Fairway Holdings Ltd v Furno Ltd
[2014] NZHC 858
•29 April 2014
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
CIV-2014-470-32 [2014] NZHC 858
UNDER the Companies Act 1993 IN THE MATTER OF
17th AVENUE CONSOLIDATED LIMITED
BETWEEN
FAIRWAY HOLDINGS LIMITED Plaintiff
AND
FURNO LIMITED First Defendant
WARREN FURNISS Second Defendant
Hearing: 29 April 2014 Appearances:
G Brittain for plaintiff
V A Whitfield and N Edwards for defendantsJudgment:
29 April 2014
(ORAL) JUDGMENT OF LANG J [on application for interim relief]
FAIRWAY HOLDINGS LTD v FURNO LTD [2014] NZHC 858 [29 April 2014]
[1] This proceeding concerns a company called 17th Avenue Consolidated Limited (“17th Avenue”). The shareholders of that company are the plaintiff, Fairway Holdings Limited (“Fairway”), and the first defendant, Furno Limited “(Furno”). Fairway is owned by Mr Peter Cooney and his business partner, Mr
Grant Eynon. Mr Cooney is also a director of and shareholder in a construction company called CBC Construction (2010) Limited (“CBC”).
[2] Mr Warren Furniss, who currently lives in Australia, is the shareholder and director of Furno. The directors of 17th Avenue are Mr Cooney and Mr Furniss.
[3] 17th Avenue is currently developing a four hectare site on the corner of 17th Avenue and Clarke Street in Tauranga. In or about February 2013, it entered into an agreement to construct a building on part of that site and sell it to a company called Clarke Street Holdings Limited (“Clarke Street Holdings”) for the sum of $1.4 million. Mr Cooney engaged CBC to carry out the construction of the building.
[4] The building was ultimately completed and a new title was issued in or about December 2013. At that point, 17th Avenue’s solicitors sent directors’ and shareholders’ resolutions to Mr Furniss for his signature. The sale of the Clarke Street property was a major transaction for the purposes of 17th Avenue’s constitution and s 129 of the Companies Act 1993 (“the Act”). The resolutions were designed to enable 17th Avenue to meet its obligations under the constitution and the Act in relation to the transaction.
[5] To date, Mr Furniss has refused to sign the resolutions. He maintains he was never advised of the terms of the sale to Clarke Street Holdings. In particular, he says that he was never aware that the land was to be sold to that company for just
$352,000. He believes that the sale of the property to Clarke Street Holdings is at a price that is far less than would be achieved if the property was sold on the open market.
[6] In this proceeding, Fairway alleges that Furno and Mr Furniss are acting in an oppressive manner by refusing to sign the resolutions. It seeks interim relief under s 174 of the Act in the form of orders requiring Furno and Mr Furniss to sign the
resolutions so that 17th Avenue may complete the sale of the Clarke Street property to Clarke Street Holdings.
[7] The application for interim relief has been heard as a matter of urgency, because 17th Avenue is now in default of its obligations to the Westpac Banking Corporation (“Westpac”). In order to enable it to construct the Clarke Street property, 17th Avenue obtained a loan facility from Westpac in the sum of $1.1 million. It was required to repay this facility on or before 31 March 2014 from the proceeds of sale of the Clarke Street property. 17th Avenue has been unable to repay the facility because the sale of that property has not been completed.
[8] Westpac has issued notices under s 92 of the Property Law Act 1996, and these expire tomorrow. If they expire unremedied, Westpac will be free to exercise its power as mortgagee to sell 17th Avenue’s assets. These include the land that is the subject of the agreement for sale and purchase with Clarke Street Holdings.
[9] In order to understand the issues that the present application raises, it is necessary to have regard to the factual background in somewhat greater detail.
Background
[10] Mr Furniss was previously the owner of the development site. He originally operated it as a golf driving range and through this he came to know Mr Cooney, who was apparently a patron of the driving range. Mr Furniss was interested in developing the site. Although he was the owner of the land, he did not have the necessary capital to develop it. Moreover, although he had previous experience in property development, he was not directly involved in commercial construction projects. He and Mr Cooney therefore decided to enter into a joint venture
arrangement under which 17th Avenue was incorporated to acquire and develop the
site.
[11] 17th Avenue was duly incorporated on 28th November 2005 as the vehicle for the joint venture. After the company was incorporated, it purchased the site from Mr Furniss for the sum of $4 million. Fairway contributed the sum of $2 million in
cash, and Furno contributed an equivalent amount by transferring the land to 17th
Avenue.
