Ordered to pay $927,000 damages, John and Heather Dutton misprepresented weathertightness of their Mount Maunganui penthouse apartment in their family trust’s 2018 sale to Murray and Lorette Sole, the High Court ruled.
The Soles claimed compensation for their share of remediation costs for the three level Belle Mer apartments on Marine Parade, plus replacement of their kitchen and two years alternative accommodation costs whilst repairs were carried out.
The High Court was told the Soles discovered weathertightness issues within a year of their $1.49 million purchase. They learnt a series of building reports obtained by Belle Mer’s body corporate dating back over four years prior to their purchase had identified various issues, primarily leaks around apartment balconies. Belle Mer was built in the late 1990s.
They emailed Mr Dutton, seeking an explanation. He responded, stating the situation was ‘quite alarming’ and that he ‘did not know about the reports.’ Later confronted with evidence that he was present at body corporate meetings where weathertightness reports were discussed, Mr Dutton apologised, saying he ‘now recalled the reports.’
Justice Blanchard ruled the Duttons breached a warranty clause in the sale agreement for failing to disclose body corporate expenses were likely to rise for weathertightness repairs.
They were also liable for misprepresentation; having ticked a box in their real estate agent’s checklist stating they had no knowledge of any hidden or underlying defects.
The Soles were aware of the checklist’s existence. The real estate agent (as agent for the Duttons) commented, when asked, that the Duttons told him there were ‘no known issues with the building.’
Damages awarded were less than the Soles’ actual remediation costs. A deduction was made for ‘betterment;’ a deduction for the Soles now having a repaired building and new kitchen, both in better condition than if no repairs had been needed because of water ingress.
Sole v. Hutton – High Court (7.03.25)
25.082