SHABOR LIMITED v GRAHAM [2021] NZCA 448

SHABOR LIMITED v GRAHAM [2021] NZCA 448 [15 September 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA193/2020[2021] NZCA 448BETWEEN SHABOR LIMITEDAppellantAND ROBERT GRAHAMFirst RespondentPINE RIDGE TRUSTEE COMPANYLIMITEDSecond RespondentHearing: 4 May 2021Court: Brown, Courtney and Collins JJCounsel: K M Quinn and C B Pearce for AppellantD M O'Neill and P A Depledge for RespondentsJudgment: 15 September 2021 at 2.30 pmJUDGMENT OF THE COURTA The appeal is allowed in part.B Judgment is entered for Shabor on the Fair Trading Act cause of action for$371,000 together with interest at 5 per cent from 3 June 2014.C The costs judgment is set aside and the matter is remitted to the High Courtfor reconsideration of costs.D Shabor is entitled to costs in this Court for a standard appeal on a band Abasis, with usual disbursements and certification for second counsel.____________________________________________________________________REASONS OF THE COURT(Given by Courtney J)Table of ContentsParaNo.INTRODUCTION [1]Factual backgroundShabor purchases the farm [7]The statement as to carrying capacity was a misrepresentation [16]THE FAIR TRADING ACT CLAIMThe parties' positions [26]Did the Judge err in finding that cl 27.3 broke the chain ofcausation?The Judge's finding on causation [32]The ground of appeal [36]Discussion [41]What was Shabor's loss?The Judge's indication [58]Quantum of loss [62]Contributory conduct [68]THE MISREPRESENTATION CLAIMThe issues [84]Did cl 27.3 preclude inquiry into reliance on the misrepresentation? [86]Was it fair and reasonable for cl 27.3 to be conclusive between theparties?Section 50 of the CCLA [91]The Judge's conclusion [97]Was there error by the Judge? [100]The subject matter and value of the transaction and the nature ofthe parties[101]Mr Graham's conduct and Mr Sharp's and Mr Borland's lack ofcare[108]Was Mr Graham's conduct fraudulent? [112]The contractual context, including the failure to insert a duediligence clause[119]Effect of cl 27.3 [126]The Judge's conclusion was correct [127]RESULT [132]Introduction[1] In 2014 Robert Graham advertised his sheep and beef farm for sale by tender.1The advertisement stated that the farm "comfortably winters 7,500 plus stock units1 The vendors were actually Robert Graham and Pine Ridge Trustee Company Ltd, of whichMr Graham was a shareholder. For convenience the High Court Judge referred to themcollectively as Mr Graham and we do likewise.with capacity for more". The closing date for tenders was 10 April 2014. Mr Sharpand Mr Borland saw the advertisement. They inspected the farm and thought it wouldbe suitable for deer farming. They submitted a tender of $5,250,110, which wascalculated on the basis of the Stock Unit figure in the advertisement. Shabor Ltd(which was incorporated a few weeks later) was the nominated purchaser.[2] The tender was accepted. Clause 27.3 of the sale and purchase agreementcontained a "no-reliance clause" which provided that:The Purchaser shall be deemed to have purchased the property acting solelyin reliance on the Purchaser's own judgement and upon its own inspection ofthe property and all other information regarding the property, and not inreliance upon any representative [sic] or warranty made by the Vendor,the Vendor's Agent or Managers other than as expressly set out in thisAgreement.[3] Within a short time of taking over the farm Shabor found that the farm couldnot carry 7,500 Stock Units over winter. It began work to improve the farm's carryingcapacity.[4] Shabor brought proceedings against Mr Graham for misrepresentation andbreach of the Fair Trading Act 1986 (FTA).2 Both causes of action failed.3 Fitzgerald Jfound that although Mr Graham had misrepresented the carrying capacity of the farm,cl 27.3 was conclusive as between the parties for the purposes of the misrepresentationclaim and broke the chain of causation for the purposes of the FTA claim.4 In aseparate judgment the Judge awarded costs to Mr Graham.5[5] Shabor appeals. The issues on the appeal are:(a) In respect of the FTA cause of action:2 The proceedings in the High Court also named the real estate agent, Success Realty Ltd, as adefendant. By the time of trial, however, that claim had been resolved.3 Shabor Ltd v Graham [2020] NZHC 507, (2020) 21 NZCPR 440 [High Court decision].4 At [237].5 Shabor Ltd v Graham [2020] NZHC 1592 [Costs decision].(i) Did cl 27.3 of the sale and purchase agreement break the chainof causation between Mr Graham's conduct and Shabor's loss(as held by the Judge) for the purposes of ss 9 and 43?(ii) If not, what is the correct quantum of damages under the FTAcause of action?(iii) Was the Judge correct to reduce damages by 40 per cent onaccount of Shabor's own conduct?(b) On the misrepresentation cause of action:(i) Did cl 27.3 on its terms purport to preclude reliance onthe capacity representation, as held by the Judge?(ii) If so, is it fair and reasonable for the purposes of s 50 of theContract and Commercial Law Act 2017 (CCLA) that cl 27.3be conclusive between the parties, having regard to all thecircumstances of the case?(iii) If it is not fair and reasonable for cl 27.3 to be conclusive, wasthe Judge correct to disallow estimated labour costs for fencingand therefore to reduce the quantum of damages by $106,122?[6] If the appeal succeeds, Shabor seeks to have the issue of costs revisited in theHigh Court.Factual backgroundShabor purchases the farm[7] Mr Borland, an engineer by occupation, had been involved in deer farming formore than 25 years and farming full time since 2008. Mr Sharp had farmed on hisown account since 1976, mainly cattle and sheep but with a focus on deer farmingsince 1989. The two men wanted to buy a property and farm together.[8] Mr Sharp and Mr Borland saw Mr Graham's advertisement for the farm on orabout 1 April 2014. They thought it looked attractive based on the advertising materialand the property information memorandum (PIM). The reported soil test resultsshowed fertiliser levels that were below optimum, but they viewed this as anopportunity to increase carrying capacity beyond the stated 7,500 stock units throughimproving soil fertility levels.[9] Mr Sharp and Mr Borland visited the property on 7 April 2014, only three daysbefore tenders closed on 10 April 2014. Their banker, Mr Murphy, accompanied them.The three had already discussed the basis of any price they might offer. It wasexpected that any price would be calculated on a per Stock Unit basis. Mr Murphyadvised that sale prices for farms in the area ranged from $500 to $1,000 per StockUnit.[10] Mr Borland, Mr Sharp and Mr Murphy went to the farm to meet Mr Grahamand his real estate agent, Mr Gudsell. Accompanied by Mr Gudsell, Mr Sharp,Mr Borland and Mr Murphy toured the property for about two hours. During that timethe question of carrying capacity was raised, with Mr Gudsell assuring them of thecarrying capacity of 7,500 Stock Units.[11] After leaving the property Mr Borland, Mr Sharp and Mr Murphy went to alocal café to discuss the property. Mr Sharp and Mr Borland calculated a price basedon 7,500 Stock Units as represented, multiplied by $700 (based on Mr Murphy'sadvice about farm sale prices). This produced a price of $5,250,000, to which theyadded $110 as a precaution against other tenderers who might be using the samefigures. They went to a Bayleys office to collect the tender documents.[12] On 10 April 2014 Mr Borland and Mr Sharp visited their lawyer. Theydiscussed the tender conditions. These took the form of a standard sale and purchaseagreement wording with attached "further terms". The further terms included theno-reliance clause as part of a general limitation of liability in cl 27:27.0 Limitations of liabilityThe Vendor does not warrant:27.1 The accuracy of any matter, fact or statement in any report or otherinformation on the property prepared or provided by the Vendor's [sic] or itsManagers or Agents (including information contained in Schedules to thisAgreement), any advertising of the sale of the property or any statement madeexcept in relation to any specific warranty given in this Agreement or27.2 Any other matter relating to the property or its use or nature or thestate of the property in any respect other than expressly set out in thisAgreement.27.3 The Purchaser shall be deemed to have purchased the property actingsolely in reliance on the Purchaser's own judgement and upon its owninspection of the property and all other information regarding the property,and not in reliance upon any representative [sic] or warranty made by theVendor, the Vendor's Agent or Managers other than as expressly set out in thisAgreement.[13] Mr Borland and Mr Sharp made some minor changes to the further conditions,including adding chattels to the chattels list, and submitted an unconditional tender onthose terms. They did not seek to make any change to cl 27. The fact that the tenderwas unconditional was notable; Mr Gudsell gave unchallenged evidence that anunconditional tender for a farm property was rare; in his experience, 90 per cent oftenders are conditional on completion of due diligence. The tender was accepted andthe agreement was declared unconditional on 17 April 2014 with settlement due on3 June 2014. Shabor was the nominated purchaser.[14] The agreement conferred an option to purchase stock and Mr Borland andMr Sharp attended the property in late May 2014 to observe the valuation of the stock.Alarm bells began to ring at that point. The number of animals on offer was low andsome were in poor condition. The day before settlement Shabor's solicitor wrote toMr Graham's solicitor expressing concern about the accuracy of the capacityrepresentation and reserving its position. The response was to convey Mr Graham'sadvice that:1. He has in the past carried at least 7,500 stock units on the property.2. With the drought conditions, a different fertilizer policy, our client hasutilized over the last couple of years, this has affected the carryingcapacity.3. Our client advised the Real Estate Agents the exact numbers of stockhe was carrying and they prepared and presented the information instock units.4. Our client understands that there is a very wide variation as to howstock units are calculated.5. We understand that your clients are capable experienced farmers andwould have known the capabilities of any farm they intended topurchase.[15] After taking over the farm Mr Borland and Mr Sharp saw that their concernsabout the carrying capacity were well founded. The actual stock numbers that hadbeen run immediately before the sale were much lower than represented andsupplementary feed had been used frequently. Over the winter of 2014 they were ableto run only about 4,500 to 5,000 Stock Units. They began increasing the fertiliserapplication and took other steps to improve the property's carrying capacity.The statement as to carrying capacity was a misrepresentation[16] The accuracy of the representation as to the carrying capacity of the farm wascritical to both causes of action and the Judge determined this question beforeconsidering the issues arising in the respective causes of action.