DDL Limited v Greig - [2019] NZHC 2306

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-354

[2019] NZHC 2306

BETWEEN
DDL LIMITED

Plaintiff

AND

DAVID GREIG

Defendant

Hearing: 12 September 2019

Appearances:

P Withnall for plaintiff Defendant in person

Judgment:

23 September 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Introduction

[1] On 25 May 2012, two companies, Galatea Holdings Ltd (Galatea) and Nova Holdings Wellington Ltd (Nova), and the defendant, Mr David Greig in his capacity as the trustee of the Nelson Rock Trust, executed a deed entitled “Buy Back Deed”. The plaintiff, DDL Ltd, is the nominee of Galatea pursuant to a deed of nomination executed on 20 July 2012 and stands in Galatea’s shoes in this litigation. On its face, the Buy Back Deed was completed in all respects in accordance with the requirements of a deed as provided for in s 9 of the Property Law Act 2007.

[2] DDL now sues Mr Greig alleging that he is in breach of the Buy Back Deed. It seeks an order for specific performance and ancillary relief. It applies for summary judgment pursuant to pt 12 of the High Court Rules 2016 on its claim for specific performance.

DDL LIMITED v GREIG [2019] NZHC 2306 [23 September 2019]

Background

[3] The background to the Buy Back Deed does not emerge especially clearly from the pleadings. However, essentially, Galatea was the beneficial and Nova the legal owner of a property in McFarlane Street, Wellington. In breach of its obligations to Galatea as a trustee, Nova borrowed money for its own purposes from Westpac Banking Corporation (Westpac) and granted Westpac security over the property. Galatea wished to sell McFarlane Street, but Nova did not have the funds to discharge the debt to Westpac. To regularise the situation, it was arranged that Nova would sell other property and use the proceeds of sale to clear its debt and discharge the security over McFarlane Street. The Buy Back Deed was part of these arrangements.

[4]The recitals record:

(a)Galatea has agreed to sell to Preston Investment Trust (“Preston”) and Preston … has agreed to sell to [Mr Greig in his capacity as trustee of the Nelson Rock Trust], and [Mr Greig] has agreed to purchase the properties described in the Schedule hereto.

(b)Galatea has only agreed to sell the properties to Preston and for Preston to on-sell to [Mr Greig] on certain terms and conditions.

(c)Preston and [Mr Greig] have only agreed to purchase the properties from Galatea on certain terms and conditions.

(d)The parties are entering into this Deed collaterally with the Agreements for Sale and Purchase of the properties, to record the terms and conditions relating to those transactions, particularly in respect of Unit W2.05.

[5] The Preston Investment Trust (Preston) was associated with Mr Barrie Skinner, one of the directors of Nova.

[6] The operative parts of the Buy Back Deed set out the terms on which Mr Greig in his capacity as a trustee was to acquire the…

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: [2019] NZHC 2306
Decision Date: 23 September 2019

CaseChat Overview and Summary

DDL Limited is suing David Greig for breach of a Buy Back Deed, seeking specific performance and ancillary relief. Greig denies the allegations and opposes summary judgment. DDL, as the nominee of Galatea Holdings Ltd, seeks to compel Greig to sell Unit W2.05 for $405,000 under the Buy Back Deed, which was executed in May 2012. The Deed was part of an arrangement to resolve a breach of trust by Nova Holdings Wellington Ltd, which borrowed money from Westpac and granted security over a property owned by Galatea and held by Nova. Greig claims duress and misrepresentation by Galatea as defences, but the court found no evidence to support these claims. Greig also argued that Galatea breached a guarantee of rental income, but the court found this claim unlikely to succeed.

The court granted summary judgment on DDL's claim for specific performance. The court found that the Buy Back Deed was valid and enforceable, and that Greig had no defence to DDL's claim. Greig's arguments based on duress, misrepresentation, and breach of a guarantee were found to be without merit. The court exercised its discretion to grant specific performance because it was a commercial transaction and damages would not be an adequate remedy. The court reserved costs pending further submissions from counsel and Greig.

Orders