Christchurch Residential Rentals Limited v Stanton

[2016] NZHC 2936

IN THE HIGH COURT OF NEW ZEALAND

CHRISTCHURCH REGISTRY

CIV-2015-409-533

[2016] NZHC 2936

BETWEEN

CHRISTCHURCH RESIDENTIAL RENTALS LIMITED

Plaintiff

AND

LINDA STANTON

Defendant

Hearing:

2 December 2016

Counsel:

S J Shamy for Plaintiff

C R Vinnell for Westpac New Zealand Limited (intervening party)
No appearance for the Defendant

Judgment:

6 December 2016

INTERIM JUDGMENT OF NICHOLAS DAVIDSON J

[1]    This interim judgment is another chapter in the gradual progress of litigation concerned with 18 contracts for sale and purchase between the plaintiff purchaser, Christchurch Residential Rentals Ltd (CRRL), and Ms Linda Stanton, the defendant vendor, who has not taken part in these proceedings.

[2]    The contracts relate to properties damaged in the Canterbury earthquakes. Part of the consideration given by Ms Stanton as the vendor relates to EQC and insurance settlement and is set out in clause 19.5 of the same form contracts which reads:

19.5 Uponconfirmation  of  this  agreement  by  the  purchaser  under  clause 19.3 the vendor shall immediately provide an invoice for the purchase price at which time the purchaser as debtor shall call upon the vendor as creditor to sign a Deed of Acknowledgment of Debt for the purchase sum. At this time the vendor will also sign a Deed of

CHRISTCHURCH RESIDENTIAL RENTALS LTD v STANTON [2016] NZHC 2936 [6 December 2016]

Trust as trustee and take the required steps to allow the purchaser to settle the vendor’s Claims on their behalf. The Deed of Acknowledgment of Debt does not constitute an assignment of the vendor’s Claims to the purchaser. The vendor shall sign and return a Deed of Acknowledgment of Debt, a Deed of Trust, and a settlement statement to the purchaser within three (3) days of confirmation of this agreement.

[3]    The purchaser bears the costs of negotiation and settlement of any claim pursuant to clause 19.6 and the vendor is to credit the purchaser the net EQC and insurance proceeds received, in reduction of the purchase price. The balance of the purchase price over and above the initial payment and the EQC and insurance proceeds received is to be paid by the purchaser following receipt of those proceeds. If the amount of EQC/insurance proceeds exceeds the purchase price, the vendor is entitled to the surplus. The vendor would, however, pay the purchaser 15 per cent of the gross proceeds to meet the purchaser’s costs pursuant to the deed of acknowledgment of debt, clause 3.5.

[4]ANZ and Westpac Banks hold security interests. Westpac is owed some

$1.8 million as at August 2016, and $550,000 received by way of EQC payments has been held as an offset against interest accruing on the principal sum lent. The Westpac securities are “all obligations”. Westpac now wants to sell some properties pursuant to its mortgagee powers.

[5]    No recovery is likely from Ms Stanton, who has not responded to extensive enquiries of her whereabouts requested or otherwise directed by the Court in early 2016, but it would seem she received some $900,000, and no trace has been found of such sum of money.

[6]    Mr Shamy for CRRL invokes the doctrine of part performance for the plaintiff and in essence seeks a declaration which reflects clause 19.5 of the sale and purchase agreements, that the plaintiff be authorised to take the required steps to settle the defendant’s EQC and insurance claims on her behalf.

[7]    The proceeds of settlement will go to whichever bank holds security over that property, and then, with the security discharged, the balance will be paid into court

pending resolution of the “second stage” of the contracts following settlement of the sale of each property.

[8]    The plaintiff therefore seeks orders, which incorporate terms agreed with Westpac, confirmed to the Court by Mr Vinnell in the following terms (with minor amendment):

1.A Declaration is made that the plaintiff, Christchurch Residential Rentals Limited, is to be authorised to settle all earthquake-related claims in relation to the 18 Christchurch area properties listed in attached schedule A on behalf of the registered owner of those properties, Linda Stanton, on the following terms.

2.Christchurch Residential Rentals Limited is authorised to obtain from third parties such information as is necessary to resolve the earthquake claims.

3.That the interest of Westpac New Zealand Limited as first mortgagee in respect of each of the 14 properties in respect of which it is mortgagee is expressly recognised.

4.That no insurance or EQC claim in relation to the 14 properties over which Westpac New Zealand Limited has security will be compromised or settled without the express written consent such consent not to be unreasonably withheld.

5.That the proceeds of the earthquake-related claims in relation to each property are to be paid to the bank registered as mortgagee in relation to that property, up to the amount of any debt which is owing to that bank.

6.That any balance of EQC and insurance proceeds paid in respect of the properties listed over and above amounts owed to the two banks, Westpac and ANZ, shall be paid into the High Court at Christchurch.

Schedule A

i.      3 Albemarle Street, Sydenham;

ii.      8 Albemarle Street, Sydenham;

iii.      10 Albemarle Street, Sydenham;

iv.      117 Burke Street, Sydenham;

v.      1/938 Colombo Street, St Albans;

vi.      2/938 Colombo Street, St Albans;

vii.143 Ensors Road, Waltham;

viii.145 Ensors Road, Waltham;

ix.      67 Hastings Street West, Sydenham;

x.      1/106 Huxley Street, Sydenham;

xi.      155 Huxley Street, Sydenham;

xii.178 Linwood Avenue, Linwood;

xiii.93 Nursery Road, Phillipstown;

xiv.18 Southampton Street, Sydenham;

xv.59A Southbrook Road, Rangiora;

xvi.1/93 Tedder Avenue, North New Brighton;

xvii.2/93 Tedder Avenue, North New Brighton; and

xviii.45 Whites Road.

[9]    The Declaration and Orders do not authorise the deduction of the 15 per cent fee to which CRRL is prima facie entitled.

[10]   The declaration sought is squarely in terms of the intent of the sale and purchase agreements, and the plaintiff seeks that and the orders made for the purpose of the next step towards eventual settlement. I am satisfied that the orders sought are those to which the plaintiff is entitled under the agreement for sale and purchase.      I make orders in terms of the italicised part of the judgment above.

[11]   As this judgment is part of an ongoing process associated with the sale and purchase agreements, and there are caveat proceedings to be heard next year  on     21 February 2017 before Osborne AJ this judgment is of necessity interim in nature.

[12]Costs are reserved.

……………………………………..

Nicholas Davidson J

Solicitors:

Ian Robertson & Co, Christchurch, for the Plaintiff Linda Stanton, Defendant

Young Hunter, Christchurch

cc: S J Shamy, Barrister, Christchurch, for the Plaintiff

Anthony Harper, Christchurch for Westpac New Zealand Ltd

Wynn Williams, Christchurch for Southern Response Earthquake Services Ltd