[17] The accuracy of the statement turned largely on the meaning of "Stock Unit",the term used in the advertising material. Expert witnesses agreed that the standard,accepted measure of a Stock Unit is one breeding ewe weighing 55 kilograms withone lamb. The experts also agreed that one standard Stock Unit equates to 550kilograms of dry matter eaten per annum. So, one breeding ewe weighing55 kilograms with one lamb will eat 550 kilograms of dry matter per year. Thesignificance of these figures is that, to carry one Stock Unit without supplementaryfeed, a farm would need to produce at least 550 kilograms of dry matter per year.[18] Those basic propositions were uncontentious. But the experts differed on howthey could be applied to other types or weights of animals. There were also differingviews about how the standard Stock Unit could be used. One view was that thestandard Stock Unit rates were intended primarily for feed budgeting purposes.Another view was that the standard Stock Unit rate was commonly used for "back ofthe envelope" assessments of a property's carrying capacity.[19] The Judge, however, did not regard the application of the standard Stock Unitto other types or weights of animals as helpful. The purpose of the capacityrepresentation was to convey useful and meaningful information to potentialpurchasers about the farm's carrying capacity. If the phrase "Stock Units" did not referto the standard definition, the capacity representation would have been meaningless.6The Judge found that the representation conveyed that the farm could comfortablywinter the equivalent of at least 7,500 55-kilogram ewes each with one lamb or, framedby reference to the amount of dry matter eaten, could produce the 4,125,000 kilogramsof dry matter per annum needed to sustain that number of animals.7[20] Determining the actual carrying capacity of the farm was more difficult. Thiswas because there was no reliable information about historical stock numbers on thefarm; Mr Graham had used supplementary feed in the past and the sale of the propertyhad come at the end of two years of serious drought and was significantlyunder-fertilised.8 The Judge was unable, so many years later, to accurately assess theproperty's actual carrying capacity in 2014. However, she did not consider itnecessary to do so because all that was required for liability purposes was that theactual carrying capacity be materially lower than 7,500. Further, the calculation ofdamages was tied to the cost of lifting the property's carrying capacity to thatrepresented, which did not require identifying the actual capacity in June 2014.9[21] The Judge therefore focused on whether, at the time of the sale, the propertywas capable of producing the agreed 4,125,000 kilograms of dry matter per annumneeded to sustain 7,500 Stock Units.10 On this approach the Judge treated theestimated pasture production and utilisation as better indicators of carrying capacitythan historical numbers of stock actually carried on the property.11[22] The Judge found that soil quality, and in particular phosphorus levels, were akey driver of pasture production.12 If soil is deficient in this nutrient, plants will not6 High Court decision, above n 3, at [12].7 At [13].8 At [17].9 At [137(h)].10 At [18].11 At [137(a)].12 At [137(b)].grow to their maximum capacity which will in turn decrease the amount of stock thatcan be carried. The "Olsen P" test is commonly used to measure phosphorus levels insoil.[23] The PIM included the results of soil tests taken from the farm in February 2014,which showed an average Olsen P level of 11 micrograms per millilitre. The evidenceof Shabor's key expert witness, Dr Roberts, was that an average Olsen P level of 18would have been required to support just under 7000 stock units.13 Dr Roberts alsonoted that the February 2014 samples were taken from a drought year and during thesummer period. This is not recommended because the soil is very dry and canartificially elevate test results, including Olsen P levels.[24] The Judge concluded that in the past the property may have carried around7,500 Stock Units and possibly more but that by June 2014 its carrying capacity haddeclined and at the time of sale it was not able to carry that level of stock.14 Takingall of the evidence into account, the Judge found that the carrying capacity at the timeof sale was around 5,500 Stock Units, possibly up to around 6,000 Stock Units.15 Sheheld that:16As the Property's actual carrying capacity in June 2014 was materially lowerthan 7,500 Stock Units, the Capacity Representation was a misrepresentation(for the purposes of the CCLA) and misleading for the purposes of the FTA.[25] The Judge also considered that Mr Graham was "somewhat casual" in hisestimate of the property's carrying capacity for the purposes of the 2014 advertisingmaterials but found that he did not knowingly under-estimate the advertised carryingcapacity.17 Notably, Mr Graham had listed his farm for sale on two previous occasions,in 2007 and 2012, and had advertised the carrying capacity on those occasions as 8,500and 8,000 Stock Units.13 Dr Roberts' evidence "was not seriously challenged": at [68]. See also at [215].14 At [137(c)]–[137(d)].15 At [137(g)].16 At [137(f)].17 At [137(j)].THE FAIR TRADING ACT CLAIMThe parties' positions[26] In Red Eagle Corp Ltd v Ellis the Supreme Court said that in a relatively simplecase where there is no doubt about what was said or its meaning and the loss arosefrom the same event, liability can be established by a two stage inquiry.18 First,whether the conduct was misleading and deceptive for the purposes of s 9 of the FTA.This question is to be considered in context, including the characteristics of the personaffected (e.g. an unsophisticated consumer as opposed to a sophisticatedbusinessperson). The question can be framed conveniently as whether a reasonableperson in the plaintiff's position would likely have been misled or deceived by therepresentation.19[27] Once a breach of s 9 has been proved the inquiry moves to the requirements ofs 43 — whether the loss or damage was sustained "by" the conduct of the defendant.This question engages a "common law practical or common-sense concept ofcausation".20 It requires proof that the claimant was actually misled or deceived bythe defendant's conduct and then whether that conduct was the or an effective causeof the loss. It is possible for one of the effective causes of loss to be the claimant'sown conduct in failing to take reasonable care to look after their own interests, inwhich case the Court can exercise its discretion as to whether the full amount of theloss should be recoverable.21[28] Both parties proceeded, correctly, on the basis that the approach described inRed Eagle was appropriate in this case. The first stage of the inquiry was satisfied.Mr Graham accepted that he was acting in trade for the purposes of s 9 of the FTA.The Judge's finding that the statement regarding carrying capacity was misleading anddeceptive for the purposes of the FTA is not challenged.2218 Red Eagle Corp Ltd v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [27]–[31].19 Wellington City Council v Dallas [2014] NZCA 631 at [21].20 Red Eagle Corp Ltd v Ellis, above n 18, at [29], quoting Wardley Australia Ltd v State of WesternAustralia (1992) 175 CLR 514 at 525.21 At [30].22 High Court decision, above n 3, at [137(f)].[29] The appeal turns on the second stage of the enquiry — causation and loss.The Judge held that no liability arose under the FTA because cl 27.3 had the effect ofbreaking the chain of causation between the misleading representation and Shabor'sloss. The Judge gave an indicative view of the damages and considered that ifMr Graham had been liable, any damages would have been reduced by 40 per cent toreflect Shabor's own conduct.23[30] Shabor says, first, that the Judge erred by giving effect to the legal fictioncreated by cl 27.3 rather than undertaking an assessment on the totality of the evidence.Secondly, the Judge's (hypothetical) assessment of the level of contributory conductby Shabor was wrong.[31] Mr Depledge, for Mr Graham, supported the approach taken by the Judge.Acknowledging that the misrepresentation must have played some part in inducingentry into the contract, he submitted that causation was nevertheless negated by thepresence of the no-reliance clause.24 Alternatively, the misrepresentation was not thedominant cause of loss but rather was overtaken by Mr Sharp's and Mr Borland'sfailure to carry out any further inquiries after receiving legal advice on the agreement.If the misrepresentation had been a cause of the loss, he supported the Judge'sassessment of a 40 per cent reduction for contributory conduct.Did the Judge err in finding that cl 27.3 broke the chain of causation?The Judge's finding on causation[32] The Judge dealt with Shabor's CCLA cause of action before considering theFTA claim, despite the latter having been pleaded first. She held that the CCLA claimfailed because cl 27.3 was conclusive as between the parties. In her opening remarkson the FTA cause of action the Judge expressed the view that, where bothmisrepresentation and breach of the FTA were asserted, a different outcome on eachcause of action was unlikely:2523 At [236].24 Relying on Gould v Vaggelas (1984) 157 CLR 215 at 238.25 High Court decision, above n 3 (emphasis in original).[185] Given the similarities between the two causes of action, in all of theauthorities discussed earlier (save for Waikatolink v Comvita), the ContractualRemedies Act and Fair Trading Act claims have been treated relativelyinterchangeably, with no difference in outcome, including on the effect of ano-reliance clause. Again, this is not surprising, given the undoubtedconsumer focus of the Fair Trading Act. As I have recorded above, neitherMr Sharp or Mr Borland, or as a result, Shabor, purchased the Property as aconsumer. It would therefore be somewhat surprising if Shabor was in a betterposition vis-a-vis its contracting counter-party under consumer-focusedlegislation, than it is under contract-focused legislation.[33] Following these comments, the Judge set out the approach suggested by theSupreme Court in Red Eagle before considering what effect, if any, cl 27.3 had on theFTA claim.26 On its face cl 27.3 precluded Shabor from asserting that its reliance onthe misrepresentation caused or contributed to its loss. But when the agreement wasentered into it was not possible to contract out of the FTA.27 No-reliance clauses suchas cl 27.3 were seen as means of circumventing that restriction.28[34] The Judge noted this Court's discussion in David v TFAC Ltd in whichArnold J, writing for the Court, had considered that while consumer protectionjustified not allowing parties to contract out of the FTA, that justification had less forcein the context of commercial transactions involving substantial independently advisedparties negotiating from positions of equality.29 Although clauses such as entireagreement clauses and no-reliance clauses were not determinative, they could berelevant in deciding whether there had been misleading and deceptive conduct.30 Buta disclaimer or similar clause may be overwhelmed by oral assurances or otherconduct.3126 At [186]–[187].27 Subsequent amendments to the Act now permit contracting out in certain circumstances: FairTrading Act 1986, s 5D, inserted by s 8 of the Fair Trading Amendment Act 2013.28 David v TFAC Ltd [2009] NZCA 44, [2009] 3 NZLR 239 at [62].29 At [61].30 At [63], citing Kewside Pty Ltd v Warman International Ltd (1990) ATPR (Digest) 46-059 (FCA)at 53,222.31 At [63], citing Phyllis Gale Ltd v Ellicott (1997) 8 TCLR 57 (HC) at 65–66; and Cornfields Ltd vGourmet Burger Co Ltd (2000) 9 TCLR 698 at [41].