It’s not just another leaky home tale: there’s a $500,000 lawsuit against a builder, a building inspector, and the New Zealand boss of the world’s biggest real estate chain. Three senior real estate agents before a disciplinary tribunal. A mysterious ‘secret’ witness. And a very upset pensioner who lost her life savings.
In part 1 of The Big Leak, we learned how Jean Warburton bought Remax boss Corrina Mansell’s Hamilton rental — only to find out it was plagued with leaks. Warburton's lawyer found that, all along, there had been a report that warned of the problems with the house at 2B Edgecumbe St.
The document that the whole legal battle hinges upon is called the INRED report. It’s a specialist building report which uses thermal imaging to assess leakiness in a building’s walls which might otherwise go unseen.
The INRED report for 2B Edgecumbe St was actually commissioned in November 2011, when a buyer was interested in purchasing the house from the previous owner, Michael Wallis. It discovered "significant moisture ingress issues" and “moisture levels throughout the interior… that are above acceptable levels”.
That deal fell through, but when Wallis sold the house to Corrina Mansell, he handed over that report, plus details of the repair work he’d commissioned from a builder called Matt Carson, who re-clad an entire wall of the house and replaced the balcony. There was also another building report suggesting the issues were now resolved.
But Jean Warburton never saw the INRED report until the court case began.
So where had it been?
Mansell says that her partner, Jack Blair, posted the report to Gibson’s office during the sales process - ironically, she says it was sent in a Ray White-branded envelope - and claims it was mentioned in a couple of casual conversations with Gibson as well. So it was his and Cary Ralph’s responsibility to declare it to any potential buyers.
But Gibson, Ralph and their office manager Gayle Patterson-Gray are adamant the report never arrived, and was never mentioned to them.
The three of them go to great lengths trying to prove they never saw that report, and to show why it’s just not believable that Corrina Mansell would send such an important document by post, instead of email or courier. They say Remax used couriers for everything bar staff birthday cards.
Ralph says he’s handed over all his emails and text messages to show it was never, ever mentioned in any of them. Gibson says the same of his communications.
Patterson-Gray even talked to the local post office to check the letter hadn’t somehow got stuck there. “The thing is there is not one bit of written evidence that she had ever sent this report to us,” she says. “And we are blown away that nobody has picked up on this.”
In the end, says Gibson: “I would be saying, ‘Show me one scrap of written evidence referring to that report’.”
In his report, the Real Estate Authority’s own investigator Wayne Radovich (we’ll get to why he’s involved in a moment) points out “no documentary evidence has been gathered which would tend to show the report was posted or received by the agency”.
What’s striking is that even if Corrina Mansell did send off the INRED report and the agents ignored it, she had plenty of other opportunities to ensure potential buyers knew the house’s history.
In fact, there were five specific occasions. There were two real estate listings forms. And two sale and purchase agreements completed - one set for the collapsed Dean deal, one for the Warburton deal. Both had sections which asked vendors to “list any defects or problems known to the client”.
All, says Ralph, were left blank. He says Mansell designed both forms, so she would be intimately acquainted with them. She also travelled the country lecturing Remax agents on best practice with the mantra: “Discuss. Disclose. Document.”
The final chance was a standard consultation with the auctioneer before the auction, where he would have asked if there were any conditions or clauses he needed to highlight to any buyers.
“Anyone with a brain looking at it would see you can’t miss five chances to disclose it, can you?” says Ralph.
While the INRED report may not have surfaced in time to stop Jean Warburton buying the house, its appearance changed the legal case entirely.
With the suggestion that there had been unconsented work done on the house before Mansell bought it, Michael Talbot re-filed the claim, and this time added builder Matt Carson (and his company Matt Carson Homes) to a list of defendants now numbering six.
Warburton’s claims include $317,770 to fix the defects, compensation for lost rental income of $480 per week from June 2016 until whenever the house is repaired, her costs, interest, and $25,000 in damages.
But Jean Warburton is not suing Gibson and Ralph. Talbot didn’t find any grounds to take action against them, and he says Mansell was liable anyway for whatever they did on her behalf.
However, they are still involved in the court case - because Mansell has effectively counter-sued them, in a move called ‘joining in’. By alleging that she handed on the INRED report, and they failed in their duties by never disclosing them to Warburton, she’s arguing that if anyone is guilty of “misleading and deceptive conduct”, it’s Ralph and Gibson, and so any damages she’s held liable for must be paid by them. Talbot, who is a disinterested observer of that part of the case, says it’s on Mansell to prove she handed everything over and the agents hid it from the purchaser, in which case they would have to pay up.
And there was one thing in her favour - an anonymous tipster who claimed that building inspector Tony Bankier and real estate agent Andrew Gibson were secretly old mates who had cooked up a dodgy deal together.