Auckland property purchaser, Dabin Wang, says a $1.07 million claim for loss on resale following his default on an Auckland purchase is far too high; misleading information about the level of buyer interest caused him to bid too high in a closed tender offer, he says. The vendor has to accept responsibility for misrepresentations by its real estate agent, he claims.
Mr Wang defaulted on a $2.96 million purchase, losing his deposit. The vendor later resold at $1.78 million.
Munroe Family Trust put its North Shore property at Forrest Hill up for sale in July 2021. Barfoot & Thompson’s Milford branch was appointed agent. Kai Deng from Barfoot drew Mr Wang’s attention to the listing. The property had potential for subdivision into townhouses.
Mr Wang is an immigrant from China. He speaks poor English. Dealing through Mr Deng had the advantage they could converse in Mandarin. The High Court was told Mr Wang had previously purchased at least three properties through Mr Deng.
When tenders closed for Forrest Hill in July 2021, Mr Wang’s $2.96 million was the highest offer. He was to later learn the next highest bid was $610,000 less.
When sued for Munroe Trust’s loss on resale, Mr Wang claimed Barfoot’s Mr Deng had misled him. He claims Mr Deng talked up the level of buyer interest alleging he was told active buyers were offering in the range $2.7 million to $2.9 million. He alleges Mr Deng said a bid near three million dollars would be needed to secure the property.
Mr Deng says he has ‘no memory’ of making such comments.
After a High Court fast-track summary judgment hearing, Associate judge Brittain ruled it was arguable that Mr Deng was acting as agent for vendor Munroe Family Trust when making the alleged pre-contract misrepresentation and that the Trust had to accept responsibility, if the comments are true.
A full court hearing is needed to resolve the conflict in evidence between Mr Wang and Mr Deng, Judge Brittain ruled. The nuances of what Mr Deng said speaking in Mandarin needs to be considered when translated into English, he said.
As a side issue, Mr Wang claims Mr Deng was also at fault for not explaining at time of the sale any potential consequences of defaulting. Mr Wang said in China the only penalty is loss of deposit. The New Zealand rule is that a defaulting buyer loses not only the deposit paid but is also liable for any loss on resale.
Munroe Trustee Ltd v. Wang – High Court (19.02.24)
24.060