Perry v O'Neills Building Removals Limited (in liquidation)
[2018] NZHC 503
•22 March 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2017-404-856
[2018] NZHC 503
BETWEEN BRENDA MARGARET PERRY
Plaintiff
AND
O’NEILLS BUILDING REMOVALS LIMITED (IN LIQUIDATION)
First Defendant
JEREMY O’NEILL
Second DefendantAUBURN DEVELOPMENTS LIMITED
Third Defendant
Hearing: 28 February 2018 Appearances:
G Grant for the Plaintiff
No appearance by or on behalf of the Defendants
Judgment:
22 March 2018
JUDGMENT OF GORDON J
This judgment was delivered by me on 22 March 2018 at 4 pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors: Rainey Law, Auckland
PERRY v O’NEILLS BUILDING REMOVALS LTD (IN LIQ) [2018] NZHC 503 [22 March 2018]
Introduction
[1] The plaintiff, Brenda Perry, worked hard and saved hard in order to make her dream of having a modest home on land she owned (the property) on Waiheke Island, a reality.
[2] On 16 July 2016, Ms Perry entered into a contract with the first defendant, O’Neills Building Removals Ltd (O’Neills), for the sale of a house at 80 Anzac Street, Takapuna (the house) by O’Neills to Ms Perry, for O’Neills to transport the house across Auckland Harbour to the property on Waiheke Island, and for O’Neills to re- site the house there. This was going to be Ms Perry’s dream home.
[3] The house (along with three others) was situated on land in Takapuna owned by the third defendant, Auburn Developments Ltd (Auburn). Auburn had plans to build an apartment block on the site (the development site) and therefore needed to clear the houses off the land. Auburn sold two of those houses to O’Neills. One of those was the house purchased by Ms Perry from O’Neills.
[4] Ms Perry’s case is that O’Neills committed numerous breaches of the contract she signed with them. She also says that O’Neills misled her, as did the second defendant, Jeremy O’Neill, a director and shareholder of O’Neills. She says Auburn misled her as well.
[5] As a result of O’Neills’ alleged breaches, Ms Perry cancelled the contract. The house was never delivered to the property on Waiheke Island.
[6] The hearing proceeded before me by way of formal proof, the three defendants having been debarred from defending the proceeding by failing to comply with unless orders made in relation to discovery.
Ms Perry’s claims
[7]In her amended statement of claim, Ms Perry pleads five causes of action:
(a)Breach of contract by O’Neills;
(b)Misleading and/or deceptive conduct in breach of s 9 of the Fair Trading Act 1986 (FTA) by Mr O’Neill;
(c)Misleading and/or deceptive conduct in breach of s 9 of the FTA by O’Neills;
(d)Party to misleading and/or deceptive conduct in breach of s 9 of the FTA by Mr O’Neill; and
(e)Misleading and/or deceptive conduct in breach of s 9 of the FTA by Auburn.
Liquidation of O’Neills
[8]There is a preliminary matter.
[9] O’Neills was placed into liquidation on 17 November 2017 by special resolution of its two shareholders, Mr O’Neill and Ms Joyce. In fact, O’Neills has not traded since July 2017, although that fact was not disclosed to Ms Perry until the liquidator published his first report on 24 November 2017.
[10] The liquidator is James Hogg. Ms Grant, who appeared for Ms Perry, wrote to Mr Hogg on 12 February 2018 to seek his consent as liquidator to Ms Perry continuing her proceeding against O’Neills for the formal proof hearing. Ms Grant followed up that letter with an email dated 20 February 2018. Mr Hogg replied on 26 February 2018 by email stating that he did not give consent. His email continued:
… There are no resources from which to get proper legal opinion on the matter and therefore I cannot commit to further expenditure and it would be unfair on other unsecured creditors.
It is most likely that there will be no distribution and thus far there are no substantial realisable assets. I would not like to give Ms Perry false hope.
[11] In the absence of consent from the liquidator, Ms Perry seeks an order from the Court granting her leave to continue her proceeding under s 248(1)(c) of the Companies Act 1993, which provides:
248 Effect of commencement of liquidation
(1)With effect from the commencement of the liquidation of a company,—
…
(c)unless the liquidator agrees or the court orders otherwise, a person must not—
(i)commence or continue legal proceedings against the company or in relation to its property; or
…
[12] Ms Grant submits that a judgment of the Court will constitute proof of the amount of Ms Perry’s claim as an unsecured creditor in the liquidation. Her status as an unsecured creditor in the liquidation will not change; the advantage is merely that she will have crystallised her losses.
[13] In Hsu v Moore Stephens Markhams Ltd,1 Cooper J set out the principles that are relevant to such an application by reference to an earlier judgment of Master Faire:2
[25] … That company is now in liquidation and as such, proceedings may only be commenced with leave of the Court. In Fisher v Isbey, Master Faire identified six principles to be applied in deciding whether to grant leave, those principles are:
(a)Creditors should be treated equally;
(b)No creditor should, by the bringing of proceedings, be able to gain an advantage over other creditors;
(c)The assets of the company should not be dissipated in wasteful litigation;
(d)The onus is on the party seeking leave;
(e)The claim should not be clearly unsustainable; and
(f)The Court must determine whether it is appropriate to determine the claim under s 302 of the Companies Act 1993.
[26] Generally, claims that will be granted leave are claims that are necessary to establish parties entitlement under the liquidation, which cannot adequately be dealt with in any other way, which are meritorious and which do not waste the assets of the company unnecessarily.
1 Hsu v Moore Stephens Markhams Ltd [2014] NZHC 961.
2 Hsu v Moore Stephens Markhams Ltd, above n 1; citing Fisher v Isbey (1999) 13 PRNZ 182 (HC) at [19] and [23].
(Citations omitted)
[14] I consider that this is a case in which it is appropriate to grant leave to Ms Perry to continue her proceeding for the following reasons:
(a)Ms Perry’s claim is necessary to establish her entitlement under the liquidation and cannot adequately be dealt with in any other way;
(b)Her claim is meritorious;3
(c)The assets of O’Neills will not be dissipated by wasteful litigation or even the cost of mounting a defence given that the hearing process is by way of formal proof. No costs will be incurred by the liquidator in defending the proceeding; and
(d)Obtaining a judgment will allow Ms Perry to crystallise her claim as an unsecured creditor in the liquidation. A judgment will not give her any greater priority or change her status as an unsecured creditor. There is therefore no effect on other creditors in the liquidation.
[15]Leave is accordingly granted to Ms Perry to continue with this proceeding.
Factual background
[16] I take part of the following summary of the key background facts from the submissions of Ms Grant. The submissions accurately summarise the three affidavits Ms Perry has filed. The first is a detailed affidavit sworn 20 June 2017 which annexes emails, other correspondence and photographs of the extensive damage to the house. The second and third are updating affidavits sworn 8 August 2017 and 27 February 2018 respectively.