[35] The Judge then surveyed subsequent New Zealand cases that had consideredthis issue — Pegasus v Draper,32 Overton Holdings Ltd v APN New Zealand Ltd33 andPAE (New Zealand) Ltd v Brosnahan34 — and concluded: 35[196] Like the position under the Contractual Remedies Act cause of action,I conclude that the no-reliance clause in this case is effective in defeating theclaim under the Fair Trading Act also.[197] In particular, I adopt the approach taken by the Court of Appeal in PAE(New Zealand) Ltd v Brosnahan and set out at [195] above. In this case,cl 27.3 was clear in stating that Mr Sharp and Mr Borland, when submittingtheir tender and entering into the Agreement, relied on their own judgement,and not on any representations or warranties given by Mr Graham. Mr Sharpand Mr Borland were aware of the tender terms as of 7 April 2014, andimportantly, prior to formulating and submitting their tender. Rather than theeffect of the clause being "overwhelmed" by earlier representations, thecontent of cl 27.3 itself, that it was clearly visible to Mr Sharp and Mr Borlandand that they received advice on it, "drew down the curtain of liability". They,as purchasers, were on notice and represented in clear terms to Mr Graham,that they were not relying on any representations made by him. There is noreason why this statement should not bind them in the circumstances of thiscase.[198] I therefore conclude that cl 27.3 was effective in breaking the chain ofcausation between the Capacity Representation and Shabor's loss. For thereasons briefly set out at [233]–[236] below in relation to damages, had I notfound cl 27.3 broke the chain of causation in this case, in the second step ofthe analysis endorsed in Red Eagle, I would have reduced Shabor's damagesclaim to take into account what I consider to have been its haste in enteringinto this significant transaction, and consequent failure to conduct appropriatedue diligence (which as noted, was a theme of a number of experts' evidence).The ground of appeal[36] Mr Quinn, for Shabor, submitted the Judge's view that it would be unlikely forCCLA and FTA claims arising in the same proceeding to produce different outcomesdisclosed an error because the two causes of action required different approaches tothe question of causation. It is correct that different issues arise under each. We agreethat the Judge's comments had the potential to distract from the approach required forthe FTA causation enquiry and, as we come to shortly, we think that the Judge did errin her approach to the question of causation.32 Pegasus Town Ltd v Draper [2011] NZCA 140, (2011) 13 NZCPR 51.33 Overton Holdings Ltd v APN New Zealand Ltd [2015] NZCA 526, (2015) 17 NZCPR 251.34 PAE (New Zealand) Ltd v Brosnahan [2009] NZCA 611, (2009) 10 TCLR 626.35 High Court decision, above n 3 (footnote omitted and emphasis in original).[37] Mr Quinn submitted that cl 27.3 created a legal fiction that Shabor had notrelied on the misrepresentation, which the Judge wrongly treated as determinative ofthe causation issue. Instead, the Judge should have asked whether, as a matter of fact,Shabor's directors had actually relied on the misrepresentation. Mr Quinn alsosubmitted that the Judge's reliance on PAE was misplaced, since that case did notrepresent an accurate parallel with circumstances of this case.[38] Mr Quinn argued that the evidence pointed strongly towards Mr Sharp andMr Borland having been actuated by the misrepresentation in entering into thecontract, particularly the speed with which they made the decision to tender for thefarm, their use of the misrepresentation to formulate the tender price, the lack of anysteps towards due diligence and their unchallenged evidence that they would not havetendered at that price if they had known the true position. He also pointed out that,when considering damages on the hypothetical basis, the Judge herself considered that"Mr Sharp and Mr Borland placed wholesale reliance on a carrying capacity set out inadvertising materials".36 Although obiter (given the Judge's conclusion on causation),Mr Quinn submitted that this comment accurately reflected the evidence. Further, itwas consistent with the Judge's view that, had the FTA claim succeeded, damageswould have been reduced by 40 per cent to reflect Shabor's own conduct.37 AsMr Quinn put it, the obvious question is what the cause of the other 60 per cent was— the answer being that Mr Graham's conduct remained an effective, indeed thedominant, cause of Shabor's loss.[39] Mr Depledge submitted that the capacity representation was not the dominantcause of the loss; it was overtaken by Mr Sharp's and Mr Borland's failure to carry outany further inquiries after receiving legal advice on the agreement. He emphasisedthe consumer protection policy of the FTA, which did not extend to protectingpurchasers who fail to look after their own interests in a manner that is unreasonablein the circumstances. He relied heavily on the statement by Elias J (as she then was)in Des Forges v Wright that "[t]he Fair Trading Act is not designed to provide aguarantee to purchasers who fail to look after their own interests in a manner which is36 At [233].37 At [236].reasonable in the circumstances"38 and by the Supreme Court in Red Eagle that"[c]onduct towards a sophisticated businessman may, for instance, be less likely to beobjectively regarded as capable of misleading or deceiving such a person than similarconduct directed towards a consumer".39[40] Mr Depledge argued that these cases had changed the approach taken inNew Zealand, which now emphasises the need for purchasers to take reasonable stepsto protect themselves. He dismissed as not relevant the Australian decisions relied onby Shabor and invited us to disregard the subsequent New Zealand cases that havetreated the question of causation as requiring consideration of the evidence generally— Leigh v MacEnnovy Trust Ltd,40 PAE41 and Waikatolink Ltd v Comvita New ZealandLtd 42 — either because of factual differences or for want of adequate analysis of theissue.Discussion[41] We start our discussion with Mr Depledge's argument that Shabor's failure tolook out for its own interests could, and did, effectively counter the effect of themisrepresentation for the purposes of the causation inquiry. This approach is notconsistent either with Red Eagle or with the settled approach to assessing the effect ofno-reliance and similar clauses. The statements in Des Forges and Red Eagle on whichMr Depledge relied were directed towards determining whether the conduct inquestion had amounted to a breach of s 9, specifically whether a reasonable personwould have been misled or deceived by the conduct in question. They did not concernwhether conduct that had been held to be a breach of s 9 caused the loss complainedof. Accordingly, we do not accept the submission that those cases resulted in anydifference in the approach to the causation inquiry.38 Des Forges v Wright [1996] 2 NZLR 758 (HC) at 765.39 Red Eagle Corp Ltd v Ellis, above n 18, at [28].40 Leigh v MacEnnovy Trust Ltd (2010) 12 TCLR 790 (HC).41 PAE (New Zealand) Ltd v Brosnahan, above n 34.42 Waikatolink Ltd v Comvita New Zealand Ltd (2010) 12 TCLR 808 (HC).[42] In David, this Court made it clear that whether a disclaimer clause waseffective would depend on the totality of the evidence. Arnold J expressly referred toFrench J's observations in Kewside Pty Ltd v Warman International Ltd that:43A disclaimer or exclusion clause will affect liability for misleading ordeceptive conduct only if it deprives the conduct of that quality or breaks thecausal connection between conduct and loss. Whether it has that effect in agiven case is a question of evidence and not a question of law.[43] In Campbell v Backoffice Investments Pty Ltd French CJ elaborated on thecircumstances in which disclaimers might be held to be effective in breaking the causalconnection between misleading and deceptive conduct and loss:44[31] Where the impugned conduct comprises allegedly misleadingpre-contractual representations, a contractual disclaimer of reliance willordinarily be considered in relation to the question of causation. For if aperson expressly declares in a contractual document that he or she did not relyupon pre-contractual representations, that declaration may, according to thecircumstances, be evidence of non-reliance and of the want of a causal linkbetween the impugned conduct and the loss or damage flowing from the entryinto the contract. In many cases, such a provision will not be taken to evidencea break in the causal link between misleading and deceptive conduct and loss.The person making the declaration may nevertheless be found to have beenactuated by the misrepresentations into entering the contract. The question isnot one of law, but of fact.[44] Prior to the amendment permitting parties to contract out of the FTA thisapproach was consistently followed in New Zealand. In Phyllis Gale Ltd v Ellicott(decided before Campbell but citing Kewside), in response to the submission that adisclaimer clause may provide some evidence from which the Court could concludethat the claimant was not in fact influenced by the misrepresentation, the Judge saidthat evidence to that effect was not present and, in fact, was to the contrary.45[45] PAE concerned the purchase of shares in a company. Directors of the vendorcompany made representations about turnover and profitability that were found to bematerially incorrect. The purchaser was a substantial company (a subsidiary of amulti-national company) and its lawyers had prepared the agreement, which contained43 David v TFAC Ltd, above n 28, at 63, quoting Kewside Pty Ltd v Warman International Ltd, aboven 30, at 53,222.44 Campbell v Backoffice Investments Pty Ltd [2009] HCA 25, (2009) 238 CLR 304 (footnotesomitted).45 Phyllis Gale Ltd v Ellicott, above n 31, at 65–66.clauses excluding any implied or general warranty and acknowledging that only thewarranties expressly recorded in the contract would apply. The FTA claim failed onthe ground that the purchaser's reliance on the representations was unreasonable. But,obiter on the question of causation, the Court referred to David and considered that inagreeing in unequivocal terms, at the purchaser's instigation, what the directors hadsaid and done before the agreement no longer mattered; they effectively "drew downthe curtain of liability, excluding from it all preceding conduct [and by this means]they also broke the chain of causation".46 It is notable, however, that the aspectscritical to the outcome in PAE are absent in this case — the international commercialcontext, the long negotiation period and the fact that the entire agreement clause hadbeen introduced by the purchaser itself.