TADD MANAGEMENT LIMITED v WEINE [2023] NZHC 764 [5 April 2023]
Table of Contents
Introduction [1]
Statutory and policy framework [7]
Background [19]
The Property [19]
The parties [22]
TADD [22]
The defendants [25]
New Zealand Consulting Engineers Ltd (NZCEL) [28]
Marketing of the Property [29]
Pre-auction inspection by plaintiff [45]
Causes of action [49]
Summary of plaintiff ’s case [51]
Summary of defendants’ case [52]
Affirmative defences [54]
The evidence [59]
Seismic assessments of the Property [63]
Misrepresentation [67]
Plaintiff’s submissions [68]
The representations [68]
The Information Memorandum [69]
The ISA [70]
Covering letter [71]
Context [74]
Inducement [82]
Detailed Seismic Assessments [93]
NBS representations incorrect [95]
Alleged loss [97]
Defendants’ submissions [98]
Opinion [100]
ISA not false or wrong [108]
Inducement [117]
Discussion [124]
Relevant principles of misrepresentation [124]
Application of the principles regarding misrepresentation [133]
Were the representations an “opinion”? [135]
ISA [135]
Covering letter [147]
Information memorandum [156]
Were the NBS representations incorrect? [157]
Effect of the warnings [168]
Inducement [176]
Did plaintiff ’s own inquiries negate the inducement? [192]
Contributory negligence [196]
Plaintiff ’s submissions [202]
Discussion [204]
Common mistake [213]
Plaintiff ’s submissions [215]
Defendants’ submissions [217]
Discussion [221]
Relief [238]
Plaintiff ’s submissions [238]
Defendants’ submissions [252]
Discussion [254]
Trustee liability [260]
Defendants’ submissions [261]
Plaintiff ’s submissions [264]
Discussion [273]
Third party claim [275]
Defendants’ submissions [282]
NZCEL submissions [290]
Discussion [303]
Breach of contract [304]
Negligence [323]
Fair Trading Act [324]
Opinion or statement of fact? [329]
Effect of ss 5C and 5D of the FTA [340]
Outcome [364]
Further evidence regarding the assets of the Trust [367]
Costs [368]
Introduction
[1] At an auction on 7 December 2017 the plaintiff, Tadd Management Ltd (TADD), bought a commercial building in Lower Hutt (Property). The vendors of the building were Ruth Weine and Michael Hofmann-Body, as trustees of the Ruth Weine Family Trust (Trust).
[2] Prior to the auction, the vendors’ real estate agent provided to TADD and other potential purchasers of the Property an Initial Seismic Assessment (ISA) and explanatory covering letter. The ISA assessed the Property as having a 60%NBS (New Building Standard) rating. The ISA and covering letter were prepared by New Zealand Consulting Engineers Ltd (NZCEL),…
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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AGLC
TADD Management Ltd v Weine [2023] NZHC 764
Case
[2023] NZHC 764
Decision Date
CaseChat Overview and Summary
In the case of TADD Management Ltd v Weine, the High Court of New Zealand considered whether the vendor's representations regarding the seismic rating of a commercial property constituted a misrepresentation. TADD Management Ltd (TADD) purchased a commercial building at auction from Ruth Weine and Michael Hofmann-Body as trustees of the Ruth Weine Family Trust. Prior to the auction, the vendors' real estate agent provided TADD with an Initial Seismic Assessment (ISA) and covering letter, which assessed the building's New Building Standard (NBS) rating at 60%. After purchasing the building, TADD commissioned a Detailed Seismic Assessment (DSA), which assessed the building at 10%NBS, significantly lower than the rating provided in the ISA. TADD sought damages for misrepresentation, claiming it relied on the vendors' representations regarding the NBS rating in bidding for and buying the property. The court found that the ISA was not merely an opinion, but a statement of fact. The court also determined that the representations were incorrect, as the building was, in fact, an earthquake-prone building. Consequently, the vendors were found liable for misrepresentation, and TADD was awarded damages of $592,000, the difference in value between the property as represented and its actual value, plus the cost of the Spencer Holmes DSA, together with interest.