Agents argued the disclosure duty wasn't theirs – Court of Appeal disagreed
Agents who concealed weathertightness defects during due diligence are liable for deceit, even where the principal held the disclosure duty, the Court of Appeal says.
In Wang v Vanifatova [2026] NZCA 171, Collins, Mander, and Becroft JJ upheld Andrew J's High Court finding that Xiaoyue (Crystal) Wang and her husband He (Wilson) Wang had deliberately misrepresented the true condition of a two-storey townhouse sold to Angelina Vanifatova in 2021. The property was owned by Crystal's father, Weiguo Wang, who was retired and living in China at the time of sale.
The Wangs were ordered, together with Mr. Wang Snr, to pay $495,190 in remedial costs, $26,580.45 in consequential losses, and $30,000 in general damages.
The townhouse, part of a unit title development completed in early 2002, featured a monolithic cladding system directly fixed to timber framing and an upper-floor deck identified in evidence as a source of water ingress. Tenants had complained of leaks, mould, and musty odours from as early as October 2014. Mr. Wang carried out various remedial works between 2015 and 2020, including removing internal linings, replacing timber, and repeatedly applying sealant – none of which lastingly resolved the issue.
A critical piece of withheld evidence was the Dillon Sue report, a June 2020 building inspection obtained by an earlier prospective purchaser who did not proceed with his conditional contract. During Ms. Vanifatova's three-working-day due diligence period, the Wangs disclosed only an older 2014 Visual Audit report.
Counsel for the appellants argued the trial judge had conflated Mr. Wang Snr's contractual disclosure duty as vendor with the appellants' common law duty not to deceive. The Court of Appeal disagreed.
Mander J held that the overarching consideration when assessing the Wangs' conduct was that they were acting as Mr. Wang Snr's agents for the purposes of the sale. The appellants had effectively stood in the vendor's shoes and sold the property as if they were the vendor themselves.
The court explained that the appellants' tortious liability did not arise from any breach of the disclosure clause itself, but rather from their incomplete and partial provision of information in response to specific requests made during the due diligence period.
The court also rejected the argument that Andrew J had adopted an illegitimate collective approach to the couple's state of knowledge. While the trial judge needed to consider dishonesty individually, he was entitled to take into account their close relationship as husband and wife who acted in concert, and who continued to act together in respect of the property in their capacity as agents of Mr. Wang Snr.
The evidence showed Ms. Wang liaised with property managers and received inspection reports about recurring water ingress, while Mr. Wang was directly involved in attempting to resolve the issues and spoke with tenants about them. The court considered it unreasonable to suggest the couple would not have been talking to each other about these matters and informing one another of developments.
The judgment reinforces that misrepresentations can arise from incomplete or partial information, not just positive false statements. Mander J explained that the appellants' liability rested not on the truth or falsity of any positive or explicit statement they made, but on the combination of information they chose to provide and information they deliberately withheld – which together amounted to a knowing misrepresentation of the true position.
The appellants must pay costs for a standard appeal on a band A basis with usual disbursements, and the court certified for second counsel.
