Ridgway Empire Ltd v Grant - [2019] NZSC 85

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 43/2019
[2019] NZSC 85

BETWEEN	RIDGWAY EMPIRE LIMITED Applicant
AND	JILL GRANT Respondent

Court:	Glazebrook, O’Regan and Ellen France JJ
Counsel:	N R Campbell QC and D W Grove for Applicant G P Blanchard QC and E E Hill for Respondent
Judgment:	8 August 2019

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B The applicant is to pay the respondent costs of $2,500.
____________________________________________________________________

REASONS

Introduction

The applicant, Ridgway Empire Ltd (Ridgway) sold a residential unit in Auckland (unit 4) to the respondent, Jill Grant, in 2009. It subsequently transpired that unit 4 was not weathertight. Ms Grant successfully brought a claim for damages in the High Court on the basis of pre‑contractual misrepresentation about the unit’s weathertightness.[1] Ridgway’s appeal from that decision was dismissed by the Court of Appeal.[2] Ridgway now seeks leave to appeal to this Court.

Background

[1]Grant v Ridgway Empire Ltd [2018] NZHC 2642 (Palmer J) [HC judgment].

[2]Ridgway Empire Ltd v Grant [2019] NZCA 134 (Gilbert, Wylie and Thomas JJ) [CA judgment].

Unit 4 is one of five connected units built in the 1970s. Ridgway had owned unit 4 since December 2003 and Ridgway’s director, Aaron Ridgway, occupied the unit until October 2007.[3] Mr Ridgway had made alterations to unit 4 in early 2004 in the course of which some leaks from the third‑floor deck were discovered.[4]
[3]At that point he moved into the adjoining townhouse, unit 5.
[4]The wood was wet, but not rotten, and was replaced. No building consent was obtained for this work.
Mr Ridgway marketed unit 4 himself. It was common ground in the Court of Appeal that:[5]
(a)before entering into the sale and purchase agreement, Ms Grant asked Mr Ridgway whether the unit leaked and whether it was a leaky building;
(b)Mr Ridgway replied to the effect “no, the unit does not leak and it is not a leaky building”; and
(c)although Mr Ridgway did not know it at the time, the unit was in fact leaking and it was a leaky building. Because of latent defects, the unit had been leaking for some time causing extensive damage that was not discovered until mid‑2011.
[5]CA judgment, above n 2, at [2].
In the High Court, Palmer J found the statement made by Mr Ridgway that there was no issue as to weathertightness was an unqualified statement of fact which was false.[6] Palmer J also found the representation was intended to induce her to enter into the agreement for sale and purchase and she reasonably relied on it in doing so.[7] Damages of $474,101 were awarded comprising the costs of repair and $25,000 general damages for stress and anxiety.
[6]HC judgment, above n 1, at [37]–[38].
[7]At [39].
The Court of Appeal upheld this decision.[8]

The proposed appeal

[8]CA judgment, above n 2, at [18], [22] and [25].

The proposed appeal would revisit the findings of the Court of Appeal…

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: [2019] NZSC 85
Decision Date: 8 August 2019

CaseChat Overview and Summary

Ridgway Empire Ltd (Ridgway) sought leave to appeal from the Court of Appeal’s decision dismissing their appeal against the High Court’s finding that Ms Jill Grant was entitled to damages for pre-contractual misrepresentation. The Court of Appeal had found that Ridgway had made an unqualified statement of fact about the weathertightness of unit 4, which was false, and that Ms Grant reasonably relied on that statement in entering into the contract. Ridgway argued that the Court of Appeal applied the wrong test in determining the meaning of the pre-contractual statements and that they were not unqualified statements of present fact. Ridgway also argued that the Court of Appeal was incorrect to hold that Ms Grant’s reliance on the statements was reasonable and that the Court imposed an incorrect duty to disclose which is of uncertain extent.

The Court found that the assessment of these matters did not raise any question of general or public importance or of general commercial significance. The Court of Appeal had correctly applied the principles in determining the meaning of pre-contractual statements and that it was a factual question. The Court of Appeal had also correctly found that Ms Grant’s reliance on the statements was reasonable, given the clear and unequivocal nature of the response and Mr Ridgway’s superior knowledge about the unit. The Court found that the Court of Appeal had not imposed an incorrect duty to disclose but had found that the non-disclosure was material against the particular factual background.

The application for leave to appeal was dismissed. Ridgway was to pay the respondent costs of $2,500.

Orders