Marsh v Goldline Properties Limited - [2023] NZHC 281

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-2356

[2023] NZHC 281

IN THE MATTER Section 143 of the Land Transfer Act 2017

AND

IN THE MATTER

of an application that caveats 126191304.1, 12619253.1, 12619312.1 and 12619325 not

lapse

BETWEEN

MAREE DAWN MARSH

Applicant

AND

GOLDLINE PROPERTIES LIMITED

Respondent

Hearing: 14 February 2023

Appearances:

T O Rea for Applicant

D G Collecutt for Respondent

Judgment:

23 February 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(application that caveats not lapse)

This judgment was delivered by me on 23 February 2023 at 4:00pm Pursuant to Rule 11.5 High Court Rules

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

MARSH v GOLDLINE PROPERTIES LIMITED [2023] NZHC 281 [23 February 2023]

[1] By four contracts made mid-2020, Ms Marsh purchased four vacant lots from Goldline Properties Limited (Goldline). The contracts were subject to a number of conditions.

[2] Goldline had engaged a real estate agency called “Counties Realty Limited”, of which a Mr Ian Croft was the director and licensee. Ms Marsh intended to relocate houses on to the lots and on-sell the lots for a profit. However, within a relatively short period of time after entering into the contracts, Ms Marsh realised she would not be able to organise the finance to complete the project.

[3] Ms Marsh explains in her affidavit that she had known Mr Croft for a number of years. Mr Croft had previously acted as Ms Marsh’s real estate agent on the sale of properties and she had previously purchased properties where Mr Croft had acted for the vendor. Ms Marsh explains she knew Mr Croft also had experience in property development. At the time Ms Marsh entered into the four contracts, she said she expected Mr Croft would have some involvement in her planned property development but only to the extent that he would advise her as a consultant on developing the properties and that he may well act for her when she came to re-sell the properties. If that was the case, Mr Croft would be paid by way of commission in the usual way.

[4] However, when Ms Marsh realised she was unable to arrange sufficient finance for the project, she contacted Mr Croft some weeks after the contracts were signed. From that contact, a joint venture agreement between them was entered, recorded in a one page document dated 29 July 2020.

[5] Ms Marsh is adamant that at the time of her purchase, there was no intention that Mr Croft or his company would have any legal or beneficial interest in the properties. She maintains that there had been no discussion prior to the contracts with Mr Croft about him being involved in the purchase.

[6] I note here that the joint venture agreement, in its original form, is between Ms Marsh and Mr Croft, but that was later amended to refer to Mr Croft’s company, One Property & Co Ltd. The amendment seems to have been initialled. Mr…

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 Marsh v Goldline Properties Limited

Details

AGLC: Marsh v Goldline Properties Limited [2023] NZHC 281
Case: [2023] NZHC 281
Decision Date: 23 February 2023

CaseChat Overview and Summary

The High Court of New Zealand heard an application by Maree Dawn Marsh to prevent the lapse of caveats she had entered on four properties she had contracted to purchase from Goldline Properties Limited. The dispute centred on whether the contracts were made in contravention of the Real Estate Agents Act 2008, specifically section 134, which prohibits a real estate agent from acquiring an interest in property they are acting on behalf of a client to sell. The central issue was whether the contracts could be cancelled because the agent, Ian Croft, entered into a joint venture with Marsh after the contracts were signed but before settlement, thereby acquiring an interest in the land.

The court examined the meaning and application of section 134(4), which allows a client to cancel a contract if it was made in contravention of section 134(1) or brought about by agency work in contravention of section 134(2). Marsh argued that the contracts were not made in contravention of section 134(1) because there was no intention for Croft to acquire an interest in the properties at the time of signing. Goldline contended that the contracts were made in contravention because Croft’s later involvement through the joint venture agreement meant he acquired an interest. The court held that the contracts were assessed at the time they were made, and since there was no intention for Croft to acquire an interest then, section 134(4)(a) did not apply.

Regarding section 134(4)(b), the court ruled that a contract could only be brought about in contravention of section 134(2) if there was a breach of that section at the time the contract was made. Since Croft’s interest arose after the contracts were made, the court found that section 134(4)(b) did not permit cancellation for post-contract acquisition of interest. The court concluded that section 134(4) does not provide a vendor with the right to cancel for any breach of fiduciary duty but only for breaches occurring at the time the contract was made or brought about.

The court granted Marsh's application to sustain the caveats, holding that the joint venture did not entitle Goldline to cancel the contracts under section 134. The court also ordered that costs should follow the event on a 2B basis unless submissions on costs were filed within five working days.

Orders