Shabor Limited v Graham - [2017] NZHC 3146

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV 2017-419-000088 [2017] NZHC 3146

BETWEEN
SHABOR LIMITED

Plaintiff

AND

ROBERT GRAHAM First Defendant

AND

PINE RIDGE TRUSTEE COMPANY LIMITED

Second Defendant

AND

SUCCESS REALTY LIMITED Third Defendant

Hearing: 6 December 2017

Appearances:

K Quinn for the Plaintiff
D O'Neill for the First and Second Defendants
I Rosic for the Third Defendant

Judgment:

19 December 2017

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
19.12.17 at 11:30am, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

SHABOR LIMITED v SHABOR LIMITED v R GRAHAM, PINE RIDGE TRUSTEE COMPANY LTD AND SUCCESS REALTY LTD [2017] NZHC 3146 [19 December 2107]

Background

[1] The plaintiff purchased a farm at Oparau, Waikato (the property) from the first and second defendants (vendors) pursuant to a sale and purchase agreement dated 11
February 2014. The third defendant (Bayleys) acted as real estate agent for the vendors.

[2] The plaintiff says it purchased the property in reliance on statements the vendors and Bayleys made to its directors that were not true. It says therefore it paid considerably more for the property than it was worth.

[3] The claim against the vendors was for breach of the Fair Trading Act 1986 (FTA), misrepresentation and mistake. The claim against Bayleys alleges a breach of the FTA.

[4] The first and second defendants have applied for summary judgment. Bayleys has applied to strike out the plaintiff’s claim on the grounds that it discloses no reasonably arguable cause of action, and for summary judgment on the grounds that the claim cannot succeed.

Principles

[5] A Court may give judgment against a plaintiff if the defendant satisfies the Court that none of the causes of action in the plaintiff’s statement of claim can succeed.1

[6] A defendant must demonstrate that none of the plaintiff claims can succeed and that the defendants’ evidence cannot be contradicted.

[7] A pleading may be struck out if it discloses no reasonably arguable cause of action. The principles are well understood. Causes of action are analysed on the
assumption that all facts pleaded in the statement of claim are true.

1 HCR 12.2(2).

The third defendant’s strike out application

[8] It is Bayleys’ position that there is no dispute, that the farm was advertised as comfortably carrying 7,500 plus stock units with capacity for more, and that the plaintiffs were told the vendor did not use supplement feed at the farm. These representations were made, Bayleys say, by the first and second defendant vendors and were carried through by Bayleys in advertisements, a property information memorandum and orally during the plaintiffs’ inspection of the farm on 7 April 2014.

[9] Bayleys say:

(a) It informed the plaintiff in a clear, express and written disclaimer that it was merely passing over information provided by the vendor and that it did not check that information or take any responsibility for its accuracy, and that…

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: [2017] NZHC 3146
Decision Date: 19 December 2017

CaseChat Overview and Summary

In Shabor Limited v Graham, the plaintiff, Shabor Limited, purchased a farm in Oparau, Waikato, from the first and second defendants, the vendors, pursuant to a sale and purchase agreement. The third defendant, Bayleys, acted as the real estate agent for the vendors. The plaintiff claims that it purchased the property in reliance on statements made by the vendors and Bayleys that were not true, and as a result, it paid considerably more for the property than it was worth. The claim against the vendors was for breach of the Fair Trading Act 1986, misrepresentation, and mistake, while the claim against Bayleys was for breach of the FTA.

The first and second defendants applied for summary judgment, while Bayleys applied to strike out the plaintiff’s claim and also applied for summary judgment. The court considered whether the defendants could satisfy the court that none of the causes of action in the plaintiff's statement of claim could succeed. The court noted that a pleading may be struck out if it discloses no reasonably arguable cause of action, and that causes of action are analyzed on the assumption that all facts pleaded in the statement of claim are true.

In dismissing the summary judgment and strike-out applications, the court found that there were disputed issues of material fact that needed to be ascertained. The court held that it could not be satisfied that Bayleys was merely passing over information for Mr. Graham. The court also found that the defendants had full knowledge regarding the farm's stock carrying capacity and whether or not supplements were required. The court held that what was needed was for the court to make a fair and reasonable assessment having regard to all the circumstances of the case to decide whether there was an actionable claim on behalf of the plaintiff. The court concluded that this could not be done in this case upon summary judgment/strike-out applications where it was claimed that a non-warranty clause should prevent the use of information provided by the vendor and/or through its agent for the very purpose of selling the farm. The summary judgment/strike-out applications were dismissed, and costs would be determined upon application in due course.

Orders