Herd v Haines - [2020] NZCA 396

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA137/2019
[2020] NZCA 396

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

Hearing:	26 May 2020
Court:	Kós P, French and Courtney JJ
Counsel:	J W Maassen for Appellants N S Gedye QC for Respondents
Judgment:	7 September 2020 at 11.30 am

JUDGMENT OF THE COURT

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AThe appeal is dismissed.
BMr Haines is entitled to costs for a standard appeal on a band A basis plus usual disbursements.

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REASONS OF THE COURT

(Given by Courtney J)

Introduction

The appellant, Robert Herd, agreed to buy the game fishing vessel, “It’s Time”, from the respondents, Rodney Haines and Kathleen Norman.[1] The vessel was registered in Vanuatu and the contract was subject to Vanuatu law. The agreed consideration was AUD$400,000 cash plus the transfer of land in Vanuatu with a value of AUD$400,000.[2] Settlement was to occur on 19 May 2013.[3]
[1]The initial contract was varied and it is the varied contract under which the parties proceeded and which gives rise to this appeal. We refer to the varied contract as “the contract” throughout.
[2]The contract provided for alternative forms of consideration dependent on specified contingencies but this consideration was the form that ultimately prevailed.
[3]The settlement date was determined by reference to the same contingencies as the consideration.
Mr Herd took possession of the vessel in April 2012, though the contract provided that title would not pass until the consideration had been paid. The other appellant, Rhumba Holdings Ltd (RHL), (controlled by Mr Herd) provided security for the transaction in the form of a registrable mortgage over land in Vanuatu referred to as Lot 58.[4]
[4]RHL also agreed to a “caution” which has a function similar to that of caveat under Vanuatu law.
Mr Herd failed to tender either the cash or any transfer of land on the settlement date. It is common ground that Mr Herd did not have the necessary cash at that time. On 26 August 2013 Mr Haines issued a notice of default requiring Mr Herd to rectify his default within 30 days. Mr Herd failed to tender either the cash or land transfers. Mr Haines repossessed the vessel, took it to New Zealand and sold it at a loss. He also incurred other costs associated with the repossession of the vessel.
In an action by Mr Haines and Ms Norman to recover their losses, Lang J rejected Mr Herd’s arguments that the contract was void for uncertainty and unenforceable for lack of adequate identification of the land to be transferred. He rejected the argument that Mr Herd’s obligation to tender the consideration did not arise because of Mr Haines’ own failure to identify the land he wanted or to tender the documents required to complete settlement. He held that the contract was valid, that Mr Herd had the right to select the land to be transferred as part of the…

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] NZCA 396
Case: [2020] NZCA 396
Decision Date: 7 September 2020 at 11.30 am

CaseChat Overview and Summary

Robert Herd and Rhumba Holdings Ltd (RHL) appeal against a judgment of Lang J in the High Court at Auckland (Haines v Herd). They sought to buy a fishing vessel from Rodney Haines and Kathleen Norman. The vessel was registered in Vanuatu and the contract was subject to Vanuatu law. The agreed consideration was AUD$400,000 cash plus the transfer of land in Vanuatu with a value of AUD$400,000. Settlement was to occur on 19 May 2013. Mr Herd took possession of the vessel in April 2012, though the contract provided that title would not pass until the consideration had been paid. RHL provided security for the transaction in the form of a registrable mortgage over land in Vanuatu referred to as Lot 58. Mr Herd failed to tender either the cash or any transfer of land on the settlement date. On 26 August 2013 Mr Haines issued a notice of default requiring Mr Herd to rectify his default within 30 days. Mr Herd failed to tender either the cash or land transfers. Mr Haines repossessed the vessel, took it to New Zealand and sold it at a loss. He also incurred other costs associated with the repossession of the vessel. In an action by Mr Haines and Ms Norman to recover their losses, Lang J rejected Mr Herd’s arguments that the contract was void for uncertainty and unenforceable for lack of adequate identification of the land to be transferred. He rejected the argument that Mr Herd’s obligation to tender the consideration did not arise because of Mr Haines’ own failure to identify the land he wanted or to tender the documents required to complete settlement. He held that the contract was valid, that Mr Herd had the right to select the land to be transferred as part of the consideration and that he was required to tender both the cash and the land transfers on the settlement date. Failure to meet those obligations entitled Mr Haines to issue the default notice. Mr Herd’s failure to remedy the default entitled Mr Haines and Ms Norman to recover damages for their losses resulting from the breach. The Judge did not accept that Mr Haines had to realise his security over Lot 58 before he could proceed against Mr Herd personally. The appeal was dismissed. Mr Haines is entitled to costs for a standard appeal on a band A basis plus usual disbursements.

Orders