Jing Jun Yu and Andrew Investments (2004) Ltd v Bradley

• Jurisdiction: New Zealand
• Judge: Cooper P
• Judgment Date: 15 August 2022
• Neutral Citation: [2022] NZCA 378
• Docket Number: CA477/2020
• Court: Court of Appeal

Between

Jing Jun Yu

First Appellant

Andrew Investments (2004) Limited

Second Appellant

and

Dale Gordon Bradley and Jillian Anne Bradley

Respondents

[2022] NZCA 378

Court:

Cooper P, Clifford and Goddard JJ

CA477/2020

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

Contract, Property — appeal against a High Court decision which awarded damages to the respondents for loss suffered in a failed sale and purchase agreement — boundary misrepresentation — breach of the right of inspection — general and special damages

Counsel:

L J Taylor QC and E J Watt for Appellants

H M Z Lanham for Respondents

The appeal was dismissed.

• A The appeal is dismissed.

• B The appellants must pay the respondents' costs for a standard appeal on a band A basis and usual disbursements.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Cooper P)

Table of Contents

	Para No
Introduction	[1]
Narrative	[4]
The proceeding in the High Court	[45]
First issue — corrected misrepresentations?	[59]
Second issue — who repudiated and cancelled the Agreement?	[67]
Was Mr Yu's right to inspect under cl 3.2 of the Agreement breached?	[68]
Did Mr Yu have a claim for compensation under cl 8 of the Agreement?	[76]
Damages	[117]
Result	[132]

Introduction

1 This is an appeal from a High Court judgment arising out of a dispute between the parties to an agreement for the sale and purchase of land situated on Whitford-Maraetai Road, to the south-east of Auckland (the Agreement). 1 The Property, referred to in evidence as No 471 Whitford-Maraetai Road, is a substantial one, comprising 2.4 ha, and has been developed by the construction of a two-storey, four-bedroom house of approximately 256 square metres. The first appellant, Mr Yu, who is the sole director of the second appellant, Andrew Investments (2004) Ltd, made an offer to purchase the Property from the respondents, the Bradleys, for $2.3 million. The Bradleys accepted the offer and the Agreement was executed on 12 November 2016. The Agreement became unconditional on 30 November 2016 and Mr Yu subsequently paid the deposit of $230,000. He later exercised his right to nominate Andrew Investments (2004) Ltd to complete the purchase. 2

2 However, the transaction did not settle, due to the circumstances we address below. Mr Yu sued for the return of the deposit and the Bradleys counterclaimed for damages suffered when the Property was resold at a lower price to a third party, and various associated costs. The High Court entered judgment for

$575,672.99, less deductions for the $230,000 deposit the Bradleys retained. 3 Mr Yu now appeals alleging the High Court made various factual and legal errors in its assessment of liability. It is also said the Court erred in determining the quantum of the damages

3 We refer to the disputed factual issues in the course of the narrative below.

Narrative

4 The Property was advertised for sale in 2016. The promotional material emphasised the spectacular sea and coastal views that could be obtained from it. In front of the house on the Property is a steeply sloping lawn leading down to native bush.

5 The kernel of the present dispute is that part of what appeared to be the front lawn of the Property was in fact on the title of a neighbouring property. Palmer J described the position as follows:

[5] In 2016, there was nothing physically indicating that the boundary of the [Property] stopped before the sloping lawn reached the native bush. But, in fact, a V-shaped wedge of the lawn, pointing upwards and reaching about half way up towards the house, was part of a neighbouring property below. The sloping lawn was visible from the upstairs master bedroom in the house; but not from the downstairs or the lawn immediately outside the house, due to a hedge and the slope. The distance between the apex of the V and the hedge was 18 metres. …

(Footnotes omitted.)

6 The Property was listed for sale with Mr Tzong-Wen (Daniel) Huang, an agent of the real estate company, Barfoot & Thompson, and his associate salesperson, Ms Yangling (Helen) Han. The Bradleys had owned the Property since 2000. Mr Bradley gave evidence that he and his wife had never treated the sloping lawn in the neighbouring property as their own, but had kept it tidy by agreement with the neighbours. The neighbours, Mr and Mrs Bramwell, acquired the neighbouring property in 2016.

7 It was Mr Bradley's evidence that he had shown Mr Huang the position of the boundary on site. Mr Bradley said he made it clear that not all of the sloping lawn was part of the Property, but that he mowed it and kept it looking tidy.

8 In October 2016, another adjoining landowner, Mr Kelvin Mackie, offered to purchase the Property for $2.1 million. Mr Mackie owned the properties adjacent to three of the Property's boundaries and was in the process of subdividing that land into lifestyle blocks. The Bradleys made a counter-offer of $2.3 million, but agreement was not reached.

