Ridgway Empire Ltd v Grant - [2019] NZCA 134

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA669/2018
[2019] NZCA 134

BETWEEN	RIDGWAY EMPIRE LIMITED Appellant
AND	JILL GRANT Respondent

Hearing:	3 April 2019
Court:	Gilbert, Wylie and Thomas JJ
Counsel:	D W Grove for Appellant G P Blanchard QC and E E Hill for Respondent
Judgment:	2 May 2019 at 11 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant is to pay the respondent’s costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)

This is an appeal from a judgment of Palmer J awarding damages to the respondent purchaser of a residential unit for a precontractual misrepresentation by the appellant vendor about weathertightness.[1]
[1]Grant v Ridgway Empire Ltd [2018] NZHC 2642 [High Court judgment].
Jill Grant purchased a residential unit in Auckland from Ridgway Empire Ltd (Ridgway) in 2009. Ridgway had owned the property since December 2003 and its director, Aaron Ridgway, had lived in the unit until October 2007. At that time, he moved into the adjoining unit 5 which his associated interests had purchased. Unit 4 was leased to tenants before Mr Ridgway decided to sell it. Mr Ridgway marketed unit 4 himself. He showed Ms Grant through the property and spoke to her directly about it. Although there was a dispute in the High Court about the exact wording of Mr Ridgway’s oral representation about weathertightness, the Judge considered this was immaterial.[2] This issue is no longer live. It was common ground before us that:
(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.
[2]At [36].
The Judge considered Mr Ridgway’s statement was an unqualified representation of fact which was false, though innocently made.[3] The Judge found Mr Ridgway’s assurance was intended to induce Ms Grant to enter into the agreement to purchase and she reasonably relied on it in doing so.[4] The Judge awarded Ms Grant damages of $474,101, being the repair costs plus $25,000 general damages for stress and anxiety.[5]
[3]At [38].
[4]At [39]–[40].
[5]At [61]–[62].
We note in passing that an alternative claim for breach of warranty in relation to works carried out by Ridgway in 2004 failed.[6] There is no challenge to the Judge’s findings on this part of the claim. No claim was advanced based on mistake. Any such claim is now time-barred and Mr Blanchard QC, for Ms Grant, confirmed that it is not pursued.

Appeal

[6]At [56].

Ridgway appeals contending the Judge erred in finding:
(a)there 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.

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Details

Case: [2019] NZCA 134
Decision Date: 2 May 2019 at 11 am

CaseChat Overview and Summary

The appeal was brought by Ridgway Empire Limited against Jill Grant, the purchaser of a residential unit, challenging a judgment awarding damages for precontractual misrepresentation about weathertightness. The Court of Appeal considered whether the Judge was correct to find that there was an actionable misrepresentation of fact, that the vendor intended to induce the purchaser to enter into the purchase agreement by making the representation, that it was reasonable for the purchaser to rely on the representation, and that the purchaser had proved the quantum of the damages awarded. The Court held that the vendor's statements were unqualified statements of present fact, not opinion, and that the purchaser was entitled to rely on them. The appeal was dismissed, and the appellant was ordered to pay the respondent's costs for a standard appeal on a band A basis and usual disbursements. The Court found that the Judge's assessment of the evidence and conclusions on the issues were well-justified and that the appeal did not succeed on any of the grounds raised.
The Court of Appeal held that the vendor's statements that the unit did not leak and it was not a leaky building were actionable representations of fact. The statements were expressed as unqualified statements of present fact, not qualified in any way or expressed as being merely opinions. The vendor had superior knowledge of the state of the unit and had owned it for several years, carried out significant renovations to it and lived in the unit for several years. The vendor took it upon himself to make these unqualified representations of present fact and must accept the consequences of them being shown to be false. The Court found that the Judge's conclusion that the purchaser was entitled to rely on the vendor's assurances was correct. The vendor's response was clear and unequivocal. The purchaser was entitled to rely on the vendor's unqualified assurances given his superior knowledge of the unit. The Court found that the Judge's assessment of the quantum of damages awarded was well-justified on the evidence. The Court was unable to see any flaw in the Judge's analysis and conclusion on the quantum of damages.

Orders