Compensation totalling $474,100 was ordered for saying an Auckland home did not leak, when it did. Damages are awarded for innocent misrepresentations inducing purchasers to buy.
Aaron Ridgway denied liability for comments made prior to his company selling in 2009 a three-level Clifton Road townhouse overlooking Takapuna beach to Jill Grant for $1.46 million. Before signing up she asked him directly whether the building leaked. He said it didn’t. He did not qualify his answer. There had been repairs to the building in the past after water ingress was discovered, but Mr Ridgeway said he was unaware of any further leaks at the time he made the statement.
Ms Grant purchased one of five connected townhouses. Entities associated with Mr Ridgeway have owned four of the townhouses at various times. The High Court was told water leaks from a third floor deck on the townhouse purchased by Ms Grant were discovered by Mr Ridgeway in 2004 when he carried out kitchen alterations. The deck surface was replaced. After her purchase, Ms Grant discovered leaks in the ceiling below the repaired third floor deck. Flashings had deteriorated. Replacement of the entire deck and adjoining walls was needed. When repairs got underway, it was discovered water damage had spread further than earlier thought. After protective shrink wrap on the building was removed at the conclusion of Ms Grant’s repair, Mr Ridgeway complained water was leaking into his adjoining unit. Further investigation identified long-term water damage to Mr Ridgeway’s unit, damage which pre-dated Ms Grants purchase.
Justice Palmer ruled Mr Ridgeway’s negative response to the question of whether the building leaked was an unqualified representation of a material fact that induced Ms Grant to purchase. He was liable for the consequences. He did not qualify his answer with an honest explanation of his experience with the property. Damages were awarded against Mr Ridgway’s company, Ridgway Empire Ltd, under the Contract and Commercial Law Act. Damages of $474,100 were calculated on $186,800 for remedial work done, $66,600 for professional fees and Council consents, $195,500 for further remedial work required and $25,000 damages for stress and anxiety.
The High Court was told there is an ongoing dispute between Ms Grant and Mr Ridgway over damage arising from her earlier repair and the adequacy of proposed further repairs. Shrink-wrap remains over her townhouse, obscuring all sea views.
Grant v. Ridgway Empire Ltd – High Court (11.10.18)
18.196