Cox v Coughlan - [2014] NZHC 164

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-3083 [2014] NZHC 164

BETWEEN GARY DAVID COX, STEVE COWIE AND GARY DAVID SUTCLIFFE First Plaintiffs

GARY DAVID COX Second Plaintiff

ANDMICHAEL JOHN COUGHLAN AND ANNEMARIE ELIZABETH WILSON Defendants

CONVEYANCING SHOP LAWYERS LIMITED
Third Party

Hearing: 4 February 2014

Counsel: R O Parmenter for Plaintiffs
D G Collecutt and M Beresford for Defendants
No appearance for Third Party

Judgment: 14 February 2014

JUDGMENT OF RODNEY HANSEN J

This judgment was delivered by me on 14 February 2014 at 4.30 p.m., pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors: Daniel Overton & Goulding, Onehunga
Simpson Dowsett Mackie, Mt Roskill.

COX, COWIE AND SUTCLIFFE v COUGHLAN AND WILSON [2014] NZHC 164 [14 February 2014]

Introduction

[1] The first plaintiffs, as trustees of the family trust of the second plaintiff (Mr Cox), own a holiday home at Pauanui. The defendants own a tenanted residential property at Army Bay, Whangaparaoa. In 2012 the defendants were looking for a holiday home. Mr Cox was interested in acquiring an investment property and the family trust wanted to divest itself of the Pauanui property. As the properties were of an approximately equal value, the parties negotiated to swap.

[2] Solicitors were instructed on both sides and agreements, expressed to be collateral, were prepared and exchanged. However, what was signed did not incorporate a series of proposed variations to the terms as originally drafted. Although arrangements were made to settle, ultimately the defendants declined to proceed. They resist the plaintiffs’ proceedings for specific performance of the agreement and damages on the grounds that:

(a) No binding agreement was concluded.

(b)If agreement was reached, it was not enforceable as it did not satisfy the requirements of s 24 of the Property Law Act 2007 for contracts for sale of land to be recorded in writing.

(c) If there was an enforceable agreement, it was validly avoided by the defendants after the plaintiffs failed to give notice that a condition inserted for their benefit had been satisfied.

[3] The plaintiffs’ position is that an agreement was concluded and evidenced in writing. They say, in the alternative, that the defendants are estopped from denying that there is a binding agreement.

[4] If the plaintiffs are able to establish that there is an enforceable agreement, the defendants accept that specific performance and damages should follow but there is a dispute as to the basis on which damages should be calculated.

Binding agreement?

Background facts

[5] Negotiations for the swap had begun in May 2012 after Mr Coughlan and Ms Wilson were introduced to Mr Cox as prospective purchasers by the real estate agent engaged to sell the Pauanui property. Solicitors were instructed by the parties in November 2012. Ms Tara Wratten, of Daniel Overton and Goulding, acted for the Cox interests. Mr Paul Jennings, of Conveyancing Shop Lawyers, was instructed by Mr Coughlan and Ms Wilson.

[6] On 7 December 2012, Mr Jennings sent standard form agreements1…

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 Cox v Coughlan

Details

AGLC: Cox v Coughlan [2014] NZHC 164
Case: [2014] NZHC 164
Decision Date: 14 February 2014

CaseChat Overview and Summary

In Cox v Coughlan, the plaintiffs sought specific performance of a property swap agreement and damages for the defendants' failure to proceed with the settlement. The defendants denied the existence of a binding agreement and, if one existed, argued it was not enforceable because it did not satisfy the writing requirement of the Property Law Act 2007. They also claimed they validly avoided the agreement when the plaintiffs failed to provide notice that a condition had been satisfied. The court found that the defendants had accepted a counter-offer made by the plaintiffs' solicitors, which varied the original terms of the agreement. This was evidenced by the parties' conduct and correspondence that followed. The court also found that the writing requirement was satisfied by a series of documents that referred to the counter-offer and the subsequent variation. Finally, the court held that the defendants had not validly avoided the agreement because the condition was satisfied when the plaintiffs provided the new tenancy agreement. The court ordered specific performance of the agreement and damages, to be calculated on the basis of the rental that would have been payable under the tenancy agreement, less interest which would or could have been earned on the purchase price.

Orders