Buying their first home, Ameet Bhargav and Renu Khajuria were assured it was not a leaky home and provided with a building report confirming there were no water ingress issues. The High Court awarded $861,000 damages. Vendor Davinder Singh Rahal had made cosmetic repairs to cover up leaky home defects before selling at a price $115,000 above what he paid for the Auckland property nine months previously.
The High Court was told Mr Rahal had earlier purchased the Goodwood Heights property on Ribbonwood Crescent in 2019 in the name of his family company First Trust Ltd, buying with full knowledge it was a leaky home. He then set about concealing evidence of leaks by opening up an exterior wall, replacing timber and placing a new bottom plate on top of the existing plate. Damaged ceiling gib board was replaced. Bitumen tape was laid across joints where exterior cladding met an upper deck. A building inspection report was provided by Vinay Mehta of Metsons (NZ) Ltd. His report described the house as ‘generally in good condition’ and ‘chances of water ingress are almost nil’.
In March 2020, Ameet and Renu signed up to buy at $665,000. The day after completing their purchase it rained heavily; they found water leaking into a downstairs bedroom. A building surveyor identified multiple defects and failures to comply with the building code. Ameet and Renu sued.
Justice Hinton ruled First Trust Ltd was liable for breach of contract; work done without obtaining necessary building consents. Mr Rahal and Mr Mehta, together with their respective companies, were all held liable for a breach of the Fair Trading Act; engaging in misleading and deceptive conduct. None of them appeared in court to defend the claim. All four were jointly liable to pay damages of $861,000: the estimated cost of repairs; the cost of alternative accommodation while repairs were underway; loss of rental income, together with general damages of $30,000 for the stress and anxiety caused.
Bhargav v. First Trust Ltd – High Court (20.07.22)
22.126