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Clode v Oliphant

Clode v Oliphant

Case [2018] NZHC 1442 15 June 2018

Contract Formation

Breach of Contract

Injunction

Balance of Convenience

Damages

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-647

[2018] NZHC 1442

BETWEEN
BRENT DOUGLAS CLODE

Applicant

AND

DAVID JAMES OLIPHANT

First Respondent

AUBURN DEVELOPMENT LIMITED
Second Respondent

RAILSIDE INVESTMENT LIMITED

Third Respondent

Hearing: 1 June 2018

Appearances:

Applicant in person

A W Johnson for Respondent

Judgment:

15 June 2018

JUDGMENT OF PALMER J

This judgment is delivered by me on 15 June 2018 at 3.30 pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Solicitors:
Martelli McKegg, Auckland

Copy to:
Applicant

CLODE v OLIPHANT [2018] NZHC 1442 [15 June 2018]

Summary

[1] In March 2018, Mr Brent Clode and Mr David Oliphant reached an agreement as to Mr Clode’s involvement in a large property development in Takapuna, Auckland (the Agreement). Mr Clode is not involved with the development to the extent he considers the Agreement provides. He seeks a mandatory interim order that the respondents perform their obligations under the Agreement. Mr Oliphant gives evidence the head contractor, consultant, project manager and quantity surveyor involved in the development will not deal with Mr Clode and there is a significant risk the lender will put the project into receivership if an injunction is granted.

[2] The legal test for granting a mandatory interim injunction, or an injunction with the effect of final orders, is the same as that for a conventional injunction but is likely to be more difficult to meet in practice. I decline this application. There may be a live issue of the legal interpretation of Mr Clode’s rights under the Agreement. But I am not persuaded damages would be insufficient to remedy any breaches. I consider Mr Clode has alternative means of seeking resolution of his disputes under the Agreement. So I consider the balance of convenience favours Mr Oliphant. The inconvenience to Mr Clode of not having a mandatory order, that he has some greater involvement in directing the project, is less than the inconvenience to the respondents of its potential impact on the financing and operation of the development.

What happened?

The parties and the Development

[3] Mr Oliphant, the first respondent, is the sole shareholder and director of two companies, the second and third respondents. Auburn Development Ltd (ADL), the second respondent, owns the Sargeson Apartment development on Anzac Street, Takapuna, Auckland. Railside Investment Ltd (RIL), the third respondent, owns a property development site at 402 Lake Road, Takapuna. The parties agreed both properties, together, could be called “the Development”. I am told it is one of the largest property developments on the North Shore of Auckland.

Dispute and Agreement

[4] Mr Clode says he devised the Development and invited Mr Oliphant to be his 50 per cent business partner responsible for raising unfinanced capital. Mr Clode says he was an unregistered 50 per cent shareholder in the second and third respondents. He says, until 22 December 2017 he had total control of the Development, for which he…

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 Clode v Oliphant

Details

AGLC: Clode v Oliphant [2018] NZHC 1442
Case: [2018] NZHC 1442
Decision Date: 15 June 2018

CaseChat Overview and Summary

In Clode v Oliphant, the High Court of New Zealand was asked to grant an interim mandatory injunction to enforce the terms of an agreement between Mr. Brent Clode and Mr. David Oliphant regarding Mr. Clode's involvement in a property development project. Mr. Clode claimed Mr. Oliphant had breached the agreement by withholding information and excluding him from decision-making processes. The court was required to decide whether to grant the injunction based on the likelihood of success, balance of convenience, and overall justice of the case. The court found that while there might be a serious question to be tried regarding the interpretation of the agreement, the balance of convenience heavily favoured the respondents due to the potential financial and operational consequences of involving Mr. Clode in the project. The court also noted that Mr. Clode had alternative means of resolving his disputes under the agreement, which he had not pursued. Consequently, the court declined the application for an interim mandatory injunction.

The court ruled that the legal test for granting a mandatory interim injunction was the same as for a conventional injunction but more difficult to meet in practice. The court considered that while there might be a live issue of the legal interpretation of Mr. Clode's rights under the agreement, it was not persuaded that damages would be insufficient to remedy any breaches. The court found that the balance of convenience favoured Mr. Oliphant due to the significant inconvenience to the respondents of Mr. Clode's potential involvement in the project. The court also noted that Mr. Clode had alternative means of seeking resolution of his disputes under the agreement, which he had not initiated. The court declined the application for an interim mandatory injunction, stating that there was no need to require something that the respondents were already obliged to do under the agreement.

Orders