BETWEEN
BRENT DOUGLAS CLODE

First Plaintiff

SYNERGY MANAGEMENT LIMITED Second Plaintiff

AND

MICHAEL GRANT SULLIVAN AND DUTHCO TRUSTEES (SULLIVAN) LIMITED AS TRUSTEES OF THE SULLIVAN FAMILY TRUST NO 1

First Defendants

DAVID ROBERT JANS Second Defendant

THOMPSON PARK TRUST LIMITED AS TRUSTEE OF THE THOMPSON PARK TRUST

Third Defendant

Hearing: 4-7, 11 April 2016

Appearances:

A M Swan for Plaintiffs
S C D A Gollin and M D Pascariu for Defendants
P T Finnigan for Second Defendant (appearance excused)

Judgment:

8 July 2016

JUDGMENT OF PALMER J

This judgment is delivered by me on 8 July 2016 at 5.20pm pursuant to r 11.5 of the High Court Rules.

Solicitors:
MinterEllisonRuddWatts, Auckland
Duthie Whyte Solicitors, Auckland

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

CLODE v SULLIVAN & ORS [2016] NZHC 1561 [8 July 2016]

Contents
Summary ................................................................................................................[1] The facts .................................................................................................................[2]
The players  [2]
2006-2011: Jans and Sullivan  [5] October to December 2011: Jans and Clode  [6] December 2011-March 2013: Jans and Sullivan  [10] March 2013 – May 2014: Jans and Clode Again  [11] May 2014 – June 2014: Default and the PSAs  [16] June 2014: Finding a funder  [29] Friday 27 to Sunday 29 June 2014: Clode & Sullivan Interactions                [36] Tuesday 1 July to Thursday 3 July: Clode and Sullivan Negotiations            [42] Thursday 3 July 2014: The Settlement Agreement  [58] July – December 2014: Aftermath and breakdown  [60]
Overview of issues and submissions....................................................................[79] Issue 1: Did Mr Clode mislead Mr Sullivan into entering the Agreement?
Submissions  [83] Relevant Law  [85] Was Mr Clode “in trade”?  [87] Did Mr Clode make a misrepresentation or an expression of opinion
on good faith?  [88] Does Mr Clode have a defence of estoppel by convention?  [102]

Issue 2: Did the Agreement include transfer of Unit 80 at no cost?
The parties’ submissions [105] The relevant law of contractual interpretation [107] Interpreting the Agreement [111] Rectification as an alternative [117]

Issue 3: Was the Agreement validly cancelled and, if so, by whom?
The parties’ submissions  [123] The relevant law of repudiation, misrepresentation and cancellation           [126] Did Mr Clode cancel the Agreement on 14 October?  [131] Did Mr Clode’s conduct after entering the Agreement amount to
repudiation?  [134]
Was Mr Sullivan’s cancellation a repudiation?  [147] Issue 4: What remedies should be granted?  [150] Result..................................................................................................................[155]

Summary

[1] This case concerns a messy contractual dispute between Auckland property developers. Mr Brent Clode, the plaintiff, wants to be paid what he says he is owed under a Settlement Agreement with Mr Michael Sullivan. The Agreement was intended to settle Mr Clode’s claims relating to a property development at Thompson Park in Mt Wellington, Auckland. That allowed Mr Sullivan to purchase the development. Several issues arise:

(a) Mr Sullivan says he entered the Agreement based on a misrepresentation by Mr Clode. Mr Clode disagrees. I hold that Mr Sullivan did enter the Agreement on the basis of a misrepresentation by Mr Clode which breached the Fair Trading Act 1986.

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 Sullivan

Details

AGLC: Clode v Sullivan [2016] NZHC 1561
Case: [2016] NZHC 1561
Decision Date: 8 July 2016

CaseChat Overview and Summary

The case concerns a dispute between property developers Mr Brent Clode and Mr Michael Sullivan over a settlement agreement. The court had to determine four issues: whether Mr Clode misled Mr Sullivan into entering the Agreement, whether the Agreement included transfer of Unit 80 at no cost, whether the Agreement was validly cancelled and, if so, by whom, and what remedies should be granted. The court held that Mr Clode misled Mr Sullivan into entering the Agreement by representing that he had valid intellectual property rights in the development, which breached the Fair Trading Act. The court also held that the Agreement required transfer of Unit 80 at no cost to Mr Clode. The court found that Mr Clode did not repudiate the Agreement and that Mr Sullivan was not entitled to cancel the Agreement on the basis of repudiation by Mr Clode but he was entitled to cancel it on the basis of Mr Clode’s misrepresentation. The court ordered that the Settlement Agreement has always been void and that Mr Clode must refund the $150,000 he was paid under the Agreement, with interest.

Orders