[17] O’Neills was a “husband and wife” company whose principal business was moving and relocating houses. The business was run and largely conducted by
3 As recognised by Downs J in an interlocutory judgment dated 30 August 2017: Perry v OʼNeills Building Removals Ltd [2017] NZHC 2060 at [9] and [28].
Mr O’Neill, with back office tasks and communications carried out from time to time by Mr O’Neill’s partner, Lois Joyce. At all material times, Mr O’Neill and Ms Joyce were the sole directors and shareholders of O’Neills.
[18] Auburn is a property developer. Auburn owned land and four houses located on that land at 74, 76, 78 and 80 Anzac Street, Takapuna. The four houses had been fully renovated in 2012, in the first season of “The Block”, a television series. Auburn intended to dispose of and remove the houses to make way for its construction of a 92-unit apartment complex on the development site.
[19] To that end, Auburn contracted with O’Neills in May 2016 to allow O’Neills to sell and remove the two houses at 74 and 80 Anzac Street. O’Neills advertised the houses for sale on Trade Me. Ms Perry saw the advertisement in early July 2016 and went to view the houses on 5 July 2016. She liked the house at 80 Anzac Street.
[20] Over the period of 10 days from 5 to 15 July 2016 (as she was due to leave New Zealand for business on 16 July 2016), Ms Perry set about doing due diligence. That included, on 7 July 2016, a visit with Mr O’Neill to the property on Waiheke Island to check the suitability of the section and access for possible relocation of the house.
[21] Ms Perry also had a number of telephone conversations with Mr O’Neill to ask specific questions about the relocation of the house to Waiheke Island, including costs and possible temporary storage arrangements prior to the property being ready. Necessary Auckland Council consents were going to take some time to obtain.
[22] Arrangements for temporary storage of the house was a key topic of discussion, as Ms Perry was told by Mr O’Neill subsequent to her first viewing of the house that it might have to be removed as soon as 1 August 2016, or at least sometime in August 2016, because development was due to start on the development site.
[23] In other words, it was implicitly made clear to Ms Perry by O’Neills and Mr O’Neill that Auburn’s position was that the house would have to be moved before
work started on the development site and Ms Perry expected no less in terms of there being no risk of damage to the house.
[24] During her viewings and discussions with O’Neills and Mr O’Neill, it was at all times made clear to Ms Perry that anyone considering purchasing the house needed to be aware of this aspect and needed to be “ready to go” to have the house moved off the development site when required.
[25] Ms Perry investigated temporary storage possibilities on Waiheke Island but did not find anything suitable. Mr O’Neill told her that he would be able to find a yard in Auckland somewhere, although Waiheke Island was preferable. As Ms Perry was scheduled to be out of New Zealand between 16 July 2016 and 7 August 2016 on business, she discussed with Mr O’Neill the possibility that, if she was to go ahead with the contract, the house not be moved before 12 August 2016. This would allow time for Ms Perry to make the necessary arrangements upon her return, such as insurance and also to be present for the house move. This ended up being noted in the special conditions of the contract.
[26] Ms Perry signed the contract on 16 July 2016 (although it is dated 15 July 2016). Pursuant to that contract, Ms Perry was to buy the house, and O’Neills agreed to sell it to her. O’Neills also agreed to deliver and install the house on the property on Waiheke Island.
[27] In accordance with the contract, Ms Perry paid O’Neills half the contract price at the outset. She paid $89,000 on or about 15 July 2016. There was to be a progress payment of $71,200 immediately prior to the house being moved to the property and the final $17,800 was to be paid immediately before the lowering of the house. These two latter amounts were not paid for reasons which will become apparent.
[28] Ms Perry had been told by Mr O’Neill that Auburn would definitely require the house to be removed from the development site in the immediate future. In other words, this would occur before the property on Waiheke Island would be ready. As a consequence, a secure storage site in Ranui was identified by O’Neills as a back-up to
any temporary storage site Ms Perry could find on Waiheke Island. This is also referred to as a special condition of the contract.
[29]The house was not moved during the time Ms Perry was absent overseas.
[30] After her return, and in the period between 7 and 27 August 2016, in telephone discussions with O’Neills (with Mr O’Neill and sometimes Ms Joyce), they advised that there was now not the urgency on the part of Auburn to move the house in August 2016. Ms Perry says that both she and O’Neills were happy with this as there was no benefit to her in the house moving to an interim storage site.
[31] From August 2016 onwards, in order to fulfil what was required of her to enable the contract to be performed by O’Neills, Ms Perry proceeded to engage professionals and pay substantial costs and disbursements necessary to obtain resource consent and building consent required for the house to be re-sited on the property, and for the land to be prepared to accommodate the house.
[32] Those costs and disbursements include, but are not limited to, amounts paid to a draftsman, an engineer, a planning consultant, Auckland Council, ecologists, an arborist, surveyors, and transport costs between Waiheke Island and Auckland. The costs totalled $49,851.43 as at the date of the hearing.
[33] However, what was unknown to Ms Perry was that Auburn had given “some sort of security” over the house. She first heard a suggestion to that effect in January/February 2017. Then, in a letter dated 23 February 2017, solicitors acting for O’Neills wrote to Ms Perry and advised that Auburn had advised O’Neills that it was using its best endeavours to obtain a release of the security over the house by 15 March 2017.
[34] Ms Perry also discovered in late 2016 that the house had suffered damage. Beginning in October 2016, the house had suffered damage on the development site, firstly through unknown causes but later owing to construction work commencing on- site in the vicinity of the house.
[35] Ms Perry first saw this damage on 10 October 2016 when she was driving by the house. She was shocked to discover that the bricks on the house had been removed and building work was ongoing around the house. Ms Perry had not been informed.
[36] From that date, Ms Perry tried unsuccessfully to have O’Neills take appropriate steps to secure and protect the house from further damage. They did not do so but told her that “Alastair, the developer would do so”.
[37] The damage to the property up to April 2017 included, but was not limited to, the following:
(a)The front deck was removed;
(b)There was water damage to the kitchen unit as a result of a water leak from water mains;
(c)Railings from inside the back deck were removed;
(d)Plywood was put on the house by Auburn without Ms Perry’s knowledge;
(e)The carport was demolished;
(f)A vanity unit in the en-suite was smashed and on the floor;
(g)The meter board was dented and the door knocked off;
(h)A plywood corner piece was broken off at the time large machinery was working close to the house;
(i)Lights were torn out of the ceiling in four areas of the house;
(j)The kitchen tap and under sink equipment were stolen;
(k)The lock barrel of the back door was drilled out;
(l)The back deck was removed contrary to a special condition of the contract;
(m)There were exposed areas of the house, leading to plywood deterioration over the month; and
(n)The brick foundations were exposed.
[38] The photographs annexed to Ms Perry’s first affidavit graphically demonstrate the damage referred to in [37] above.
[39] By 21 April 2017, despite repeated requests by Ms Perry to both O’Neills and Mr O’Neill, they had failed or refused to uplift the house from the development site, which was by then a construction zone. Ms Perry had seen large machinery working near the house.
