Bushpark Property Developments Ltd (in Liq) v Yang - [2012] NZHC 973

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-001981 [2012] NZHC 973

UNDER the Companies Act 1993

IN THE MATTER OF the liquidation of BUSHPARK PROPERTY DEVELOPMENT LIMITED (IN LIQUIDATION)

BETWEEN BUSHPARK PROPERTY DEVELOPMENTS LIMITED (IN LIQUIDATION)
First Plaintiff

ANDHENRY DAVID LEVIN AND VIVIEN JUDITH MADSEN-RIES AS LIQUIDATORS OF BUSHPARK PROEPRTY DEVELOPMENT LIMITED (IN LIQUIDATION)
Second Plaintiffs

ANDPEI CHI YANG First Defendant

ANDHSIU MEI SU Second Defendant

ANDL K TRUSTEE (NO 19) LIMITED Third Defendant

Hearing: 23-24 April 2012

Counsel: N H Malarao and P C Murray for Plaintiffs
G J Kohler and J A Wickes for Defendants

Judgment: 14 May 2012

In accordance with r 11.5 I direct the Registrar to endorse this judgment with the delivery time of 4.00pm on the 14th day of May 2012.

BUSHPARK PROPERTY DEVELOPMENTS LIMITED (IN LIQUIDATION) V YANG HC AK CIV-2011-404-
001981 [14 May 2012]

RESERVED JUDGMENT OF COLLINS J

Introduction

[1] This proceeding has been initiated by the second plaintiffs who are the liquidators of the first plaintiff (Bushpark). They are seeking to recover from the defendants (vendors) one-third of the deposit which Bushpark paid the vendors in relation to the purchase of a property in Karaka (the property). That transaction occurred prior to Bushpark being placed in liquidation. At all material times the vendors were the registered owners of the property.

Facts

[2] On 11 February 2007 Bushpark entered into an agreement with the vendors for the sale and purchase of the property (the agreement).1

[3] The essential terms of the agreement were:

(1) The purchase price was $6.9 million inclusive of GST.

(2)The deposit was $1.03 million, representing 15 per cent of the purchase price.

(3) Settlement was to be on 11 February 2008.

[4] Clause 9.4 of the Agreement provides:

9.4If the purchaser does not comply with the terms of the settlement notice served by the vendor then:

(1) Without prejudice to any other rights or remedies available to the vendor at law or in equity the vendor may:

1 The agreement is a common form of agreement for the sale and purchase of real estate. It is the
7th edition of a form of agreement prepared by the Real Estate Institute of New Zealand and the
Auckland District Law Society.

(a) sue the purchaser for specific performance; or

(b) cancel this agreement by notice and pursue either or both of the following remedies namely:

(i) forfeit and retain for the vendor’s own benefit the deposit paid by the purchaser, but not exceeding in all 10% of the purchase price;

(ii) sue the purchaser for damages. [emphasis added].

[5] On 26 February 2007 Bushpark paid the deposit of $1.03 million to the vendors’ real estate agents who deducted their commission ($162,000) and paid the balance of the deposit ($873,000) to the vendors.

[6] On 29 January 2008 the vendors’ solicitors sent Bushpark a settlement statement for sale and purchase of the property.

[7] On 8 February 2008 Bushpark’s solicitors informed the vendors’ solicitors that Bushpark believed…

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.

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Details

Case: [2012] NZHC 973
Decision Date: 14 May 2012

CaseChat Overview and Summary

The liquidators of Bushpark Property Developments Limited, the first plaintiff, are seeking to recover from the vendors, the second and third defendants, one-third of the deposit which Bushpark paid the vendors in relation to the purchase of a property in Karaka. The liquidators claim that the vendors are liable to repay $345,000 of the deposit because the vendors were required to limit the sum of the deposit they could retain to 10% of the purchase price under cl 9.4(1)(b)(i) of the agreement. The vendors contend that they were entitled to retain the entire deposit because Bushpark defaulted on settlement. The Court found in favour of the liquidators on the first cause of action, breach of contract. The Court held that the vendors were required to limit the sum of the deposit they could retain to 10% of the purchase price under cl 9.4(1)(b)(i) of the agreement. The Court held that the vendors cancelled the agreement on 14 November 2008. The Court held that it was not necessary for the vendors to send a specific notice of cancellation “by notice per cl 9.4(1)(b) of the agreement” in order to cancel the agreement. The Court held that the liquidators are entitled to recover from the vendors the sum of $345,000 together with interest and costs.

Orders