Lee v Village Lifestyles Limited

[2009] NZCA 218

IN THE COURT OF APPEAL OF NEW ZEALAND

CA611/2008
[2009] NZCA 218

BETWEENJEE HING LEE

Appellant

ANDVILLAGE LIFESTYLES LIMITED

Respondent

Hearing:18 May 2009

Court:Glazebrook, O'Regan and Arnold JJ

Counsel:Appellant in person

Interpreter:  L Cheung
B P Rooney for Respondent

Judgment:29 May 2009 at 2.30 pm

JUDGMENT OF THE COURT

AThe application for an order striking out the appeal is granted. The appeal is struck out accordingly.

BCosts are awarded to the respondent for a standard application on a Band A basis with usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Glazebrook J)

Introduction

[1]       On 2 October 2008, Ms Lee filed a notice of appeal from two judgments of Associate Judge Hole in the High Court at Auckland, dated 6 August 2008 and 16 September 2008, granting summary judgment in favour of Village Lifestyles Ltd (Village Lifestyles).  This required specific performance of an agreement by which Ms Lee agreed to sell land at Pokeno, south of Auckland, for $8m plus GST if any ($9m including GST).

[2]       Village Lifestyles applies to strike out the appeal on a number of grounds, including that no steps have been taken to pursue the appeal (the six month period for filing the case on appeal expired on 2 April 2009), that security for costs has not been paid and that it is not a genuine appeal.  Further, it is submitted that the appeal lacks substantive merit.

Background

[3]       Village Lifestyles is a partner in the Pokeno Land Consortium which, in consultation with the Franklin District Council, is developing 400 hectares of land at Pokeno as a township, which ultimately will comprise a major residential settlement.

[4]       Associate Judge Hole held that, on 23 September 2005, Ms Lee entered into an agreement to sell her property in Pokeno to Bala Holdings Limited (Bala) or its nominee for $8m (plus GST).  The agreement provided for deferred settlement on 7 February 2008, with payment instalments totalling about $4m to be paid to Ms Lee as vendor in the interim.  Bala nominated a related company, Shridhama Developments Limited (Shridhama), as purchaser.  Shridhama paid Ms Lee the instalments in accordance with the terms of the agreement.

[5]       In November 2007, Village Lifestyles took an assignment of the benefit of the agreement from Shridhama.  It paid Shridhama the $4m, which by then had been paid to Ms Lee, and assumed the obligation to pay the balance of the agreed price to Ms Lee on settlement.

[6]       On the date of settlement under the agreement, 7 February 2008, Village Lifestyles was ready, willing and able to settle the purchase.  Ms Lee, however, refused to settle.  In March 2008, Village Lifestyles applied to the High Court for summary judgment for specific performance of the agreement.

[7]       Ms Lee’s defence was that the agreement relied on by Village Lifestyles was a forgery.  She admitted that she had signed an agreement to sell her property to Bala for $9m but said that the agreement she signed had been dated 16 September 2005, whereas the agreement relied on by Village Lifestyles was dated 23 September 2005.  She said that the vendor’s signature on the 23 September 2005 agreement was not hers. 

[8]       Her evidence was that the difference between the 16 September 2005 agreement and the agreement relied on by Village Lifestyles was in the deposit and instalment payment dates.  Ms Lee, however, agreed that she had received the deposits and instalments referred to in the 23 September 2005 agreement but said, under the alleged 16 September 2005 agreement, she ought to have received them earlier.  Ms Lee did not produce the 16 September 2005 agreement in evidence.  She said that it had been “hidden” by the agent who acted for her on the sale.

[9]       On 6 August 2008, Associate Judge Hole issued a preliminary judgment, by which he gave Ms Lee an opportunity to engage a handwriting expert to analyse the vendor’s signature on the 23 September 2005 agreement.  He adjourned the summary judgment application.  Both parties obtained handwriting experts’ reports and produced evidence from handwriting experts.  Both experts agreed that the 23 September agreement had probably been signed by Ms Lee.  The Associate Judge then considered this evidence in light of all of the other evidence and, by a final judgment dated 16 September 2008, entered summary judgment directing Ms Lee to settle the purchase.

[10]     Village Lifestyles sealed the judgment.  Ms Lee lodged this appeal and applied to the High Court for a stay of execution pending the appeal.  Village Lifestyles simultaneously applied for orders enforcing the judgment.  Both applications were heard by John Hansen J on 13 October 2008.  John Hansen J dismissed Ms Lee’s application for a stay and granted orders in favour of Village Lifestyles to enforce the judgment.

[11]     These orders left Village Lifestyles in a position to settle the transaction electronically through its own solicitors, but before that occurred Ms Lee agreed, through another solicitor, to settle voluntarily.  Settlement occurred on 23 October 2008.  Village Lifestyles paid the balance of the agreed price for the property, less the penalty interest which Ms Lee was ordered to pay, and is now the registered proprietor of the property. 

Submissions

[12]     Ms Lee submits that, because of her poor English, she did not realise that she had to pay security for costs but is ready willing and able to pay it immediately.  She submits that it would be unfair to strike out her appeal on the basis of a misunderstanding as to her obligations in relation to security for costs.  She also submits that her appeal has merit.  In support of that contention she sought leave on the day of the hearing to file an affidavit from another document examiner who opines that the signature on the 23 September 2005 agreement is not hers.  She had earlier sought leave to file an affidavit from a Ms Choi who was allegedly with Ms Lee at the time the 16 September agreement was signed.