9 Mr Yu first visited the Property on 9 November 2016, accompanied by Ms Han. There is a conflict in the evidence of Mr Yu and Ms Han about what happened during that visit. Mr Yu said that they walked down the sloping lawn to the line of trees at the bottom and through bushes which, unbeknownst to him at the time, were in fact part of the neighbour's property. They were agreed that Ms Han showed Mr Yu a map of the Property. That map showed the Property's boundaries, and Ms Han claimed she texted a screenshot of it to Mr Yu. Ms Han also claimed she had pointed out the boundaries to Mr Yu and had specifically told him that the relevant part of the lawn was not part of the Property. The Judge found on the balance of probabilities that Ms Han had not specifically pointed out the boundaries of the Property to Mr Yu. 4

10 On 10 November 2016 Mr Yu made a written offer to purchase the Property for $2.15 million. Mr Mackie also made an offer and on 12 November 2016 Ms Fitzpatrick, the manager of the relevant branch of Barfoot & Thompson, chaired a meeting at which two offers were presented to the Bradleys, now both in the sum of $2.3 million. Mr Mackie's proposed settlement date was too soon for the Bradleys; Mr Yu's offer was conditional on obtaining solicitor's approval within two days.

11 Mr Huang advised the Bradleys that Mr Yu wanted to settle on 15 February 2017, but was prepared to delay settlement or allow the Bradleys to occupy the house paying rent until they were able to purchase a new home. Ms Fitzpatrick emailed Mr Huang stating that it was:

… paramount that [Mr Yu is] aware that the proposed subdivision may result in seven properties sharing the driveway to [the Property] … Please also ensure that [Mr Yu] is aware of the boundaries for the said property …

The email attached a boundary map and a map of the proposed subdivision, asking that they be “disclosed to [Mr Yu] prior to the [Bradleys] accepting the offer”.

12 Mr Yu said that he then met Mr Huang at a café in the afternoon of 12 November 2016. However, Mr Huang said he did not meet Mr Yu then, and Ms Han said that Mr Yu's meeting was with her. Mr Bradley's evidence was that Ms Han had called him from a café saying she was meeting with Mr Yu, and had invited the Bradleys to meet her there, which they subsequently did. The Judge found on the balance of probabilities that Mr Yu met with Ms Han. In any event, Mr Yu agreed that at that meeting he was shown and initialled a hard copy of the subdivision plan and a map of the Property from the Property Guru website. 5 The Judge accepted Ms Han's evidence that she discussed both maps with Mr Yu and at the same time pasted a solicitor-approval clause into the Agreement. The Judge said: 6

Mr Yu's evidence is that he understood the only purpose of the meeting was to make sure he knew about the subdivision, not the boundaries of the [Property]. On this issue, I accept Ms Han's evidence. The boundaries of the [Property] are clearly shown on the map Mr Yu initialled, which was the same one he was shown on his visit on 9 November 2017. Mr Yu may not have assimilated the information but I find, on the balance of probabilities, the boundaries were pointed out to him at this meeting.

13 The Bradleys then arrived at the café and met with Ms Han, who showed them the subdivision plan and the map initialled by Mr Yu. Mr Bradley then signed the Agreement, accepting Mr Yu's offer.

14 Mr Yu went to the Property again on 14 November 2016, with Ms Han. He said that Ms Han on this occasion gave him the impression that the land proposed to be subdivided was past the tree-line, beyond the lawn area. His evidence was that he thought that even if the adjacent land was subdivided it would not affect the view. Ms Han was unable to recall pointing out the location of the proposed subdivision but accepted she had walked Mr Yu around the Property and said that Mr Yu was carrying

the signed subdivision plan and the Property Guru map with him during this inspection

15 The Agreement became unconditional on 30 November 2016. Mr Yu requested that a rental appraisal be carried out, and Mr Bradley agreed that could occur. Representatives of Barfoot & Thompson went to the Property for that purpose and a rental appraisal report was finalised on 13 December 2016 and provided to Mr Yu.

16 The Judge found the deposit was paid “by 13 January 2017”. 7

17 On 20 December 2016, Mr Bramwell sent a text to Mr Bradley seeking to ensure that Mr Yu clearly understood the boundaries of the Property. Mr Bradley responded that he had made the boundaries very clear to Mr Yu. Mr Bradley said in evidence that he believed he had done so because of the advice he had given to Mr Huang and because he had seen the boundary map which Mr Yu had signed. Subsequently, Mr Bramwell organised for a survey of the land to be carried out....