[12] Fairway and Furno also entered into a shareholder’s agreement in which they allocated their respective responsibilities in respect of 17th Avenue’s activities. This involved Fairway being appointed as the project manager to oversee and supervise the development of the site. In practice, this meant that Mr Cooney as Fairway’s director was the person responsible for project-managing all aspects of the development.
[13] The first project undertaken by the joint venture was the construction of a building for an educational facility called Footsteps. This building was constructed by CBC and, upon completion, was leased to Footsteps. Mr Cooney arranged for a finance facility to be obtained from Westpac to fund the construction of the building. The rent received from the building is currently meeting the payments under this facility. Mr Cooney alleges that an amount of approximately $104,000 remains
owing to CBC by 17th Avenue in respect of the construction of the Footsteps
building. That issue falls outside the ambit of the present proceeding.
[14] In or about the beginning of 2013, Mr Furniss and Mr Cooney considered the prospect of developing another building on the site in order to build momentum and interest in respect of it. The proposal was that an office building would be constructed for CBC to use as its head office. The initial proposal was that the land would be sold to CBC. Ultimately, however, the proposal was altered so that 17th Avenue would obtain a further loan facility from Westpac and use this to construct a commercial building on the site. When the building was completed, 17th Avenue
would sell the land and building to CBC or a related entity. That proposal led to 17th
Avenue obtaining the facility of $1.1 million from Westpac.
[15] Once again, Mr Cooney engaged CBC to construct the building. CBC and
17th Avenue entered into a construction contract dated 12 February 2013. A budget of developmental expenditure was also prepared in respect of the project. This ascribed a value to the land of $352,000 and total development costs of $995,200. A further allowance was made for interest in the sum of $40,000. This led to the
project having total anticipated development costs of $1.387 million. It appears to be common ground that Mr Cooney did not provide Mr Furniss with copies of either the construction contract or the agreement for sale and purchase.
[16] Importantly, however, both Mr Cooney and Mr Furniss signed a facility letter with Westpac dated 6 May 2013 recording the terms of the $1.1 million facility. This recorded as follows:
…
3.Upon the settlement of the sale of the completed Classic Builders Group Head Office property to Clarke Street Holdings Limited, the net sale proceeds are to be paid into the Facility account (0435-
0700057-91) and applied as follows;
• $1,100,000 is to be paid in reduction of the principal sum
• $150,000 to assist meet interest costs under the Facility.
...
Mr Cooney and Mr Furniss signed that document on 10 May 2013.
[17] Thereafter, CBC proceeded to construct the building. Mr Furniss remained in Australia during this period, and had no practical involvement in the day to day management of the project. He left this to Mr Cooney and CBC. Each month, however, Mr Furniss received reports setting out the sums that had been drawn down on the Westpac facility to pay costs associated with the project.
[18] It is clear that by December 2013, issues had arisen between Mr Furniss and Mr Cooney. An exchange of emails on 19 December 2013 records that each was seeking to exit the Clarke Street project. Each proposed that the other buy his interest out. It is also clear, however, that they were unable to reach agreement regarding the terms on which that could be achieved.
[19] The emails also demonstrate that Mr Furniss had a number of concerns about the Clarke Street project and Mr Cooney’s involvement in it. In particular, Mr Furniss was concerned at what he perceived to be significant conflicts of interest on the part of Mr Cooney. These related to Mr Cooney simultaneously holding positions of authority in 17th Avenue, Fairway, CBC and Clarke Street Holdings. Mr
Furniss also expressed concern about cost overruns in the construction of both the Footsteps building and the building to be sold to Clarke Street Holdings. These issues led to a breakdown of trust on the part of Mr Furniss towards Mr Cooney. He considered that Mr Cooney was placing his own interests first and those of Mr Furniss and 17th Avenue second.
[20] It is against this backdrop that 17th Avenue’s solicitors sent the resolutions to
Furno and Mr Furniss for signature on 23 December 2013.
Section 174 of the Companies Act 1993
[21] Section 174 permits an application to be made to the Court by a shareholder who considers that the affairs of a company have been, are being, or are likely to be conducted in a manner that is oppressive, unfairly discriminatory, or unfairly prejudicial to the applicant in his or her capacity as a shareholder or in any other capacity. If the Court finds that the affairs of the company have been conducted in that manner, it can make a wide range of orders if it considers it just and equitable to do so.
