Lu v Wila Developments (Ormiston) LP - [2024] NZHC 838

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-000584

[2024] NZHC 838

BETWEEN
HAO YUAN LU

First Plaintiff

UNICON CONSTRUCTION LIMITED
Second Plaintiff

JIAXI WONG
Third Plaintiff

YAO CHEN as trustee of VICTORIA CHEN TRUST

Fourth Plaintiff

YAO CHEN as trustee of VICTORIA CHEN TRUST and HE XIANG ZHANG

Fifth Plaintiffs

AND

WILA DEVELOPMENTS (ORMISTON) LP

Defendant

Hearing: 18, 19 and 21 March 2024

Counsel:

S E Wroe, J P G Mackie and X Zhang for Plaintiffs T P Mullins and R M Keane for Defendant

Judgment:

18 April 2024

JUDGMENT OF LANG J

This judgment was delivered by Justice Lang
On 18 April 2024 at 11.00 am Pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar

Date:………………………

Solicitors/counsel:
Zhang Law/S Wroe/J P G Mackie, Auckland Lee Salmon Long, Auckland

LU v WILA DEVELOPMENTS (ORMISTON) LP [2024] NZHC 838 [18 April 2024]

Table of Contents

The subdivision process [10]

PART A: The plaintiffs’ claims [17]

The agreements for sale and purchase  [17]
Was Wila entitled to cancel the agreements on the basis that new titles had not issued by 31 March 2021?  [18]
Relevant principles  [18]

The steps that the plaintiffs contend Wila failed to take in breach of its

obligations under the agreement  [23]
Failing to communicate with the Council more regularly and with greater urgency between 20 January and 31 March 2021 regarding the status of its application for a s 224 certificate  [27]
Failure to pay the developer contribution and bonds in a prompt and timely manner       [54]

The developer contribution [54]

The bond payments [60]

Failure to advise the Council of the existence of the sunset clause [61]

Conclusion [65]

Was Wila also entitled to cancel the agreements on the basis that the plaintiffs had lodged caveats against the title to its property? [66]

Did Wila affirm the agreements after receiving advice that Mr Lu had registered the caveat? [85]
Is Wila entitled to enforce the forfeiture of the deposits for breach of cl 28.1?
[88]

PART B: Wila’s Counterclaim [96]

The law [97]

The events that underpin the claim for compensation [100]

Analysis  [107]
Result  [117]
Costs  [119]

[1] The plaintiffs in this proceeding either agreed or were nominated to purchase sections in a residential subdivision being undertaken by the defendant, Wila Developments (Ormiston) LP (Wila). Wila is a limited partnership, of which Wila (Ormiston) Ltd is the general partner. Mr Guoxiong (Kenny) Li is the director of Wila (Ormiston) Ltd and, in that capacity, he supervised the sale of sections in the subdivision to third parties.

[2] When sections in the subdivision were sold, the agreements for sale and purchase contained a “sunset clause”. This gave both parties the right to terminate the agreement if certificates of title to the newly created sections had not issued by 31 March 2021. If either party exercised this power, Wila was required to refund the deposit paid by the purchaser together with accrued interest. 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 Lu v Wila Developments (Ormiston) LP

Details

AGLC: Lu v Wila Developments (Ormiston) LP [2024] NZHC 838
Case: [2024] NZHC 838
Decision Date: 18 April 2024

CaseChat Overview and Summary

The plaintiffs, who had entered into agreements to purchase sections in a residential subdivision, sought the return of their deposits and damages for losses suffered as a result of the defendant, Wila Developments (Ormiston) LP, cancelling the agreements. They alleged that Wila was not entitled to cancel the agreements because it had failed to take steps reasonably necessary to ensure that new titles were issued by the sunset date. They also contended that Wila was not entitled to cancel the agreements on the ground that they had lodged caveats against the title to Wila’s property. Wila counterclaimed for compensation under s 148 of the Land Transfer Act 2017 for the legal costs and penalty interest it was required to pay to purchasers of sections that it re-sold to third parties. The court found that Wila was entitled to cancel the agreements because it had not breached its obligations under the agreements to take all steps reasonably necessary to ensure that new titles were issued by 31 March 2021. It was also entitled to cancel the agreements on the ground that the plaintiffs had lodged caveats against the title to Wila’s property. The court found that Wila was entitled to enforce the forfeiture of the deposits for breach of a clause prohibiting the purchasers from lodging caveats against the title to the property. The court found that the plaintiffs were not entitled to compensation for the loss of their deposits because they did not have reasonable cause to lodge the caveats. The court ordered that Wila was entitled to compensation from Unicon, one of the purchasers, for the legal costs and penalty interest it incurred as a result of the caveats being lodged. The court dismissed the plaintiffs’ claims and ordered that Wila was entitled to costs against the plaintiffs.

Orders