[40] Despite Ms Perry’s efforts to fix a removal date, O’Neills did not provide one. Frustrated by the delay and concerned about the damage to the house, Ms Perry issued proceedings on 21 April 2017.
[41] On 29 April 2017, O’Neills loaded the house onto a trailer. On 10 May 2017, O’Neills relocated the house to a storage yard in Ranui. From then, the house suffered further extensive damage in part from it not being watertight. Again, the extent of the damage is well-demonstrated by photographs annexed to Ms Perry’s affidavit.
[42] On 20 June 2017, Ms Perry cancelled the contract because of the effect of the failures, misleading conduct and breaches of their obligations by O’Neills and Mr O’Neill. That conduct made it clear to Ms Perry that O’Neills did not intend to complete performance of the contract.
[43] At the time Ms Perry cancelled the contract, she also sought undertakings from O’Neills and Mr O’Neill regarding protection of what remained of the house and repayment to her of her deposit of $89,000. No undertakings were given and no repayment has been made.
[44] On 17 August 2017, Downs J heard a pre-trial application for relief under s 9 of the Contractual Remedies Act 1979. Ms Perry sought an order for repayment of her deposit and other monies I have referred to which she spent carrying out her obligations under the contract with O’Neills. The case for Ms Perry before Downs J was that the validity of the cancellation of the contract was beyond dispute, and it was just and practicable for the Court to make a pre-trial order. However, O’Neills contested factual issues which it said needed to be determined at trial. While Downs
J observed in his judgment that Ms Perry’s case appeared to be strong,4 and that his sympathy rested with Mrs Perry,5 he held that matters needed to await trial.
[45] But, as things turned out, and as already noted, the hearing proceeded before me by way of formal proof as a result of all defendants failing to comply with unless orders in relation to discovery.
Breach of contract by O’Neills – first cause of action
[46] The amended statement of claim pleads seven breaches of contract. At the hearing, Ms Grant focused on four breaches.
[47] The first is the breach of an implied term by O’Neills to move the house within a reasonable time (the contract was signed on 16 July 2016 and the house was not moved until 10 May 2017).
[48] Ms Perry relies on an oral agreement that the house would be moved as soon as practicable after Ms Perry requested its removal, but before any such request if Auburn directed it be removed in order to commence construction on the development site. In particular, it was impliedly agreed that the house would be removed prior to any construction work commencing on the development site.
[49] The traditional test concerning the implication of a term into a contract was set out in BP Refinery (Westernport) Pty Ltd v Shire of Hastings.6 As the Court of Appeal explained in Devonport Borough Council v Robbins, the proposed term must be:7
… reasonable and equitable; necessary to the business efficacy of the contract, so that the contract would not be effective without it; so obvious that it goes without saying; capable of clear expression; and does not contradict any express term of the contract …
[50]The Privy Council in Attorney-General of Belize v Belize Telecom Ltd
subsequently stated that the only question is what the instrument read as a whole
4 Perry v O’Neills Building Removals Ltd, above n 3, at [9].
5 At [28].
6 BP Refinery (Westernport) Ltd v Shire of Hastings (1977) 180 CLR 266 (PC) at 283.
7 Devonport Borough Council v Robbins [1979] 1 NZLR 1 (CA) at 23.
against the relevant background would reasonably be understood to mean,8 and noted that the court has no power to improve upon the instrument or make it fairer or more reasonable.9 The steps from BP Refinery are not to be treated as independent tests which must each be surmounted, but rather a collection of ways in which judges have expressed the central idea that the proposed implied term must spell out what the contract actually means.10
[51]The New Zealand Supreme Court adopted the Belize Telecom approach in
Nielsen v Dysart Timbers Ltd:11
[25] … When there is a suggestion a term should be implied in the case of a bilateral transaction, the question is what a reasonable person would consider both parties must have meant to happen in circumstances not expressly addressed by the contract. The conventional concepts (officious bystander and business efficacy) are built on that underlying premise …
[52] Which test is to be preferred has, however, been left open.12 I note however, that in Ward Equipment Ltd v Preston, Kós P stated that he did not think the correct approach in New Zealand needed to be viewed as uncertain.13 He commented:
[94] … Belize Telecom does not alter the fundamental point that implication is not to be deployed to improve a contract, but simply to ascertain the meaning all parties intended the contract to bear. The officious bystander, rather abruptly dismissed by Lord Hoffman in Belize Telecom but reinstated by Lord Neuberger in Marks & Spencer, may be called on still where a gap has been identified to tell us what the parties would have said they meant. Importantly, the familiar and useful five conditions for implication in BP Refinery Pty Ltd v Shire of Hastings, much loved by New Zealand contract lawyers (and by association, the New Zealand commercial community), remain applicable … Belize Telecom suggests BP Refinery does not provide a series of essential independent tests, but simply a collection of methods to assess contractual meaning. In New Zealand for the foreseeable future the conditions nominated in BP Refinery — best viewed as guidelines — will remain a prominent part of analysis where the construction advanced by a litigant involves a sufficiently substantial change to the express contractual words as to trigger the implication of a term.
8 Attorney-General of Belize v Belize Telecom Ltd [2009] UKPC 10, [2009] 1 WLR 1988 at [16].
9 At [21].
10 At [64].
11 Nielsen v Dysart Timbers Ltd [2009] NZSC 43, [2009] 3 NZLR 160. See also Mobil Oil New Zealand Ltd v Development Auckland Ltd [2016] NZSC 89, [2017] 1 NZLR 48.
12 BDM Grange Ltd v Trimex Pty Ltd [2017] NZCA 12 at [67]; Ward Equipment Ltd v Preston [2017] NZCA 444.
13 Ward Equipment Ltd v Preston, above n 12, at [84].
[53] As to a ‘reasonable time’, it is a fact-specific assessment. It must be determined by reference to all the circumstances of the case. As Asher J stated in Cemix Ltd v Flowcrete Asia SDN BHD:14
[48] It is trite law that if no time is stipulated for the performance of an obligation in a contract, generally that obligation must be performed within a reasonable time …
[54] Ms Perry’s evidence summarised at [22] to [25] and [28] satisfies me that it was an implied term that O’Neills would move the house within a reasonable time and that there was a breach of that term by O’Neills.
[55] For the second breach, Ms Perry also relies on an implied term at [48] above. She says there was a failure by O’Neills to move the house off the development site before construction work started, thereby allowing the house to be damaged by construction work. Ms Perry’s evidence satisfies me that this was also an implied term and that there was a breach of this term by O’Neills.
[56] For the third breach, Ms Perry relies on cl 15 of the special conditions of the contract which provides:
15.Should Jeremy O’Neill be unable to commence or complete this house removal project for any reason on behalf of O’Neills Building Removals Ltd, then the agreement may be cancelled at the option of Brenda by notice to O’Neills or whomever appropriate and all monies paid by Brenda to O’Neills Building Removals Ltd immediately refunded to her.
