The Wellington Council is unsuccessful it its claims against a director of a building company for negligent misstatement and breaches of the Fair Trading Act

In Derwin V Wellington City Council the HC considered claims by the Council against Mr Dallas, the managing director of the building company contracted to build a dwelling that later suffered from weathertightness defects, for negligent misstatement and breaches of the Fair Trading Act 1993 .

The HC declined the Council’s claims against Mr Dallas for negligent misstatement as it held he had not assumed personal responsibility for the statements, and where he did assume personal responsibility it was not reasonable for the Council to rely on his statements.

The HC declined the Council’s claim against Mr Dallas for breaches of the Fair Trading Act.  The Court found that some of Mr Dallas’ statements were not misleading, and where the statements were misleading it was not reasonable for the Council to rely on the misleading statements.