[46] Leigh v MacEnnovy Trust Ltd concerned the purchase of an apartment "off theplans" where the agreement contained an entire agreement clause.47 The purchaserscancelled the agreement for misrepresentation, relying on both the ContractualRemedies Act 1979 (CRA) and the FTA. On the FTA cause of action Harrison Jexpressly found that the representations were an effective operating cause of thepurchasers' loss and that their admissions in the agreement had not operated to breakthe chain of causation.48 He noted that the respondent had not attempted to raise theno-reliance clause in defence of that cause of action, presumably accepting "that thepolicy of consumer protection inherent in the FTA would be defeated by upholding acontractual acknowledgement by a purchaser that she had not been induced to executea contract by a misleading or deceptive statement which was not set out in theagreement, when the contrary was true, would be defeated".49 Mr Depledge submittedthat Harrison J had not undertaken an analysis of cases such as David and PAE and sothe decision ought to be disregarded. We disagree. David was cited in support of theJudge's conclusion and, given the settled position of the law by then, further analysiswas unnecessary. It is plain from the Judge's factual findings that he was followingthe Kewside approach.46 PAE (New Zealand) Ltd v Brosnahan, above n 34, at [46].47 Leigh v MacEnnovy Trust Ltd, above n 40.48 At [53].49 At [54].[47] In Comvita, in the context of an intellectual property agreement induced bymisrepresentations, Harrison J rejected the argument that the entire agreement clausewas conclusive evidence that the claimant had not relied on the misrepresentations.He considered that, to the contrary, the acknowledgement contained in the clause "wasoverwhelmed by the weight and effect of [the] assurances".50[48] In Pegasus Town Ltd v Draper, this Court referred to the passage in Davidalready cited above at [34] as setting out the principles to be applied.51 The caseconcerned misrepresentations made to purchasers of land in a residential development.The Court was satisfied that the disclaimers and exclusion clauses "were overcome bythe oral assurances and the silence of the agents on the question of possible proposals[and] were not such as to deprive the conduct of the quality required by the [FTA]".52[49] It is plain that the correct approach to causation where a no-reliance clauseforms part of the contract is that explained in Kewside and Campbell and approved bythis Court in David. Therefore, the question for the Judge in this case was whether, asa matter of fact, Shabor had relied on the misrepresentation and whether that reliancecaused loss as a result of Shabor purchasing the farm at the tendered price. Clause 27.3formed part of the body of evidence to be considered but was not, in itself,determinative.[50] The Judge expressly stated her intention to rely on PAE, implying that she wasfollowing the Kewside approach.53 However, the Judge did not consider all therelevant evidence. It will be recalled that the facts identified by the Judge as leadingto the conclusion that Mr Borland and Mr Sharp had not relied on themisrepresentation were (1) the statement in cl 27.3 itself that they had not relied onrepresentations made by Mr Graham (2) they were aware of the terms of the tenderwhen they formulated the offer and (3) they received legal advice before submittingthe tender. On the basis of these facts the Judge concluded that cl 27.3 was effectivein breaking the chain of causation between the misrepresentation and Shabor's loss.5450 Waikatolink Ltd v Comvita New Zealand Ltd, above n 42, at [109].51 Pegasus Town Ltd v Draper, above n 32, at [47].52 At [48].53 High Court decision, above n 3, at [197].54 At [198].The facts identified by the Judge were certainly relevant but there was other relevantevidence that the Judge did not consider.[51] First, Mr Sharp and Mr Borland gave unchallenged evidence that they believedthe representation as to carrying capacity to be accurate and relied on it in formulatingthe tender. This evidence was striking in its clarity regarding the immediate relianceplaced on the misrepresentation to calculate the offer, before Mr Sharp and Mr Borlandhad seen the tender documents.[52] Secondly, the very short time frame between inspection of the farm and thetender closing meant that Mr Sharp and Mr Borland had no other source of informationabout the carrying capacity, as Mr Graham must have known. So both partiesproceeded on the basis that, regardless of what cl 27.3 said, the only source ofinformation about the carrying capacity was the statement in the advertising materials.[53] Thirdly, cl 27.3 was in very general terms whereas the capacity representationwas specific and central to the advertising. This differs from PAE, in which the partieshad agreed on express warranties that would be relied on, and the entire agreementclause merely had the effect of excluding those that were not express.[54] In our view the weight of the evidence showed that, notwithstanding theacknowledgement recorded in cl 27.3 and the fact that Shabor was legally advised,Mr Borland and Mr Sharp did rely on the misrepresentation. Whether they werecareless to do so, as the Judge found, is a matter for the later enquiry regardingcontributory conduct. We do not accept Mr Depledge's submission that continuedreliance on the misrepresentation following the receipt of legal advice made thepreviously reasonable reliance unreasonable. The enquiry at this stage is subjective— were Mr Sharp and Mr Borland actually misled?[55] The circumstances of this case differ significantly from those relied on byMr Depledge as examples of a representee failing to look after its own interests. BothFletcher Construction NZ and South Pacific Ltd v Cable Street Properties Ltd55 and55 Fletcher Construction NZ and South Pacific Ltd v Cable Street Properties Ltd CA271/98,9 September 1999 at [39].Niagara Sawmilling Co Ltd v Carter Holt Harvey Ltd56 involved very experiencedcommercial parties engaged in truly commercial transactions (vendor and propertydeveloper in the first and landlord and tenant in the second). In both cases the correctposition could have been ascertained by seeking further advice or information whichis not the case here, as we discuss below.[56] We are satisfied that the Judge erred in her assessment of the evidence as toreliance. This ground of appeal is made out.[57] Before moving to the quantum issues, we note that whether a damages awardshould follow a finding of liability under the FTA is a matter of discretion.We consider that this case is one in which the discretion is properly exercised.Mr Graham did not suggest otherwise. The discretion is very broad — "a matter ofdoing justice to the parties in the circumstances of the particular case and in terms ofthe policy of the Act".57 Factors relevant to the exercise of the discretion include thedegree of blameworthiness of the defendant and the extent to which the plaintiff hasfailed to protect their own interests.58 It is apparent from some of the cases we havediscussed that, while the existence of the no-reliance clause is relevant to the exerciseof the discretion, particularly where the transaction is commercial in nature, it is notdeterminative against a remedy.59What was Shabor's loss?The Judge's indication[58] Notwithstanding the Judge's conclusion on liability under the FTA, sheconsidered the issue of damages under both the CCLA and FTA causes of action. Asto the latter she stated the correct approach as being that:6056 Niagara Sawmilling Co Ltd v Carter Holt Harvey Ltd [2012] NZHC 441 at [62]–[66].57 Goldsbro v Walker [1993] 1 NZLR 394 (CA) at 404. See also Red Eagle Corp Ltd v Ellis, aboven 18, at [31].58 Goldsbro v Walker, above n 57, at 406.59 Waikatolink Ltd v Comvita New Zealand Ltd, above n 42, at [167]; and Leigh v McEnnovy TrustLtd, above n 40, at [59]–[61].60 High Court decision, above n 3, (footnotes omitted) citing Cox & Coxon Ltd v Leipst [1999] 2NZLR 15 (CA); and James Edelman McGregor on Damages (20th ed, Sweet & Maxwell, London2018) at [49-028] and [49-058].[230] Damages under s 43 of the Act are calculated on the tort measure ofdamages. Thus, rather than compensation to secure performance of 7,500Stock Units, damages are (generally) calculated as if the misrepresentationhad not been made. In those circumstances, "[t]he normal measure ofdamages is the value transferred, generally represented by the contract price,less the value received, whether of property or of services or of money".[59] Shabor had claimed the difference between the price paid and the value of thefarm given its actual carrying capacity. The Judge held that the difference in the valueof the property had it carried 7,500 Stock Units compared with the 5,500 Stock Unitsit actually carried was approximately $530,000.61[60] Shabor also claimed operating losses of approximately $450,000, said to haveresulted from running the property at less than the anticipated number of Stock Units.This figure was based on evidence from Shabor's accountant, Mr Gray, who said thatShabor had suffered a net loss of $472,209 in the 2014 financial year, almost allattributable to the operations at the subject property (as opposed to the other farm thatShabor owned). It appeared that there had been no comment from Mr Graham'switness on this evidence.[61] The Judge did not make a specific finding as to whether the operating loss wasclaimable. Instead she said:62But even accepting for present purposes the total of diminution in valueand operating loss (given a total of $980,000), I would have reduced theFair Trading Act damages award to reflect what I consider to be Shabor's ownconduct contributing significantly to that loss.Quantum of loss[62] There is no challenge to Shabor's right to recover the difference between thepurchase price and the actual value of the farm. We note Mr Sharp said in evidencethat had he suspected the carrying capacity was materially less than that represented,Shabor would not have tendered at the price it did. Reliance on the misrepresentationled Shabor to pay more than it otherwise would have for the farm.61 At [212(e)], [228] and [231].62 At [233].[63] The position regarding the operating losses was less clear. In submissions,Mr Depledge said it was not disputed that if Shabor had established liability,diminution in value and compensation for operating losses may have been theappropriate approach to damages under the FTA cause of action. Apart from asubsequent note in the submissions that Shabor's quantification of its operating lossesdid not take into account the fact that Shabor was also undertaking an expensive deerconversion, including the transfer of deer from another farm which should thereforehave been classified as income from that farm, there was simply a general complaintthat Shabor had not attempted to apportion income accurately.[64] We are not satisfied that the operating losses are claimable under the FTA.Shabor pleaded the same losses in the FTA and misrepresentation causes of action.However, the measures of damages for these causes of action are different. In theformer, the tort measure is generally applicable; in the latter, expectation damages maybe recovered. In Cox & Coxon v Leipst this Court explained, in the context of a claimunder the FTA that:63Where there has been an actionable wrong, it is a general and basic principleof law that the remedy by way of monetary award is to put the wronged partyin the same position as he or she would have been in but for the wrong. Wherethe wrong is misrepresentation leading to a contract for purchase of property,the position to be restored is that which would have enured had themisrepresentation not been made. If [the purchasers] would not havepurchased at all, then prima facie their loss would be based on the differencebetween the value of the property and the price paid or, in some circumstances,the loss of an opportunity to buy a different property. On the other hand, ifthey still would have purchased, the resulting loss could only be one arisingin some collateral way, such as lost opportunity to buy at a reduced price orsome other direct out of pocket consequence.