing their first offer to purchase the house. However, the court found that the plaintiffs did not rely on the treated timber representation when deciding to enter into the agreement to buy the house. Instead, they relied on their building inspector’s report. Therefore, the plaintiffs' claims against the agents were dismissed. The court also dismissed the plaintiffs' claims against the first defendant for misrepresentation and deceit. However, the court found that the first defendant breached a warranty in the agreement for sale and purchase by failing to obtain a building consent and code compliance certificate for the re-cladding work he had done on the house. The plaintiffs were awarded $20,000 in general damages for the breach of warranty. The court reserved leave to the plaintiffs to file a memorandum on how to proceed to determine quantum, effectively making an interim judgment on liability with quantum to be determined. The fifth, sixth and seventh defendants were awarded costs against the plaintiffs, while the plaintiffs were awarded costs against the first defendant.

Orders