[57] Ms Perry cancelled the contract on 20 June 2017. Despite her requests, the deposit of $89,000 has not been refunded.
[58] As at the date of cancellation, despite strenuous efforts on the part of Ms Perry, Mr O’Neill had demonstrated, on behalf of O’Neills, that he was unable to complete the house removal project. I refer to the following:
(a)The damage to the house described earlier in this judgment;
14 Cemix Ltd v Flowcrete Asia SDN BHD HC Auckland CIV-2006-404-1537, 2 April 2008 at [48],
(b)In the period October 2016 to November 2016, the house move according to O’Neills was always about to happen. Ms Perry was told in phone calls with Ms Joyce that “after Jeremy [O’Neill] finishes current job he is on, he will go to Takapuna”;
(c)When Ms Perry emailed O’Neills sending photographs to show them the condition of the house upon her visit to the Ranui site and to express her concern yet again, the only response was, “Did [she] have permission to be on site?”;
(d)The condition of the house deteriorated significantly on the Ranui site and Ms Perry advised O’Neills of that. Ms Perry tried desperately at times between October 2016 up until the date of cancellation, to get appropriate assurances and actions from O’Neills, Mr O’Neill and Ms Joyce that the house was protected from damage, and available to be moved and installed on her property in accordance with the contract;
(e)In response, Ms Perry received nothing but lack of communication. When she did receive communications, they were misleading and untrue. Generally, there was also a lack of any appropriate action. There were failures or refusals to take the steps needed to protect and preserve the house, and to complete or alter the contract as it was originally agreed and intended;
(f)The effect of the failures, misleading conduct and breaches left Ms Perry in a position where, from the serious and wide-ranging damage to the house, it was apparent that O’Neills did not intend to complete performance of the contract; and
(g)There were no assurances by O’Neills, Mr O’Neill or Ms Joyce that O’Neills would fix the damage and meet the costs of doing so.
[59] As at the date of Ms Perry’s first affidavit, she was 59 years old and her evidence is that she does not have unlimited means. The opportunity that she believed
she had secured in July 2016 to acquire the house and have it installed on the property on Waiheke Island for her was “a dream come true”. She could not otherwise afford to build a similar 120 square metre house there and the house had been fully renovated just four years earlier in “The Block”. For that reason, she tried everything she could think of to protect the house and to try and persuade O’Neills and Mr O’Neill to do likewise, and to cooperate with her to complete the contract.
[60] I am satisfied that the evidence establishes that Mr O’Neill was not able to complete the house removal project on behalf of O’Neills. Ms Perry therefore had the option, under cl 15, to cancel the contract. Having done so, O’Neills then breached cl 15 by failing to refund the $89,000 that Ms Perry paid to O’Neills on the signing of the contract.
[61] The fourth breach relied on by Ms Perry is a failure to keep the house watertight. She relies on a combination of two terms of the contract as follows:
a)O’Neill’s Building Removals are responsible to relocate the building in a professional work-like manner, giving the client the best possible attention and service throughout this contract; and
b)Special condition
5 Also included in the purchase price is:
i)All coverings in order to keep the house watertight.
[62] Further, in their statement of defence dated 29 May 2017, O’Neills and Mr O’Neill acknowledged that they were responsible for keeping the house watertight from the time O’Neills started work on the house, which was from October 2016 onwards.
[63] Ms Perry’s evidence is that it was apparent from her inspections of the house at Ranui, first during May 2017, that the house was clearly not watertight. On 25 May 2017, Ms Perry emailed O’Neills advising it that water was seen during the house inspection of 24 May 2017. The rain was entering three rooms – the master bedroom, kitchen and middle bedroom.
[64] On 2 June 2017, when Ms Perry went to the Ranui site, she discovered that the kitchen ceiling had collapsed. She inspected the house the following day and water was visible on both the kitchen floor and master bedroom floor, showing that water was still getting in.
[65] On 5 June 2017, Ms Perry visited the site again. At that point, the master bedroom ceiling had collapsed. By 7 June 2017, the house was still not watertight and there was fresh water evident on the floors. On 10 June 2017, Ms Perry saw new ceiling collapses in the lounge area where, in previous days, “bubbling” had been seen and water could be seen dripping from the ceiling to the floor. More debris had also fallen in the area of the collapsed kitchen ceiling, with water visible dripping onto the bench and floor. Further collapses were also visible in the master bedroom, with insulation on the floor fallen from the ceiling. There was a significant gap in the roof tarpaulin through which clear daylight could be seen.
[66] I find that the two terms in [61] above together created an obligation on the part of O’Neills to keep the house watertight or that it was an implied term that O’Neills had an obligation to keep the house watertight. I am further satisfied that O’Neills breached the contractual or implied term.
[67] Ms Perry has established on the balance of probabilities that O’Neills breached the contract in the four respects discussed above.
Losses/damages – quantum
[68] At the hearing, Ms Perry for pragmatic reasons abandoned her claim for damages of $329,506, being the difference in value of the property as it stands, as opposed to its value with the house located on it.
[69] Ms Perry seeks $89,000, being the deposit paid by her to O’Neills upon the signing of the contract. That sum has not been repaid to her. She is entitled to that.
[70] She also seeks the further sum of $49,851.43, being the total of the amounts paid by her in performance of her obligations under the contract in preparation for the delivery of the house to the property. She is entitled to that.
[71] Ms Perry seeks general damages of $35,000. General damages are a form of compensatory damages.15 They compensate for losses that cannot be objectively quantified in monetary terms.16 They cover, for example, pain and suffering, indignity and humiliation, and mental distress.
[72] Ms Perry says that she has suffered considerable upset, worry and distress at a point in time in her life when she had saved hard in order to create her dream home. She says it is not an exaggeration to say that she has been personally devastated by being so blatantly let down and misled over so many things for so long to the point where she increased her general damages claim in the amended statement of claim in relation to O’Neills and Mr O’Neill from $25,000 to $35,000.
[73] Where the cause of action is a breach of contract, the general rule is that damages for injured feelings, upset and annoyance are not recoverable.17 However, where substantial inconvenience has directly resulted from a breach of contract, damages can be recovered for the mental distress incurred.18 Nevertheless, as the Court of Appeal recently commented in Williams v Craig:19
[32] … Assessment of compensatory damages is by its very nature a subjective exercise. But it must be kept within reasonable bounds.
[74] I am satisfied that Ms Perry is entitled to an award of general damages for the mental distress she has suffered. The substantial inconvenience to Ms Perry, which has been detailed above, has directly resulted from the breach of the contract by O’Neills.
