Case Note: Quattro Trustees Ltd v Marjo [2014] NZHC 3396

Mr and Mrs Marjo (“the Defendants”) proposed to build a substantial new house on their property at 27 Minehaha Avenue, Takapuna following the demolition of their previous dwelling in 2012.  As the height of the proposed build did not comply with the relevant height restrictions imposed by the council, the Defendants had to apply for a resource consent.

The Defendants, prior to submitting their application, obtained written agreement to the proposed build from Quattro Trustees Limited and The Sparkling Waters Trust (“the Plaintiffs”), and other affected neighbours.  This permitted the Defendant’s application for resource consent to proceed to council on a non-notified basis.  The effect of this was that the council did not notify the application, and the Plaintiffs therefore lost the chance to make submissions to the council opposing the application, which may or may not have resulted in the council upholding the objections and not granting the resource consent.

A dispute arose, shortly after the build commenced, when the Plaintiffs learned of the true extent of the height of the new house which would result in loss of sunlight and views from their properties.  The Plaintiffs claimed that at the time they agreed to the proposed build the Defendants made verbal representations regarding the proposed build which were false, particularly regarding the height of the building.  

The Plaintiffs brought a claim against the Defendants in deceit on the basis that they relied solely on the representations made to them by the Defendants.  They sought both interim and permanent injunctions restraining the Defendants from carrying out any further building work.  

The Defendants denied making the representations and claimed that they:

  • were unaware of the height of the build; and
  • had advised the Plaintiffs that the new house was on substantially the same footprint as the old dwelling.

In the interim, the Defendants submitted a modified application for a further resource consent in relation to plans involving a house that would be slightly lower than the one presently being constructed but still outside the height restrictions.  Notification of this application is a matter yet to be determined by council.

The Court found that the Plaintiffs had established a serious question to be tried, either in deceit or possibly negligent misrepresentation.  The Court went on to consider the issues of deceit or negligent misstatement, and the Defendant’s subsequent resource consent application, and held that:

  • subject to various conditions, the Defendants were not to carry out further construction works pursuant to the existing resource consent on the third level of the house now under construction;
  • it was desirable to let the resource consent process run its course in relation to the modified application, it(being the only way  the Plaintiffs could be afforded the chance to formally submit  their opposition to the  consent application, as that might potentially resolve matters in a much more satisfactory way than the current proceeding;
  • the deceit (or negligent misrepresentation) proceeding be listed for a later hearing.

Whilst we are still awaiting the outcome of the deceit proceeding, this case acts as a reminder of the importance of clients obtaining professional advice, particularly legal advice, when approached for their written agreement to a resource consent application.  The time for seeking such advice is before the client provides such agreement based on the client’s understanding of the activity based on representations made by the applicant, which may or may not be innocent.