Supreme Court clarifies key principles in misstatement cases

The Supreme Court's recent decision in Routhan v PGG Wrightson Real Estate Ltd [2025] NZSC 68 provided critical guidance on how damages are assessed in negligent misstatement cases under New Zealand law. The Court clarified that recoverable loss is not determined solely by causation and remoteness, but also by examining the 'scope of duty' (whether the loss relates to a risk the defendant fairly assumed responsibility for). The decision refined the influential principles from South Australia Asset Management Corp v York Montague Ltd [1997] AC 191 (HL) (SAAMCO) and will be of particular interest to professionals whose advice may influence another's decision-making.

Background

In 2010, the Routhans purchased a farm near Hokitika for $2.8 million. PGG Wrightson Real Estate Ltd (PGG) marketed the farm as high yielding, claiming an average milk production of 103,000 kgMS per season. The Routhans relied on this representation when deciding to purchase the property.