[75] In Mikitasov v Collins (No 4), Courtney J gave general damages for a breach of a vendor warranty, stating that:20
15 Williams v Craig [2018] NZCA 31 at [32].
16 Weaver v HML Nominees Ltd [2015] NZHC 2080 at [175].
17 Edwards v AA Mutual Insurance Co Ltd (1985) 3 ANZ Insurance Cases 60-688 (HC) at 79,174.
18 Edwards v AA Mutual Insurance Co Ltd, above n 17. See also Juhasz v Medical Life Assurance Society Ltd [2017] NZHC 2866 at [236]; Jeremy Finn, Stephen Todd and Matthew Barber Burrows, Finn and Todd on the Law of Contract in New Zealand (6th ed, LexisNexis, Wellington, 2018) at [21.2.3(f)(iii)].
19 Williams v Craig, above n 15.
20 Mikitasov v Collins (No 4) (2011) 11 NZCPR 617 (HC).
[34] Mr Mikitasov also seeks general damages. He has given evidence about the stress and upset that he and his family have suffered as a result of the defects to the house and the work required to rectify them. In recent times this Court has recognised through an award of general damages the distress and anxiety suffered by occupants of leaky homes, with awards of $20,000- 25,000 …
[76] I also refer to Penney v Ng,21 where Brewer J reviewed awards in similar cases concerning defects in homes. In that case, which concerned a leaky home, Brewer J awarded a sum of $20,000 as general damages.
[77]I consider the amount of $25,000 is appropriate in this case.
[78] Ms Perry also seeks interest at the Judicature Act 1908 rate on all sums paid from the date of payment to 28 February 2018 (except for loss of use of Ms Perry’s deposit monies where interest is already included in damages). Ms Perry is entitled to interest. I award interest at the relevant Judicature Act rate for the further sum of
$49,851.43 referred to in [70] above.
[79] Finally, Ms Perry seeks scale costs and disbursements of $44,292.84 in accordance with the schedule prepared by Ms Perry and which is annexed to this judgment. I award costs and disbursements as sought.
Misleading and/or deceptive conduct (FTA) by Mr O’Neill – second cause of action
[80] Ms Perry brings a claim under s 9 of the FTA against Mr O’Neill personally. Ms Grant submits that at all material times Mr O’Neill was a director and shareholder of O’Neills, and that he was the alter ego of the company who made key decisions and controlled the company. Ms Grant submits that this is apparent from all of his conduct as described in Ms Perry’s affidavit (and which I have referred to in this judgment).
[81]It is necessary for Ms Perry to establish that:22
21 Penney v Ng [2014] NZHC 1486 at [62]-[65].
22 Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28]-[29].
(a)The conduct and/or statements and/or silence on the part of Mr O’Neill was capable of misleading or deceiving Ms Perry, i.e. would a reasonable person in Ms Perry’s situation, with the characteristics as known to Mr O’Neill or ought to have been known to him, have been likely to have been misled or deceived; and
(b)Ms Perry’s loss was caused by Mr O’Neill’s conduct and/or statements and/or silence.
[82] The misleading and/or deceptive conduct Ms Perry relies on occurred both before the contract was entered into on 16 July 2016 for the purchase and relocation of the house (initial conduct) and after the contract was signed (subsequent conduct).
[83]The initial conduct by Mr O’Neill is said to be as follows:
(a)He advertised the house for sale on Trade Me and invited Ms Perry, amongst others, to make an appointment to view the house if she/they were interested in purchasing it;
(b)He offered and agreed to sell the house to Ms Perry;
(c)He offered and agreed for O’Neills to uplift the house from the development site, transport it to Waiheke Island and re-site it on the property for Ms Perry’s benefit (via an interim storage site if necessary);
(d)He arranged for O’Neills to enter into the contract with Ms Perry; and
(e)He expressly or impliedly agreed that O’Neills would uplift the house from Auburn’s development site without undue delay, prior to it sustaining damage from any cause and prior to any construction work commencing on the development site.
[84] Mr O’Neill’s subsequent conduct which is said to be misleading and/or deceptive is as follows:
(a)Refusing or failing to warn Ms Perry that Mr O’Neill had been told by Auburn or its agents that permission of a security holder might be needed before the house could be moved off the development site. In particular, on 20 November 2016, Mr O’Neill confirmed to Ms Perry that no-one else owned the house, other than O’Neills and her;
(b)Advising Ms Perry that he and O’Neills would compensate her for all the damage that had occurred to the house at the development site but then failing to do so;
(c)Refusing to disclose to Ms Perry the terms of the contract which O’Neills had with Auburn on the grounds of confidentiality;
(d)Indicating from time to time that he or O’Neills would take relevant action against Auburn but then failing to do so;
(e)Advising Ms Perry that the Ranui storage site was secure for the storage of the house from 10 May 2017;
(f)Advising Ms Perry that the house, when moved to Ranui, would be placed on piles but then failing to do so for approximately five weeks from 10 May to 13 June 2017;
(g)Telling Ms Perry that the house was made watertight when stored at Ranui when the house was sustaining damage from water ingress;
(h)Refusing for around five weeks to accede to Ms Perry’s reasonable requests to make the house watertight and to provide related assurances that he and O’Neills would be responsible to remediate the further damage to the house that had occurred following its removal from the development site; and
(i)Failing or refusing to commit to/confirm dates for barge bookings to transport the house to the property on Waiheke Island.
[85] Ms Perry says this subsequent conduct caused her to make the various wasted payments from August 2016 onwards in preparation for the house being transported to Waiheke Island and installed on the property. Those payments are referred to at
[32] above.
Discussion
[86]Section 43(1)(a) of the FTA provides:
43 Other orders
(1)This section applies if, in proceedings under this Part or on the application of any person, a court or the Disputes Tribunal finds that a person (person A) has suffered, or is likely to suffer, loss or damage by conduct of another person (person B) that does or may constitute any of the following:
(a)a contravention of a provision of Parts 1 to 4A (a relevant provision):
[87] Section 43(2) provides that the Court may make any of the orders set out in s 43(3) against any person found liable under the Act. The orders available in s 43(3) include an order directing the refund of money by “person B” to “person A”23 and an order directing “person B” to pay “person A” the amount of any loss or damage.24
[88] Ms Perry alleges that Mr O’Neill is liable under s 43(1)(a) himself for a contravention of s 9 of the FTA.
[89]Section 9 provides:
9 Misleading and deceptive conduct generally
No person shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
[90] The first issue which arises is whether Mr O’Neill, as a director of the company, can be primarily liable on the basis that a director is independently engaged “in trade”. In Newport v Coburn,25 the Court of Appeal stated:
23 Section 43(3)(e).
24 Section 43(3)(f).
25 Newport v Coburn (2006) 2 NZCCLR 1126 (CA).
[88] The question of the concurrent primary liability of the officers of the company and the company itself is a matter of some controversy. As we indicated earlier, we consider ourselves bound by the decisions of this Court in Kinsman and Specialised Livestock, both of which decided that a director of a company can be primarily liable along with the company itself on the basis that the director is independently engaged “in trade”. That conclusion is based on a particular interpretation of s 45(2), which relevantly provides:
(2) Any conduct engaged in on behalf of a body corporate —
(a)By a director, servant, or agent of the body corporate, acting within the scope of that person's actual or apparent authority;
…
shall be deemed, for the purposes of this Act, to have been engaged in also by the body corporate.
