Lawyer and company misled buyers about sub-division
Published15 Aug 1995
A Christchurch lawyer, John Rutherford, and a company of which he is a director, Rural Management Limited, have been found guilty of misleading people about land being subdivided.
The Commerce Commission brought two charges each against Mr Rutherford and Rural Management. Judge Holderness released his decision today and found Mr Rutherford and the company guilty on all charges. Sentencing will be in the Christchurch District Court later this month.
Mr Rutherford's company advertised "fully serviced titled sections" at the Wainui sub-division near Christchurch.
Judge Holderness decided that stage 1 of the sub-division was not fully serviced, as there were no arrangements in place for disposal of sewerage. Anyone buying a section would have to make their own arrangements for sewerage disposal and have them approved by the District Council before even getting a building permit.
Titles were not available for sections in stage 2 of the sub-division.
A couple agreed to buy one of the stage 2 sections for $32,000 in January 1993. By October they had still not received the title and asked for their money back. Mr Rutherford would not do that but instead offered them a stage 1 section.
A complaint was made to the Commission, and only after an investigation began was the money refunded.
Judge Holderness said he was satisfied that Mr Rutherford had overall control of the day to day management of the company and was the guiding hand and mind in its development of the sub-division.
He was also satisfied that the average New Zealander looking to buy a section would have been misled by the advertising.
Mr Rutherford represented himself and the company.
He relied on defences in the Fair Trading Act, that he had made a reasonable mistake, that he had relied reasonably on another person or that the breach was due to the actions of another person and he had taken reasonable precautions. He said he had relied on local authorities to ensure the sub-division went ahead as planned.
