Justice Gerard van Bohemen ruled the home had been “completely unusable” at the time of settlement, ordered the refund of a $1m deposit.
The sellers have now completed $1.1m in remedial works and relisted the home for sale.
A buyer who was days from taking possession of a $10 million Auckland mansion has won the right to walk away from the deal and have his $1m deposit refunded after a fatal landslide left the home teetering on a cliff’s edge.
Ningfei Du bought the Arney Rd, Remuera home at auction in 2022, putting down a 10%, or $1.06m, deposit.
But three days before settlement — when Du would’ve had to pay the full $10.6m purchase price — Auckland’s January 2023 storms hit, sending a landslide tumbling out from under the property.
The slip crashed down the cliff-face into a house on Shore Rd, killing Museum of Transport and Technology volunteer David Lennard.
The Arney Rd mansion’s vendors — David Youn and Miji Sunwoo — were still living in the house at the time. The property was given a red placard by authorities, indicating the house was too damaged to enter.
They contacted their insurers and tried to arrange for the sale to go ahead, but a little over a month later, in March, Du officially cancelled the deal.
The vendors claimed Du was in breach of the contract and refused to return the deposit.
However, in a recent High Court decision, Justice Gerard van Bohemen backed Du, saying the home had become “completely unusable” at the time of settlement.
“It follows that Mr Du was fully entitled ... to cancel the ASP [agreement for the sale and purchase].”
The January 27-29 downpours dumped record rainfall on the city and caused widespread flooding, slips and mass road closures.
Four people died in the storm, while Auckland Council later launched a billion-dollar buyout of homes in areas at risk of future flooding.
Youn and Sunwoo subsequently commissioned $1.1m in remedial works to make the land and home safe again.
Following the works, they put the home back on sale in September last year, with Youn telling the Herald he hoped a new buyer would come along before the end of this year.
Remedial works undertaken on the home following the 2023 storm damage. Photo / Supplied
Storm damage
Youn and Sunwoo earlier paid $5.95m for the grand home in 2019, public records show.
They then completed a “striking renovation” of the four-bedroom home, which sits on a 1102 sq m site and was originally designed by 1970s architect Claude Megson, property website OneRoof reported.
The renovation included a sleek designer kitchen, lap pool and huge deck overlooking Rangitoto Island and Auckland harbour.
However — when the landslide hit — the home’s backyard and swimming pool tumbled down the hill, while its deck was left suspended in mid-air.
A column supporting the master bedroom was also exposed.
Police told Youn and Sunwoo to immediately vacate due to safety concerns, while Auckland Council staff issued a red placard the next day, saying the home was too dangerous to enter.
On the day of settlement, January 31, Youn and Suwoon’s lawyers emailed Du’s lawyers proposing that the settlement go ahead that day.
They said they would make all reasonable efforts to have the red placard removed as quickly as possible by engaging engineering and geotechnical reports.
They would also file a claim with their insurer Vero — with whom they had a $1.26m policy limit — and work to have that claim money paid to Du.
Du’s lawyers responded by saying they had not been able to do a pre-settlement inspection on January 29 as planned and understood the mansion was now “untenantable” and that it would not be fixed that day in time for settlement.
The lawyers said they needed immediate information about the extent of the damage and time to consider Du’s rights in the matter.
In early February 2023, both sides engaged reports into the state of the house, with the findings stating there was risk of further instability and more studies were needed.
By March that year, the home’s red sticker was replaced with a yellow sticker, allowing people to live in and access all its rooms apart from the deck and main bedroom.
The Arney Rd home in 2022 before the storms. Photo / Supplied
Youn and Sunwoo, who were reliant on the Arney Rd sale going ahead so they could complete a purchase of another home in Mellons Bay, then proposed a new March 24 settlement date with similar conditions.
When Du missed the settlement date, they told him he owed $9.26m on the purchase and that interest would begin accruing daily.
Du’s lawyers fired back, saying the home had been untenantable on the original settlement date and remained so as of March 2023.
He cancelled the purchase agreement and asked for his deposit back, saying he would take Youn and Sunwoo to the High Court and charge them “increased costs” if they refused.
The matter was subsequently heard in the High Court in February this year.
Youn and Sunwoo’s lawyers argued the settlement date had successfully been moved to March 2023 because it was not possible to settle on the original January date, and by that time the home was habitable.
They said it was habitable because most of the property could be accessed, and Youn and Sunwoo had also offered to lower the purchase price to match any extra costs that the remedial works might incur.
But Justice van Bohemen agreed with Du that the home had been “untenantable”, both in January at the official settlement date and also later in March.
He ordered Du’s deposit be repaid, with interest.
The Arney Rd in 2024 following remedial works. Photo / Supplied
