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Poplawski v Pryde

Poplawski v Pryde

Case [2013] NZCA 229 13 June 2013

Breach of Contract

Misrepresentation

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA555/2012
[2013] NZCA 229

BETWEEN	ZBIGNIEW JAN POPLAWSKI AND STEFAN DAVID POPLAWSKI Appellants
AND	THOMAS MCNEIL PRYDE First Respondent
AND	CRUICKSHANK PRYDE Second Respondent

Hearing:	7 May 2013
Court:	O’Regan P, Arnold and Ellen France JJ
Counsel:	P W Michalik for Appellants M E Parker and A J Nash for Respondents
Judgment:	13 June 2013 at 11 am

JUDGMENT OF THE COURT

AThe appeal is allowed in part.
BThe decision of the High Court dismissing the appellants’ claim for compensation under s 43 of the Fair Trading Act 1986 (the Act) is set aside.
CAn order is made under s 43(2)(d) of the Act directing the respondents to pay the appellants the sum of $175,000 plus interest at the rate set by s 87 of the Judicature Act 1908 from 28 July 2009 until the date of payment.
DThe respondents must pay the appellants 90 per cent of costs for a standard appeal on a band A basis plus 90 per cent of usual disbursements.
ECosts in the High Court should, in the absence of agreement between the parties, be set by that Court in the light of this judgment.
FThe liability of the respondents to pay the amounts referred to in C and D above is joint and several.

____________________________________________________________________

REASONS OF THE COURT

(Given by O’Regan P)

Table of Contents

Para No

Introduction  [1]
Issues  [4]
Facts  [6]
The email  [27]

Was it unreasonable for the appellants to rely on the
misleading email? [28]

The High Court approach [28]
The appellants’ argument [38]

Applying Red Eagle to the facts of the present case [51]

Was a breach of s 9 proved?  [51]
(a)Due diligence  [54]
(b)Knowledge of Mr Thow’s financial position  [57]
(c)Access to legal advice  [62]
(d)Conclusion – breach of s 9  [63]

Was the first respondent’s conduct the effective cause, or an
effective cause, of the appellants’ loss or damage? [64]

Contribution to loss  [67]
Conclusion  [73]
Costs  [74]

Introduction

This is an appeal from a decision of Whata J in which he dismissed a claim made by the appellants against the first respondent, Mr Thomas Pryde under s 9 of the Fair Trading Act 1986 (FTA), which deals with misleading and deceptive conduct in trade.[1] The appellants, Zbigniew Poplawski and Stefan Poplawski are father and son respectively. The High Court Judge referred to them as “Pop” and “Stefan” respectively, and we will do the same.
[1]Poplawski v Pryde [2012] NZHC 2011 [High Court judgment].
The allegation of misleading conduct in this case was centred on an email sent by Mr Pryde to a lawyer acting for the appellants, Mr Maarten Dirkzwager. The appellants said they relied on this email in making an advance of $350,000 to Mr Brendan Thow. The advance was not repaid and Mr Thow is bankrupt.
Whata J found that the email was capable of being misleading, but did not consider that a reasonable person in Stefan’s position would likely have been misled…

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 Poplawski v Pryde

Details

AGLC: Poplawski v Pryde [2013] NZCA 229
Case: [2013] NZCA 229
Decision Date: 13 June 2013 at 11 am

CaseChat Overview and Summary

In this appeal, the appellants, Zbigniew Poplawski and Stefan Poplawski, sought to overturn a decision of the High Court which dismissed their claim for compensation against the first respondent, Thomas Pryde, for misleading and deceptive conduct under section 9 of the Fair Trading Act 1986. The claim arose from an email sent by Mr Pryde to the Poplawskis' lawyer, which the appellants argued was misleading and led to their loss. The High Court found that the email was capable of being misleading but did not consider that a reasonable person in the appellants' position would likely have been misled by the email. The Court of Appeal allowed the appeal in part, setting aside the High Court's decision and ordering the respondents to pay the appellants $175,000 plus interest and costs.

The Court of Appeal found that the High Court erred in its approach to determining whether the appellants reasonably relied on the misleading email. The Court held that the Supreme Court's approach in Red Eagle Corp Ltd v Ellis, which involved a two-stage analysis, was more appropriate in this case. The Court concluded that the misleading email did constitute a breach of section 9 of the Fair Trading Act because it was misleading and it was reasonable for the appellants to rely on it. The Court also found that the misleading email was an effective cause of the appellants' loss.

In relation to the quantification of damages, the Court of Appeal agreed with the High Court's assessment that the appellants contributed 50 per cent to their own loss. The Court held that the appellants' neglect of their own interests was a significant factor in their loss, and that the broad-brush assessment of the contributions made by the respective parties to the loss sustained by the appellants was a proper reflection of the facts of this case.

The Court of Appeal ordered that the respondents must pay the appellants $175,000 plus interest and 90 per cent of costs for a standard appeal on a band A basis plus 90 per cent of usual disbursements. Costs in the High Court should be determined by that Court in light of this judgment if the parties are not able to agree.

Orders