Bath v Whakaruru - [2024] NZCA 350

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA562/2023
[2024] NZCA 350

BETWEEN	JAY BATH Appellant
AND	ANNA KATARAINA WHAKARURU and SONNY MARUPO WHAKARURU (as trustees of the SONNY AND ANNA WHAKARURU FAMILY TRUST) Respondents

Hearing:	18 June 2024
Court:	Katz, Brewer and Downs JJ
Counsel:	T Nelson for Appellant J C Z Loh and R Rao for Respondents
Judgment:	30 July 2024 at 10.00 am

JUDGMENT OF THE COURT

ALeave is granted to adduce fresh evidence.
BThe appeal is dismissed.
CThe appellant must pay the respondents costs for a standard appeal on a band A basis and for a standard application on a band A basis, with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Downs J)

The appeal

The appellant, Jay Bath, agreed to purchase a residential property, in Manurewa, from the respondents, as trustees of the Sonny and Anna Whakaruru Family Trust (the property). The appellant defaulted. The respondents promptly resold the property, but at a loss. Associate Judge Sussock granted the respondents summary judgment in relation to:[1]
(a)Damages of $320,500 for their net loss on the resale.
(b)Penalty interest on the unpaid portion of the purchase price: $72,822.30.
(c)Costs and expenses of $36,080.75 in relation to the resale.
(d)Rates in the amount of $1,200.64.
[1]Whakaruru v Bath [2023] NZHC 2474 at [104(a)–(d)].
The appellant contends it is reasonably arguable the respondents failed to mitigate their losses, hence the Judge erred in granting them summary judgment.
The appellant seeks leave to adduce marketing material from the resale process as fresh evidence. The respondents offer no opposition to the application. We grant the application to adduce fresh evidence.

Background

On 14 September 2021, the appellant entered an unconditional agreement (the agreement) to purchase the property from the respondents. The price was $1,160,000. The appellant paid a five per cent deposit (of $58,000). Settlement was scheduled for 17 May 2022.
On 5 April 2022, the appellant emailed the respondents.[2] The appellant said his financial position had changed and he was “now seeking to arrange finance through a second-tier lender which will take some additional time”. The appellant sought to renegotiate both the purchase price and settlement date. He suggested the price be $900,000 (not $1,160,000) and settlement be six months later (than 17 May 2022).
[2]This (and other correspondence) was through the parties’ lawyers.
The respondents declined to renegotiate the agreement.
On 17 May 2022, the appellant again asked for a six‑month extension. He also asked for a price reduction to $1,000,000.
The respondents said they would agree to the extension provided: the appellant immediately paid an additional five per cent deposit; the purchase price remained $1,160,000; and the appellant paid an additional sum of $30,000.
The appellant declined, saying he was “not in a position, financially, to complete settlement of the purchase price referred to in [the agreement] and also to pay [the respondents] the additional deposits”.
The appellant failed to settle on 17 May 2022. The appellant says in…

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 Bath v Whakaruru

Details

AGLC: Bath v Whakaruru [2024] NZCA 350
Case: [2024] NZCA 350
Decision Date: 30 July 2024 at 10.00 am

CaseChat Overview and Summary

In Bath v Whakaruru, Jay Bath, the appellant, appealed against a decision of the High Court that granted summary judgment to Anna and Sonny Whakaruru, the respondents, in relation to damages, penalty interest, costs and expenses incurred following Bath's default on a contract to purchase a residential property. The Court of Appeal considered the appellant's contention that it was reasonably arguable that the respondents had failed to mitigate their losses, hence the Judge erred in granting them summary judgment. The appellant also sought leave to adduce marketing material from the resale process as fresh evidence, which the respondents did not oppose. The Court granted the application to adduce fresh evidence.

The key legal issues the Court had to decide were whether the Judge correctly placed the onus of proof on the appellant and whether it was reasonably arguable that the respondents had failed to mitigate their loss by taking reasonable steps in the circumstances to obtain a proper price on resale. The Court noted that the onus of proof in summary judgment applications is on the plaintiff to satisfy the court that the defendant has no defence to the plaintiff's claim. The Court found that the Judge misstated the onus in at least one of the passages identified by the appellant's counsel. However, the Court concluded that it was not reasonably arguable that the process adopted by the respondents was unreasonable in the circumstances, and the respondents could not be criticised for not engaging with the appellant post-auction. The Court further held that the Judge was correct to grant summary judgment irrespective of the language she used in reaching that conclusion.

The Court of Appeal dismissed the appeal and ordered the appellant to pay the respondents' costs for a standard appeal and a standard application on a Band A basis, with usual disbursements.

Orders