[22] In this context, the Court has a very broad jurisdiction but exercises its powers cautiously. It gives significant weight to the company’s constitution and to the expectations of the parties involved. Importantly, the Court is required to assess the question of fairness in the round and not from the point of view of any particular shareholder.
[23] Counsel agree that the leading authority in New Zealand on the meaning of the phrase “oppressive, unfairly discriminatory or unfairly prejudicial conduct” is Thomas v H W Thomas Ltd.1 In that case, the Court of Appeal held that the statutory wording does not create three separate and distinct tests. Rather, the words are to be read together. The underlying concern in this context is with conduct that is unjustly detrimental to any member of the company, whatever form it takes, and whether it
affects all members alike or discriminates some only.2
1 Thomas v H W Thomas Ltd [1984] 1 NZLR 686.
[24] In particular, the Court needs to be careful not to second-guess management decisions that have been legitimately made whilst conducting the affairs of the company. Errors of judgment by management, inefficiencies and poor business management without distinct elements of bad faith or self interest cannot amount to oppression.3
[25] In its present form this proceeding is not concerned with business strategies as such, or the overall management of the company. Rather, it concerns a claim by Mr Cooney and that Mr Furniss is refusing to sign the resolutions in circumstances where he knew and agreed from an early stage that 17th Avenue was to sell the Clarke Street property to Clarke Street Holdings for the sum of $1.4 million. He contends that the refusal by Mr Furniss to sign the resolutions in those circumstances amounts to oppressive conduct against Fairway as a shareholder of 17th Avenue. He submits that it will cause harm to both Fairway and 17th Avenue because it is preventing 17th Avenue from completing the sale of the Clarke Street property to Clarke Street Holdings. Mr Cooney is concerned that if the sale does not proceed, it
is likely that Westpac will exercise its powers as mortgagee to sell the property on the open market for a much lesser sum. This will cause loss to both 17th Avenue as the owner of the property, and to Fairway as one of 17th Avenue’s shareholders.
[26] The Court may only make orders under s 174 if it is just and equitable to do so. As counsel for Furno and Mr Furniss emphasises, the Court is required to provide a remedy that is both appropriate in the circumstances and that is the least invasive intervention to the existing state of affairs. This means that the Court should be wary of intervening in the management of the company to any greater
extent than is necessary to provide an appropriate remedy.4
Interim relief
[27] Both counsel agree that in the context of an application for interim relief the traditional principles are appropriate. These require the Court to determine whether there is a serious issue to be tried. If there is, the Court must consider whether the
balance of convenience favours the granting of the interim relief sought. This is
3 Latimer Holdings Ltd v SEA Holdings NZ Ltd [2005] 2 NZLR 328.
likely to require the Court to step back and assess where the overall justice of the case lies.5
[28] Counsel for Furno and Mr Furniss submits that a higher threshold applies in the present case, because the Court’s decision will effectively finally determine this
proceeding. Counsel has referred me to New Zealand Olympic & Commonwealth
Games Association Inc v Telecom NZ Limited,6
in which this Court favoured an
approach that recognised that where an interim decision will be determinative of the outcome of a proceeding, the interests of justice require something more than a
marginal serious question to be tried to be established.
[29] In the context of the present case, I do not consider that anything turns on any difference that there may be between the two tests. I consider that if, as Mr Cooney alleges, Mr Furniss knew and approved of the agreement to sell the Clarke Street property to Clarke Street Holdings for $1.4 million, it would arguably be oppressive for him now to refuse to take such steps as may be necessary to complete the sale. I am also satisfied, for reasons I shall outline shortly, that there is a real risk that 17th
Avenue will suffer serious harm in the event that the sale does not proceed.
Serious issue to be tried
[30] There can be no dispute that Mr Furniss was aware at all material times that the Clarke Street property was ultimately to be sold to either CBC or another entity associated with Mr Cooney. The real issue is whether Mr Furniss also arguably knew and agreed that the sale price was to be $1.4 million. Mr Furniss maintains that he was never aware of the sale price. He says that he believed that this was to be a matter for further negotiation between the parties once the project neared completion. For that reason he maintains that he was entirely within his rights not to
sign the resolutions when he discovered in December 2013 that 17th Avenue was
obliged to sell the Clarke Street property for the sum of $1.4 million. He maintains that the property has a significantly greater market value than that.
5 Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129.
