Mahon v Edney - [2018] NZHC 1473

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-993

[2018] NZHC 1473

BETWEEN
NEVILLE CHRISTOPHER MAHON

First Plaintiff

CORONATION ROAD HOLDINGS LIMITED
Second Plaintiff

AND

TIMOTHY LAIRD EDNEY

First Defendant

THE STATION AT WAITIRI LIMITED

Second Defendant

Hearing: 14 – 18 May 2018

Counsel:

D J Cooper and A M Glenie for Plaintiffs

D J Chisholm QC and M J W Lenihan for Defendants

Judgment:

20 June 2018

JUDGMENT OF WHATA J

This judgment was delivered by me on 20 June 2018 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors: Anderson Creagh Lai Limited, Auckland
Brown Partners, Auckland

MAHON v EDNEY [2018] NZHC 1473 [20 June 2018]

[1] Mr Mahon is a property developer. Mr Edney is a commercial property investor. In January 2016, Mr Mahon’s company, Coronation Road Holdings Ltd (Coronation) assigned its right to purchase five properties in Queenstown to Waiwhakatu Ltd (Waiwhakatu), a company owned by Mr Edney. Mr Mahon claims that the assignment took place on the basis that the properties would be transferred back to him. This never happened. Mr Mahon therefore sues Mr Edney and the present owner of the properties, The Station at Waitiri Ltd (Waitiri), for its return and/or damages.

Background

[2] On 25 June 2015, Coronation entered into an agreement to purchase five properties located on Park Street, Queenstown, from Domicile Developments Ltd. At that time, settlement was to be on 30 November 2015. The purchase price was $5m, with a deposit of $300,000 payable when the agreement became unconditional. Mr Mahon subsequently obtained two extensions, ultimately coming to an agreement that the sale would settle on 27 January 2016, with a deposit to be payable on 19 December 2015.

[3] In mid-October, Mr Mahon sought out Mr Edney for assistance in purchasing the property. This culminated in a meeting in mid- December 2015. Mr Mahon insists that at the meeting in December 2015 a clear agreement was reached in the following terms:

(a)Under the Park Street Sale and Purchase Agreement, he would nominate a special purpose vehicle associated with Mr Edney to settle the transaction on 27 January 2016.

(b)Mr Edney would pay the purchase price and acquire the legal title.

(c)Mr Edney would hold the properties (i.e. warehouse them).

(d)Mr Mahon would exercise an option to purchase the special purpose vehicle holding the Park Street properties by giving notice of the date on which the shares in the vehicle were to be transferred.

(e)In consideration for the warehousing, Mr Edney would receive the purchase price ($5m) plus either:

(i)A sum representing 15 per cent internal rate of return on his investment during the warehousing period, less any rental and, in any event, no less than $200,000; or

(ii)An apartment in the complex he would then purchase at cost.

[4] I will refer to this as the alleged December agreement. This is not accepted by Mr Edney. I return to this…

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 Mahon v Edney

Details

AGLC: Mahon v Edney [2018] NZHC 1473
Case: [2018] NZHC 1473
Decision Date: 20 June 2018

CaseChat Overview and Summary

The plaintiffs, Neville Mahon and Coronation Road Holdings Limited, brought an action against the defendants, Timothy Edney and The Station at Waitiri Limited, seeking the return of five properties in Queenstown or damages in lieu. The plaintiffs' claims were based on breach of contract, common intention constructive trust, equitable estoppel, and quantum meruit. The court dismissed all claims except for the claim in quantum meruit, for which the court granted leave to the parties to confer on quantum and seek further time to be heard if necessary. The defendants were awarded costs on a 2B basis, with disbursements to be fixed by the registrar, less 10 per cent to account for the success on the quantum meruit claim. The court found that there was no agreement, representation, or common intention to deal with the Park Street properties on specified terms, but rather an informal understanding that the plaintiffs were to be afforded an opportunity to purchase the properties or the special purpose vehicle holding them, which was given. The court found it unjust to permit the defendants to benefit from the plaintiffs' efforts in developing the properties without reimbursing them for their efforts.

Orders