Feng v Sea.TX Property Limited - [2023] NZHC 2067

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2733

[2023] NZHC 2067

BETWEEN
YANLANG FENG AND CHENGPIN CAI

Plaintiffs

AND

SEA.TX PROPERTY LIMITED

First Defendant

LING NING
Second Defendant

BARFOOT & THOMPSON

Third Defendant

Hearing:
3–6 July 2023 (written closing submissions on 13 July 2023 and

in reply on 21 July 2023)

Counsel:

D Delic, S Lu and Z Evita for Plaintiffs R M Dillon for First Defendant

E R Harrison and S J MacIntosh for Second and Third Defendants

Judgment:

4 August 2023

JUDGMENT OF RADICH J

Introduction

[1] The plaintiffs (Mrs Feng and Mr Cai), as purchasers, and the first defendant (Sea.TX), as vendor, entered into an agreement for sale and purchase of a residential property in Auckland. The agreement recorded, in handwriting, the sale price as “$1,580,000”. The standard sale and purchase form used includes, next to the space in which the price is entered, two options. The options are “plus GST (if any)” or “inclusive of GST (if any)”. One of them is to be deleted.

FENG AND CAI v SEA.TX PROPERTY LIMITED [2023] NZHC 2067 [4 August 2023]

[2] The real estate agent who prepared the agreement for sale and purchase – the second defendant (Ms Ning) – says that she made a mistake. She deleted the wrong option. She had intended for the sale price to be expressed in the agreement for sale and purchase as “$1,580,000 inclusive of GST (if any)”. Instead, it was expressed as being “$1,580,000 plus GST (if any)”.

[3] The plaintiffs, their son Chenhong Feng (who is known as Joey Feng and for whom the property was being purchased), Ms Ning (who was representing Mrs Feng and Mr Cai as purchasers) and the two real estate agents from the third defendant (Barfoot & Thompson) who were representing Sea.TX as vendor, all say that it was an error. They say that the parties to the agreement all entered into the agreement on the basis that the purchase price of $1,580,000 was GST inclusive.1

[4] Xinyi Li (Ms Li – the director and shareholder of the first defendant) says that she did not enter into the agreement on that basis and that she had always intended that the $1,580,000 price was to be “plus GST”.

[5] The plaintiffs seek rectification of the agreement on the grounds that they and the first defendant (through Ms Li) had a common intention that the price would be inclusive of GST and that, as a result of an error, the agreement did not reflect that common intention.

[6] The first defendant, through Ms Li, resists. However, if rectification is ordered, an indemnity is claimed from the second and third defendants.

[7] If rectification is not ordered, the plaintiffs claim against the second and third defendants in negligence. If that proves to be the outcome, then the second and third defendants claim an indemnity from the first defendant.

[8]The headline issues are these:

1 While it…

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 Feng v Sea.TX Property 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 2067
Decision Date: 4 August 2023

CaseChat Overview and Summary

The plaintiffs, Mrs Feng and Mr Cai, sought rectification of an agreement for sale and purchase of a residential property in Auckland. The agreement recorded the sale price as "$1,580,000 plus GST (if any)", but the parties' common intention was that the price should be "$1,580,000 inclusive of GST". The real estate agent, Ms Ning, made an error in completing the form. The first defendant, Sea.TX, resisted rectification but claimed an indemnity from the second and third defendants if rectification was ordered. If rectification was not ordered, the plaintiffs claimed against the second and third defendants in negligence. The second and third defendants claimed an indemnity from the first defendant if they were found liable.

The High Court of New Zealand found that the parties had a common intention that the purchase price was $1.58 million inclusive of GST. The Court ordered rectification of the agreement to reflect the common intention. The Court also ordered that the sum of $237,000 (the value of the GST on the $1.58 million price) be repaid to the plaintiffs as damages, as well as $66,447 in interest costs incurred by the plaintiffs to fund the GST component of the purchase price. The Court discharged the freezing order and trust over the sum of $237,000 and the plaintiffs' undertaking as to damages. The Court found that the first defendant was not entitled to an indemnity from the second and third defendants, as there was no breach of any relevant duties. The alternative claim in negligence was not pursued, as rectification had been ordered.

The Court made the following orders: (a) the agreement would be rectified to reflect the parties' common intention that the purchase price was $1.58 million inclusive of GST; (b) the sum of $237,000 would be repaid to the plaintiffs as damages; (c) the freezing order and trust over the sum of $237,000 would be discharged; (d) the first defendant would pay the plaintiffs $66,447 in damages; and (e) the plaintiffs' undertaking as to damages would be discharged. If costs could not be resolved between the parties, they could file memoranda within specified timeframes.

Orders