Amende v Kennedy

[2018] NZHC 781

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-396

[2018] NZHC 781

BETWEEN

DAVID REINHARD AMENDE AND RONDA LOUIS AMENDE

Applicants

AND

SHARYN KENNEDY, DANIEL MARK KENNEDY AND CAMERON JAMES KENNEDY

Respondents

Hearing:	On the papers
Counsel:	H Fulton for Applicants
Judgment:	24 April 2018

JUDGMENT OF WHATA J

This judgment was delivered by me on 24 April 2018 at 11.00 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:           R S Wood Lawyer, Auckland

AMENDE v KENNEDY [2018] NZHC 781 [24 April 2018]

[1]    The applicants seek to enforce my judgment of 11 July 2017. As set out in that judgment, the applicants and the respondents were parties to an agreement for sale and purchase dated 9 February 2014 (the agreement). The applicants agreed to purchase the property owned by the respondents at 21 Woodlands Crescent, Browns Bay, Auckland. At cl 6.2 of the agreement, the vendor warrants and undertakes that at settlement, where the vendor has done or permitted to be done on the property any works, a code compliance certificate was issued for those works. The respondents had completed works in June 2006 in respect of which no local body code compliance certificate had been issued. As such, cl 18 of the agreement provided:

The vendor agrees to a retention of $50,000, being part of the purchase price, to be held by the purchasers’ solicitor until a code compliance certificate is issued in respect of the renovation work completed in June 2006.

[2]    In breach of the agreement, the respondents failed to carry out the works or obtain a code compliance certificate. The applicants cancelled the agreement by letter dated 18 December 2015. The funds continued to be retained by Mr Botting. The applicants thus made an application seeking both to discharge Mr Botting from his undertaking, and authorisation for the funds subject to the undertaking to be paid to them.

[3]    In the result, based on the evidence before me, I resolved to make the following orders:

(a)Mr Botting is discharged from his undertaking.

(b)The undertaking sum is to be paid into the Court, to be held on interest- bearing account pending the following steps:

(i)A copy of my judgment is to be served on Young & Caulfield, solicitors for the respondents, in accordance with Associate Judge Christiansen’s earlier orders for substituted service.

(ii)The respondents shall be given ten working days within which to give notice of an interest in these sums.

(iii)If the respondents do not indicate an interest in the proceedings, there shall be leave reserved to the applicants in this matter to seek judgment for damages to remedy the breach, and to seek to enforce any judgment sum against the amount paid into Court.

[4]Further to those orders, the applicants now apply:

(a)For judgment for damages to remedy the respondents’ breach of contract;

(b)Such judgments and costs to be paid from the fund paid into the Court so far as that fund extends;

(c)If necessary, a charging order over such fund applied to the applicants’ judgment and costs.

Assessment

[5]    A copy of my judgment was served on the respondents by mail to their solicitors as the address for service, in terms of the sale and purchase agreement. The effective date of service was 14 July 2017. This is confirmed in the affidavit of Richard Samuel Wood. A further affidavit of Mr Wood, dated 16 February 2018, confirms the respondents have taken no step nor advised that they have an interest in the retained funds.

[6]    The applicants now maintain that the respondents have failed to perform their part of the bargain under the agreement for sale and purchase. By that agreement, they warranted and undertook a code of compliance certificate had been issued in respect of the respondents’ works on the property in 2006. I agree. Quite plainly, the vendors have not performed their part of the bargain to enable the undertaking by Mr Botting to be discharged in their favour. I am also satisfied, given the lapse of time since my judgment, the respondents have effectively abandoned responsibility for the work necessary to complete the undertaking.

[7]    The applicants claim that the proper measure of damages is the cost of remedying the breach. I sought clarification from the applicants as to the quantum of damages sought. I indicated to them that I was prepared to enter judgment in relation to the sum paid into Court, being the retention sum, together with interest. If, however, the applicants sought a different damages award, then fresh pleadings would need to filed. The applicants responded that they were satisfied that the judgment sum be the sum paid into Court in relation to the undertaking.

[8]    For the reasons set out in my first judgment, and because no steps have been taken by the respondents, I am satisfied that there should be judgment in the sum paid by way of undertaking, firstly, to Mr Botting and then placed into this Court.1 First, the applicants have provided evidence that the estimated costs of the works associated with code of compliance has increased to $46,116.16. I have no reason to doubt the robustness of this estimate. Secondly, the retention sum is the sum referred to in the original application and there being no notice of opposition, it is just that this sum be paid to the applicants.

[9]There shall, therefore, be an order accordingly as follows:

(a)Judgment in the sum of $52,412.41 being the amount paid into Court, together with interest accumulated since payment into Court.

(b)Costs in respect of the present application on a 2B basis.

1      Because this is an originating application, I have the power to make the same orders as if the respondents had not complied with an interlocutory order – see High Court Rules 2016, r 7.48.