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Premium Real Estate Ltd v Stevens

Premium Real Estate Ltd v Stevens

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IN THE SUPREME COURT OF NEW ZEALAND
SC 23/2008
[2009] NZSC 15

BETWEENMARK MONCRIEFF STEVENS AND OTHERS

Appellants

ANDPREMIUM REAL ESTATE LTD

Respondent

Hearing:13 November 2008

Court:Elias CJ, Blanchard, Tipping, McGrath and Gault JJ
Counsel:W Akel and N M Alley for Appellants

M A Gilbert SC and P J Napier for Respondent

Judgment:6 March 2009

JUDGMENT OF THE COURT

A The appellants’ appeal is allowed.
B The respondent’s appeal is dismissed.
CThe respondent is ordered to pay the appellants damages of $659,813 and to repay to them the commission of $67,050.
DThe judgment sums will bear interest at 7% per annum from 16 July 2004 (the date of settlement).
EThe appellants are awarded costs in this Court of $15,000 and costs in the Court of Appeal of $6,000, together in each case with their reasonable disbursements as fixed by the respective Registrars if not otherwise agreed between the parties.

REASONS

Para No

Elias CJ  [1]
Blanchard, McGrath and Gault JJ  [54]
Tipping J  [97]

ELIAS CJ
[1]       Premium Real Estate Limited acted as real estate agent for Mr and Mrs Stevens in the sale of their home. It introduced the purchaser, Mr Larsen, who acquired the property in May 2004 through Mahoenui Valley Trust for a price of $2.575m. Premium has been found by the High Court[1] and, on appeal, by the Court of Appeal[2] to have failed to disclose information material to the sale. Such failure was held to be both misleading and deceptive conduct in trade, contrary to the provisions of the Fair Trading Act 1986, and in breach of the fiduciary obligations owed by Premium to Mr and Mrs Stevens. Two types of information were withheld (although, as the Court of Appeal noted, provision of the information as to the first would inevitably have disclosed the second, so the two are interrelated). First, Premium and its salesperson, Ms Riley, acted on a number of occasions for Mr Larsen in buying and selling properties and had some expectation of acting for him in the future, including in any subsequent re-listing of the Stevens’ property, setting up what the Courts below have held to be a conflict of interest which should have been disclosed. Secondly, Mr Larsen was a trader in residential properties, a fact the Courts below considered was material to the decision made by Mr and Mrs Stevens to sell their property for $2.575m.
[1]        Stevens v Premium Real Estate Ltd (2006) 11 TCLR 854 (Courtney J).
[2]Premium Real Estate Ltdv Stevens [2009] 1 NZLR 148 (O’Regan, Arnold, Wilson JJ).
[2]       It was found in the Courts below that, had the relationship between Premium and Mr Larsen and in consequence the fact of his being a trader in residential properties been disclosed to Mr and Mrs Stevens, they would not have entered into the transaction. It was also found that, not only was disclosure relating to Mr Larsen not made by…

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.

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Details

Case: [2009] NZSC 15
Decision Date: 6 March 2009

CaseChat Overview and Summary

The Supreme Court of New Zealand allowed the appeal of the appellants, Mark Moncrieff Stevens and others, against Premium Real Estate Limited. The Court dismissed Premium's appeal against the findings of liability. Premium was found to have breached its fiduciary duties and acted in misleading and deceptive conduct in trade, contrary to the Fair Trading Act 1986. Premium was ordered to pay the appellants damages of $659,813 and to refund the commission of $67,050. The judgment sums bore interest at 7% per annum from 16 July 2004. The appellants were also awarded costs in the Supreme Court of $15,000 and costs in the Court of Appeal of $6,000, together with their reasonable disbursements. Premium Real Estate Limited, acting as a real estate agent for the appellants, failed to disclose material information about the purchaser, Mr Larsen, who was a property speculator. The Court found that the appellants would not have entered into the transaction if they had been aware of Mr Larsen's intentions. The Court of Appeal had previously reduced the compensation awarded to the appellants, but the Supreme Court varied the result to restore to the appellants the commission they paid to Premium.

Orders