Rondova v When Routine Bites Hard Limited - [2013] NZHC 267

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-1486 [2013] NZHC 267

BETWEEN VALENTJNA RONDOVA Appellant

ANDWHEN ROUTINE BITES HARD LIMITED
Respondent

Hearing: 15 August 2012

Counsel: N Campbell for the Appellant
L J Turner for the Respondent

Judgment: 20 February 2013

JUDGMENT OF WOODHOUSE J

This judgment was delivered by me on 20 February 2013 at 3:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar
……………………………………

Counsel:
Mr N Campbell, Barrister, Auckland
Mr L J Turner, Barrister, Auckland
Instructing Solicitors:
Mr M J Robinson and Ms C Anderson (for the Appellant), Turner Hopkins, Solicitors, Takapuna
Chris Wilson (for the Respondent), Herne Bay Law, Solicitors, Auckland

RONDOVA V WHEN ROUTINE BITES HARD LIMITED HC AK CIV-2012-404-1486 [20 February 2013]

[1] This appeal concerns an agreement for sale and purchase of land between the appellant as vendor and the respondent as purchaser. I will in general refer to the parties as the vendor and the purchaser.

[2] The District Court Judge held that there had been a contractual misrepresentation by the vendor and that this misrepresentation entitled the purchaser to cancel the agreement pursuant to s 7 of the Contractual Remedies Act
1979 (the Act) and recover its deposit.1 The misrepresentation related to a stack of

fibrolite sheets on the land. Before the contract was made the vendor stated that there was no asbestos in the fibrolite. The fibrolite in fact was approximately three to five percent asbestos.

The issues

[3] The vendor does not challenge the finding that there was a misrepresentation. The vendor does challenge the findings that the purchaser was entitled to cancel and to recover the deposit. There are four issues in respect of the District Court
judgment for the purchaser:

Issue 1: Did the vendor know that the purchaser was aware of the representation?

The representation was made by the vendor, through a real estate agent, to Mr Aaron Dawson. After the representation had been made Mr Dawson became the shareholder and director of a company which became the purchaser. The essential issue of fact in this regard is whether, before the contract for sale and purchase was made, the vendor or her agent knew that Mr Dawson had passed on to the purchaser the
representation about asbestos.

1 When Routine Bites Hard Ltd v Valentjna Woodcock DC Auckland CIV-2009-044-237, 23 February
2012.

Issue 2: Was the purchaser induced by the misrepresentation to enter into the agreement for sale and purchase?

Issue 3: Did the misrepresentation substantially increase the burden of the

purchaser under the agreement?

Issue 4: Could the purchaser cancel without first making time of the

essence?

[4] The vendor also appeals against dismissal of her counterclaim. The purchaser was plaintiff in the District Court. There was a counterclaim for damages on the grounds that the vendor had properly cancelled the agreement following the purchaser’s failure to settle and the land had been resold at a loss.

Conclusion in summary

[5] I am satisfied that the appeal should…

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: [2013] NZHC 267
Decision Date: 20 February 2013

CaseChat Overview and Summary

In this case, the High Court allowed the appeal by the vendor, Valentjna Rondova, against the District Court judgment that found her liable for a misrepresentation in relation to the presence of asbestos on the land she was selling to When Routine Bites Hard Limited. The Court found that the vendor knew the purchaser was aware of the representation, but was not induced by the representation to enter into the agreement. Furthermore, the misrepresentation did not substantially increase the burden of the purchaser under the agreement. Lastly, the Court found that the purchaser was required to give notice making time of the essence before cancelling the contract due to the misrepresentation. As a result, the appeal was allowed, and the judgment in favour of the purchaser was set aside. The vendor was entitled to judgment for damages of $285,248, together with interest and costs.

Orders