PREMIER PROPERTY DEVELOPMENTS LTD v OHL LTD [2023] NZHC 1962

PREMIER PROPERTY DEVELOPMENTS LTD v OHL LTD [2023] NZHC 1962

Premiere breached clause 7.1(2) by failing to disclose its consent/waiver of the basement tenant's reduced rent which directly affected the property's tenancy description, but OHL's Fair Trading Act claim failed because it was not misled by Premier given Colliers and its agent had informed OHL of the rent subsidy prior to contract; the only compensable loss from the contractual breach was the lost rental cashflow for the balance of Buza's lease, a loss eliminated by Premier's reasonable offered rent underwrite, and Premier is therefore entitled to recovery of the $692,000 stakeholder balance with interest.

Citation
[2023] NZHC 1962
Parties
Plaintiff / Counterclaim Defendant: Premier Property Developments Limited; Defendant / Counterclaim Plaintiff: OHL Limited; Third Party (discontinued): Colliers New Zealand Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
27 July 2023
Procedural Posture
Commercial Property Sale; Contract and Fair Trading Act Dispute / High Court Judgment (trial Judgment)
Outcome
Judgment for Premier: OHL's Fair Trading Act claim dismissed; contractual warranty breach found but compensable loss eliminated by vendor underwrite; Premier entitled to recover withheld funds.
Legal Topics
Misrepresentation, Vendor Warranties, Measure of Damages, Causation, Mitigation, Valuation Impact
Contract Law Property Law Fair Trading Act Litigation Commercial Law Evidence (hearsay) Misrepresentation Vendor Warranties Measure of Damages +3 more

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Parties

Premier Property Developments Limited

Plaintiff / Counterclaim Defendant

OHL Limited

Defendant / Counterclaim Plaintiff

Colliers New Zealand Limited

Third Party (discontinued)

Procedural Posture

Commercial Property Sale; Contract and Fair Trading Act Dispute / High Court Judgment (trial Judgment)

Legal Issues

  1. 1 Whether the vendor's marketing and information memorandum representations were misleading or deceptive under s9 Fair Trading Act 1986
  2. 2 Whether the vendor breached contractual warranties in the sale agreement (cl 7.1(2) and cl 7.2(1)) by consenting to or waiving tenant rent obligations and by delivery of plant in reasonable working order
  3. 3 Causation: whether any misleading conduct was an operating/effective cause of OHL's loss

Ratio Decidendi

Premiere breached clause 7.1(2) by failing to disclose its consent/waiver of the basement tenant's reduced rent which directly affected the property's tenancy description, but OHL's Fair Trading Act claim failed because it was not misled by Premier given Colliers and its agent had informed OHL of the rent subsidy prior to contract; the only compensable loss from the contractual breach was the lost rental cashflow for the balance of Buza's lease, a loss eliminated by Premier's reasonable offered rent underwrite, and Premier is therefore entitled to recovery of the $692,000 stakeholder balance with interest.

Court Disposition

Judgment for Premier: OHL's Fair Trading Act claim dismissed; contractual warranty breach found but compensable loss eliminated by vendor underwrite; Premier entitled to recover withheld funds.

Orders

  • Premier entitled to recover $692000 held by Alexander Dorrington (stakeholder)
  • Interest on that sum to be paid under the Interest on Money Claims Act 2016 calculated from date of settlement, payable by OHL to the extent not recovered from interest accrued by stakeholder