Kumar v Bahramitash - [2004] NZCA 266

IN THE COURT OF APPEAL OF NEW ZEALAND
CA51/04
BETWEENSATISH KUMAR AND SUNILA KUMAR

Appellants

ANDPARSOA BAHRAMITASH

Respondent

Hearing:21 October 2004

Coram:Anderson P
Hammond J
William Young J
Appearances: D Singh for Appellants

P J Dale for Respondent

Judgment:8 November 2004

JUDGMENT OF THE COURT DELIVERED BY HAMMOND J

Introduction
[1]       This appeal arises out of a conveyancing dispute in which the appellants (as purchasers) sought specific performance against the respondent (the vendor) with respect to an agreement for the sale and purchase of a vacant residential section in Auckland.
[2]       Williams J declined the relief sought in a judgment delivered in the High Court at Auckland dated 4 March 2004 (CIV-2003-404-5876).
[3]       The Kumars now appeal to this Court. In the result, we take the view that the case was one for specific performance, with, if necessary, an abatement in price. The appeal accordingly succeeds.
[4]       Although the arguments before us involved a close traverse of a number of authorities in the High Court and in this Court, in the view we take of the matter, the proceeding was of a relatively straightforward character and can be dealt with quite succinctly.
Background
[5]       The Kumars were interested in purchasing a vacant section at Mangere Bridge, Auckland, from Mr Bahramitash. They inspected the section. Two of the boundaries to the property were fenced. Construction was occurring on neighbouring land.
[6]       On 21 August 2003 the Kumars entered into a contract to purchase this section. The contract was in the standard REINZ-ADLS (7 ed (2), July 1999) form. The settlement date under this contract was 11 September 2003.
[7]       After the agreement was executed, the Kumars developed two concerns. First there was difficulty in locating some boundary pegs (which had been displaced). Secondly, they discovered quite a large mound of mixed soil and building debris (“spoilage”) on the section which had not been there prior to the agreement being entered into.
[8]       The Kumars wanted to be sure the boundary pegs were properly in place, and they wanted this spoilage removed, prior to settlement.
[9]       These two occurrences provoked correspondence between the solicitors for the Kumars and Mr Bahramitash.
[10]     It is convenient at this point to put to one side altogether, as no longer relevant to this judgment, the claim which was advanced with respect to the boundary pegs, in the High Court proceedings. It suffices to say, for present purposes, that the Kumars’ claims - at least as presented - with respect to the boundary pegs were misconceived and only faintly touched upon, by way of background, in this Court. It is therefore unnecessary to say anything more under that head. To do so would detract from the real issues in the case.
[11]     We therefore resume the narrative as at 3 September 2003. On that date the Kumars’ solicitor complained about this spoilage on the subject land. He said his clients required its removal, and claimed compensation if this work was not done before settlement.
[12]     Mr Bahramitash’s…

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.

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Details

Case: [2004] NZCA 266
Decision Date: 8 November 2004

CaseChat Overview and Summary

The appeal before the Court of Appeal of New Zealand involved a dispute between the Kumars (the appellants) and Mr. Bahramitash (the respondent) over the sale and purchase of a vacant residential section in Auckland. The Kumars sought specific performance against Mr. Bahramitash, claiming that the property had been encumbered by spoilage after the contract date, and they sought to remove the spoilage or receive compensation for it. The High Court had previously declined the relief sought by the Kumars. The Kumars appealed this decision.

The primary legal issue in the appeal was whether the Kumars were entitled to specific performance of the sale agreement, and if so, whether an abatement in price should apply due to the presence of spoilage on the property. The Court needed to determine whether the Kumars were required to tender settlement less an amount for the diminution in value before they could seek specific performance, or if they could directly seek specific performance with an abatement in price.

The Court of Appeal found that the Kumars were entitled to specific performance of the sale agreement, with an abatement in price for the spoilage. The Court held that Mr. Bahramitash was not ready, able, and willing to proceed with the settlement in accordance with the contract terms because he had not removed the spoilage from the property. Therefore, his settlement notice was invalid, and the contract remained in effect. The Court ruled that the Kumars were entitled to seek specific performance, as provided by clauses 9.5 and 9.7 of the standard agreement. The Court further determined that an abatement of $2,000 should be applied to the purchase price to account for the cost of removing the spoilage. The Court set a new settlement date and ordered that the respondent would be entitled to interest from that date if settlement did not occur. Costs were awarded to the appellants.

The Court of Appeal allowed the appeal and granted the Kumars specific performance of the sale agreement, with an abatement in price of $2,000. The settlement was to occur on 19 November 2004, and the costs were set at $3,000 for the appellants, along with their reasonable disbursements.

Orders