Easternmanor Development Limited v Yeshe Development Limited - [2023] NZHC 2317

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-600

[2023] NZHC 2317

BETWEEN
EASTERNMANOR DEVELOPMENT LIMITED

Plaintiff

AND

YESHE DEVELOPMENT LIMITED

Defendant

Hearing: 15 August 2023

Appearances:

R O Parmenter for Plaintiff N C King for Defendant

Judgment:

24 August 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 24 August 2023 at 4.15pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar
……

EASTERNMANOR DEVELOPMENT LIMITED v YESHE DEVELOPMENT LIMITED [2023] NZHC 2317
[24 August 2023]

[1] By three separate agreements for sale and purchase dated 21 October 2021 (the contracts), Easternmanor Development Limited (EDL) sold three vacant Lots (the properties) in a subdivision to Yeshe Development Limited (Yeshe). EDL had purchased the properties from a company called Acanthus Limited (Acanthus). All three contracts contain the same terms including price. Settlement was 20 working days after the issue of titles.

[2] The agreements recorded that EDL was purchasing from Acanthus and made the contracts between EDL and Yeshe conditional upon EDL’s purchase from Acanthus becoming unconditional.

[3]The agreement between Acanthus and EDL contained the following clauses:

22.4Subject to clause 22.5 below, the Purchaser shall not nominate, assign, transfer, or otherwise dispose of or alienate the benefit of this Agreement or on-sell the Lot, without the prior written consent of the Vendor, which consent shall not be unreasonably or arbitrarily withheld or delayed.

22.5Neither the Purchaser nor the Purchaser’s agent shall publicly market the section for sale, whether online or in print media, until such time as the Certificate of Title to the Lot has issued. If the Purchaser wishes to publicly market the Lot for sale (whether the transaction is to be by way of a nomination, assignment or an on-sale), then the Purchaser must obtain the Vendor’s prior written consent. Such consent shall be granted at the Vendor’s sole and absolute discretion.

[4] Yeshe was provided with a copy of the contracts between Acanthus and EDL late on 21 October 2021, that is after Yeshe had signed the contacts.

[5] Titles issued on 21 November 2022 making 19 December 2022 the settlement date. Matters were complicated when on 18 November 2022, Yeshe was removed from the Companies Register for not filing its Annual Return. Yeshe was not restored to the Register by its directors until 24 January 2023. EDL says it could not issue a settlement notice until Yeshe had been restored to the Register. A settlement notice was issued on 13 February 2023 and EDL cancelled the contract on 3 March 2023.

[6] EDL seeks summary judgment against Yeshe for losses it says it has suffered from the value of the property having fallen from the price Yeshe agreed to pay.

[7]The above timeline is not disputed by Yeshe.

Summary judgment principles

[8] EDL must prove a negative, that is, it must demonstrate Yeshe has no defence to the claims and…

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.

Keep reading for free

Create a free CaseChat account to read Easternmanor Development Limited v Yeshe Development Limited and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2023] NZHC 2317
Decision Date: 24 August 2023

CaseChat Overview and Summary

The case between Easternmanor Development Limited and Yeshe Development Limited concerns the sale and subsequent cancellation of three vacant lots in a subdivision. Easternmanor Development Limited (EDL) sought summary judgment against Yeshe Development Limited (Yeshe) for losses incurred due to a decline in property value after Yeshe failed to settle the purchase within the agreed timeframe. The contracts were conditional upon EDL's purchase from Acanthus becoming unconditional, with settlement to occur 20 working days after the issue of titles. The titles were issued on 21 November 2022, making 19 December 2022 the settlement date. However, Yeshe was removed from the Companies Register on 18 November 2022 for not filing its Annual Return and was not restored until 24 January 2023, preventing EDL from issuing a settlement notice. EDL issued a notice on 13 February 2023 and cancelled the contract on 3 March 2023.

The court was required to decide whether Yeshe had any valid defences to EDL's claims. Yeshe raised several potential defences, including a breach of the Fair Trading Act 1986 regarding the timing of title issuance, the contractual restriction on EDL reselling the properties, and a misrepresentation as to the value of the properties. The court assessed each defence in turn. Regarding the timing of title issuance, the court found that Yeshe was committed to the purchase by the timeframe dictated by the contracts and that there was no evidence EDL had misled Yeshe regarding the timing of title issuance. The court also found that the contractual restriction on EDL reselling the properties did not impact the validity of the contracts between EDL and Yeshe, and that Yeshe was not contractually restricted from reselling the properties. Finally, the court found that Yeshe had not provided any evidence to support a claim of misrepresentation as to the value of the properties.

The court concluded that EDL had proved that Yeshe had no defence to the claims and that there was no real question to be tried. The court ordered judgment for EDL on its three causes of action against Yeshe, with a total judgment sum of $401,742.00. The court also ordered interest on the damages amount from the settlement date until payment and from the settlement date to cancellation. Costs were reserved, but if no costs submissions were filed within five working days, EDL would be entitled to costs on a 2B basis.

Orders