Fudging
the facts about a farm’s milk production cost Kaukapakapa farmer Roger Prout
$250,000 damages for breach of the Fair Trading Act in negotiations leading up
to the 2013 sale of his farm. Damages
initially assessed at $500,000 were cut in half because of inadequate due
diligence by purchaser Pauline Laboyrie.
The High Court was told Ms Laboyrie
purchased Alpine Road Farm north of Auckland after following up an
advertisement on TradeMe. She had
limited farming experience, but had been in relationships with farmers in both
Kaukapakapa and the Waikato. She
purchased Alpine Road Farm for $2.9 million after speaking with Mr Prout,
asking some questions by phone and making a brief site visit. No professional advice was sought on the
farm’s economic viability. No budgets
were prepared.
Justice Heath found that Mr Prout had
misled Ms Laboyrie about the farm’s production levels. In stating past output, Mr Prout did not
mention total output included production from cows grazed on land leased from
neighbours. Production attributable only
to cows grazing the land being sold was much less. Justice Heath said Ms Laboyrie would not have
purchased the farm had the true position been disclosed. Mr Prout was liable for a breach of the Fair
Trading Act. He was described as a dairy
farmer of some thirty year’s experience.
He is also a licensed real estate agent and operates a yacht charter
business.
Aldrie
Holdings v. Clover Bay Park – High Court (24.02.16)
16.036