Dobson v Xia

[2019] NZHC 1371

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-002478

[2019] NZHC 1371

UNDER

Subpart 6 of the High Court Rules 2016

IN THE MATTER OF

An agreement for sale and purchase of real estate

BETWEEN

WENDY ELAINE DOBSON and SCO

TRUSTEES NO. 4 LIMITED as trustees of the WE Dobson Family Trust

Plaintiffs

AND

JING XIA

Defendant

Hearing:

(On the papers)

Counsel:

A Fletcher for the Plaintiffs

No appearance for the Defendant

Judgment:

18 June 2019

JUDGMENT OF MOORE J

[As to damages]

This judgment was delivered by me on 18 June 2019 at 4:00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar Date:

DOBSON & ANOR v XIA [2019] NZHC 1371 [18 June 2019]

Introduction

[1]                  The plaintiffs are Wendy Dobson and SCO Trustees No. 4 Ltd as trustees of the WE Dobson Family Trust (“the Trust”). The plaintiffs applied for summary judgment against the defendant, Jing Xia, in respect of an alleged breach of contract. Ms Xia filed no opposition to the proceeding and did not appear at any of the hearings.

[2]                  On 4 April 2019 I entered summary judgment on liability against Ms Xia in favour of the plaintiffs by way of formal proof.1 That is because the plaintiffs made out their case in that they proved that Ms Xia breached the First Settlement Agreement by failing to settle. Originally, the plaintiffs sought to argue that Ms Xia had breached the Second Settlement Agreement. They later accepted that that purported agreement was not binding on Ms Xia. This had an impact on the quantum of damages claimed, as I summarised in the judgment:

“[25] The schedule of sought damages set out by the plaintiffs in their statement of claim was tailored to a breach of contract of the Second Agreement. The quanta of loss flowing from the (alleged) breaches are necessarily different. For a start, the sale price of the Property under the Second Agreement was higher. The discrepancy in the overall quantum of damages caused by that difference could be easily be calculated by the Court. But there is also the matter of the penalty interest that is said to have accrued as per the First Agreement. The accrual of this interest is said to have been waived by the Second Agreement and replaced by a lump sum payment towards solicitor costs. But now the plaintiffs acknowledge that the Second Agreement was never binding on the parties because Ms Xia never signed it. This necessarily has a bearing on quantum, as arguably, the plaintiffs would still be entitled to penalty interest under the First Agreement for the periods in which it was assumed that the Second Agreement was thought to be operative. Further, with the Second Agreement essentially failing as an enforceable instrument, it raises the question as to whether the plaintiffs are entitled to retain the further $25,000 deposit paid under that Agreement or whether it should be subtracted from an eventual costs award.”

[3]                  I therefore entered judgment in respect of liability only and left the assessment of damages until further submissions could be received. The plaintiffs have now revised their calculations and made further submissions. This judgment deals with the appropriate quantum of damages to be granted to the plaintiffs.

1      Dobson v Xia [2019] NZHC 692; this judgment should be read in conjunction with the earlier one.

Submissions

[4]The plaintiffs calculate the appropriate quantum of damages as follows:

(a)$205,000, being the difference between the sale prices in the First and Third Agreements;

(b)$1,752.16,2 being the outgoings in respect of the property from the date Ms Xia failed the settle the First Agreement (26 January 2018) to the settlement date of the Third Agreement (17 May 2018);

(c)$4,983.40, being the real estate agent’s advertising and marketing costs;

(d)$22,855, being the real estate agent’s commission on resale; and

(e)$32,857.11, being compensatory interest on the amount payable but not paid by Ms Xia between 26 January and 17 May 2018 ($1,080,434.94), a period of 111 days at a reasonable interest rate of 10 percent.3

[5]Less the following sums:

(a)$120,000, being the deposit paid under the First Agreement; and

(b)$25,000, being the further deposit paid under the purported Second Agreement.

[6]                  This leads to a total amount of $122,447.67. The plaintiffs say this reflects accurately the loss they have suffered in the matter.

2      Constituting rates of $697.94 and a body corporate levy of $1,054.22.

3      The plaintiffs recognise that the penalty interest rate of 15 percent provided for in the First Settlement Agreement should be substituted with a reasonable compensatory rate in the wake of that agreement’s cancellation in accordance with Nicholls v Forrest HC Auckland A1305/85, 12 June 1986 at 17-18. See also Robertson v Agri Trustee Company Ltd [2013] NZHC 3479.

Result

[7]                  I am satisfied that the quantum of loss as calculated by the plaintiffs is accurate. I therefore enter judgment of $122,447.67 in their favour.

[8]The plaintiffs are also entitled to costs on a 2B basis.

Moore J

Solicitors:

Schnauer and Co, Auckland