Mao v Singh - [2022] NZSC 153

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI O AOTEAROA

SC 96/2022
[2022] NZSC 153

BETWEEN	XIEYAN MAO Applicant
AND	HARGUN SINGH Respondent

Court:	Glazebrook, O’Regan and Williams JJ
Counsel:	D Zhang and E Tie for Applicant M G Locke for Respondent
Judgment:	21 December 2022

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B The applicant must pay the respondent costs of $2,500.

____________________________________________________________________

REASONS

The applicant applies for leave to appeal against a judgment of the Court of Appeal dealing with a dispute about an agreement for sale and purchase (the agreement) under which the applicant agreed to sell a property in Auckland to the respondent for a price of $1.555 million.[1] The Court of Appeal dismissed an appeal from a judgment of the High Court, in which that Court made an order for specific performance of the agreement for sale and purchase in favour of the respondent.[2] The High Court ruled that the applicant’s purported cancellation of the agreement was ineffective.
[1]Mao v Singh [2022] NZCA 390, (2022) 23 NZCPR 477 (Kós P, Cooper and Courtney JJ) [CA judgment].
[2]Singh v Mao [2021] NZHC 1959 (Associate Judge Bell) [HC judgment].
The facts are set out in some detail in the Court of Appeal judgment, and it is not necessary to repeat them here.[3] The essence of the dispute was that the agreement provided for the applicant to transfer the property with vacant possession, but the house on the property was, in fact, subject to a fixed term tenancy that did not expire until almost a year after the date of the agreement. As the property was marketed as a development site, a failure to deliver the property with vacant possession was a significant issue for the respondent. The tenants agreed to vacate early but only on payment of $18,000.
[3]CA judgment, above n 1, at [3]–[26].
There were exchanges between the parties’ respective solicitors in relation to the problem caused by the tenancy, which included offers by the respondent to defer settlement to allow the applicant to arrange vacant possession. However, the applicant insisted on settlement, even though she could not deliver the property with vacant possession. She did not accept any obligation to deal with the tenants and arrange for them to vacate the property. She issued a settlement notice, requiring settlement without vacant possession.[4]
[4]In the Court of Appeal she conceded she was, in fact, required to give vacant possession, but she had maintained the opposite position until then, including in argument in the High Court: at [52] of the CA judgment, above n 1.
The respondent thereupon served a settlement notice on the applicant, requiring settlement with vacant possession, as required by the agreement.
The applicant then purported to cancel the agreement for non‑compliance with her settlement notice. Some months later the respondent commenced proceedings in the High Court for specific performance of the agreement.
The applicant argued in the Court of…

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 Mao v Singh

Details

AGLC: Mao v Singh [2022] NZSC 153
Case: [2022] NZSC 153
Decision Date: 21 December 2022

CaseChat Overview and Summary

In the Supreme Court of New Zealand, Xieyan Mao, the applicant, sought leave to appeal against a decision of the Court of Appeal, which had upheld a judgment of the High Court that ordered specific performance of an agreement for sale and purchase in favour of Hargun Singh, the respondent. The agreement concerned the sale of a property in Auckland for $1.555 million. The central dispute was whether Mao was required to transfer the property with vacant possession and whether she could effectively cancel the agreement when she could not deliver the property as required. The High Court ruled that Mao's cancellation was ineffective, and the Court of Appeal dismissed her appeal.

The legal issues before the Supreme Court focused on the interpretation of the agreement, particularly clause 10, which provides a process for resolution of claims by a purchaser for breach in circumstances where the purchaser has not purported to cancel the agreement. Mao argued that the Court of Appeal's analysis was inconsistent with previous judgments, such as Holmes v Booth and Property Ventures Investments Ltd v Regalwood Holdings Ltd, and that the Court of Appeal's decision in Yu v Bradley was contradictory. The Court of Appeal had found that the respondent's tender of settlement would have been futile due to Mao's intransigent position on settlement despite the property being tenanted.

The Supreme Court considered Mao's arguments but concluded that the proposed appeal had insufficient prospects of success. The Court found that Mao's insistence on settlement despite the property being tenanted made the factual finding of her unwillingness to settle inevitable. While the interpretation of the agreement may have commercial significance, the Court did not consider it appropriate to address it in this particular factual setting. Therefore, the criteria for leave to appeal under section 74 of the Senior Courts Act 2016 were not met, and the application for leave to appeal was dismissed. Mao was ordered to pay the respondent costs of $2,500.

Orders