Brkic v White - [2018] NZHC 1458

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-003066

[2018] NZHC 1458

BETWEEN GORDAN BRKIC, EMILIJA BRKIC and NAGI FALTAUS
Plaintiffs

AND

CAROLINE RUTH WHITE, CRUMMER TRUSTEES NO. 82 LTD and MARK

DONALD STALKER as Trustees of the GRAFTON ROAD TRUST

Defendant

Hearing: 26 to 28 February 2018

Appearances:

Phillip Rice for the Plaintiffs

Lawrence Herzog for the Defendants

Judgment:

18 June 2018

JUDGMENT OF MOORE J

This judgment was delivered by me on 18 June 2018 at 4:30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

BRKIC & ORS v WHITE & ORS [2018] NZHC 1458 [18 June 2018]

Introduction

[1] The plaintiffs are trustees of a family trust which owned a commercial unit in Auckland. They agreed to sell the unit to the defendants. In order to finance the purchase, the defendants entered into an ancillary loan agreement under which the plaintiffs provided vendor finance.

[2] The defendants did not repay the loan by the due date. The plaintiffs now seek repayment together with interest calculated in accordance with the terms of the loan.

[3] The defendants dispute liability. They claim that the agreement for sale and purchase (“the ASP”) was fraudulently altered by the plaintiffs and/or their agents after they had executed it and is thus unenforceable. In particular they claim cl 6, which contains the vendors’ warranties and undertakings, was unilaterally deleted after they had signed the ASP. They claim they would never have signed the ASP without that clause intact.

[4] The plaintiffs refute this. They say they insisted there should be no vendor warranties; the ASP arrived from the defendants’ solicitor with cl 6 deleted.

Factual background

[5] In order to properly assess the defendants’ claim and in particular examine the issue of whether the SPA was delivered to the plaintiffs with cl 6 intact or not, it is necessary to review the factual background in some detail.

[6] The plaintiffs are Gordan Brkic, Emilija Brkic and Nagi Faltaus. They are the trustees of the Brkic family trust, known as the Madeg Family Trust. Gordan and Emilija Brkic are husband and wife. Mr Faltaus is the Trust’s solicitor.

[7] In around 2005 a development company, Progression Development Ltd (“PDL”), was involved in reconfiguring a former parking building at 160 Grafton Road, Auckland. PDL owned a number of commercial units in the building.

[8] That company was owned and operated by Stephen Kelly. Mr Brkic first met Mr Kelly in about 2006 when Mr Kelly engaged him to provide engineering services during the construction of two additional floors to the top of 160 Grafton Road.

[9] In 2007 the Madeg Family Trust acquired Unit 3B1, which was commercial space situated on the top floor. The Madeg Family Trust’s original intention was to lease the unit to Mr Brkic’s engineering business, DHC Consulting Ltd (“DHC”).

[10] As it turned out, DHC never moved into Unit 3B1, which remained vacant. Attempts…

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 Brkic v White

Details

AGLC: Brkic v White [2018] NZHC 1458
Case: [2018] NZHC 1458
Decision Date: 18 June 2018

CaseChat Overview and Summary

The plaintiffs, trustees of the Madeg Family Trust, sought repayment of a loan provided to the defendants, trustees of the Grafton Road Trust, in connection with the sale of a commercial unit in Auckland. The defendants disputed liability, claiming the agreement for sale and purchase (ASP) was fraudulently altered by the plaintiffs and/or their agents after they had executed it. In particular, the defendants claimed cl 6, which contained the vendors’ warranties and undertakings, was unilaterally deleted after they had signed the ASP. They claimed they would never have signed the ASP without that clause intact.

The court rejected the defence of fraud, concluding that the ASP was valid and that there were no vendor warranties given and thus no breach. The balance of the purchase price of $109,820 was payable in accordance with the loan agreement. The loan agreement required repayment by 10 May 2012. It was not repaid by that date. The defendants were in default. The loan agreement provided that in the event of default, interest was payable at 22 per cent per annum. The Madeg Family Trust had made demand for the repayment of the principal and the defendants had failed to make payment.

The plaintiffs were entitled to judgment in their favour. Judgment was entered for the plaintiffs in the sum of $109,820 with interest calculated at the rate of 22 per cent per annum from 10 May 2012. The plaintiffs, as the successful party, were entitled to costs. The court invited the parties to confer with a view to filing a consent memorandum. In the event of disagreement, the parties were to file memoranda within 25 working days of the date of this judgment. No memorandum was to exceed three pages in length.

Orders