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.