Having paid one million dollars back in 2014 to purchase a century-old home in Wellington’s Te Aro valley, Philippa Wren’s family trust years later sued vendor Brenda Boughen claiming over $800,000 for cost of repairs alleging a failure to disclose pre-existing fire damage and water ingress issues. Compensation for fire damage only was awarded: $130,000.
The three-storey timber-framed house on Maarama Crescent was built around 1901. Ms Boughen lived at the address for some twenty five years before selling in 2014. Ms Wren lived briefly at the property for about seven months, before moving to the United Kingdom, putting tenants in place. Nearly four years later, tenants advised of water leaks in two areas. A subsequent building assessment identified water ingress which appeared to be the result of a deck installed at the time Ms Boughen was owner. This assessment also identified fire damage in the roof cavity. Ms Wren alleged the quality and soundness of the house was misrepresented at time of sale.
Justice Gendall ruled Ms Boughen made no misrepresentations about water ingress. She never met Ms Wren before the sale was concluded. In addition, complaints about repairs required to framing, joists and floors had to be measured against the fact that the house was over one hundred years old, he said.
As regards fire damage, the court was told Council records noted the upper-storey had been gutted in a fire on an unspecified date prior to 1961. Ms Boughen said that after being sued, she had learnt from a former Maarama Crescent neighbour that there had been a further fire around 1982.
Ms Boughen told the court she was ignorant of any past fire damage at the time she sold. This was questioned by Ms Wren as purchaser; Ms Boughen had replaced the roof just prior to selling and a ceiling manhole providing access to the roof cavity had been sealed and covered over to prevent access.
Justice Gendall ruled both sides had entered into the contract unaware of the roof damage; they had made a common mistake. The Contract and Commercial Law Act allows damages where a mistake has led to a ‘substantially unequal exchange of values.’ As a rule of thumb, a purchaser must have overpaid by at least ten per cent before the rule kicks in.
There was conflicting expert evidence as to whether the fire damage was structural or cosmetic. Justice Gendall awarded $130,000 for cost of repair.
Wrenn v. Boughen – High Court (6.09.23)
23.151