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Fogarty v Fogarty

Fogarty v Fogarty

Case [2020] NZHC 2508 27 November 2020

Cancellation of Contract

Contract Law

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IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2019-485-273

[2020] NZHC 2508

BETWEEN
CATHERINE MARGARET FOGARTY

Plaintiff

AND

JAMES ANTHONY FOGARTY

First Defendant

TERENCE RAYMOND HAWKINS
Second Defendant

WESTPAC NEW ZEALAND LIMITED

Third Defendant

Hearing: 3 September 2020

Appearances:

R J Bayer and R M Stoop for Plaintiff D J Moore for First Defendant

Judgment:

27 November 2020

JUDGMENT OF CLARK J

Overview

[1] Mr and Mrs Fogarty entered into a deed of family arrangement with their son James Fogarty, the first defendant.1 Under the deed James was to buy his parents’ home. While title would vest in James his parents were to have a life interest. Title was eventually transferred but James has still not paid the purchase price. Mrs Fogarty sues for breach of contract.

1 In this judgment I refer to the first defendant as “James” rather than “Mr Fogarty” to avoid confusion with James’ father. I mean no disrespect to James in using his first name.

FOGARTY v FOGARTY [2020] NZHC 2508 [27 November 2020]

[2] By the time of the hearing and in light of their ongoing settlement discussions the plaintiff no longer pursued her claims against the first and second defendants.

[3] The hearing proceeded by way of formal proof. In the remainder of this judgment I explain why I did not grant James leave to file a statement of defence. I then explain why I have decided to order that title revert to Mrs Fogarty by way of relief for James’ breach of contract.

Factual background

[4] Until Mr Fogarty died in July 2019 the couple lived together in the home he built in 1969 at Hillside Drive, Upper Hutt (the property).

[5] In 2004 James agreed with his parents to purchase the property for $200,000. The parents agreed to sell the house to James at that price so he could enter the property market. The agreement was formalised in a deed of family arrangement signed and witnessed on 18 July 2004.

[6]The key terms of the deed were that:

(a)A life interest in the property was to be reserved to Mr and Mrs Fogarty to allow them to continue to live there for the rest of their lives.

(b)The certificate of title would continue to be in the parents’ name until full payment was received.

(c)The payment of $200,000 for the property was to be made up of:

(i)$10,000 to be paid into the parents’ account;

(ii)a $5,000 fixed deposit to be transferred into the parents’ name;

(iii)$10,000 was to be deducted from James’ inheritance; and

(iv)The balance of $175,000 to be paid in instalments as convenient.

(d)Until the property was transferred to him, James would continue to pay the rates and half of the power and telephone accounts for the property while he was residing in a unit on the property. The parents would be responsible for maintenance of the property including insurance and mortgage repayments (if any).

[7] James started…

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.

Continue reading Fogarty v Fogarty

Details

AGLC: Fogarty v Fogarty [2020] NZHC 2508
Case: [2020] NZHC 2508
Decision Date: 27 November 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Catherine Margaret Fogarty (Mrs Fogarty) sued her son, James Anthony Fogarty (James), for breach of contract. The dispute centred around a deed of family arrangement in which James had agreed to purchase his parents’ home. Under the deed, title would vest in James, but his parents would retain a life interest. James had not paid the full purchase price and Mrs Fogarty sought relief. The court had to determine whether James had a substantial defence against Mrs Fogarty’s claim, whether the delay in filing a statement of defence was reasonably explained, and whether Mrs Fogarty would suffer irreparable prejudice if judgment was entered by default. The court found James did not have a substantial defence, his delay in filing a statement of defence was not reasonably explained, and Mrs Fogarty would suffer irreparable prejudice if judgment was entered by default. The court therefore declined to grant James leave to file a statement of defence. The court also found that Mrs Fogarty had validly cancelled the contract and that it was just and practicable to make an order vesting the property in Mrs Fogarty. The court awarded Mrs Fogarty damages for emotional distress in the sum of $8,000. The court ordered that title to the property vests in Mrs Fogarty and that James pay Mrs Fogarty damages in the sum of $8,000. Mrs Fogarty was also entitled to costs as the successful party.

Finally, the court awarded Mrs Fogarty damages for emotional distress in the sum of $8,000. The court found that Mrs Fogarty had suffered real distress arising from James' breach, but that the breach had not been the only contributor to her distress. The court considered it appropriate to award damages but reduced to recognise Mrs Fogarty's emotional distress was not caused solely by James' failure to pay the purchase price. The court also noted that damages for breach of contract were compensatory, not punitive. The court made orders vesting the property in Mrs Fogarty, requiring James to pay Mrs Fogarty damages in the sum of $8,000, and awarding Mrs Fogarty costs as the successful party.

Orders