[65] This decision was explained further in Harvey Corp Ltd v Barker.64 That caseconcerned the purchase of a property in reliance on a misrepresentation that theproperty included part of a driveway and ornamental gates. In fact, both were situatedacross a paper road vested in the local authority. Blanchard J, for the Court, said:65The proper question in a claim under s 43 is whether the [claimants] areworse off as a result of the making of the representation – by changing theirposition in reliance on it – not whether they have been unable to realise a63 Cox & Coxon v Leipst, above n 60, at 26 per Henry and Blanchard JJ.64 Harvey Corp Ltd v Barker [2002] 2 NZLR 213 (CA).65 At [14].benefit because of the failure of the vendors to convey a property without thedefect complained of. The [claimants] accordingly had to prove that themisrepresentation of the property had caused them to act in a way whichresulted in a loss. Normal measures of such a loss are whether what has beenacquired is worth less than what was paid and/or whether there has beenwasted expenditure. To the extent that the [claimants] might by reason ofthe misrepresentation have paid too much for the land – and so did not get fullvalue for their expenditure – the "lost" additional money would be recoverableunder s 43. But, in order to sustain such a claim, it was necessary for them toshow that they paid more than the market value of the property as it actuallywas, [66] The operating losses claimed represent the costs incurred by Shabor to improvethe quality of the farm, including increasing its carrying capacity. That cost was notincurred in reliance on the misrepresentation. To the contrary, recovering the operatinglosses would restore Shabor to the position it would have been in had themisrepresentation been true, i.e. the contractual measure. On the other hand, thedifference in value would place Shabor in the same position it would have been in hadit paid the true value of the farm, i.e. it had a farm that needed work to increase itscarrying capacity.[67] In our view the correct quantum is the Judge's assessment of the differencebetween the price paid and the actual value — $530,000.Contributory conduct[68] On a broad brush assessment the Judge indicated that she would have reducedthe FTA damages award by 40 per cent for Shabor's own conduct:66As discussed earlier, despite the significance of the transaction, its entry intothe Agreement was hasty; I accept the experts' evidence that more duediligence ought to have been carried out; Mr Sharp and Mr Borland placedwholesale reliance on a carrying capacity set out in advertising materialsexpressed in Stock Unit terms, without ascertaining the basis upon which thathad been calculated; and failed to take steps available to protect its position,such as negotiating appropriate clauses in the Agreement or making its tenderconditional on due diligence.[69] Mr Quinn read this passage as meaning that the Judge had relied on the merefact of reliance on the misrepresentation as contributory conduct. We do not read thepassage in this way. Rather, we understand the reference to "wholesale reliance" as66 High Court decision, above n 3, at [233].merely emphasising Shabor's failure to ascertain the basis for the representation. Thiswould reflect the fact that reliance itself cannot be a contributing cause of loss; relianceprovides the basis on which a claimant asserts they have been misled or deceived andestablishes causation, but it is not a factor in the next stage, which is concerned withother conduct that contributed to the loss.[70] The Judge's reasons for concluding that any damages should be reduced by40 per cent can be therefore summarised as being that Shabor (1) entered into theagreement in haste, without taking steps to ascertain the true position regardingcarrying capacity, and (2) failed to protect its position by negotiating the terms of theagreement or making its tender conditional upon due diligence.[71] As to the haste with which Shabor entered into the agreement, Mr Quinnpointed out that Mr Sharp and Mr Borland had visited the property on 7 April 2014and the date for tenders closed on 10 April 2014, just three days later. The Judge didnot identify any specific step that could have been undertaken in that 72-hour periodwhich would have shown the representation as to carrying capacity to be false.[72] None of the witnesses identified specific steps that could have been takenwithin the short time available to ascertain the true position. Mr Graham suggested attrial that the presence of machinery for feeding out, which was visible on the propertyduring the inspection, indicated that supplemented feed was being used. Mr Borlandhad seen the equipment but did not ascribe any significance to that; in evidence heexplained that the equipment looked new or near new and, knowing that Mr Grahamwas selling the farm, saw nothing unusual about Mr Graham having new equipmentto (presumably) take to his new farm. The Judge made no finding on this point.[73] There was no evidence as to what else Mr Sharp and Mr Borland could havedone that would have alerted them to the inaccuracy in the representation. It was notin dispute that they knew the low Olsen P readings indicated that more fertiliser wouldbe required to improve the soil fertility. But Mr Sharp did not accept that this meantanything in relation to the carrying capacity as represented. He simply understood thelow Olsen P levels as indicating that if they wanted to improve production beyond therepresented carrying capacity, more fertiliser would be required. There was nochallenge to the reasonableness of this view.[74] Mr Sharp and Mr Borland were asked about whether they had consideredconsulting a valuer or farm consultant prior to tendering for the farm. They both saidthey had not, though indicated that time may have been against them to do so. Therewas no evidence as to what a farm consultant might have advised in that time framethat could have made a difference to their understanding of the farm's carryingcapacity.[75] Mr Depledge submitted that the tight time frame counts against Shabor becauseit was not Mr Graham's fault that only three days remained and Shabor had the choiceof not proceeding to tender. We do not accept that argument. It is not for a party whohas made a misrepresentation intended to induce an offer to say that the other partyought not have proceeded. To the contrary, the fact that only very little time wasavailable to a purchaser viewing the property on 7 April 2014 meant that Mr Grahammust have realised that the only means of ascertaining the carrying capacity of theproperty was by relying on the misrepresentation.[76] We agree, however, that the failure to include some contractual protection inthe tender justified a reduction. Mr Quinn acknowledged this but maintained that itjustified a reduction of only 25 per cent at most. It was evident from thecross-examination that the possibility of including a due diligence provision in theagreement was not considered. But Mr Gudsell (the real estate agent) andMr Matheson (an agricultural consultant) gave evidence that such a condition iscommonly included in agreements for sale and purchase of farms. Given that Shaborwas legally advised prior to submitting the tender, this was a reasonable step forShabor to have taken.[77] However, failure to require a due diligence period could only have contributedto Shabor's loss if there was a reasonable possibility that doing so would havedisclosed the true carrying capacity of the farm. But there was no evidence as to whata reasonable due diligence period would have been or what information could havebeen obtained within that time frame.[78] The experts generally agreed that the best objective benchmark for carryingcapacity was soil fertility but it was accepted that soil sampling was most effective inthe winter, some months after the settlement date. Some of the experts would haveput weight on what the farm had historically carried. Mr Gudsell suggested thatinformation about livestock numbers, financial records and farm diaries could havebeen requested. But the documents that contained this information were likely to bedifficult to identify, as was evident from the difficulty the parties had at trial.[79] Mr Gudsell also suggested that a valuation could have been obtained but,self-evidently, a valuation would be based on the known carrying capacity, which wasthen thought to be 7,500 Stock Units as a result of the misrepresentation. Informationthat showed the actual carrying capacity was the only information that could havemade a difference and, for the reasons discussed, it was uncertain what financialrecords or diaries would have been produced.[80] Realistically, further enquiries within a due diligence period of, say, twomonths could likely have done no more than demonstrate that more work would berequired to confirm the carrying capacity. However, the tenor of the evidencegenerally suggested that a number of warning signs would have emerged if furtherenquiries had been made. These included the apparently poor condition of the stock,which had caused Mr Borland and Mr Sharp concern when they attended the stocksale in May 2014. Further inquiries would likely have disclosed the fact ofsupplementary feeding. All that was needed was sufficient information to have alertedShabor to the possibility that the farm was not actually carrying 7,500 Stock Units.Shabor could then have made a more informed decision whether to proceed in theknowledge of that possibility or withdraw.[81] In fixing on 40 per cent as the appropriate reduction for Shabor's own conduct,the Judge made a broad-brush assessment, as indicated in Red Eagle.67 She referredto the reductions of 50 per cent applied in all of Comvita,68 Poplawski v Pryde69 andRed Eagle. The Judge did not explain the differences between those cases and this67 Red Eagle Corp Ltd v Ellis, above n 18, at [39].68 Waikatolink Ltd v Comvita New Zealand Ltd, above n 42.69 Poplawski v Pryde [2013] NZCA 229, (2013) 13 TCLR 565.case that led her to conclude that a lesser reduction was appropriate. However, it isclear that there are differences.