Herd v Haines - [2020] NZSC 155

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 80/2020
[2020] NZSC 155

BETWEEN	ROBERT JOHN HERD AND RHUMBA HOLDINGS LIMITED Applicants
AND	RODNEY DAVID HAINES AND KATHLEEN ANNE NORMAN Respondents

Court:	Glazebrook, Ellen France and Williams JJ
Counsel:	J W Maassen for Applicants N S Gedye QC and R C Mark for Respondents
Judgment:	21 December 2020

JUDGMENT OF THE COURT

AThe application for leave to appeal is dismissed.
BThe applicants must pay the respondents costs of $2,500.

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REASONS

Introduction

The respondents, Rodney Haines and Kathleen Norman, succeeded in the High Court on an action brought against the applicants, Robert Herd and Rhumba Holdings Ltd, for the recovery of losses the respondents said resulted from the applicants’ default under a contract for the sale and purchase of a game fishing vessel.[1] The applicants appealed unsuccessfully from the High Court decision to the Court of Appeal.[2] They now seek leave to appeal to this Court.

Background

[1]Haines v Herd [2019] NZHC 342 (Lang J) [HC judgment].

[2]Herd v Haines [2020] NZCA 396 (Kós P, French and Courtney JJ) [CA judgment].

Under the contract for sale and purchase, the respondents agreed to sell the vessel to Mr Herd.[3] The vessel was registered in Vanuatu and the contract was subject to the law of Vanuatu.[4] The consideration ultimately payable was set out in cl 2.1(b) of the contract. That clause provided for the payment of AUD 400,000 cash plus the transfer of “AUD$400,000 worth of land (as per Vanuatu registered bank panel mortgage valuer valuation) with the preferred Land being Palikula Beachfront or waterfront property”. The transaction was to be settled on 19 May 2013.
[3]The initial contract was varied. The parties proceeded under the varied contract and it was the varied contract that gave rise to the appeal to the Court of Appeal. We accordingly refer to the varied contract as “the contract” throughout.
[4]The High Court heard expert evidence about the law of contract in Vanuatu. Lang J accepted the evidence of Professor Corrin, the Director of Comparative Law in the Centre for Public, International and Comparative Law at the University of Queensland, that in practice the Vanuatu courts look to the English common law of contract: HC judgment, above n 1, at [26].
In April 2012, Mr Herd validly took possession of the vessel, but under the contract title would not pass until the consideration was paid. Rhumba Holdings (a company controlled by Mr Herd) provided security for the transaction in the form of a registrable mortgage over land in Vanuatu.
On settlement date, Mr Herd failed to tender either the cash or any transfer of land. On 26 August 2013, Mr Haines issued a notice of default under the contract requiring Mr Herd to rectify his default. After Mr Herd failed to rectify within the 30‑day period specified, Mr Haines repossessed the vessel and sold it at a loss.
The respondents’ action to recover their losses from Mr Herd was brought…

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 Herd v Haines

Details

AGLC: Herd v Haines [2020] NZSC 155
Case: [2020] NZSC 155
Decision Date: 21 December 2020

CaseChat Overview and Summary

In Herd v Haines, the applicants, Robert John Herd and Rhumba Holdings Limited, sought leave to appeal to the Supreme Court of New Zealand against the decision of the Court of Appeal, which had dismissed their appeal against the High Court’s judgment in favour of the respondents, Rodney David Haines and Kathleen Anne Norman. The High Court found the applicants liable for losses incurred by the respondents after the applicants failed to complete a contract for the sale and purchase of a game fishing vessel. The applicants’ appeal to the Court of Appeal was also dismissed, and they now sought leave to appeal to the Supreme Court. The primary legal issues the Court had to decide were whether the contract was sufficiently certain and complete, whether the Court of Appeal’s interpretation relied on irrelevant contextual factors, and whether clause 11 of the contract provided a mechanism to fill the gaps in clause 2.1(b). The Court also considered whether Mr Haines had to identify the land to be transferred and/or engage in reasonable dialogue about it, whether Mr Haines was ready, willing and able to settle at settlement date, and whether Mr Haines gave valid notice before cancelling the contract and was ready, willing and able to perform during the notice period.

The Court held that the contract was sufficiently certain and complete, and that the Court of Appeal’s interpretation was not based on irrelevant contextual factors. The Court found that clause 11 did not provide a mechanism to fill the gaps in clause 2.1(b), and that Mr Haines was not required to identify the land to be transferred. The Court also held that there was no evidence that Mr Haines was not ready, willing and able to settle at settlement date, and that the notice given by Mr Haines was valid. The Court concluded that the proposed appeal did not involve any matter of general or public importance or commercial significance, and that there was no appearance of a miscarriage of justice in the Court of Appeal’s assessment of the facts. The Court dismissed the application for leave to appeal and ordered the applicants to pay the respondents’ costs of $2,500.

Orders