Kaitaia Timber Co Ltd v Alternative Enterprises Ltd

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IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2012-488-303 [2012] NZHC 2497

BETWEEN  KAITAIA TIMBER COMPANY LIMITED Plaintiff

ANDALTERNATIVE ENTERPRISES LIMITED

First Defendant

ANDJOHN LESLIE WILSON HARRISON AND JANICE ELIZABETH HARRISON Second Defendants

Hearing:         24 September 2012

Appearances: K I Bond for Plaintiff

W W Peters for Defendants

Judgment:      9 October 2012

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on    9 October 2012  at 11:00am

pursuant to Rule 11.5 of the High Court Rules.

...................................

Registrar/Deputy Registrar

Solicitors:

Harkness Henry (K I Bond/T M Braun), Private Bag 3077 Hamilton 3240, for Plaintiff

Email:   Kevin.bond@harkness.co.nz / toby.braun@harkness.co.nz

Wayne Peters Lawyers (W W Peters) P O Box 5053 Whangarei 5053 for Defendants

Email:   wwp@waynepeterslawyers.co.nz

KAITAIA TIMBER COMPANY LIMITED V ALTERNATIVE ENTERPRISES LIMITED HC WHA CIV-2012-

488-303 [9 October 2012]

[1]      In   2008  Kaitaia  Timber  Company  Ltd  sold   its  sawmill  property  at

155 Pukepoto Road, Kaitaia, to Alternative Enterprises Ltd for $700,000.  Settlement of the purchase took place in February 2009, but under the agreement Kaitaia Timber Company Ltd left money in.  It claims $484,601.14 as the outstanding balance of the purchase price payable by Alternative Enterprises Ltd and its directors, John and Janice Harrison.  It applies for summary judgment.

[2]      In opposition, Alternative Enterprises Ltd says that Kaitaia Timber Company Ltd induced it to enter into the agreement on misrepresentations as to the condition of the property, the environmental profile for the property and the sawmill’s business prospects.   It alleges breaches of warranties under the agreement for sale and purchase.  It also says that Kaitaia Timber Company Ltd did not transfer plant and equipment which were to be supplied under the agreement.  It says that these matters give it claims for damages against Kaitaia Timber Company Ltd, which can be raised in defence of the claim for the purchase price by way of equitable set-off.  It also alleges that a notice under s 119 of the Property Law Act 2007 was defective.  The Harrisons say that they are not personally liable for the purchase price.

[3]      The questions in the case are:

(a)       Are Mr and Mrs Harrison personally liable?

(b)      Are the defendants able to claim misrepresentation?

(c)      Does Alternative Enterprises Ltd have a claim for breach of warranty under  general  condition  6.1(1)  of  the  agreement  for  sale  and purchase?

(d)Does Alternative Enterprises Ltd have a claim for breach of warranty under  general  condition  6.2(6)  of  the  agreement  for  sale  and purchase?

(e)       Did Kaitaia Timber Company Ltd supply all the plant and equipment under the agreement for sale and purchase?

(f)       Did Kaitaia Timber Company Ltd comply with the Property Law Act

2007 in selling a Southland property as mortgagee? (g)          Can the defendants claim a damage campaign? and

(h)      If Alternative  Enterprises  Ltd  has  damages  claims  against  Kaitaia

Timber  Company  Ltd,  can  they  be  raised  in  defence  by  way  of equitable set-off?

Facts

[4]      Kaitaia Timber Company Ltd  had  used the site in  Pukepoto  Road  for a sawmill, including for timber…

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Details
Case
[2012] NZHC 2497
Decision Date

CaseChat Overview and Summary

In Kaitaia Timber Co Ltd v Alternative Enterprises Ltd, the High Court considered a dispute over the sale of a sawmill. Kaitaia Timber Co Ltd sued Alternative Enterprises Ltd for the outstanding balance of the purchase price, and its directors, Mr and Mrs Harrison, for personal liability under the agreement for sale and purchase and personal covenants under the mortgage. The defendants raised a number of defences, including misrepresentation, breach of warranty, non-disclosure of defects, and non-compliance with the Property Law Act. The court found that none of the defendants' claims were arguable. Mr and Mrs Harrison were personally liable under the personal covenants in the mortgage. The defendants could not raise their claims as defences by way of equitable set-off. The court granted summary judgment in favour of Kaitaia Timber Co Ltd, ordering Alternative Enterprises Ltd and the Harrisons to pay the outstanding balance, interest, and costs.

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