Awakino Fortune Limited v Rising (New Zealand) International Investment Development Co Limited

[2020] NZHC 1204

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-008

[2020] NZHC 1204

BETWEEN

AWAKINO FORTUNE LIMITED

Plaintiff

AND

RISING (NEW ZEALAND) INTERNATIONAL INVESTMENT DEVELOPMENT CO LIMITED

Defendant

Hearing:

2 June 2020

Appearances:

DM O’Neill for the Plaintiff

No appearance for the Defendant

Judgment:

2 June 2020

ORAL JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 2 June 2020 at 11.45am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:

D O’Neill, Hamilton

Awakino Fortune Ltd v Rising (NZ) International Investment Development Co Ltd [2020] NZHC 1204 [2 June 2020]

[1]        This is a summary judgment application in which no notice of opposition has been filed. The summary judgment has been properly served, but there has been no contact at all from the defendant, whose principal operatives appear to be based in China.

[2]        The case arises out of an agreement for sale and purchase under which the defendant agreed to purchase a 29 hectare property from the plaintiff for $8.5 million. A deposit of $425,000 was paid by the defendant.

[3]        The agreement was conditional on the defendant obtaining consent to the purchase of the property from the Overseas Investment Office (the “OIO”) under the Overseas Investment Act 2005, on terms which were acceptable to the defendant acting reasonably.

[4]        No consent was ever obtained by the defendant under the Overseas Investment Act 2005, and after several extensions granted by the plaintiff, the plaintiff eventually cancelled the contract. In its statement of claim, it pleads that the defendant was obliged to use all commercially reasonable endeavours, take all steps and diligently pursue such steps to obtain the OIA consent. The plaintiff says that the defendant did not take reasonable steps to satisfy the OIA consent condition; indeed it withdrew the consent application in July 2018, and thereafter took no further steps to pursue the application.

[5]        The plaintiff then cancelled the contract. It has provided affidavit evidence from a registered valuer, Mr Coakley, who has expressed the view that the market value of the property as at 2 September 2019 is now only $4 million.

[6]The plaintiff originally claimed the difference between the purchase price of

$8.5 million and the current market value of the property ($4 million), but in a memorandum of counsel dated 26 May 2020 Mr O’Neill advised that he had received instructions to reduce the amount sought to $750,000.

[7]        I am satisfied from the affidavits filed in support that the plaintiff’s claim has been sufficiently made out. In particular, Mr Reipen’s affidavit in support attaches an email received from Dr John Xing on behalf of the defendant, in which Dr Xing effectively acknowledged that the defendant did not pursue the OIA application with appropriate diligence. Dr Xing referred to his mother’s serious illness in August, the defendant’s lawyer being on vacation, and the fact that if the application to the OIO was not approved, it would be announced on the OIO website. That was said to be a matter that gave the defendant concern over future applications or business operations in New Zealand. In addition, Dr Xing said the lawyer instructed for the defendant in New Zealand refused to give advice.

[8]        In the absence of any opposition to the claim, I am satisfied that the claim of breach of contract is made out, and that the plaintiff was entitled to cancel. The evidence of the registered valuer showing a loss of approximately of $4 million as at 2 September 2019 amply supports the plaintiff’s reduced claim for $750,000, and I give summary judgment to the plaintiff accordingly for the sum of $750,000.1

[9]For the foregoing reasons, I give judgment for the plaintiff for the sum of

$750,000, together with interest on that sum under the Interest on Money Claims Act 2016 to today’s date. Costs are also awarded to the plaintiff on a 2B basis.

Associate Judge Smith

1      Mr O’Neill told me at today’s hearing that the plaintiff’s decision to reduce the claim to $750,000 merely reflects its acceptance that there would be significant difficulties for it in attempting to execute any higher judgment.