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Levin v West City Construction Ltd

Levin v West City Construction Ltd

Case [2014] NZCA 98 27 March 2014

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Implied Terms

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA326/2013
[2014] NZCA 98

BETWEEN	HENRY DAVID LEVIN AND DAVID STUART VANCE AS LIQUIDATORS OF ST GEORGE DEVELOPMENTS LIMITED (IN LIQUIDATION) Appellants
AND	WEST CITY CONSTRUCTION LIMITED Respondent

Hearing:	19 February 2014
Court:	O’Regan P, Stevens and Asher JJ
Counsel:	N H Malarao and K C Francis for Appellants P J Davey and C J Taylor for Respondent
Judgment:	27 March 2014 at 11 am

JUDGMENT OF THE COURT

A The appeal is allowed and the cross-appeal is dismissed.

BAn order is made setting aside the assignment of the North Shore City Council bond.
C        The respondent is to pay the amount of $104,350 to the appellants.
D        The appellants are to have costs on a standard appeal for one counsel on a band B basis in this Court and usual disbursements.
E        The order that the respondent was entitled to costs on a scale 2B basis together with disbursements in the High Court is quashed, and substituted by an order that the appellants as liquidators are entitled to costs on a scale 2B basis together with disbursements as fixed by the Registrar of the High Court.
FAny outstanding costs or interest issues are to be determined in the High Court.

____________________________________________________________________

REASONS OF THE COURT

(Given by Asher J)

Introduction

This case concerns the assignment of a bond as a method of payment for services provided by West City Construction Ltd (West City) to St George Developments Ltd (in liquidation) (St George). St George went into liquidation in January 2008 and the appellant liquidators say the assignment took place within the two year voidable transaction period. Associate Judge Abbott found it took place before the two year period began.[1] The issue is whether the assignment occurred by an oral agreement on 22 November 2005 as the Associate Judge found or later, when a deed of assignment was signed on 3 October 2006.
[1]Levin v West City Construction Ltd [2013] NZHC 929.
Messrs Levin and Vance submit that the Associate Judge was wrong in finding that there was an effective equitable assignment prior to 22 January 2006, the relevant date for voidable transactions. They claim that the date of the assignment was 3 October 2006, the date of a formal legal assignment, rather than 22 November 2005, the date of the alleged earlier oral agreement. On this basis they submitted the assignment was a voidable transaction and should be set aside.
The respondent, West City, submits that the Associate Judge was correct in finding that there was an oral assignment that occurred prior to 22 January 2006. It cross-appeals against the Judge’s finding that there was no defence available to West City under s 296(3) of the Companies Act 1993 if the assignment was on 3 October 2006, inside the two year period. It also cross-appeals on the basis that the Judge was wrong in indicating that if the…

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 Levin v West City Construction Ltd

Details

AGLC: Levin v West City Construction Ltd [2014] NZCA 98
Case: [2014] NZCA 98
Decision Date: 27 March 2014 at 11 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand was asked to determine the validity of an assignment of a bond between St George Developments Ltd (in liquidation) and West City Construction Ltd. The liquidators, Levin and Vance, argued that the assignment took place within the two-year voidable transaction period, while West City argued that the assignment occurred prior to the two-year period beginning. The Court had to decide whether the assignment was valid and if it occurred within the two-year voidable transaction period. The Court found that there was no valid assignment prior to 22 January 2006, and that the assignment on 3 October 2006 was a fresh transaction. The Court held that the assignment was a voidable transaction and should be set aside. The appeal was allowed and the cross-appeal was dismissed. West City Construction Ltd is ordered to pay $104,350 to the appellants, and the appellants are to receive costs on a scale 2B basis together with disbursements as fixed by the Registrar of the High Court.

Orders