Sell­ers of leaky home win ap­peal


A Ka¯piti Coast cou­ple have won a Court of Ap­peal case against the cou­ple to whom they sold a leaky $785,000 home – de­spite twice telling the buy­ers it didn’t leak.

Steven and Katharine Ma­son bought the two-storey house in Rau­mati South, north of Welling­ton, from An­drew and Sharon Magee in 2011.

They sub­se­quently found that, as a re­sult of sev­eral orig­i­nal de­sign and con­struc­tion de­fects, it was a leaky home. The Masons said it would cost them $940,000 to fix.

They took their case to the High Court ear­lier this year, and won a rul­ing that the Magees were li­able for a ‘‘pre-con­trac­tual mis­rep­re­sen­ta­tion’’ that in­duced them to buy the house.

The High Court awarded dam­ages against the Magees of about $470,000, which the judge as­sessed to be the loss in value of the house, in Karekare Rd.

How­ever, a Court of Ap­peal judg­ment pub­lished last week has over­turned that de­ci­sion, and found the Magees had no rea­son to be­lieve the house they had been liv­ing in for two years was not weath­er­tight.

The prin­ci­pal ques­tion in the ap­peal re­volved around a con­ver­sa­tion be­tween Sharon Magee and Katharine Ma­son at the house in 2011, in which Ma­son said: ‘‘All I want to know is that this prop­erty is not a leaky house, be­cause we couldn’t cope with that.’’

Ma­son told the High Court: ‘‘Sharon replied that the house def­i­nitely was not leaky, and I re­call her re­spond­ing, ‘Ab­so­lutely not. We have never had any is­sues with this house’ (or words to that ef­fect).’’

This fol­lowed a pre­vi­ous con­ver­sa­tion at a din­ner with mu­tual friends, at which Sharon Magee said the house was not leaky.

The High Court found Magee’s state­ment con­veyed a mis­rep­re­sen­ta­tion about the build­ing’s de­sign or con­struc­tion.

How­ever, two of the three ap­peal judges found Magee’s state­ment was qual­i­fied by her not hav­ing ex­pe­ri­enced any leak prob­lems, and hav­ing no rea­son to be­lieve the house suf­fered leaky home de­fects.

They found Ma­son ‘‘adopted an as­sump­tion that, hav­ing lived in the prop­erty for two years, Mrs Magee would know whether it was a leaky build­ing’’.

How­ever, Magee did noth­ing to ‘‘en­gen­der that as­sump­tion’’. ‘‘In par­tic­u­lar, she made no rep­re­sen­ta­tions about her knowl­edge or ex­per­tise.

‘‘We con­clude that, with the qual­i­fi­ca­tion given by Mrs Magee, the state­ment did not rea­son­ably mean the house was not, through de­sign or con­struc­tion, leak­ing or prone to leak.’’

The judges said the sale agree­ment was con­di­tional on the Masons ob­tain­ing a build­ing re­port to their sat­is­fac­tion.

‘‘Re­gret­tably, the re­port failed to iden­tify the weath­er­tight­ness is­sues,’’ the court said. The build­ing in­spec­tor who pro­vided the re­port later set­tled, pay­ing $68,000, the find­ings said.

The ap­peal court set aside the High Court judg­ment, and ruled the Masons should pay le­gal costs.

How­ever, one of the judges, Jus­tice Pa­tri­cia Court­ney, split with the other mem­bers of the court. In a dis­sent­ing judg­ment, she found Sharon Magee’s state­ment was un­equiv­o­cal, and said she would have dis­missed the ap­peal.

Sharon Magee said on Wed­nes­day the de­ci­sion had been ‘‘a long time com­ing’’.

‘‘We’re just re­ally happy that we de­cided to take it fur­ther, to the ap­peals court. The first find­ing was wrong.’’

She said the Masons com­mis­sioned a build­ing re­port, which said the house was in good con­di­tion, with only a few mi­nor con­cerns.

The case was brought ‘‘over a com­ment that was made at a din­ner party amongst friends’’.

‘‘The whole case was just about me say­ing those words – ‘no, it’s not a leaky home’.’’

If the Magees had known it was leaky, they would have fixed it, she said.

Steven Ma­son, who was at the house on Wed­nes­day, said he and his wife had only re­cently re­ceived the ap­peal judg­ment, and did not wish to com­ment.

An­drew and Sharon Magee.

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