6 New Zealand Olympic & Commonwealth Games Association Inc v Telecom NZ Limited (1996)
35 IPR 55.
[31] In this context, several factors are relevant. First, Mr Cooney deposes that he and Mr Furniss discussed this issue on several occasions. He says that Mr Furniss agreed to the proposal and that it was necessary in order to enable the overall development to proceed further at that stage.
[32] One of the issues that arose at the time the proposal was being discussed was the fact that Clarke Street was not able to raise the purchase price necessary to complete the purchase of the property until it obtained title to it. This created a problem, because 17th Avenue did not have sufficient funds to enable it to complete the subdivision infrastructure necessary for new titles to be issued. As a result, Mr Cooney says that he entered into an arrangement with CBC under which CBC agreed to meet the initial costs of completing the subdivision infrastructure. 17th Avenue would not be required to reimburse it in respect of those costs until such time as it had sufficient funds to do so. It was against that background that the final agreement between 17th Avenue and Clarke Street Holdings took shape.
[33] CBC ultimately met infrastructure costs of approximately $250,000. This sum allegedly remains owing to CBC by 17th Avenue. Mr Furniss says that he had no knowledge of this arrangement and would never have agreed to it. He also points out that, when added to the other costs of the Clarke Street property development, it meant that the sale of the property for the sum of $1.4 million produces a significant loss.
[34] There is no contemporary documentation to support Mr Cooney’s evidence that Mr Furniss agreed to the proposal to sell the property to Clarke Street Holdings for $1.4 million, or that he agreed that 17th Avenue would reimburse CBC in respect of the infrastructure costs. Several factors, however, persuade me that it is at least arguable that Mr Furniss must have been aware of the nature of the arrangement.
[35] Although Mr Cooney is unable to be definite about when he discussed the issue of price with Mr Furniss, I consider that Mr Furniss must have known of the sale price by the time he signed the Westpac facility letter on 6 May 2013. It can reasonably be inferred from the terms of the facility letter that 17th Avenue had by that stage entered into a contract for the sale of the completed building to Clarke
Street Holdings. Mr Furniss is not a novice in the field of property development. He acknowledges that he has had vast experience in this field in both New Zealand and Australia. It is arguable, in my view, that the facility letter must have indicated to Mr Furniss that there was an existing contractual arrangement relating to the sale of the building to Clarke Street Holdings. It is hardly likely that Westpac would have agreed to advance the sum of $1.1 million to the company unless it was satisfied that the company had contractual arrangements in place that would enable the facility to be repaid.
[36] Subsequent events are also important in this context. If Mr Furniss’s evidence on this point is correct, he would have expected the sale price to be negotiated between 17th Avenue and Clarke Street Holdings as construction of the building neared completion. He was obviously aware that construction was taking place during the latter part of 2013, because he was receiving the monthly reports of draw-downs on the Westpac facility. There is no evidence, however, that Mr Furniss ever raised the issue of price with Mr Cooney. Moreover, he did not express any surprise at the prospect of the sale to Clarke Street Holdings when 17th Avenue’s solicitors sent the resolutions to him on 23 December 2013.
[37] If Mr Furniss was not aware until that time of the fact that 17th Avenue had entered into a contract to sell the building to Clarke Street Holdings for $1.4 million, he would surely have raised that issue immediately. Instead, he responded by saying that he did not intend to sign the resolutions at that time and that he intended to consult his solicitors early in 2014. His first substantive response was on 5 January
2014. This dealt only with the issue of the parties endeavouring to extract themselves from the project through one party buying the other out. It did not raise any issue about the Clarke Street property, or the price at which it had been sold to Clarke Street Holdings.
[38] This suggests to me that Mr Furniss was well aware as at 5 January 2014 that the property was subject to an existing agreement for sale and purchase and of the price at which it had been sold. Mr Furniss did not raise any concern about the price at which the property had been sold until he filed an affidavit in response to 17th Avenue’s application for interim relief in this proceeding.
[39] These factors persuade me that it is arguable that Mr Furniss was aware of and agreed to the sale of the Clarke Street property to Clarke Street Holdings for the sum of $1.4 million at some point around April 2013.
[40] In reaching that conclusion I have not overlooked the fact that on 5 March
2013, Mr Cooney sent an email to Mr Furniss which reads as follows:
Hi guys, in regards to 17th Ave I believe its well overdue that we all get together and go over where we are up to regards financials, and a way forward as the banks are again at the stage of rolling over the loan but are demanding a payment up front of $100,000 and want it now. Before CBC sign the contract to purchase the proposed land it would be good that all parties understood the deal and agreed so as there is no controversy at a later date.
