Rahal v Bhargac & anor [2026] NZCA 176 is a leaky home case where under the Fair Trading Act 1986 the Court of Appeal replaced an award of damages in the High Court (Hinton J) of $270,000 to the buyers on a loss in value basis with one of $688,868.40 based on costs to repair.
It also increased the damages for consequential losses from $51,840 for lost rent to $103,107 for assessing damage, lost rent and costs of alternative accommodation. It decreased the award of general damages from $80,000 under the FTA to an award of $35,000 that was thought to be more in line with previous cases. It adopted a new tariff of $21,000 per unit for non-occupiers and $35,000 per unit for occupiers.
The awards were against the shareholder/director Mr Rahal who was a co owner along with his company First Trust Ltd. As director of FTL, he was responsible for the renovation, presentation and marketing of the property. He was the alter ego of FTL. So, Mr Rahal was jointly and severally liable with FTL under s 9 of the FTA for misleading and deceptive conduct about the leaky building.
The award of damages as increased by the Court of Appeal replicated the award against FTL for breach of vendor warranty.
