Li v GSC Holdings Limited - [2018] NZHC 1769

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000172

[2018] NZHC 1769

BETWEEN
JINCHANG LI

Plaintiff

AND

GSC HOLDINGS LIMITED

Defendant

Hearing: 18 June 2018

Appearances:

S R G Judd and J Rafiei for the Plaintiff T J Herbert for the Defendant

Judgment:

17 July 2018

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 17 July 2018 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

William Gong Lawyers Ltd, Auckland Doug Cowan, Auckland

T J Herbert, Auckland S R G Judd, Auckland

LI v GSC HOLDINGS LTD [2018] NZHC 1769 [17 July 2018]

Introduction

[1] The plaintiff applies for summary judgment on part of his claim against the defendant.

[2] The basis of the plaintiff’s claim is an agreement to purchase one of the lots in the defendant’s proposed subdivision at Huapai entered into by the parties on 20 October 2015.1 The plaintiff claims he validly cancelled the agreement and is entitled to have his deposit of $46,800 refunded. He also seeks interest and costs.

[3]The application is opposed.

[4] Both sides rely on the terms of the agreement. Several terms at the heart of their argument featured prominently in their dealings leading up to the commencement of this proceeding. It is helpful to refer to them at the outset:

(a)Under cl 22(1)(a) the agreement was conditional on the defendant (as vendor) procuring a certificate for the subdivision under s 224 of the Resource Management Act 1991 (“s 224 certificate”) within two years of the date of the agreement.2 The special term was expressly inserted for the sole benefit of the defendant.

(b)Under cl 9.8(5), if the date for fulfilment of certain conditions (including special conditions) passed without the condition being fulfilled, either party was entitled to avoid the agreement by giving notice to the other at any time before the condition was fulfilled or waived. (Emphasis added).

(c)Under cl 44, the plaintiff was entitled to cancel the agreement by notice in writing if notice of satisfaction of the special term relating

1 The claim originally related to two agreements for sale and purchase for two lots. The plaintiff sought a refund of $963,600 for the deposits for the two lots (lots 29 and 30) plus interest and costs. It proceeds in relation to lot 30. This is on the basis that the part of the claim relating to lot 29 has been satisfied.
2 A s 224 certificate certifies compliance with the resource consent for the subdivision. It is a prerequisite obtaining titles for the new lots.

to the procuring of a s 224 certificate was not given by 4 pm on 30 November 2017. (Emphasis added).

Accepted background

[5] On 21 October 2017, two years had passed from the date of the agreement, the defendant had not procured the s 224 certificate. On 18 October 2017 (shortly before the expiry of that two year period),…

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: [2018] NZHC 1769
Decision Date: 17 July 2018

CaseChat Overview and Summary

In the High Court of New Zealand, the plaintiff, Jinchang Li, sought summary judgment against GSC Holdings Limited for the return of a deposit of $46,800, plus interest and costs, following the cancellation of an agreement for the sale of Lot 30 in a proposed subdivision at Huapai. The defendant opposed the application, arguing that its notice of waiver of a condition in the agreement rendered the plaintiff’s cancellation ineffective. The primary issue before the court was whether the defendant's notice of waiver was a legally available means to satisfy the condition in the agreement, thereby extinguishing the plaintiff's right to cancel.

The court held that the defendant's notice of waiver was not a legally available means to satisfy the condition in the agreement. The condition in question, which required the defendant to procure a s 224 certificate within two years, was for the sole benefit of the defendant. While it is generally accepted that a condition for the sole benefit of one party may be waived, the court found that waiver could not be a permissible means of satisfaction or fulfilment in this case. The procurement of a s 224 certificate was a prerequisite to the performance of the agreement, and without it, the agreement could not be completed. The court concluded that the defendant's purported waiver did not dispense with the requirement to procure a s 224 certificate. Therefore, the plaintiff's cancellation of the agreement on 30 November 2017 was effective.

The court granted the plaintiff's application for summary judgment. It ordered that the defendant pay the plaintiff $46,800, plus interest from 1 December 2017 until the judgment debt is paid in full, and the defendant's costs on a 2B basis together with disbursements to be fixed by the Registrar.

Orders