[13]     Mr Rooney, for Village Lifestyles, opposes the filing of the new evidence on the basis that it could have been available for the hearing in the High Court and therefore is not fresh.  Further, the presence of Ms Choi at the signing of the alleged 16 September agreement has never been mentioned in any of Ms Lee’s previous affidavits.

[14]     Mr Rooney submits further that the appeal is totally without merit.  Ms Lee has never denied that she entered into an agreement to sell her property to Bala Holdings Limited for $9m (including GST).  She asserts, however, that the agreement she entered into was different from the one on which Village Lifestyles was granted summary judgment.  Ms Lee has never attempted to cancel the agreement she says she signed on 16 September 2005 (or the 23 September 2005 agreement) and indeed there would have been no grounds for her to do so. In Mr Rooney’s submission, Ms Lee was therefore liable to settle the sale when Village Lifestyles called for settlement on 7 February 2008 and, on her failure to settle, was herself in default.

[15]     He submits that, in the event that Ms Lee was able to persuade the Court that there was an arguable case that the 23 September 2005 agreement was a forgery, any entitlement (should her argument be upheld at trial) would be to late settlement interest against the original purchaser.  Mr Rooney points out that Village Lifestyles, as assignee, took only the benefit of the agreement, not its burden.  It follows that there could be no remedy available to Ms Lee against Village Lifestyles.

[16]     In addition, Mr Rooney points to evidence that Ms Lee at all times acted in reliance on the terms of the 23 September 2005 agreement.  In his submission, this is reflected in her initial approach to the evidence she filed in the High Court in her first two affidavits.  When those affidavits are scrutinised more carefully, he submits that it becomes apparent that Ms Lee’s unhappiness with the agreement arose, not because of the agreement itself or the price but because of the GST obligation she incurred when the agreement became unconditional.

[17]     Mr Rooney says that the agreement (even on Ms Lee’s version of it) provided for a significant delay between the agreement becoming unconditional and the settlement date (one year on Ms Lee’s version, over two years under the allegedly varied 25 September 2005 agreement).  Clause 12 of the standard terms of the agreement provides that, where GST is payable by the purchaser and where a GST date has not been inserted on the first page of the agreement, it is required to be paid by the purchaser to the vendor on the possession date.  In this case, no GST date was inserted on the front page of the agreement.  Thus, the purchaser did not have to pay GST to Ms Lee in this case until possession date, which coincided with settlement date in this case.  By contrast, GST became payable by the vendor, and claimable by the purchaser, when the agreement became unconditional, regardless of the time of settlement.

[18]     What occurred in this case was that the original purchaser, quite lawfully and properly, claimed a GST refund on the full price once the agreement became unconditional, even though only a small portion of the full price had been paid at that stage.  In Mr Rooney’s submission, Ms Lee’s mistake was that she overlooked her own obligation to pay the GST on the full amount, even though she herself had not been paid.  At no time has Ms Lee asserted that a GST date was inserted into the 16 September 2005 agreement.

Assessment

[19]     Ms Lee has had ample opportunity to take legal advice on both the procedural and substantive aspects of this appeal.  If she was having language difficulties, then she should have engaged an interpreter to translate the relevant court rules and the various documents sent to her regarding the appeal.  If she had done so, then her obligation to pay security for costs would have been obvious.

[20]     Ms Lee has already been granted an indulgence in relation to this application. When the matter was set down for hearing in March, it was adjourned to enable her to take legal advice.  There is no suggestion that she does not have the financial means to engage a lawyer or an interpreter.  Despite this, the Court provided an interpreter for her at the May hearing.

[21]     In light of the above factors, we do not consider that there is any proper excuse for Ms Lee’s failure to pay security for costs.   

[22]     Further, for the reasons advanced by Village Lifestyles, the appeal is without merit.  It remains without merit even if Ms Lee’s proposed new evidence were admissible (and it clearly is not as it is not fresh).  Ms Lee accepts that she agreed to sell the property.  The only thing she complains about is the timing of payments.  As Mr Rooney submits, even if she succeeds in the appeal, this could not lead to cancellation of the sale.  The only possible consequence would be late settlement interest, which would not be payable by Village Lifestyles in any event.

[23]     This would not address what appears to be Ms Lee’s true concern, her late payment of GST.  We agree with Village Lifestyles’ submission that Ms Lee had overlooked her legal obligation to pay GST in relation to the sale at the time the agreement became unconditional.  This was her own error and cannot be attributed to the original vendor and certainly not to Village Lifestyles.  Indeed, the same problem would have arisen even on the alleged 16 September 2005 agreement, given that she does not assert that there was a GST date in that agreement.

Result

[24]     The application for striking out the appeal is granted.  The appeal is struck out accordingly.

[25]     Costs are awarded to the respondent for a standard application on a Band A basis with usual disbursements.

Postscript

[26] After the hearing the respondent filed a memorandum setting out some matters relating to the credentials and suitability of the document examiner referred to at [12]. As we are of the view that the evidence is not admissible because it is not fresh, we do not need to address the issues raised in that memorandum.

Solicitors:
Callaghan & Co, Auckland for Respondent