Harcourts Group Limited v Grewal - [2018] NZHC 2983

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-1234

[2018] NZHC 2983

BETWEEN
HARCOURTS GROUP LIMITED

Plaintiff

AND

GURPREET GREWAL

First Defendant

RAMANJIT GREWAL

Second Defendant

Hearing: 29 October 2018

Appearances:

T Cooley for the Plaintiff

G Round for the Defendants

Judgment:

19 November 2018

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 19 November 2018 at 10:30am
pursuant to Rule 11.5 of the High Court Rules.

…………………………………
Deputy Registrar

Solicitors:
Brookfields Lawyers (T Cooley), Auckland, for the Plaintiff
Law & Associates (D Law/G Round), Manukau, for the Defendants

HARCOURTS GROUP LIMITED v GURPREET GREWAL [2018] NZHC 2983 [19 November 2018]

Table of Contents

The franchise agreements

Paragraph No.

[5]

The loans

[11]

Administration and liquidation

The claims for franchise fees

[16]

Mr Grewal [22]

The claims under the loan agreements

[27]

Mr Grewal’s defences [28]

The other defences
Non-disclosure [80]
Equiable set-off [81]

Outcome [83]

[1] Harcourts Group Ltd, the plaintiff, is the New Zealand franchisor for the Harcourts real estate business. Preet & Co Real Estate Ltd and Preet & Co Rentals Ltd had Harcourts franchises in South Auckland territories. Preet & Co Real Estate Ltd dealt with residential and rural real estate, and Preet & Co Rentals Ltd with letting and property management. Those companies have failed. After being put into administration, they have gone into liquidation. Gurpreet Grewal, the first defendant, is the director of both companies. His wife, Ramanjit Grewal, is the second defendant. Harcourts Group Ltd sues Mr and Mrs Grewal as guarantors:

(a)Mr Grewal for $758,824.51 plus interest under a loan to Preet & Co Real Estate Ltd in October 2017;

(b)Mr Grewal for $197,000.00 plus interest under a loan to Preet & Co Rentals Ltd in October 2017;

(c)Mr Grewal for $241,135.41 for franchise fees payable by Preet & Co Real Estate Ltd;

(d)Mr Grewal for $18,601.22 for franchise fees payable by Preet & Co Rentals Ltd;

(e)Mrs Grewal for $69,532.78 for franchise fees payable by Preet & Co Real Estate Ltd.

Harcourts Group Ltd applies for summary judgment.

[2] The defendants admit giving the guarantees. They dispute liability for the franchise fees. They admit the loans. They say that summary judgment should not be entered because they have defences which should be determined in a full hearing on the merits. Their defences are:

(a)non-disclosure of circumstances relating to the loan and franchise fees, especially the part Harcourts Group Ltd played in the failure of the business of Preet & Co Real Estate Ltd and Preet & Co Rentals Ltd;

(b)misleading and deceptive conduct under the Fair Trading Act 1986 to induce Mr Grewal to give guarantees in October 2017 by making him believe that Harcourts Group Ltd would support him and the companies, when that support was withdrawn after the guarantees were signed; and

(c)failing to disclose an accrued rebate of franchise fees of $146,043 owing to Preet & Co Real Estate Ltd.

[3]They…

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.

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Details

Case: [2018] NZHC 2983
Decision Date: 19 November 2018

CaseChat Overview and Summary

Harcourts Group Limited brought an action against Gurpreet and Ramanjit Grewal for the repayment of loans and franchise fees. The High Court considered Harcourts' application for summary judgment against Mr Grewal as guarantor. The court held that Harcourts had proved its claims under Mr Grewal’s guarantees of the loan agreements, subject to Mr Grewal’s affirmative defences. Harcourts had shown that Mr Grewal did not have any defence to the claim under his guarantee of the loans to Preet & Co Real Estate Ltd and Preet & Co Rentals Ltd in October 2017. The total amounts advanced were $1,012,300.05. Harcourts Group Ltd was entitled to judgment against Mr Grewal for that sum plus contractual interest, including default interest, as claimed. Harcourts Group Ltd had not succeeded on its summary judgment application for franchise fees against Mr Grewal or his wife. Those parts of the summary judgment application were dismissed. The court ordered Harcourts Group Ltd to file and serve evidence and a memorandum for its claim for solicitor-client costs. The Registrar was directed to set a first case management conference for directions on the remaining issues in the case.

Orders