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Bahramitash v Kumar

Bahramitash v Kumar

Case [2005] NZSC 39 30 June 2005

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IN THE SUPREME COURT OF NEW ZEALAND

SC CIV 23/2004 [2005] NZSC 39

BETWEEN PARSOA BAHRAMITASH Appellant

ANDSATISH KUMAR AND SUNILA KUMAR
Respondents

Hearing: 21 June 2005
Court: Elias CJ, Gault, Keith, Blanchard and Tipping JJ Counsel: D G Smith and J C Bassett for Appellant
D Singh for Respondents

Judgment: 21 June 2005

Reasons for Judgment: 30 June 2005

JUDGMENT OF THE COURT

A. The appeal is dismissed save that the decree of specific performance made by the Court of Appeal is varied as follows.

B. The date on which settlement is to take place is to be 5 July 2005.

Interest is to be payable by the appellant as from 11 September 2003 to

5 July 2005 in accordance with cl 3.10(2) of the General Terms of Sale of the Agreement for Sale and Purchase.

C. The appellant is to pay to the respondents costs of $15,000 in respect of the appeal to this Court together with disbursements to be fixed if necessary by the Registrar.

BAHRAMITASH V KUMAR SC CIV 23/2004 [21 June 2005]

REASONS

(Given by Blanchard J)

[1] At the conclusion of the hearing the Court gave judgment dismissing the appeal. We said that reasons for judgment would follow. We now give those reasons.

The facts and the judgments below

[2] The appellant, Mr Bahramitash, agreed to sell a residential section at Mangere Bridge, Auckland to the respondents, Mr and Mrs Kumar, for $160,000. The contract was dated 21 August 2003 and was on the Auckland District Law Society/Real Estate Institute of New Zealand form.1 A third party deposited a large quantity of soil on the section which buried and disturbed some of the survey pegs. There is an unchallenged finding of fact by the High Court that this occurred after the contract was entered into. Both parties accepted that this caused damage to the property but did not render it untenantable.

[3] Two clauses of the General Terms of Sale of the agreement form were relevant to this occurrence:

4.1The property and chattels shall remain at the risk of the vendor until possession is given and taken.

4.2If, prior to the giving and taking of possession, the property is destroyed or damaged, and such destruction or damage has not been made good by the possession date, then the following provisions shall apply:

…

(2)If the property is not untenantable on the possession date the purchaser shall complete the purchase at the above price less a sum equal to the amount of the diminution in value of the property.

5.1The vendor shall not be bound to point out the boundaries of the property except that on the sale of a vacant residential lot which is not limited as to parcels the vendor shall ensure that the property is pegged at the possession date.

1 Seventh Edition (2) July 1999.

[4] The date fixed for settlement and the giving and taking of possession was

11…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bahramitash v Kumar

Details

AGLC: Bahramitash v Kumar [2005] NZSC 39
Case: [2005] NZSC 39
Decision Date: 30 June 2005

CaseChat Overview and Summary

The case of Bahramitash v Kumar involved an appeal against a decision of the Court of Appeal that had ordered specific performance of a contract for the sale of a residential section in Mangere Bridge, Auckland. The appellant, Mr Bahramitash, had agreed to sell the section to the respondents, Mr and Mrs Kumar, for $160,000. The contract included terms that the property would remain at the risk of the vendor until possession was given and taken, and that if the property was damaged prior to possession but was not rendered untenantable, the purchaser would complete the purchase at the agreed price less a sum equal to the diminution in value of the property.

The key legal issues in the case were whether the respondents were required to tender settlement in accordance with the terms of the contract, and if not, whether the appellant had validly cancelled the contract. The Court of Appeal had held that the contract had not been validly cancelled because the appellant had not been ready, willing, and able to proceed to settle when he issued his settlement notice, as he was not prepared to give what he had contracted to give, namely, the subject land without the accretion of the spoilage. The Court ordered specific performance with an abatement for compensation in the sum of $2,000.

The Supreme Court held that the Court of Appeal's decision was inconsistent with the finding of the High Court that it had not been shown that tender would have been futile. The Court found that the evidence showed that the appellant had plainly indicated by words and conduct that a tender of settlement in terms of the contract would have been futile, and therefore the respondents were not required to make such a tender. The Court concluded that the purchasers were not in default when the vendor's settlement notice was given, and that the vendor was in default in refusing to settle and his purported cancellation was not valid. The purchasers were therefore entitled to specific performance of the contract.

The appeal was dismissed save that the decree of specific performance made by the Court of Appeal was varied to set the settlement date as 5 July 2005, and to require the appellant to pay interest from 11 September 2003 to 5 July 2005 in accordance with the terms of the contract. The appellant was also ordered to pay costs of $15,000 in respect of the appeal to the Supreme Court together with disbursements to be fixed by the Registrar.

Orders