Memelink v Grindlay - [2014] NZHC 2009

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2013-485-9708 [2014] NZHC 2009

UNDER
the Law of Contract, the Contractual

Remedies Act 1979 and the Defamation
Act 1992

IN THE MATTER OF

a breach of contract and defamatory statements

BETWEEN

HARRY MEMELINK Plaintiff

AND

MALCOLM GRINDLAY First defendant

ROBYN GRINDLAY Second defendant

Hearing:
11 July 2014

Further submissions 18 and 23 July 2014

Appearances:

A J Pietras for the plaintiff
P Davidson for the defendants

Judgment:

22 August 2014

JUDGMENT OF CLIFFORD J

Introduction

[1] The plaintiff, Harry Memelink, is suing the first and second defendants, Malcolm and Robyn Grindlay, for breach of contract and defamation. It is the first of those causes of action that is relevant here.

[2] On 19 February 2014 Mr Memelink entered judgment by default against the
Grindlays in the sum of $185,000 for monies owing under the contract, interest on that amount at 6.5 per cent per annum thereafter until payment, and $5,970 for costs.

MEMELINK v GRINDLAY [2014] NZHC 2009 [22 August 2014]

[3] The Grindlays now apply to have that default judgment set aside.

Background

[4] Mr Memelink operated a scrap recycling business (the Business) through a company D M Recyclink Ltd (Recyclink). In April 2013 the Grindlays agreed to buy the Business by purchasing the shares in Recyclink and entering into a lease of premises owned by Mr Memelink, or a company owned by him, out of which Mr Memelink had operated the Business.

[5] The contract for the purchase of the shares in Recyclink recorded in a very simple agreement (the Share Contract) that:

(a) The purchase price for the shares was $200,000.

(b) The Grindlays were to pay a deposit of $20,000 on the settlement date

– 12 April 2013. Sixty per cent of the shares would then be transferred to them.

(c) The Grindlays would pay monthly instalments of $5,000 with the first two instalments (May and June presumably) satisfied by the payment of the deposit.

(d)The Grindlays would pay the final instalment of the outstanding balance of the purchase price by 12 April 2014, at which point the balance of the shares would be transferred to them.

[6] The Share Contract settled. The Grindlays in fact paid a deposit of $15,000, and took over the Business.

[7] Difficulties between the Grindlays and Mr Memelink arose. In November

2013 the Grindlays delivered a letter to Mr Memelink’s premises cancelling the Share Contract, and the lease. Shortly after Mr Memelink commenced these proceedings.

[8] Mr Memelink filed his statement of claim on 27 November 2013 and served it on Mr and Mrs Grindlay on 27 and 28 November 2013 respectively. As relevant, Mr Memelink pleaded that the Share Contract provided that:

(a) the plaintiff sells his 500 shares in DM Recyclink to the first and second defendants for the sum of $200,000 (the purchase price);

(b) settlement date for the sale is 12 April 2013;

(c) the first and second defendants must pay the plaintiff a deposit of
20,000;

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 Memelink v Grindlay

Details

AGLC: Memelink v Grindlay [2014] NZHC 2009
Case: [2014] NZHC 2009
Decision Date: 22 August 2014

CaseChat Overview and Summary

In the case of Memelink v Grindlay, the plaintiff, Harry Memelink, sued the defendants, Malcolm and Robyn Grindlay, for breach of contract and defamation. The dispute primarily concerns the first cause of action, breach of contract. The plaintiff, who operated a scrap recycling business, had agreed to sell the business to the defendants through the purchase of shares in a company, Recyclink, and a lease agreement. The contract stipulated a purchase price of $200,000, a deposit of $20,000, and monthly instalments of $5,000 until the balance was paid by April 2014. Following difficulties between the parties, the defendants repudiated the contract and sought to cancel it, leading to the plaintiff obtaining a default judgment for the full amount of $185,000. The defendants subsequently applied to set aside this judgment.

The court had to determine whether the default judgment could be set aside as it was not strictly in accordance with the plaintiff's statement of claim. The plaintiff's statement of claim sought enforcement of the contract, not damages for its cancellation. The contract allowed for payments to be made up until April 2014, but the judgment was entered for the full amount before this date. The court found that the judgment was irregularly obtained because it did not strictly follow the pleadings, as required by established legal principles and precedents. The court concluded that the Grindlays had a reasonable excuse for not filing a statement of defence and that there was an arguable defence to the claim, making it just to set aside the default judgment. The court set aside the judgment, ordered costs to lie where they fell, and allowed the defendants to file a statement of defence. The court also suggested that mediation might be an appropriate way to resolve the remaining disputes.

Orders