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Howe v Dempsey

Howe v Dempsey

Case [2013] NZHC 2297 5 September 2013

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-3605 [2013] NZHC 2297

BETWEEN
BRUCE WILLIAM HOWE, JENNIFER MARGARET HOWE and MBT LIMITED in their capacities as trustees of ROIDON TRUST

Plaintiffs

AND

PAUL JOHN DEMPSEY Defendant

Hearing: 4 and 5 June 2013

Counsel:

H L Thompson and S J Ames for Plaintiffs
D J MacRae for Defendant

Judgment:

5 September 2013

JUDGMENT OF MILLER J

HOWE & Ors v DEMPSEY [2013] NZHC 2297 [5 September 2013]

Table of Contents

Introduction   [1] The facts     [4] The pleadings  [23] Were the Howes ready, able and willing to settle when they served the settlement notice of 24 March 2011? [27]
The settlement provisions of the agreement  [27]
The requirement that a party serving a settlement notice must itself be ready,
able and willing to settle  [32] Were the Howes not ready, able and willing to settle because they had not executed A & I forms?         [34] Were the Howes ready, able and willing to settle when they had not tendered a settlement statement?  [55]
Did time cease to be of the essence before the Howes cancelled?                  [59] Did Mr Dempsey repudiate by asking the Howes to settle for less than the amount due under the agreement?  [67] The Howes’ damages claim  [71]
The Howes’ claim to interest at the contractual rate  [77]
Must the Howes give credit for the forfeited deposit?  [82] The other sums claimed  [89] The counterclaim  [95] Decision  [97]

Introduction

[1] Mr Dempsey agreed to buy 28 Ronaki Road, Mission Bay, a substantial residential property owned by the Howes. He meant to develop the site, but his plans fell through, leaving him without funds to settle on the assigned date. He did not respond to a settlement notice.

[2] The Howes neither cancelled the agreement for sale and purchase nor extended the settlement notice to a date certain; instead, they chose to keep the agreement on foot while they searched for a buyer. More than a year later they resold, for a higher price, without issuing a fresh settlement notice. They now come to Court seeking interest until the resale at the contract rate for late settlement, and they also want to forfeit the deposit. Together those sums amount to $1,229,537.47. If the deposit and/or resale gain must be brought into the accounting, the Howes seek the interest together with the costs of resale.

[3] Mr Dempsey responds that the Howes must refund the deposit and cannot get damages. He says that they were not ready, willing and able to settle when they issued their settlement notice, for they had neither executed Authority and Instruction (A & I) forms required for an electronic dealing nor tendered a settlement statement; they also resold unlawfully, for time had ceased by then to be of the essence; and finally, their right to interest for late settlement under the REINZ/ADLS Agreement for Sale and Purchase of Real Estate lapsed after 12 months.

The facts

[4] 28 Ronaki Road was owned by a family…

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 Howe v Dempsey

Details

AGLC: Howe v Dempsey [2013] NZHC 2297
Case: [2013] NZHC 2297
Decision Date: 5 September 2013

CaseChat Overview and Summary

The plaintiffs, Bruce William Howe, Jennifer Margaret Howe and MBT Limited in their capacities as trustees of ROIDON TRUST, sought interest until resale at the contract rate for late settlement and sought to forfeit the deposit from the defendant, Paul John Dempsey. Dempsey responded that the plaintiffs must refund the deposit and could not get damages, arguing that the plaintiffs were not ready, willing and able to settle when they issued their settlement notice as they had neither executed Authority and Instruction (A & I) forms nor tendered a settlement statement. He also argued that the plaintiffs resold unlawfully as time had ceased to be of the essence and their right to interest for late settlement under the REINZ/ADLS Agreement for Sale and Purchase of Real Estate had lapsed after 12 months. The court held that the plaintiffs were ready, able and willing to settle when they issued their settlement notice of 24 March 2011, and that time ceased to be of the essence before the plaintiffs cancelled. The court held that the plaintiffs were not entitled to cancel and resell as time was no longer of the essence when they did so, nor had Dempsey repudiated the agreement. The court found that the plaintiffs were not entitled to retain the deposit following resale and that interest ought to be allowed under s 87 in the exercise of the Court’s discretion. The plaintiffs were awarded judgment for $729,437.47, being interest at the contractual rate from 22 March 2011 until 23 May 2012, $13,935.69 for rates and insurance and interest on a) and b) under s 87, calculated from 23 May 2012 until judgment. The plaintiffs must give credit for the deposit and interest on it.

Orders