Cashmere Enterprises Ltd v Mathias - [2002] NZCA 46

IN THE COURT OF APPEAL OF NEW ZEALAND

CA273/01

BETWEEN	CASHMERE ENTERPRISES LIMITED
Appellant

AND	JONATHAN MATHIAS
Respondent

Hearing:	4 March 2002
Coram:	Richardson P Gault J Tipping J
Appearances:	M C Black for Appellant M A Gilbert and M D Arthur for Respondent
Judgment:	13 March 2002

JUDGMENT OF THE COURT DELIVERED BY TIPPING J

Introduction

This is a case in which the ultimately simple facts have led to a multitude of causes of action. The appellant, Cashmere Enterprises Limited (Cashmere), entered into contracts of sale of properties at 25 and 27 Eltham Road, Kohimarama to Mrs Jennifer Going, whose solicitor was the respondent, Mr Mathias. In the course of the negotiations Mrs Going gave Mr Mathias an irrevocable written authority to pay to Cashmere, as vendor, a prospective GST refund when it came to hand. This document, which is at the heart of the case, was in these terms:

J M Going
16.12.98
94 Gowing Dr
Meadowbank
Irrevocable Authority
To: Jonathan B Mathias
Solicitor
Auckland
Re my purchase of 25-27 Eltham Road, Kohi from Cashmere Enterprises Ltd
1)I intend to conclude an agreement for purchase of the above properties for $1.5 million with the vendor leaving in finance.
2)I advise that immediately following settlement (anticipated prior to Xmas’ 98) I will apply for a GST refund of approx $166,666.00 from the I.R.D. and that I will authorise the GST Department to forward that refund to you and I irrevocably authorise you to use that refund to repay the vendor mortgage in respect of the above.
3)I also advise that I intend to pay the vendor approx $50,000 – being the equity I will receive on the sale of my property at 94 Gowing Drive.
J M Going 16/12/98

Mr Mathias sent a copy of the document to Cashmere under cover of a signed fax saying:
Herewith my client’s irrevocable authority : please advise when contract signed so we can proceed to arrange for settlement before Xmas.
After a series of events to which we will refer in more detail below, Mr Mathias received the GST refund but did not pay it to Cashmere. Cashmere sued Mr Mathias contending he was personally liable to pay it the GST refund monies. The causes of action pleaded included assignment, trust, liability of an agent who had assumed personal responsibility, negligent mis-statement, and breach of duty not to mislead under s9 of the Fair Trading Act 1986. Other causes of action were originally mounted but are no longer in issue. Suggested variations of the extant causes of action included concepts of restitution, estoppel and assumption of responsibility.
Potter J dismissed Cashmere’s claim in the High Court. She found against all the causes of action and held specifically that Mr Mathias had not promised, either expressly or implicitly, to pay Cashmere the GST monies: in other words he had given no personal undertaking to do so. We will examine each ground of appeal after setting out the background in greater detail.

Background

Cashmere,…

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: [2002] NZCA 46
Decision Date: 13 March 2002

CaseChat Overview and Summary

Cashmere Enterprises Limited sought to recover the GST refund from Jonathan Mathias, the solicitor for the purchaser in a property transaction. The Court of Appeal dismissed the appeal and affirmed the High Court's decision that Mathias was not personally liable for the refund. The central issue was whether Mathias had made any personal commitment to pay the GST refund to Cashmere. The irrevocable authority signed by the purchaser did not constitute a personal promise by Mathias. The Court found no evidence of an express or implied promise by Mathias to pay the refund, and therefore rejected all causes of action, including agency, trust, assignment, negligent misstatement, and breach of the Fair Trading Act. The appeal was dismissed, and Cashmere was ordered to pay Mathias' costs.

Orders