[82] The claimant in Comvita had made no attempt to satisfy itself that it was payingfair value for the intellectual property in question, despite being on direct notice thatit had little if any real value. It had also failed to protect its interests throughcontractual provisions during arm's length negotiations.70 It was therefore consideredto have "contributed materially" to its loss, with the Judge seeking to do justice"between two sophisticated commercial entities".71 The claimant in Poplawski hadsimilarly disregarded independent legal advice to seek security before advancing adeposit for the purchase of a helicopter.72 The claimant in Red Eagle had failed tomake rudimentary checks before advancing a substantial loan. In both Red Eagle andPoplawski the claimants were described as having been "very neglectful" of theirinterests.73[83] In this case it cannot fairly be said that Shabor was very neglectful of itsinterests. Its only failing was not to have inserted a due diligence clause in theagreement. But, as discussed, a due diligence clause would not have led Shabor todiscover the correct position — it could only have shown the possibility that thecarrying capacity of the farm had been overstated. We think that greater weight wasput on Shabor's conduct that was justified. We put the appropriate reduction forcontributory conduct at 30 per cent.THE MISREPRESENTATION CLAIMThe issues[84] As noted already, the Judge held that the statement about carrying capacitymisrepresented the position and that it was self-evident that the advertising materialswere intended to induce the purchasers to enter the contract.74 Those findings are notchallenged.70 Waikatolink Ltd v Comvita New Zealand Ltd, above n 42, [162]–[167].71 At [169]–[170].72 Poplawski v Pryde, above n 69, at [68]–[72].73 Red Eagle Corp Ltd v Ellis, above n 18, at [39]; and Poplawski v Pryde, above n 69, at [60].74 High Court decision, above n 3, at [138].[85] As in the FTA cause of action, cl 27.3 was the central issue in themisrepresentation claim. Shabor argued that, properly construed, cl 27.3 did notpreclude any complaint by Shabor that it had relied on the misrepresentation to itsdetriment. If it did, s 50 of the CCLA would be engaged and the question arosewhether it was fair and reasonable for cl 27.3 to be conclusive between the parties.Did cl 27.3 preclude inquiry into reliance on the misrepresentation?[86] Shabor maintained that, properly construed, cl 27.3 did not preclude relianceon any express representation, including the capacity representation. For conveniencewe set out cl 27 again:27.0 Limitations of liabilityThe Vendor does not warrant:27.1 The accuracy of any matter, fact or statement in any report or otherinformation on the property prepared or provided by the Vendor's [sic] or itsManagers or Agents (including information contained in Schedules to thisAgreement), any advertising of the sale of the property or any statement madeexcept in relation to any specific warranty given in this Agreement or27.2 Any other matter relating to the property or its use or nature or thestate of the property in any respect other than expressly set out in thisAgreement.27.3 The Purchaser shall be deemed to have purchased the property actingsolely in reliance on the Purchaser's own judgement and upon its owninspection of the property and all other information regarding the property,and not in reliance upon any representative [sic] or warranty made by theVendor, the Vendor's Agent or Managers other than as expressly set out in thisAgreement.[87] In the High Court, Shabor had submitted that cl 27.3 was internallycontradictory: the statement that the purchaser had relied on "all other informationregarding the property" at cl 27.3 contradicted the next statement that the purchaserhad not relied on "any representative [sic] or warranty made by the Vendor, otherthan as expressly set out in this Agreement". On this argument, Shabor maintainedthat the ambiguity required the clause to be interpreted contra proferentem with theresult that "all other information regarding the property" would be read as referring toinformation actually received but, consistently with the two previous sub-clauses, notany implied representations. The purchaser would therefore be entitled to rely oninformation supplied by the vendor.75[88] The Judge did not accept that cl 27.3 was ambiguous. Acknowledging theawkwardness of the drafting, the Judge nevertheless considered that the overallobjective intent was clear:76 namely that the purchaser is deemed to have purchased the Property acting"solely in reliance on its own judgement", together with its "own inspection ofthe Property and [its own inspection of] all other information regarding theProperty["], and importantly, that it "has not relied on any representation orwarranty by the Vendor " The concept of relying on the purchaser's owninspection of the Property and its own inspection of "all other informationregarding the Property" must be something different to not relying on "anyrepresentation by the Vendor". The former is no doubt directed to otherobjective information concerning the Property itself, such as the soil testresults and the fertilizer application records and so on, rather than the vendor'sown statements or representations about the Property.[89] Before us, Mr Pearce, for Shabor, argued that the Judge had effectivelyrewritten the clause in favour of Mr Graham by adding the words "its own inspectionof" before the words "all other information". He argued that this produced an unlikelyconstruction because the natural meaning of inspection relates to physical things suchas property — one does not inspect information.[90] In our view the Judge approached the construction of cl 27.3 correctly.Treating the words "upon its own inspection" as relating to both the property and "allother information" would be grammatically correct and within the plain and ordinarymeaning of the words. In particular, we regard the use of "inspection" in relation to"all other information" as within the bounds of plain and ordinary language. This isbecause information relating to property frequently (indeed almost invariably) takesthe form of documentation such as reports and maps and it is usual to speak ofinspecting documents. On this approach, cl 27.3 clearly purports to preclude inquiryas to reliance on the capacity representation. This ground of appeal fails.75 At [167].76 At [168] (emphasis in original).Was it fair and reasonable for cl 27.3 to be conclusive between the parties?Section 50 of the CCLA[91] Section 50 of the CCLA provides that:7750 Statement, promise, or undertaking during negotiations(1) This section applies if a contract, or any other document, contains aprovision purporting to prevent a court from inquiring into ordetermining the question of—(a) whether a statement, promise, or undertaking was made orgiven, either in words or by conduct, in connection with or inthe course of negotiations leading to the making of thecontract; or(b) whether, if it was so made or given, it constituted arepresentation or a term of the contract; or(c) whether, if it was a representation, it was relied on.(2) The court is not, in any proceeding in relation to the contract,prevented by the provision from inquiring into and determining anyquestion referred to in subsection (1) unless the court considers that itis fair and reasonable that the provision should be conclusive betweenthe parties, having regard to the matters specified in subsection (3).(3) The matters are all the circumstances of the case, including—(a) the subject matter and value of the transaction; and(b) the respective bargaining strengths of the parties; and(c) whether any party was represented or advised by a lawyer atthe time of the negotiations or at any other relevant time.[92] The Judge undertook an extensive review of the cases relating to s 50. Thereis no criticism of that review and it is sufficient for us to summarise the relevantprinciples, which are now well-settled.[93] Section 50 applies where the terms of a contract purport to preclude the courtfrom inquiring into one of the factual questions set out in s 50(1): whether a statementundertaking or promise was made prior to the contract, if so whether it constituted arepresentation and if so whether the representation was relied on. If s 50(1) is engaged,77 Section 50 of the CCLA replaced s 4(1) of the Contractual Remedies Act 1979 and is in verysimilar terms. The cases decided under s 4(1) continue to be relevant.then s 50(2) permits the court to inquire into those questions unless it considers that itis "fair and reasonable" that the provision be conclusive between the parties havingregard to all the circumstances of the case, which include the three matters specifiedin s 50(3): the subject-matter and value of the transaction, the respective bargainingstrengths of the parties and whether any party had legal representation or advice.[94] There is no need to go behind the plain words of s 50. In ANZ Bank NewZealand Ltd v Bushline Trustees Ltd the Supreme Court said:78Section 50 does not mandate a general empowerment to determine the "truebargain" between the parties. Instead the task of the court is to assess whetherin all the circumstances, it is fair and reasonable for [any provision engagings 50(1)] to be conclusive between the parties.[95] The leading authority as to when it will be fair and reasonable for a no-relianceclause or similar to be conclusive remains Brownlie v Shotover Mining Ltd, decided inthe context of s 4(1) of the Contractual Remedies Act. This Court observed:79There can be nothing inherently unfair in such an exclusionary clause. It ishighly desirable that written contracts should be so drawn as to state all theterms of the intended contract, and so avoid the uncertainties which can arisefrom allegations of verbal representations or collateral warranties. If partieshave not agreed to include express warranties in their written contract, then itis reasonable for them to state expressly that verbal warranties are excluded.Other matters relevant under the section in determining whether it is fair andreasonable to enforce the clause indicate "all the circumstances of the case".This was a commercial contract between commercial parties each withseparate legal advice. The subject matter and value of the transaction weresufficiently substantial to justify the expectation that each party would befamiliar with its terms and intended to be bound by them. The respectivebargaining strengths of the parties would not justify any special indulgence toeither. Both parties were represented and advised by solicitors at the relevanttime.It would be a matter of concern if commercial people acting in good faithcould not, in entering into a transaction such as this, achieve certainty by awritten contract excluding liability for prior statements by one of them if thatis what they wished to do.78 ANZ Bank New Zealand Ltd v Bushline Trustees Ltd [2020] NZSC 71, [2020] 1 NZLR 145 at[132] (footnote omitted).79 Brownlie v Shotover Mining Ltd CA 187/87, 21 February 1992 at 31–33.[96] In PAE, also decided under s 4(1) of the Contractual Remedies Act, this Courtsummarised the purpose and effect of the provision:80Section 4(1) recognises a wide judicial discretion to determine whether it is"fair and reasonable that the provision should be conclusive". While the issueis to be determined "having regard to all the circumstances of the case", thespecified criteria focus the inquiry on an assessment of the relative positionsof the parties and their access to independent legal advice. Its apparentpurpose is to protect one party's relative vulnerability from another party'spower to impose an exemption from liability which is contrary to the factualreality or an existing legal obligation and is thus unreasonable and unfair.Section 4(1) is a mechanism for striking balances, both individually betweenparties and conceptually between freedom of contract and unfair orunreasonable commercial conduct.The Judge's conclusion[97] On this critical issue the Judge said:81[170] I take into account that the Capacity Representation was in writtenform, rather than verbal, and thus its terms were clear. It also appears to havebeen verbally reiterated by Mr Gudsell (as Mr Graham's agent) during the7 April 2014 tour of the Property. Mr Sharp and Mr Borland took it intoaccount when formulating their tender price. It could also be argued that thereis an "information asymmetry" between the parties, given Mr Graham, havingowned the Property for some 14 years, would have been intimately familiarwith it, compared to Mr Sharp and Mr Borland's relative lack of knowledgefrom their single two hour visit.