| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA239/2023 [2024] NZCA 323 |
| BETWEEN | RUTH RENTON WEINE AND MICHAEL DAVID HOFMANN-BODY AS TRUSTEES OF THE RUTH WEINE FAMILY TRUST |
| AND | TADD MANAGEMENT LIMITED |
| Hearing: | 7 March 2024 (further memorandum received on 14 March 2024) |
Court: | Ellis, Gault and Cull JJ |
Counsel: | M Freeman and R A Bull for Appellants |
Judgment: | 17 July 2024 at 11.00 am |
JUDGMENT OF THE COURT
AThe appeal is allowed.
BThe judgment in the High Court is set aside.
CThe respondent must pay the appellants’ costs for a standard appeal on a band A basis and usual disbursements.
DCosts in the High Court are to be fixed in that Court in light of this judgment.
____________________________________________________________________
REASONS OF THE COURT
(Given by Gault J)
Table of contents
Para no
Factual background
High Court judgment
Approach on appeal
Issues
Misrepresentation
Mistake
Contractual misrepresentation
Applicable principles
The context
ISA — “60% NBS”
Mere conduit?
Information Memorandum — “Good NBS rating”
Representations in totality
Common mistake
Applicable principles
Discussion
Result
The trustees of the Ruth Weine Family Trust (the Trustees) appeal against the High Court’s decision that they made an actionable misrepresentation to Tadd Management Ltd (Tadd) in respect of the seismic capacity of a building for sale and, in the alternative, that the parties were induced into the contract for sale and purchase of the building on the basis of a common mistake that the seismic capacity of the building was 60%.[1]
Factual background
[1]Tadd Management Ltd v Weine [2023] NZHC 764, (2023) 24 NZCPR 1 [High Court judgment].
The factual background is not in dispute.
The Trustees owned a three-storey commercial property at 134 Queens Drive, Lower Hutt (the building) which they decided to sell. They engaged an entity from the Bayleys Realty Group (Bayleys) to market the building. A representative from Bayleys advised the Trustees to obtain an Initial Seismic Assessment (ISA) of the building to provide to potential purchasers.
On or about 15 August 2017, the Trustees obtained an ISA from a firm of chartered engineers, New Zealand Consulting Engineers Ltd (NZCE). The ISA gave the building a seismic rating of 60% New Building Standard (NBS), placing it within a band category identified as “earthquake risk” but not “earthquake prone”, as indicated in the Initial Evaluation Procedure (IEP) Assessment used to prepare the ISA. In particular, the Assessment Outcomes section in the ISA report stated:
4. Assessment Outcomes Assessment Status
(Draft or Final)
Final Assessed %NBS Rating 60%NBS (IL2) Seismic Grade and Relative
Risk (from Table A3.1)Alpha rating C
5 to 10 times the risk of a new buildingFor an ISA: Describe the Potential
Critical Structural
WeaknessesTorsional behaviour of the building will attract forces in the front columns.
Heavy spandrel beams along front increase introduced shear forces in column, this needs to be investigated further. It has not been taken into account and…
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- Case
- [2024] NZCA 323
- Decision Date
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