As I have pointed out this proposal will give us the funds to pay some interest and construct the Roads, stormwater, wastewater and transformer which alone is 60k. I would also like to create a formal entrance and extend the landscaping to incorporate a small internal park for the use of the future and existing business to utilise. Warren are you able to come out next week to go over this. The earlier the better as the banks are charging us serious penalty interest.
[41] Counsel for Furno and Mr Furniss points out that this email contains an obvious error, because it suggests that as at 5 March 2013 there was no contract in place for the sale of the Clarke Street property notwithstanding the fact that the agreement for sale and purchase with Clarke Holdings Limited is dated 14 February
2013. The agreement therefore predates the 5 March email by approximately three weeks. In addition, counsel emphasises that the 5 March email makes it clear that the parties had not yet reached any firm agreement regarding the Clarke Street project.
[42] Mr Cooney accepts that the 5 March email contains an error regarding the issue of the contract not yet having been signed. He says, however, that the email was designed primarily to deal with the issue of infrastructure costs. There is some support for his evidence on this point, because within two minutes of sending the
5 March email, Mr Cooney sent another email to Eynon and Mr Furniss setting out the likely costs of installing the infrastructure.
[43] I am unable to reach any firm view regarding this particular issue. It is possible that the agreement for sale and purchase was not signed until some date after 14 February 2013. Whatever the true position may be, I consider it arguable that by the time Mr Furniss signed the Westpac facility on 6 May 2013, he must have been aware of the fact that there was an existing contract for the sale of the Clarke Street property to Clarke Street Holdings Limited for the sum of $1.4 million. He must also have agreed to that, because he did not raise any objection to it at the time or thereafter.
[44] I am therefore satisfied that Fairway has established a serious issue to be tried in relation to the principal issue with which this proceeding is concerned.
[45] Mr Furniss has raised other issues regarding Mr Cooney’s conduct and, in particular, positions of conflict in which he may have permitted himself to be placed. At present, however, those issues do not form part of the present proceeding. They may ultimately do so, however, in the event that Mr Furniss wishes to raise them by way of counterclaim or through some other means.
Balance of convenience
[46] Counsel for Mr Furniss submits that the Court should interfere to the least extent possible, particularly given Mr Cooney’s conduct to date. She submits that the Court should allow the mortgagee sale to proceed, and that this process may produce a higher sale price for the Clarke Street property than will be the case if the sale to Clarke Street Holdings is permitted to proceed.
[47] Whether or not a higher sale price is likely to be achieved through a mortgagee sale depends in large part upon the current market value of the property. The latest valuation of the property is a valuation dated 2 April 2014 that Westpac commissioned from Telfer Young (Tauranga) Limited. This ascribes a current market value of $1.4 million to the Clarke Street property if it is sold on the open market. If the property is sold through a forced sale, such as a mortgagee sale, the valuation ascribes the property a value of between $1.125 and $1.2 million to it. It can also reasonably be anticipated that a mortgagee sale will produce increased legal costs and the possibility of real estate agent’s fees. Furthermore, Westpac is not
currently charging 17the Avenue penalty interest, but has reserved the right to do so in the future. If the property is sold by mortgagee sale, I have no doubt that Westpac will avail itself of that right.
[48] This means that there is a realistic prospect that if the valuation is correct and the property is sold by mortgagee sale, 17th Avenue will suffer a significant loss that it would not suffer in the event that the existing contract is allowed to proceed. This in turn will cause 17th Avenue’s shareholders to suffer loss.
[49] Counsel for Furno and Mr Furniss raises several issues about the Telfer Young valuation. First, she points out that it was only recently received and as a consequence her clients have not been able to take advice about it. I accept that submission, but do not attribute any blame for this to Mr Cooney or Fairway. They did not commission the report and, like Mr Furniss, they only received it on 24 April
2014.
[50] Secondly, counsel for Mr Furniss submits that there are obvious flaws in the report. The first of these relates to a discrepancy between the value ascribed in the report to the Footsteps’ building and that ascribed to the Clarke Street property. Although both properties appear to be of similar construction, the Clarke Street property is larger. Notwithstanding that fact, the valuation ascribes a greater valuation to the Footsteps property.
