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Roberts v Jules Consultancy Ltd

Roberts v Jules Consultancy Ltd

Case [2019] NZHC 3342 17 December 2019

Contract Formation

Misrepresentation

Diminution in Value

Contributory Negligence

Consumer Law

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2017-485-130

[2019] NZHC 3342

UNDER the Fair Trading Act 1986

BETWEEN

MICHAEL DOUGLAS ROBERTS

Plaintiff

AND

JULES CONSULTANCY LIMITED

First Defendant

JULES LELOIR

Second Defendant

Hearing: 26 and 27 November 2019

Counsel:

B M Easton and H E T Thomson for Plaintiff J K Mahuta-Coyle for Defendants

Judgment:

17 December 2019

JUDGMENT OF THOMAS J (QUANTUM)

Table of contents

Introduction [1]

The pleadings [3]

Assessment of loss [9]

Did Mr Roberts contribute to his loss? [14] Was Mr Roberts at fault in not obtaining a building report? [15] Background [15]

Evidence at quantum hearing [16]

Was it likely that a building report would have identified the defects in the Sirocco Apartments? [36]

Was Mr Roberts at fault in not obtaining further information such as the building management reports or Body Corporate committee minutes before

confirming the SPA unconditional? [49]
Conclusion on fault [56]

ROBERTS v JULES CONSULTANCY LIMITED [2019] NZHC 3342 [17 December 2019]

What reduction should be made to reflect Mr Roberts’ contribution to the

loss? [57]

How should damages be assessed? [62]

Market value of the Apartment [69]

Unaffected Market Value [72]

As Is Market Value [75]
Market value of the Apartment at the time the Representations were made [91]

Purchase price [92]
2014 As Is Market Value [93]

General damages [108]

Other claims [111]

Result [112]

Introduction

[1] In March 2014, the defendants made false and misleading representations concerning the characteristics of the Sirocco Apartments in Wellington (the Representations) in connection with the sale of Unit 812 (the Apartment). In my judgment of 25 March 2019, I concluded the defendants breached s 14 of the Fair Trading Act 1986 (the Act).1 They were therefore liable to the plaintiff for his loss. This decision addresses the quantum of that liability and is to be read in conjunction with my judgment on liability.

[2] The Representations were that, while the Sirocco Apartments had weathertightness issues, they related only to the walkways and had been rectified.

The pleadings

[3] Jules Consultancy Limited is effectively the alter ego of Jules Leloir.2 Mrs Leloir represented the defendants at the hearing into liability. I gave the defendants leave to file an amended statement of defence to include the affirmative defence of contributory negligence. This resulted in the defendants pleading:3
36.The first and second defendants plead that with respect to any damages that may be awarded against them, that the plaintiff’s contributory negligence be taken into account:-

1 Roberts v Jules Consultancy Ltd [2019] NZHC 555.
2 At [121].
3 The amended statement of defence also pleaded that the plaintiff and his legal representative misinterpreted Mrs Leloir’s responses. Given my findings on liability, Mr Mahuta-Coyle accepted that issue could not be pursued at the quantum hearing.

1.In that he made a deliberate decision not to obtain a pre- inspection report (building report) before purchasing his apartment.

2.The Plaintiff failed to request his legal representative to…

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 Roberts v Jules Consultancy Ltd

Details

AGLC: Roberts v Jules Consultancy Ltd [2019] NZHC 3342
Case: [2019] NZHC 3342
Decision Date: 17 December 2019

CaseChat Overview and Summary

In Roberts v Jules Consultancy Ltd, the High Court of New Zealand was asked to determine the quantum of damages to be awarded to the plaintiff, Michael Douglas Roberts, following a finding of liability against the defendants for false and misleading representations in relation to the sale of an apartment. The defendants had represented that weathertightness issues in the Sirocco Apartments were limited to the walkways and had been rectified. The Court found the defendants liable for the plaintiff's loss under the Fair Trading Act 1986 and proceeded to assess the appropriate quantum of damages.

The Court considered whether the plaintiff had contributed to his loss by not obtaining a building report or further information from the Body Corporate. Expert evidence suggested that a reasonably prudent purchaser would have obtained a building report and further information from the Body Corporate, which would likely have identified the systemic weathertightness issues in the Sirocco Apartments. The Court concluded that the plaintiff had contributed to his loss and assessed a 15% reduction in damages to reflect his contributory negligence.

In assessing the damages, the Court rejected the cost of repair as the measure of loss, finding that it was uncertain whether the repairs would be undertaken and that the cost of repair exceeded the value of the property post-repair. Instead, the Court adopted the diminution in value approach, assessing the difference between the market value of the apartment assuming it was unaffected by defects and its 'as is' market value.

The Court awarded the plaintiff $93,500 in diminution in value, plus $25,000 in general damages for distress and emotional exhaustion. The plaintiff was also awarded interest and costs. The Court's decision provides a detailed analysis of contributory negligence and the appropriate measure of damages in cases involving false and misleading representations under the Fair Trading Act.

Orders