[88] As this Court noted in Kinsman at [19], the use of the word “also” suggests liability under the Fair Trading Act for both the director and company where the director is acting within his or her actual or apparent authority. Issue can be taken with that conclusion for the reasons given by Professor Watts, but we proceed on the basis that it correctly states the law.
[89] Both Kinsman and Specialised Livestock were cases involving directors who were intimately involved in the running of a company …
[91] In a subsequent decision of a full court of the Court of Appeal in Body Corporate 202254 v Taylor,26 the Court also considered the position of a director’s personal liability under the FTA. Mr Taylor had applied to strike out the claims against him and the decision on that application went on appeal to the Court of Appeal. There are three separate judgments.
[92] The joint judgment of William Young P and Arnold J identifies two possible approaches to s 9. One is that s 9 is not confined to the conduct of a person who is trading on his or her own account. The judgment refers to this as “the broad approach”.27 The opposing position is that where a director is not trading on his or her own account, he cannot have been engaged in trade. The judgment refers to this as the “narrow approach”.28 The judgment states:
[78] … Although both the broad and narrow approaches are tenable, we see no reason why we should depart from the broad approach given its
26 Body Corporate 202254 v Taylor [2008] NZCA 317, [2009] 2 NZLR 17.
27 At [68].
28 At [68].
congruity with the words of the statute, the most recent and authoritative Australian decision on similar legislation and, most significantly, the pattern of New Zealand authority, including judgments of this Court.
[93] In a joint judgment, Glazebrook and Ellen France JJ took a different view on the approach to the meaning of “in trade” in s 9. The judgment states: “We prefer the narrow approach, which confines s 9 to the conduct of a person trading on his or her own account”.29 However, the judgment left open a possibility for trial in that case as follows:
[121] In the present case, the appellant argues that on the facts Mr Taylor should be considered to be “in trade” regardless of whether the narrow or the broad approach to “in trade” is applied. Mr Rainey points to evidence which, the appellant says, suggests that Mr Taylor made it clear that he conducted his property development business through his companies and not the other way around. The matter is not pleaded in that way but we agree with the majority that these are issues to be determined at trial.
[94] There is no specific discussion of this issue in the judgment of Chambers J. But Chambers J adopted the reasoning of William Young P and Arnold J in relation to the FTA.30
[95] In Gilmour v Decisionmakers (Waikato) Ltd,31 Woolford J recognised the decision as authority for the proposition that a director of a company can be personally liable under the FTA for statements they make in the course of employment:
[88] … Taylor makes it clear that an employee may be personally liable under the Act for statements they make in the course of employment and no assumption of responsibility is required. Gloken Holdings Limited v The CDE Company Limited is also authority for the proposition that where a person is the manager or director and where the breach of the Fair Trading Act is theirs, they can be considered the “alter ego” of a company and will be personally liable. A director who participates directly in his or her company's business will not ordinarily be able to avoid liability under s 9 of the Act and such representations must be regarded as in trade for the purpose of the liability under s 9.
(Citations omitted)
29 At [101].
30 At [147].
31 Gilmour v Decisionmakers (Waikato) Ltd [2012] NZHC 298.
[96] I consider it is open to this Court to adopt the broad approach, namely that s 9 is not confined to the conduct of a person who is trading on his or her own account. In other words, Mr O’Neill may be found liable as a principal under s 9.
[97] Further, the possibility left open in the judgment of Glazebrook and Ellen France JJ at [121] of that judgment applies here. Mr O’Neill was conducting his house removal business through his company and not the other way around. The evidence is that O’Neills was essentially a “husband and wife operation”. Mr O’Neill was the sole director and one of two shareholders. Effectively, Mr O’Neill was using the company to conduct his house removal and relocation business.
[98] Liability under s 9 (even on the narrow approach) depends on the impugned conduct having been “in trade”.32
[99]“Trade” is defined in s 2(1) of the FTA as follows:
trade means any trade, business, industry, profession, occupation, activity of commerce, or undertaking relating to the supply or acquisition of goods or services to the disposition or acquisition of any interest in land
[100] I do not consider that there can be any argument that Mr O’Neill’s conduct in selling, removing and delivering houses, is anything other than “in trade”.
[101] It must then be determined whether Mr O’Neill’s conduct, in particular any of his statements to Ms Perry, was misleading or deceptive. If so, was loss caused by any such deceptive or misleading statements?
[102] The initial conduct was misleading and/or deceptive, or was likely to mislead and/or deceive Ms Perry, in that by his initial conduct Mr O’Neill represented that he either owned the house himself or he was acting as agent for O’Neills. Further, he purported to have full and unfettered authority to sell the house and enter into a contract to move the house off the development site, and re-site it on a property specified by Ms Perry when required by her and, in any event, prior to any construction
32 Body Corporate 202254 v Taylor, above n 26, at [69].
work commencing on the development site. I add that it does not matter whether or not Mr O’Neill knew the correct position regarding the security over the house.33
[103] In fact, the true position as to the ownership or authority to sell the house only became apparent to Ms Perry in January/February 2017. This was the first time she heard a suggestion that Auburn was raising capital against the house and had given some sort of security over it. On 10 February 2017, Ms Perry went to see Alastair Taylor (agent or representative of Auburn) at the office on the development site. Mr Taylor told Ms Perry that there were mortgagees with an interest in the house but indicated that that may change by the end of February 2017. He suggested to Ms Perry that the problem was because Auburn was seeking off-shore finance for the development. He said words to the effect that the house would not be moving off-site until that was secured, but best efforts to achieve that by 15 March 2017 were being made.
[104] Ms Perry then received a letter dated 23 February 2017 from solicitors who were then acting for O’Neills. That letter confirmed that the date for removal of the house had been delayed to accommodate Auburn’s funding arrangements. The letter further stated that Auburn had advised O’Neills that it was using best endeavours to obtain a release of the security over the house by 15 March 2017. The solicitors refused to disclose the terms and conditions of the agreement between Auburn and O’Neills.
[105] Mr O’Neill’s initial conduct induced Ms Perry to purchase the house, to enter into the contract with O’Neills, to pay the $89,000 deposit to O’Neills, and to incur other costs of $49,851.43 in anticipation of the house being transported to Waiheke Island and installed on the property.
[106] In relation to Mr O’Neill’s subsequent conduct, I find that the conduct and statements referred to in [84] were misleading and deceptive. As to causation, it is only necessary for conduct in breach of s 9 to be an effective cause.34 It does not have
33 Red Eagle Corp Ltd v Ellis, above n 22.
34 Red Eagle Corp Ltd v Ellis, above n 22, at [29].
to be the sole cause.35 In this case, the subsequent conduct also caused loss in that it contributed to Ms Perry continuing to make various payments from August 2016 onwards in preparation for the house being transported to Waiheke Island and installed on the property.
