Mockingbird Properties Limited v Jhim Homes Limited - [2023] NZHC 737

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV2022-404-2242

[2023] NZHC 737

BETWEEN
MOCKINGBIRD PROPERTIES LIMITED

Plaintiff

AND

JHIM HOMES LIMITED

First Defendant

LASHMAN RAM JHIM

Second Defendant

Hearing: 7 March 2023

Appearances:

P Muir for the Plaintiff

D G Collecutt for the Liquidator of the First Defendant No appearance by or for the Second Defendant

Judgment:

4 April 2023

JUDGMENT OF GAULT J

This judgment was delivered by me on 4 April 2023 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:
Mr P Muir and Mr D Hoskin, Steindle Williams Ltd, Auckland Mr D G Collecutt, Barrister, Auckland
Mr T Meggitt (liquidator’s instructing solicitor), SDM Law, Auckland

MOCKINGBIRD PROPERTIES LTD v JHIM HOMES LTD [2023] NZHC 737 [4 April 2023]

[1] The plaintiff applies for summary judgment against the first defendant to recover losses following the first defendant’s failure to settle on the purchase of a property at 32 Heathdale Crescent, Papakura, Auckland.1 The plaintiff also claims against the second defendant for inducing the breach of contract but does not seek summary judgment against the second defendant.

[2]On 6 December 2022, a freezing order was made on a Pickwick basis.2

[3] On 19 December 2022, the first defendant was placed into liquidation by shareholders’ resolution.

[4] The plaintiff seeks leave to continue the summary judgment proceeding against the first defendant.

[5]The liquidator abides the Court’s decision as to:

(a)whether leave should be granted to continue with the claim against the first defendant; and

(b)if leave is granted, what quantum should be awarded in relation to the core claim, interest and costs.

Factual background

[6]The plaintiff is the owner of the property.

[7] The property was listed for sale by auction on 9 November 2021. The second defendant, the sole director of the first defendant, signed an auction bidding registration form. The first defendant agreed to purchase the property for $1,108,000 with a settlement date of 9 May 2022.

[8] In subsequent correspondence, there were requests to vary the terms of the agreement, but no variation was agreed.

1 Record of Title NA68C/400, Lot 4 DP 119307.
2 Mockingbird Properties Ltd v Jhim Homes Ltd [2022] NZHC 3247.

[9] On 9 May 2022, the plaintiff’s lawyer confirmed to the defendants’ lawyer that the plaintiff was ready, willing and able to settle and served a settlement undertaking.

[10]The first defendant failed to settle on the settlement date.

[11]On 10 May 2022, the plaintiff’s lawyers served a settlement notice.

[12] The first defendant did not settle its purchase of the property within 12 working days of the date of the settlement notice or subsequently.

[13] On 4 July 2022, the plaintiff’s lawyer emailed the defendants’ lawyer cancelling the agreement.

[14] The plaintiff relisted the property for sale by auction. On 12 July 2022, following an auction, the plaintiff entered into an agreement for sale and purchase of the property with…

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.

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Details

Case: [2023] NZHC 737
Decision Date: 4 April 2023

CaseChat Overview and Summary

Mockingbird Properties Limited applied for summary judgment against Jhim Homes Limited and Lashman Ram Jhim for losses following the failure of Jhim Homes Limited to settle on the purchase of a property. The plaintiff also claimed against Lashman Ram Jhim for inducing the breach of contract. The first defendant was placed into liquidation, and the liquidator did not object to the plaintiff continuing the summary judgment proceeding. The court considered whether to grant leave to continue the proceedings against the first defendant, taking into account various factors including the amount and seriousness of the claim, and whether the liquidator is likely to require the claim to be proved.

The court found that leave should be granted for the following reasons: the claim was not clearly unsustainable; the proceeding would not produce an advantage to the plaintiff over other creditors; assets of the company in liquidation would not be dissipated in wasteful litigation; and the inter-related nature of the claims against the first and second defendants meant that the first defendant’s breach was a necessary prerequisite to the claim against the second defendant. The court granted leave for the plaintiff to continue the claim for summary judgment only, and left the freezing order stayed.

The court's decision was that leave should be granted to continue with the claim against the first defendant for summary judgment only, and leave the freezing order stayed. The court did not determine the quantum that should be awarded in relation to the core claim, interest, and costs.

Orders