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Kahawai Point Developments Limited v Khan

Kahawai Point Developments Limited v Khan

Case [2019] NZHC 3345 17 December 2019

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-000700

[2019] NZHC 3345

BETWEEN
KAHAWAI POINT DEVELOPMENTS LIMITED

Plaintiff

AND

BALLU KHAN, FEROZA ASHRAF and NUR JAN KHAN

Defendants

Hearing:
16 October 2019

Further submissions received 1 and 5 November 2019

Appearances:

G K Holm-Hansen and A A Cho for Plaintiff K F Gould for Defendants

Date:

17 December 2019

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 17 December 2019 at 3.00 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date……………………….

KAHAWAI POINT DEVELOPMENTS LTD v KHAN [2019] NZHC 3345 [17 December 2019]

Introduction

[1] In these summary judgment proceedings, the plaintiff, as vendor, seeks orders for specific performance of the sale and purchase agreement (SPA) of a block of land at Glenbrook, South Auckland (the property). The purchase has not been completed; a 10 per cent deposit was paid, but the balance of the purchase price was not.

[2] The defendants, Mr Ballu Khan, Ms Feroza Ashraf and Ms Nur Jan Khan, are the trustees of the Kowhai Trust and said, by the plaintiff, to be the purchasers of the property. The SPA was signed by only one of the defendant trustees, namely Mr Khan; the other two trustees, Ms Ashraf and Ms Khan, did not sign. Those two trustees say that they first became aware of the existence of the SPA in May 2019, had no contact or dealing with the solicitors for the Kowhai Trust and do not consent to the purchase.

[3] The plaintiff initially sought summary judgment against all three named- defendants. However, following disclosure of the trust deed by the defendants’ solicitors (subsequent to the hearing), the plaintiff now seeks summary judgment only against Mr Khan. The plaintiff now accepts that its proceedings against the second and third named-defendants, Ms Ashraf and Ms Khan, will have to proceed in the ordinary way.

[4] The critical issue I must determine is whether the plaintiff has established that the defendant, Mr Khan, has no defence to the claim; is the SPA binding on Mr Khan?

Background facts

[5] The plaintiff is the owner and developer of a site at Glenbrook, Auckland, which includes the property at issue (Lot 59 McLarin Road, Glenbrook).

[6] On or about 20 January 2017, the plaintiff entered into a SPA for the sale and purchase of the property.

[7] In the SPA, the Kowhai Trust is the named purchaser. Mr Khan signed the SPA but Ms Ashraf and Ms Khan did not. The purchaser’s lawyers were recorded on the

SPA as “James Donovan lawyers, Howick, Auckland”. The contact details for the purchaser were recorded as “C/o Ballu Khan, K G Accountants, Howick”.

[8]Clause 17 of the SPA reads:

17.1If any person enters into this agreement as trustee of a trust, then:

(1)That person warrants that:

(a)the person has power to enter into this agreement under the terms…

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 Kahawai Point Developments Limited v Khan

Details

AGLC: Kahawai Point Developments Limited v Khan [2019] NZHC 3345
Case: [2019] NZHC 3345
Decision Date: 17 December 2019

CaseChat Overview and Summary

In the High Court of New Zealand, Kahawai Point Developments Limited brought an action against Ballu Khan, Feroza Ashraf, and Nur Jan Khan, trustees of the Kowhai Trust, for specific performance of a sale and purchase agreement for a property in Glenbrook, South Auckland. The plaintiff, as the vendor, sought an order for specific performance as the purchase had not been completed, with only a 10% deposit being paid. The defendants, who are trustees of the Kowhai Trust, claimed they were not bound by the agreement as not all trustees had signed the agreement. The plaintiff initially sought summary judgment against all three defendants but later focused on Mr. Khan alone, following the disclosure of the trust deed. The primary legal issue was whether the defendant, Mr. Khan, had no defence to the claim, specifically if the sale and purchase agreement was binding on him.

The court considered the principles of summary judgment, which require the plaintiff to show that the defendant has no defence to the claim. The court examined the terms of the sale and purchase agreement, particularly clause 17, which required all trustees to approve the agreement. The court also considered the conduct of the parties, including the payment of the deposit from the Kowhai Trust's account and the actions of the solicitors. The court concluded that it was arguable that Mr. Khan was not bound by the agreement because not all trustees had approved it. The court found that the plaintiff had not established that Mr. Khan had no defence, and the application for summary judgment was dismissed.

The court emphasised the need for all trustees to approve an agreement when acting on behalf of a trust and noted that the absence of such approval could render the agreement invalid. The court did not rule on potential other claims, such as misrepresentation or deceit, as these were not part of the current pleadings. The court also left the question of costs to be determined separately, should the parties be unable to agree on the matter.

Orders