Ameet Bhargav and his wife Renu outside their leaky house in Goodwood Heights, Manukau shortly after buying the property in 2020. Photos / Supplied
Ameet Bhargav and his wife Renu outside their leaky house in Goodwood Heights, Manukau shortly after buying the property in 2020. Photos / Supplied
A young couple awarded nearly $1 million after a judge ruled a Queen’s Service Medal recipient deceptively sold them a rot-infested home face years more stress and potential health problems following a decision to rehear the case.
It’s understood a new trial is unlikely to occur until 2025, leaving the couple and their baby marooned in a leaking property, at risk from mould and worsening mental health.
Davinder Singh Rahal took no part in a 2021 High Court trial which found his company First Trust Ltd (FTL) deliberately deceived first-home buyers Ameet Bhargav and Renu Khajuria by carrying out superficial repairs to mask the Manukau property’s significant weather-tightness problems.
Justice Anne Hinton found Rahal and his company had breached contractual warranty by carrying out unconsented building work, and breached the Fair Trading Act through misleading and deceptive conduct, labelling the actions “quite literally a cover-up”.
The Justice Ministry is now reviewing Rahal’s suitability to hold a JP warrant, and it’s understood the Honours Unit is also assessing the suitability of him retaining his gong for services to the Indian community. However, both processes are on hold pending the new trial.
Vinay Mehta, whose company Metsons (NZ) Ltd carried out a pre-purchase building inspection for the couple, cleared the property as being in “generally good condition” with “no moisture detected any place in the house” before they bought it in March 2020.
It later emerged that Mehta’s company had also carried out an inspection when Rahal bought the property in 2019, when it’s alleged the home was marketed with “explicit disclosure of leaking, damp and mould issues”.
Mehta - who also took no part in the initial court proceedings - was found jointly liable for deceptive conduct and ordered to pay damages so the couple could demolish the property and rebuild at an estimated cost of $1.05m, and move on with their lives.
After the court decision was issued last year, Rahal and Mehta applied to have the judgment set aside, arguing not doing so would constitute a miscarriage of justice.
At a preliminary hearing in December, the pair argued there were explanations for why they took no steps to defend the claims against them and why they now deserved their day in court.
The Weekend Herald reported last year that Bhargav and Khajuria purchased the three-bedroom Goodwood Heights property for $665,000 from FTL, which is owned by Rahal and his wife Jivan.
The couple paid $665,000 for this Goodwood Heights, Manukau home in March 2020. It turned out to be infested with rot.
After taking possession, they discovered moisture problems and commissioned a second inspection report from another company which identified significant weather-tightness problems.
Another expert found building work carried out by Rahal’s company was non-compliant with the building code and unconsented.
The couple engaged lawyers and tracked down the previous owner who sold the property to Rahal’s company. They confirmed it had a history of moisture problems.
The couple’s lawyer Sarah Wroe filed civil proceedings in 2021 claiming a breach of contractual warranty against FTL, and misleading and deceptive conduct against Rahal and Mehta.
Former Governor-General Sir Jerry Mataparae with Davinder Singh Rahal (right) as he receives the Queen's Service Medal for services to the Indian community in 2012.
Justice Hinton’s scathing judgment awarded damages to the couple of $861,113, plus costs and disbursements.
However, in a newly released decision, Justice Kiri Tahana said she was satisfied a miscarriage of justice would occur if the original decision was not set aside “in part”.
Her judgment says Rahal first became aware of the property when it was advertised as a “do-up opportunity” in April 2019.
He viewed the property with Harcourts real estate agent Vivek Punj, who claimed he informed Rahal about the weather-tightness problems, a claim disputed by Rahal.
Rahal made a cash offer of $550,000 and signed a sale and purchase agreement that night.
Prior to settlement, Rahal said his business partner arranged for Mehta to carry out a building inspection. Mehta’s report found “moisture was above acceptable levels in some areas” and that wall cladding “needs maintenance”, but the property was in “satisfactory condition”.
Rahal said his health then deteriorated and his business partner co-ordinated a $26,000 renovation of the property.
Building inspector Vinay Mehta was found jointly liable to pay $900,000 in damages for deceptive conduct.
The plaintiff couple viewed the house in March the following year. They raised concerns about plaster homes being prone to leaking, but allege another real estate agent assured them it was a “good deal”.
After commissioning the Metsons building inspection, they agreed to buy the house, but noticed water entering a bedroom within days of taking possession.
In considering the defendants’ failure to participate in earlier proceedings, Justice Tahana said Rahal presented medical records indicating he was ill at the time and recovering from surgery, which she agreed explained his delay.
Mehta told the court he did not participate because an agent who sold the property to the couple told him “he would take care of it”.
Justice Tahana did not accept this explanation, saying there was no reason for Mehta to rely on the assurances.
She then asked whether the defendants had a substantial ground of defence.
Justice Tahana ruled there were questions over the amount of damages awarded which needed to be tested in court.
She also ruled that evidential discrepancies about whether Rahal knew the property had weather-tightness problems required determination.
Barrister and specialist in property litigation Sarah Wroe filed successful proceedings against the defendants in the High Court. Photo / Sharlene Ferguson
Punj told the court there were “obvious signs” of leaking, and water damage in the exposed ceiling was “clearly visible” when he showed Rahal the property.
“Mr Rahal said it was not a problem and he would fix it as he had done many times before,” Punj claimed.
However, Rahal said Punj “did not mention anything about the property being a leaky home”.
Justice Tahana said the conflicting evidence had to be tested at trial.
The rehearing was also necessary to determine whether Rahal’s company had engaged in misleading and deceptive conduct, and the allocation of liability between the defendants.
There were also differing expert opinions about whether the Metsons building report commissioned by the couple - which relied on visual, “non-invasive” testing - was up to scratch.
The evidence needed to be tested to determine whether Mehta’s report and statements to the couple were misleading.
Finally, she considered whether ordering a new trial would cause irreparable harm to the plaintiffs.
The couple argued the situation was causing stress and affecting their mental health. Further delay would have significant impact, forcing them to continue living in a “damp and mouldy home with a young child”, with health and safety implications.
Justice Tahana acknowledged the stress and delays, but said increased stress was “not sufficient to establish irreparable harm”.
She upheld the finding that FTL had breached contractual warranty by carrying out unconsented work, but ruled the rest of Justice Hinton’s decision was set aside.
Bhargav and Khajuria declined to comment this week and Rahal could not be reached.
