The New Zealand Herald recently published an article on a vendor’s $500,000.00 leaky-home mistake case of failing to disclose a pre-inspection report, which is available here.

Vanifatova v Wang [2025] NZHC 1532

The purchaser, Ms Angelina Vanifatova (Ms Vanifatova), signed an agreement to purchase a property in Onehunga for $773,000.00 in 2021. On 16 June 2025, the Auckland High Court released its judgment awarding Ms Vanifatova remedial costs of $495,190.00, consequential losses of $26,580.45, general damages of $30,000.00, and interest and costs. While this may seem like a victory for Ms Vanifatova, the four or so years spent in litigation time, costs and stress must have been awful.

Multiple pre-purchase inspections were conducted on the property in question, including a report from The Property Inspectors 2010 Limited who were engaged by a previous purchaser around June 2020 which outlined moisture concerns. In reliance on this report, this previous purchaser cancelled their agreement due to concerns. A copy of this report was provided to the vendors and an agent from Bayleys tried to work through the issues with the vendors but later withdrew the listing. In October 2020, the vendors then received a routine inspection report from their property manager, Village Rentals, outlining dampness in the property. On 21 December 2020, the property was re-listed with Barfoot & Thompson whereby the vendor declared in its listing agreement that they were not aware of any past or present water penetration issues.

Prior to an open home where Ms Vanifatova viewed the property on 13 January 2021, the vendor had a dehumidifier and fan operating for a whole day and night and was even asked by the agent to move the dehumidifier and fan to the garage to “avoid any misunderstanding from the potential buyers.”

Ms Vanifatova received copies of the title, Land Information Memorandum (LIM), pre-contract disclosure statements and Body Corporate Minutes that did not indicate any past weathertightness issues, which was consistent with the LIM. Ms Vanifatova also obtained a building inspection report from Action Home Inspections Limited, who carried out an inspection on 15 January 2021, and whose report did not identify any weathertightness issues with the property. On 18 January 2021, having done her due diligence, Ms Vanifatova made an offer to purchase the property for $773,000.00, conditional upon finance and completing her due diligence within three working days. At no time was Ms Vanifatova advised of the prior reports by The Property Inspectors 2010 Limited or by Village Rentals, which raised weathertightness issues with the property.

In the High Court decision, Justice Andrew was quite critical of the Barfoot & Thompson agent saying he likely had knowledge of the property’s defects, even though this was denied and there was a disclaimer in the agreement saying neither the vendor nor the agent hold themselves as having expertise in property. The Judge further found that the vendor’s lawyers were highly likely to have also known, though he made “no criticism of the role of the solicitors”, likely as lawyers have an overriding duty of confidentiality and privilege, while agents have a different obligation of disclosure under the Real Estate Agents Act 2008 to disclose what the agents know.

Ultimately Justice Andrews found misrepresentation, breach of contractual warranty clauses as well as deceitful conduct, but did not find any breaches under the Fair-Trading Act 1986 because the vendors were not “in trade”. The decision may have been surprising to some because even though the vendors argued that the copies of the prior reports were never requested from them, the Court found there was misrepresentation in failing to disclose the weathertightness issues. Furthermore, the minor works done to try to conceal the weathertightness issues were done without a building consent so there was a breach of the vendor’s contractual warranties under the agreement that required all works done by the vendor to be consented.

The judgment is profound for both vendor and purchaser as the vendor sold the property for $773,000.00 yet was ordered to pay more than $500,000.00 in damages (on top of its legal costs). Also, while Ms Vanifatova obtained judgment, it took four long years to get the order (on top of her legal fees) and would likely require further enforcement steps to get the money in her bank account.

Bhargav v First Trust Limited [2024] NZHC 2128

This is another significant case of vendor breach as per the Auckland High Court’s judgment of 1 August 2024 by Justice Hinton (Bhargav v First Trust Limited) where the vendor, who sold their property in Goodwood Heights, Manukau for $665,000.00 after completing various targeted repairs to deceive purchasers, were ordered to pay nearly $900,000.00 in damages and costs to the purchaser. The New Zealand Herald also published an article about this here.

This case appeared to be drastically more deceitful, with the vendor obviously knowing about the defects and deliberately renovating the property to meticulously cover up weathertightness issues for prospective purchasers at open homes. After settlement, the property was said to be dripping down with water when it rained.

Conclusion

These cases demonstrate that builder’s reports are not a perfect guarantee for purchasers who must always be mindful of the risks of purchasing what is likely the biggest asset in their life. Vendors should also be aware that deceit or failing to disclose will likely result in orders against you, even if it can take years.

Buyers beware.

Vendors also beware.

If you need legal advice, contact the experts at Queen City Law that are here to help. Click here. for a profile of Tina Hwang, director, and head of Property & Disputes.