[107] Ms Perry has established a breach by Mr O’Neill of s 9 of the FTA on the balance of probabilities.
Losses/damages – quantum
[108] Ms Perry seeks judgment for the same sums against Mr O’Neill as sought against O’Neills.
[109] Ultimately, in terms of ss 43(2) and 43(3) of the FTA, I have a discretion as to whether or not to grant relief. Exercising relief is “a matter of doing justice to the parties in the circumstances of the particular case and in terms of the policy of the Act”.36
[110] Here, I have decided that an order granting relief under s 43(3)(e) and (f) is appropriate. Ms Perry is entitled to her deposit back, as well as the costs she incurred in reliance on the contract being completed.
[111]In terms of general damages, they may be awarded in claims under the FTA.37
[112] As to quantum of general damages, Ms Grant submits that the sum of $35,000 is in line with the cases referred to when inflation is taken into account.38 However, given my award of $25,000 against O’Neills, I consider the sum of $25,000 is appropriate.
35 Red Eagle Corp Ltd v Ellis, above n 22, at [29].
36 Goldsbro v Walker [1993] 1 NZLR 394 (CA) at 404.
37 AMP Finance NZ Ltd v Heaven (1997) 8 TCLR 144 (CA); Smythe v Bayleys Real Estate Ltd (1993) 5 TCLR 454 (HC); Cornfields Ltd v Gourmet Burger Co Ltd (2000) 9 TCLR 698 (HC); Hamid v England (2011) 12 NZCPR 844 (HC); Williams v Hammer Auctions NZ Ltd [1997] DCR 92 (DC).
38 AMP Finance NZ Ltd v Heaven, above n 37; Smythe v Bayleys Real Estate Ltd, above n 37; Cornfields Ltd v Gourmet Burger Co Ltd, above n 37; Hamid v England, above n 37; Williams v Hammer Auctions NZ Ltd, above n 37.
[113]I award the following in favour of Ms Perry against Mr O’Neill:
(a)$138,851.43, being the deposit of $89,000 and wasted expenditure of
$49,851.43 as reimbursement of Ms Perry’s losses.
(b)General damages of $25,000.
(c)Interest at the Judicature Act rate for the wasted expenditure of
$49,851.43 referred to in (a) above.
(d)Scale costs and disbursements of $44,292.84 in accordance with the schedule prepared by Ms Perry and which is annexed to this judgment.
Misleading and/or deceptive conduct (FTA) by O’Neills – third cause of action
Party to misleading and/or deceptive conduct (FTA) by Mr O’Neill – fourth cause of action
[114] Ms Grant submitted that in the event that the Court were to find in favour of Ms Perry on the first and second causes of action, then no decision was required on the third and fourth causes of action. I, accordingly, move on to consider the fifth cause of action.
Misleading and/or deceptive conduct (FTA) by Auburn – fifth cause of action
[115] Ms Perry also brings a claim under s 9 of the FTA against Auburn. In order to establish her claim, Ms Perry again needs to prove that:39
(a)The conduct and/or statements and/or silence by Auburn was capable of misleading or deceiving Ms Perry, i.e. would a reasonable person in her situation, with the characteristics as known to Auburn or ought to have been known to it, have been likely to have been misled or deceived; and
39 Red Eagle Corp Ltd v Ellis, above n 22, at [28]-[29].
(b)Under s 43 of the FTA, Ms Perry’s loss was caused by Auburn’s conduct.
[116]There is no doubt that Auburn was “in trade” for the purposes of the FTA.
[117] Ms Perry says that the misleading and/or deceptive conduct on the part of Auburn occurred between July 2016 and February 2017.
[118] I take into account the following evidence. First, Auburn allowed O’Neills to advertise publicly, and sell, the house for removal from the development site owned by Auburn or interests associated with Auburn. Auburn provided access for the open homes following the advertising on “Trade Me” by O’Neills.
[119] Next, Auburn allowed O’Neills to enter into the contract with Ms Perry for sale of the house and for removal of the house from the development site as soon as practicable. Ms Perry said it was implicitly made clear to her by Mr O’Neill that Auburn’s position was that the house would have to be moved before work started on the development site.
[120] Auburn further endorsed the position that the house had been sold to Ms Perry and could, in due course, be delivered into her possession. The evidence in this regard is first that on 10 October 2016, while Ms Perry was in the house on the development site, Mr Taylor came by and introduced himself. He gave Ms Perry a full set of keys for the house and his business card. Ms Perry had introduced herself as the one who had bought the house from O’Neills. Mr Taylor did not at any stage suggest to her that O’Neills was not entitled to sell the house to her. On the contrary, he treated Ms Perry as though she was indeed the purchaser and owner of the house, for example, by giving her the keys. Ms Perry’s evidence is that there was a brief discussion as to the date the house needed to be removed and she recalls that Mr Taylor indicated that it was soon, although no specific date was given.
[121] Later that afternoon, Ms Perry sent Mr Taylor a text thanking him for the keys and also so that he would have her contact information, having said to Mr Taylor that
she would do that. In response, Mr Taylor sent a text back saying, “Thanks Brenda let me know if you need any help with house”.
[122] On 12 October 2016, when Ms Perry was at the house to check on a leak in the kitchen that had been discovered two days earlier, Mr Taylor came by. After a brief discussion regarding the water leak, Mr Taylor asked Ms Perry to leave the site as the adjacent house, number 78, was being prepared for removal. Ms Perry said there was no discussion about the removal date for her house, but it appeared it would not be far away given that the development was proceeding.
[123] On that same day, Ms Perry sent a text to Mr Taylor in which she referred to her engaging a locksmith to secure the house. The text continued, “My only purpose in being there has been to protect my asset which from [an] insurance point [of] view i am liable for now that work began on it”. Mr Taylor responded the following day by text thanking Ms Perry for the update and he stated, “We have tightened the water meter so there is absolutely no water getting to the house”.
[124] I consider that Auburn’s conduct, in combination, was misleading and/or deceptive. By its conduct and statements, it represented and/or confirmed that O’Neills and/or Mr O’Neill had full and unfettered authority to sell the house and enter into a contract with Ms Perry to move the house off the development site, and re-site it on another property as specified by her.
[125] Auburn’s actions, in particular, handing Ms Perry the keys to the house in October 2016 and endorsing references to the house being “her house” and “her asset”, as well as its silence about any delay or reason why the house could not be removed from the site, encouraged her to incur costs in readiness for the house being shipped to the property and installed there. There was no hint in any of her dealings with Mr Taylor, Auburn’s representative, that there was any problem with the house being removed until it was too late, as she was by then out of pocket for the various expenses she incurred.
[126] Put simply, Ms Perry was misled into thinking that Auburn had no ongoing interest in the house, until early 2012.