[171] Despite the factors weighing against conclusiveness, I amnevertheless satisfied it is fair and reasonable for cl 27.3 to be conclusive asbetween Mr Graham and Shabor.[98] The Judge identified a number of reasons for her conclusion:82 These includedthe factors identified in s 50(3)(a) and (c) — the subject matter and value of thetransaction and the fact that the parties had legal representation. In addition:(a) Mr Sharp and Mr Borland were experienced farmers, not naïvecontracting parties.(c) Clause 27.3 was not a standard clause but had been expressly added tothe sale and purchase agreement. If cl 27.3 was not conclusive it would80 PAE (New Zealand) Ltd v Brosnahan, above n 34, at [15].81 High Court decision, above n 3.82 At [172]–[181].effectively convert the representation into an implied warranty,contrary to cl 27.1.(d) Mr Sharp and Mr Borland had the terms of the agreement prior tosubmitting the tender. They were therefore on notice that Mr Grahamdid not accept responsibility for representations made in advertisingmaterials.(e) Mr Sharp and Mr Borland were able to, and did, make amendments tothe further terms of the agreement. They could have amended cl 27.3or made their tender conditional on completing due diligence.(g) There was no fraud or wilful concealment by Mr Graham.(h) Mr Sharp and Mr Borland had submitted an unconditional tender inhaste, without undertaking due diligence.[99] Shabor maintains that the Judge erred in her assessment as to whether it wasfair and reasonable that cl 27.3 should be conclusive. Section 50 of the CCLA requiredan evaluative assessment by the Judge; if this Court considers the Judge's assessmentwas wrong, it must undertake its own, fresh, assessment.83Was there error by the Judge?[100] Mr Pearce made a number of criticisms of the Judge's assessment. Someoverlap and we deal with those together.The subject matter and value of the transaction and the nature of the parties[101] The Judge described the purchase as a reasonably significant commercialtransaction rather than one involving consumers or the purchase of residential propertyfor personal use. She considered that these factors pointed towards it being fair andreasonable to treat cl 27.3 as conclusive between the parties.84 The Judge's83 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [16].84 High Court decision, above n 3, at [172].characterisation of the transaction was, presumably, a reference to the comparisondrawn in Snodgrass v Hammington between a commercial contract involvingcommercial parties (such as that in Brownlie) and the sale of an ordinary private housein an urban area.85[102] Mr Pearce submitted that the commerciality and value of the sale did not justifyallowing Mr Graham to rely on clause 27.3. At most it was a neutral factor; thecorollary was that the size and nature of the transaction called for similar or greatercaution by Mr Graham in making representations about the property. Mr Pearce reliedon Mitchell v Murphy, which involved the purchase of a residential townhouse.86Gordon J treated the subject matter and value of the contract as neutral on the basisthat they were sufficiently substantial to have engendered in each party a need forcaution.87 Mr O'Neill, for Mr Graham, did not accept that Mitchell represented thecorrect approach, pointing out that it was contrary to that taken in Brownlie.88[103] We agree that the approach taken in Mitchell cannot be correct because it wouldundermine s 50(3)(a). If the significance of a transaction being a high valuecommercial contract were neutralised by a corresponding need for caution by bothparties, it is difficult to see how those factors would ever contribute to the assessmentof whether it was fair and reasonable for a no-reliance clause to be conclusive. Wethink the better view is that the subject matter and value of the contract are factors thatmay indicate the relative positions of the parties and any vulnerabilities.[104] However, we do not agree entirely with the Judge's characterisation of thetransaction. Although the transaction involved a reasonably substantial farmingoperation, it is not easily compared with other cases of a distinctly commercialcharacter such as PAE and Comvita.[105] Mr Graham had farmed for a living for more than 20 years and lived on thefarm. There was evidence that he had other commercial interests, though it was not85 Snodgrass v Hammington (1994) ANZ ConvR 159 (HC), citing Brownlie v Shotover Mining Ltd,above n 79.86 Mitchell v Murphy [2019] NZHC 3262.87 At [244], citing Sipka Holdings Ltd v Merj Holdings Ltd [2015] NZHC 1980 at [57].88 Brownlie v Shotover Mining Ltd, above n 79, at 32.clear the extent to which that experience preceded the sale of the farm. Shabor was aprivate company incorporated as a vehicle for Mr Sharp and Mr Borland to farmtogether. They were experienced farmers (and Mr Borland had been an engineer) butthere was no evidence that they had experience in business beyond running a farm.Mr Borland also lived on the farm after Shabor purchased it.[106] This aspect overlaps with the Judge's finding that although there was aninformation imbalance in the strict sense, Mr Sharp and Mr Borland were"experienced farmers not naïve contracting parties, wholly dependent oninformation from their contracting counter-party".89 For the reasons just discussed,we do not consider that Mr Sharp's and Mr Borland's farming experience means thatthey should be viewed as experienced contracting parties. Nor is it right to suggestthat they were (or claimed to be) wholly reliant on information from Mr Graham; theyasserted reliance only in relation to the specific representation about carrying capacity.[107] However, our different view of the commerciality of the transaction and thenature of the parties does not necessarily mean that the Judge was wrong to treatcl 27.3 as conclusive — the other circumstances of the case need to be considered.Mr Graham's conduct and Mr Sharp's and Mr Borland's lack of care[108] Mr Pearce made a number of submissions directed towards Mr Graham'sknowledge and conduct. First, Mr Graham must have thought that carrying capacitywould be important to prospective purchasers given its prominence in the marketingmaterial and the Judge erred in not taking that fact into account. This submissionreflected the comment to that effect made in Ellmers v Brown, where representationsabout the application of fertiliser were included in advertising material for the sale ofa farm.90 We think it self-evident that Mr Graham knew carrying capacity would beimportant to a prospective purchaser, but that does not advance Shabor's positionbecause it is inherent in s 50 that representations recognised as important to bothparties may be excluded from scrutiny by the courts.89 High Court decision, above n 3, at [173].90 Ellmers v Brown (1990) 1 NZ ConvC 190,568 (CA) at 190,577.[109] Secondly, the Judge emphasised Mr Sharp's and Mr Borland's carelessness inbelieving the representation while ignoring Mr Graham's carelessness in making it.We have already noted that the Judge made a specific finding that Mr Graham hadbeen careless.91 Although not expressed, we think it is apparent that this finding wascarried through to the Judge's reasoning on whether cl 27.3 should be conclusive unders 50. So we do not accept that the Judge ignored that aspect of Mr Graham's conductwhen she later took into account Mr Sharp's and Mr Borland's failure to look out fortheir own interests in their keenness to purchase.[110] As to the latter, the Judge took into account the fact that Mr Borland andMr Sharp were "obviously very keen" to purchase a property and had submitted anunconditional tender on the basis of a single two-hour visit. She also took into accountthe evidence that they had not undertaken sufficient due diligence.92 We have alreadyconsidered these aspects in our discussion about the FTA claim. There was noevidence that further inspection of the property prior to submitting the tender mighthave alerted a prospective purchaser to the inaccuracy of the representation.Therefore, we agree that any failure by Mr Sharp and Mr Borland prior to submittingthe tender is not a factor that supported a finding that it was fair and reasonable to treatcl 27.3 as conclusive.[111] As discussed earlier, however, Shabor could have better protected itself byreserving a right to conduct due diligence in the post-tender period. There was areasonable possibility that doing so would have alerted it to the possibility that thecarrying capacity had been misrepresented. But it seems unlikely that significantweight was put on this perceived carelessness because, after discussing the lack of careshown by Mr Borland and Mr Sharp, the Judge observed that these factors were "notdeterminative or of very significant weight", given that lack of due diligence, evenwhen contractually available, did not make reliance on a representationunreasonable.9391 High Court decision, above n 3, at [137(j)].92 At [180].93 At [180], citing Best of Luck Ltd v Diamond Bay Investments Ltd (No 2) HC Auckland CIV-2007-404-2043, 11 October 2007 at [121]–[128] and [132].Was Mr Graham's conduct fraudulent?[112] Shabor pleaded that the representation as to carrying capacity had been made"falsely" but there was no elaboration. It was not obvious from the judgment thatfraud was clearly asserted at trial, as is required for allegations of fraud.94 Before usMr O'Neill asserted, without challenge, that fraud had not been raised in theHigh Court. Nevertheless, the Judge made an express finding that there had been nofraud:95 Mr Graham was somewhat casual in his estimate of the Property's carryingcapacity Mr Graham did not check or verify his own assessment of around7,500 Stock Units, and in fact accepted there might have been "some doubt"about that in hindsight. But while Mr Graham was perhaps casual in hisassessment of the Property's carrying capacity in 2014, there was nothingdeliberate or sinister in this context; in other words, Mr Graham did notknowingly underestimate the advertised carrying capacity. [T]o the extent Mr Graham's conduct is relevant, there was no fraud, wilfulconcealment or misstatement of the true position. I accept that when he spokewith Mr Gudsell in early 2014, Mr Graham genuinely believed the Property'scarrying capacity to be around 7,500 Stock Units.[113] Mr Pearce argued that these findings were wrong. He said that the evidencebrought Mr Graham within the third limb of Derry v Peek, being a misrepresentationmade recklessly, careless whether it was true or false.96 It was factor, he said, thatwent against treating cl 27.3 as conclusive between the parties.