Mills v United Building Society - [1988] 2 NZLR 392

Contract — Sale of land — Auction of leasehold land — Fair Trading Act — Misleading or deceptive conduct — Test to be applied — Caveat emptor — Mortgagee sale of leasehold interest in a block of eight flats — Redemption figure set by mortgagee at $210,000 - Before auction, purchaser received copy of lease and was advised by auctioneer to obtain legal advice — Purchaser's solicitor quickly perused lease but failed to notice that lease contained onerous rental conditions — Purchaser formed his own judgment as to value and bought at auction for $231,500 - Subsequently purchaser ascertained that because of the onerous rental conditions the lessee's interest was at most $66,000 - Whether conduct of vendor was misleading or deceptive — Whether vendor had misrepresented the nature of the interest in the land — Whether the Fair Trading Act had abrogated the doctrine of caveat emptor — Whether contract was void — Fair Trading Act 1986, ss 9 and 14.