[127] It is not necessary for Auburn to be held liable for breach of s 9, for Ms Perry to establish that Auburn specifically knew that she had contracted with O’Neills to buy and have the house removed, or that she was paying money to O’Neills under, or in connection with, that contract. But, in any event, the evidence establishes that Mr Taylor, acting as agent for Auburn, did in fact know at least by early October 2016 that Ms Perry had contracted to buy the house. The FTA targets misleading and deceptive conduct in trade generally and does not require the same direct link to losses as was required by the now repealed Contractual Remedies Act 1979.40 The causation test is much broader under the FTA. It is enough for liability to be sheeted home to Auburn, for Ms Perry to prove there was a “clear nexus” between Auburn’s misleading and deceptive conduct, and the losses incurred/expenditure by Ms Perry.41
[128] Further, in relation to causation (and as noted above in relation to Mr O’Neill), Ms Perry only need establish that Auburn’s conduct, in breach of s 9, was “an effective cause” of Ms Perry’s loss or damage.42
[129] In my view, Ms Perry has established that Auburn’s conduct, by its actions and its silence in the months between July 2016 when Ms Perry signed the contract with O’Neills and February 2017 when it first raised any ongoing interest by it or its mortgagee in the house that Ms Perry had bought from O’Neills, caused her loss.
[130] It is the totality and effect of Auburn’s conduct on Ms Perry that is relevant here. In July 2016, Ms Perry paid a 50 per cent deposit to O’Neills and then incurred preparation costs of close to $50,000 in readiness for the house being shipped to the property on Waiheke Island and being installed there. Ms Perry says that had she known that there was any fetter on her ability to take delivery of the house at a time that suited her, she would not have gone ahead with the purchase.
[131] Ms Perry has established a breach of s 9 of the FTA by Auburn on the balance of probabilities.
40 Section 345(1)(d) of the Contract and Commercial Law Act 2017 repealed the Contractual Remedies Act 1979.
41 Red Eagle Corporation Ltd v Ellis, above n 22, at [29].
42 Red Eagle Corporation Ltd v Ellis, above n 22, at [29].
Losses/damages quantum
[132]Ms Perry seeks, and I award her, the following against Auburn.
(a)$138,851.43, being the deposit of $89,000 and wasted expenditure of
$49,851.43 as reimbursement of Ms Perry’s losses.
(b)General damages of $25,000.
(c)Interest at the Judicature Act rate for the wasted expenditure of
$49,851.43 referred to in (a) above.
(d)Scale costs and disbursements of $44,292.84 in accordance with the schedule prepared by Ms Perry and which is annexed to this judgment.
Conclusion
[133] Ms Perry has succeeded against O’Neills in her claim for breach of contract (first cause of action) and against Mr O’Neill for breach of the FTA (second cause of action). In those circumstances, Ms Perry did not require the Court to consider the third and fourth causes of action.
[134] Ms Perry has also succeeded in her claim under the FTA against Auburn (fifth cause of action).
[135] I, accordingly, enter judgment for Ms Perry against O’Neills, Mr O’Neill and Auburn in relation to the first, second and fifth causes of action respectively.
Orders
[136]I make the following orders:
O’Neills
[137]I order that O’Neills pay Ms Perry the following sums:
(a)$89,000, being the deposit paid by her to O’Neills upon the signing of the contract;
(b)The further sum of $49,851.43, being the total of the amounts paid by her in performance of her obligations under the contract in preparation for the delivery of the house to her property;
(c)General damages of $25,000;
(d)Interest at the relevant Judicature Act rate on the further sum of
$49,851.43 referred to in (b) above; and
(e)Scale costs and disbursements of $44,292.84 in accordance with the schedule prepared by Ms Perry and which is annexed to this judgment.
Mr O’Neill
[138]I order that Mr O’Neill pay Ms Perry the following sums:
(a)$138,851.43, being the deposit of $89,000 and wasted expenditure of
$49,851.43;
(b)General damages of $25,000;
(c)Interest at the relevant Judicature Act rate on the further sum of
$49,851.43 referred to in (a) above; and
(d)Scale costs and disbursements of $44,292.84 in accordance with the schedule prepared by Ms Perry and which is annexed to this judgment.
Auburn
[139]I order that Auburn pay Ms Perry the following sums:
(a)$138,851.43, being the deposit of $89,000 and wasted expenditure of
$49,851.43;
(b)General damages of $25,000;
(c)Interest at the relevant Judicature Act rate for the wasted expenditure of
$49,851.43 referred to in (a) above; and
(d)Scale costs and disbursements of $44,292.84 in accordance with the schedule prepared by Ms Perry and which is annexed to this judgment.
[140] Although I have made individual awards against each of the three defendants, Ms Perry is only entitled to recover up to the maximum sum of $163,851.43, plus interest as specified and costs and disbursements also as specified.
Gordon J
Annexure
Item Description Daily Rate Number of Days Total 1 Commencement of proceeding by plaintiff $2,230.00 3 $6,690.00 3 Reply to first and second defendant’s statement of
defence
$2,230.00 0.8 $1,784.00 10 Preparation for first case management conference $2,230.00 0.4 $892.00 11 Filing memorandum for first
case management conference on 12 July 2017
$2,230.00 0.4 $892.00 13 Appearance at first case
management conference on 12 July 2017
$2,230.00 0.3 $669.00 21 Inspection of defendants’ documents $2,230.00 1.5 $3,345.00 22 Filing two interlocutory applications:
(i) for relief under s 9 of the Contractual Remedies Act (dated 20 June 2017); and
(ii) to vary or rescind judgment dated 4 September
2017
$2,230.00 1.2 $2,676.00 12 Appearance at first
mention/call over (Duty Judge list) on 22 June 2017
$2,230.00 0.2 $446.00 11 Filing memorandum dated 29 June 2017 for second
mention/call over on 12 July 2017
$2,230.00 0.4 $892.00 24 Preparation of written
submissions for interlocutory hearings (x 2)
$2,230.00 3 $6,690.00 25 Preparation by applicant of
bundle for hearing
$2,230.00 0.6 $1,338.00 26 Appearance at interlocutory hearings on 17 August 2017 (half day) and 25 September
2017 (one hour)
$2,230.00 0.75 $1,672.50 30 Plaintiff’s preparation of affidavits $2,230.00 2.5 $5,575.00 33 Preparation for formal proof hearing $2,230.00 3 $6,690.00 34 Appearance at hearing on 28
February 2018
$2,230.00 0.25 $557.50 29 Sealing judgment $2,230.00 0.2 $446.00 Total costs $41,255.00 Disbursements Filing initiating documents $1,350.00 Service of proceedings on O’Neills and Mr O’Neill $218.50 Service of proceedings on
Auburn
$172.50 Filing interlocutory applications (x 2) $1,000.00
Filing amended statement of claim $110.00 Certificate of title search fees $30.44 Photocopying costs for bundles for first interlocutory application (388 pages at 30
cents)
$116.40 Sealing fee for judgment $40.00 Total disbursements $3,037.84 Grand total $44,292.84
0
16
0