[114] In Brownlie this Court considered that fraud in the making of a representationwould not necessarily preclude an exclusion clause or similar being conclusivebetween the parties but would be a factor of considerable weight.97 Those commentswere made in the context of an allegation of "common law fraud at its highest level";that the defendant had made the representations "knowing them to be false and withan intent to defraud".98 This was a serious allegation requiring proof of conscious94 Brownlie v Shotover Mining Ltd, above n 79, at 34.95 High Court decision, above n 3, at [137(j)] and [179] (emphasis in original).96 Derry v Peek (1889) 14 App Cas 337 (HL) at 374 per Lord Herschell, followed in New Zealandin Amaltal Corp Ltd v Maruha Corp [2007] 1 NZLR 608 (CA) at [48].97 Brownlie v Shotover Mining Ltd, above n 79, at 33–34.98 Shotover Mining Ltd v Brownlie HC Invercargill CP96/86, 30 September 1987 at 131.deceit. The trial Judge had found that Mr Brownlie knew the representations "wereexaggerated and were not reliably based, and at worst were downright wrong".99[115] This case is not at that level. Derry v Peek has not expressly been endorsed inthe contractual misrepresentation context and we are doubtful that a representationmade with an honest belief as to its truth would justify not treating a contractualprovision as conclusive under s 50(1) of the CCLA. In Amaltal Corp Ltd v MaruhaCorp this Court endorsed the three-part test in Derry v Peek for the purposes of thetort of deceit but went on to say:100[50] The critical features of the tort are therefore that the representor musthave lacked an honest belief in the truth of his statement; "carelessness" is notto be equated with "dishonesty"; and even recklessness in the sense of grossnegligence will not suffice, unless there is a conscious indifference to the truth.[116] In any event, we are satisfied that Mr Graham's conduct falls short of fraudunder Derry v Peek. Mr Pearce relied on a single passage of cross-examination inwhich Mr Graham said he had provided the 2013 capacity figures in the PIM, whichled to the following exchange:Q Well why is that relevant? Why are you telling us that?A That, that is because, they could look at that and they could see2013, '11,'12, if they bothered to ask me, in fact even if you go backto 2002, this is how much was carried. They could look at theconditions of the pasture, they could look at the fertiliser use over theprevious two years, they could see that no fertiliser had been put onthat year, they could see, for some strange reason they never requestedthat fertiliser was put on by me, which is quite a common practice,they could see that, yes, the fertiliser was going down, so there wasdoubt about whether it would carry 7,500 in 2014.Q Doubt in whose mind, Mr Graham?A As I've said before –Q Any doubt in your mind?A There would've been a little bit of doubt, but if I hadn't, hadn't had afarm on the market and was not selling it and carried on, therewould've been, there would've been no doubt at all.99 At 141.100 Amaltal Corp Ltd v Maruha Corp, above n 96.[117] Mr Pearce submitted that the Judge had wrongly treated the evidence asconveying that there "may have been" some doubt about the figure when the effect ofthe evidence was that there was in fact doubt about the carrying capacity.101 However,looking at Mr Graham's evidence overall, his concession that there would have been"a little bit of doubt" assumes much less significance; the accuracy of the 7,500 figurewas put to him several more times after that exchange, and each time he confirmed it.[118] On the totality of the evidence and given the advantage the Judge had inobserving Mr Graham during lengthy cross-examination, we are satisfied that she wasentitled to come to the conclusion she did. There was no fraud that might justify nottreating cl 27.3 as conclusive.The contractual context, including the failure to insert a due diligence clause[119] Most of the factors the Judge identified as supporting the conclusiveness ofcl 27.3 related to the circumstances in which the tender was submitted. Mr Pearcesubmitted that these factors did not support the conclusion the Judge reached.[120] The first related to the terms of sale. These were contained in the standardform for "particulars and conditions of sale for real estate by tender" approved by boththe Real Estate Institute of New Zealand and the Auckland District Law Society(ADLS). Attached to the standard terms was a section headed "Further Terms", whichincluded cl 27. The Judge had ascribed significance to the fact that cl 27.3 was a"further term" rather than a standard term that was "buried" in the fine print of theADLS agreement.102[121] Mr Pearce argued that this was an error because the clause simply formed partof the printed terms of tender supplied to all prospective purchasers — it was not theresult of negotiations between the parties. Mr Quinn distinguished the case from PAEand Comvita, in which the subject clauses had been the subject of express negotiationsbetween the parties.101 High Court judgment, above n 3, at [80].102 At [174].[122] It is correct that the clause was not the product of the kind of intense negotiationthat was a feature of PAE and Comvita. But it could not be said that the clause wasobscured in the fine print of a standard contract, nor that it was imposed on Shabor.The "further terms" appeared in a separate part of the agreement. They addressedmatters that would have been directly relevant to Shabor, such as the certificates oftitle, the care and saving of pasture for the purchaser's benefit, tax issues, the effect ofthe Afforestation Grant Deed between Mr Graham and the Waikato Regional Counciland chattels. As the Judge noted, Shabor made amendments to some of the "furtherterms".103 We do not accept that Shabor and/or its solicitor could have failed to noticecl 27, particularly given the reference in cl 27.1 to the advertising materials. In thesecircumstances, the Judge was right to treat the appearance of cl 27.3 in the "furtherterms" section as significant.[123] Nor do we accept the criticism of the Judge's finding that Shabor received"bespoke" legal advice.104 Although there was no direct evidence to that effect, it isthe only inference available from the fact that Mr Borland's solicitor was consultedabout the agreement and agreed to act for Shabor, and that amendments were made tothe terms. It was apparent from Mr Borland's and Mr Sharp's evidence that neitherwould have amended the agreement without the advice of Shabor's solicitor.[124] The next factor was Shabor's failure to make amendments to cl 27.3, includingto require a due diligence provision. The Judge noted that amendments had been madeto other clauses.105 And further, Mr Gudsell had said in evidence that, in hisexperience, it was rare for farm purchases not to be conditional on due diligence.The Judge referred to PAE and Comvita as showing that the ability to protect oneselfthrough negotiation of suitable clauses was relevant to the conclusions ondisclaimers.106 As discussed, the evidence did not show what period of due diligencewould have been reasonable or what steps could have been taken to establish the actualcarrying capacity of the farm. But there is a reasonable possibility that sufficientinformation could have been obtained for Shabor to realise that the representationmight not have been accurate.103 At [177].104 At [178].105 At [177].106 At [177].[125] The Judge was therefore correct to place weight on the circumstances in whichthe tender was submittedEffect of cl 27.3[126] Mr Pearce's last criticism related to the Judge's statement that if cl 27.3 wasnot treated as conclusive between the parties, the effect would be to "convert the[earlier] representations about [carrying capacity] into an implied warranty when theywere expressly excluded" by cl 27.1.107 We accept Mr Pearce's argument that thisapproach was wrong because, whenever s 50 is engaged in relation to an entireagreement or no-reliance clause, the effect of finding it not to be conclusive would beto treat the misrepresentation as an implied warranty under s 35.108The Judge's conclusion was correct[127] Although we have held that the Judge erred in some respects, we arenevertheless satisfied that her conclusion was correct.[128] We accept that the transaction lacked the distinct commercial flavour presentin other cases, and that Mr Sharp and Mr Borland were not experienced contractingparties. But nor was there any significant disparity between the parties' respectivebargaining strengths.[129] To the extent that the Judge placed weight on any perceived carelessness byShabor, we agree that this was an error. But it is clear the Judge did not consider thisto be a significant factor. It is also apparent that she did not treat the presence of cl 27.3as determinative.[130] We agree with the Judge that cl 27.3 was a clear term of the agreement, andthat Mr Sharp and Mr Borland must have been aware of it and received advice on it.Importantly, they had the opportunity to make the tender conditional on due diligence,which may well have alerted them to the inaccuracy of the representation. Finally,107 At [175], quoting PAE (New Zealand) Ltd v Brosnahan, above n 34, at [22].108 Mr Pearce referred to Vining Realty Group Ltd v Moorhouse [2010] NZCA 104, (2010) 11 NZCPR879 at [53(a)], where this Court noted that a misrepresentation "operates in effect as a warranty"which the representee should normally be able to take at face value.there was no fraud on Mr Graham's part that might have tipped the balance in favourof Shabor.[131] In these circumstances, we consider that it is fair and reasonable for cl 27.3 tobe conclusive between the parties. This conclusion means that the challenges to thequantum issues fall away.RESULT[132] The grounds of appeal on the FTA cause of action are made out. Specifically,we have concluded that:(a) Clause 27.3 did not break the causal connection between themisrepresentation and Shabor's loss.(b) The quantum of Shabor's loss is $530,000, being the differencebetween the price paid and the actual value of the farm in 2014.(c) There should be a 30 per cent reduction for contributory conduct byShabor in failing to protect its own interests by requiring a due diligenceclause in the agreement.[133] The grounds of appeal on the misrepresentation cause of action are not madeout. We have concluded that the Judge was right to find that:(a) on a proper interpretation, cl 27.3 precludes inquiry into reliance on themisrepresentation; and(b) it is fair and reasonable that cl 27.3 should be conclusive between theparties.[134] The appeal is therefore allowed in part. Judgment is entered for Shabor on theFair Trading Act cause of action for $371,000 together with interest at 5 per cent from3 June 2014.109109 Interest on Money Claims Act 2016, s 2 and sch 1, pt 1, cl 1; Judicature Act 1908, s 87; and[135] The costs judgment is set aside and the matter remitted to the High Court forreconsideration of costs.[136] Shabor is entitled to costs in this Court for a standard appeal on a band A basis,with usual disbursements and certification for second counsel.Solicitors:Cargill Stent Law, Taupo for AppellantForgeson Law, Te Kuiti for RespondentsJudicature (Prescribed Rate of Interest) Order 2011, cl 4.