[51] Counsel for Furno and Mr Furniss also points out that the valuation proceeds on the basis that the Clarke Street property is not yet subject to a binding lease. Although CBC has been in occupation of the property for some considerable period and now pays rent, it has never signed a formal lease and the valuation reflects that fact. Counsel points out that Mr Cooney has had the ability for some time to require CBC to enter into a lease, but has failed to take this step. She submits that this means that the property is currently valued at less than it would be in the event that a formal lease was in place.
[52] Counsel for Fairway responds by pointing out that the property was due to be sold to Clarke Street Holdings as soon as it was completed in December 2013. The
fact that the sale has not yet been completed is attributable to the fact that Mr Furniss has refused to sign the resolutions.
[53] I accept that it is impossible to resolve the issue of the value of the property in the context of the present application. Nevertheless, it appears to me that the Telfer Young valuation is likely to provide a rough estimate of the current market value of the property, both in a forced and unforced sale situation. I consider this to be the determinative factor so far as interim relief is concerned. I consider it would be unfortunate for all parties if the existing sale was not permitted to proceed and that a significantly lesser price was subsequently achieved through a mortgagee sale.
[54] The downstream consequences of a mortgagee sale could also be significant. If the mortgagee sale was to produce the net sum of $1.1 million, the loan facility to Westpac could not be fully repaid. In that event Westpac may seek to exercise its powers of sale as mortgagee in respect of the Footsteps building and/or the balance
of the Clarke Street land. This could result in 17th Avenue and its shareholders
facing an even greater loss.
[55] Moreover, 17th Avenue is prepared to complete the sale of the property to Clarke Street Holdings on the basis that Mr Furniss and Furno remain free to pursue their argument that the sale was for a price that was less than the true market value of the property. To this end Fairway, Clarke Street Holdings and Mr Cooney have now filed undertakings confirming that they are prepared to pay any damages that may be awarded as a result of that being found to be the case. As for counsel for Fairway points out, the Court has a broad discretion under s 174 to make orders requiring any person to pay compensation where it is just and equitable to do so. If Mr Cooney and Clarke Street Holdings were added as parties to this proceeding, the Court could require them to pay compensation to Furno if it finds that the sale to Clarke Street Holdings was for less than the true market value of the property. The quantification of damages in that context should not be a difficult matter.
[56] Taking those factors into account, I am satisfied that the balance of convenience and the interests of justice require the orders that Fairway seeks to be made. I am not prepared, however, to direct that any funds be paid at this stage to
CBC in reduction of the amount owing in respect of infrastructure costs. As counsel for Fairway candidly acknowledges, there is a lack of documentation regarding the arrangement between 17th Avenue and CBC in respect of those costs. That issue will need to be determined at the substantive hearing of this proceeding, or in some other forum.
Orders
[57] Having conferred on the matter, counsel agree that it is not strictly necessary for the resolutions to be signed in order to enable the sale to Clarke Street Holdings to proceed. Counsel for Mr Furniss and Furno is concerned that the resolutions refer to the property being sold for fair value, and she does not want to compromise her clients’ position in relation to that issue. Counsel have therefore agreed that the orders should only require the defendants to take such steps as may be necessary to enable the existing agreement for sale and purchase of the Clarke Street property to be completed. I make orders accordingly.
[58] Once settlement has taken place, I direct that 17th Avenue shall comply with the conditions set out in the Westpac facility letter dated 6 May 2013. The balance remaining after the payments to Westpac have been made is to be held in the trust account of 17th Avenue’s solicitors pending further order of the Court.
[59] I specifically record that I make these orders without prejudice to any claim that 17th Avenue, Furno or Mr Furniss may have against Fairway, Clarke Street Holdings and/or Mr Cooney in respect of the price at which 17th Avenue sold the property to Clarke Street Holdings.
[60] Finally, I reserve leave to all parties to apply for further interim relief should that be necessary to implement the sale of the Clarke Street property.
Costs
[61] Counsel for Fairway seeks an increased award of costs to reflect the fact that an open offer of settlement was made prior to the hearing today. This application should properly be made by memorandum, no more than five pages in length,
annexing copies of the correspondence relied upon. I direct that any such memorandum is to be filed and served within seven days.
[62] Counsel for Furno and Mr Furniss will have 14 days within which to respond. I will then determine the issue of costs on the papers.
Next event
[63] The Registrar should now arrange for this proceeding to be the subject of a case management conference before the Associate Judge in June 2014.
Lang J
Solicitors:
J K Hamilton, Tauranga
Whitfield Braun, Hamilton
Counsel:G Brittain, Tauranga
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