Mills v Feng - [2023] NZHC 2641

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2022-404-1909

[2023] NZHC 2641

BETWEEN
DAVID LAWRENCE MILLS and FIONNA

EILEEN MILLS as trustees of THE MILLS FAMILY TRUST
Plaintiffs

AND

WEIQIANG FENG (also known as BRIAN FENG)

First defendant

KAI WANG (also known as TONY WANG) Second defendant

Hearing: 14 September 2023

Appearances:

K Wendt for the plaintiffs

C Holland for the second defendant

Judgment:

21 September 2023

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 21 September 2023 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

MILLS and MILLS v FENG and WANG [2023] NZHC 2641 [21 September 2023]

[1] The plaintiffs entered into an agreement to sell their Meadowbank home to the first defendant, Mr Feng. Mr Feng nominated the second defendant, Mr Wang, as purchaser. Neither Mr Feng nor Mr Wang settled the purchase. The plaintiffs cancelled the agreement and re-sold their property. They incurred costs on the resale and achieved a price much lower than the price in the original agreement.

[2] The plaintiffs applied for summary judgment against Mr Feng and Mr Wang, claiming damages for the losses suffered from the defendants’ failure to settle the purchase. On 7 December 2022, Lang J granted the plaintiffs’ application.1 Judgment of just over $750,000 was entered against Mr Feng and Mr Wang.

[3] Mr Wang subsequently applied to set aside the judgment entered against him, on the ground he had not been served with the proceeding. Mr Wang’s application was granted, without opposition by the plaintiffs, on 17 July 2023.

[4] The plaintiffs’ summary judgment application against Mr Wang was re-heard before me. Mr Wang did not contest liability. For the most part he did not contest quantum. The only defence he raised was that the plaintiffs had failed to mitigate their loss.

[5] I am satisfied there is no real question to be tried on the mitigation issue raised by Mr Wang. Accordingly, I find he has no defence to the plaintiffs’ claim.

Factual background

[6]The following facts were not in dispute.

[7] The plaintiffs, who are husband and wife, owned a home in Meadowbank, Auckland. In 2021, they decided to sell their home and move to Christchurch. They put the property on the market in mid-2021. They engaged Matthew Gibson, of Ray White, as their real estate agent.

1 Mills v Feng [2022] NZHC 3278.

[8] At that time, Mr Feng and Mr Wang had a common intention to purchase properties together. One of the properties they were looking at was the plaintiffs’ property.

[9] Mr Wang negotiated with Mr Gibson for the purchase of the plaintiffs’ property. Those negotiations led to a sale and purchase agreement dated 18 October 2021. Although Mr Wang had been negotiating with Mr Gibson, Mr Feng was named as the purchaser on the agreement.

[10] The agreement was unconditional. The purchase price was $2,600,000 inclusive of GST (if any).…

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 Mills v Feng

Details

AGLC: Mills v Feng [2023] NZHC 2641
Case: [2023] NZHC 2641
Decision Date: 21 September 2023

CaseChat Overview and Summary

The plaintiffs, David Lawrence Mills and Fionna Eileen Mills, trustees of the Mills Family Trust, sued the first defendant, Weiqiang Feng, and the second defendant, Kai Wang, for their failure to settle the purchase of the plaintiffs' Meadowbank home. The plaintiffs had entered into a sale and purchase agreement with Mr Feng, who nominated Mr Wang as the purchaser. Neither Mr Feng nor Mr Wang settled the purchase, causing the plaintiffs to incur significant losses when they had to resell the property at a lower price. The plaintiffs sought damages for the losses they suffered due to the defendants' failure to settle.

The legal issues before the court were whether Mr Wang had a valid defence to the plaintiffs' claim and, if so, what the quantum of damages should be. The only defence raised by Mr Wang was that the plaintiffs had failed to mitigate their loss by declining his offer to purchase the property for $2,200,000. The court had to determine whether the plaintiffs' decision to decline Mr Wang's offer constituted a failure to mitigate their loss.

The court held that the plaintiffs were not required to accept Mr Wang's offer to mitigate their loss. The offer was made under conditions that exposed the plaintiffs to a significant risk of Mr Wang failing to settle, given his ongoing issues with selling his own property and obtaining finance. The court found that it was reasonable for the plaintiffs to decline the offer, as accepting it would have been unreasonable given the circumstances known to them at the time. The court concluded there was no real question to be tried on the mitigation issue and granted summary judgment against Mr Wang.

The court ordered Mr Wang to pay the plaintiffs damages of $613,070.40, contractual interest of $126,004.20, interest on the loss from the resale price under the Interest on Money Claims Act 2016, and costs. The court also directed that the charging order against Mr Wang's property and shares continue in effect. Mr Wang was to pay costs of $5,497 to the plaintiffs on the application to continue the charging order.

Orders