Murray v McIlroy - [2016] NZHC 2877

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-001338

CIV-2016-404-002256 [2016] NZHC 2877

BETWEEN
ANDREW SPENCER MURRAY

Plaintiff

AND

LEWIS ROBERT MCILROY Defendant

Hearing: 15 November 2016

Appearances:

David Beard for the Plaintiff
James LaHatte for the Defendant

Judgment:

30 November 2016

JUDGMENT OF MOORE J

This judgment was delivered by me on 30 November 2016 at 3:30 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar
Date:

MURRAY v MCILROY [2016] NZHC 2877 [30 November 2016]

Introduction and background

[1] The plaintiff, Mr Murray, is a real estate agent. In early 2013 he had completed his branch manager’s examinations but needed to pass a number of further papers in order to obtain his real estate agent’s licence. He had been working as a salesman at a local branch of a national agency.

[2] However, he decided to set up his own business as a real estate agent and for this purpose set up a company known as The Apartments Specialists (2013) Limited (“the company”). The new business would focus on the marketing, sale and lease of apartments in the Auckland market.

[3] However, before he was lawfully entitled to practice on his own he was required, through the operation of the Real Estate Agents Act 2008 (“the Act), to engage a licensed agent to supervise him and administer the trust account pending completion of his qualifications. Once qualified the Act would permit him to undertake these tasks himself without the statutory requirement of supervision or oversight of a fully licensed agent.

[4] For the purposes of selecting a suitable licensed agent Mr Murray met and interviewed a number of prospective agents including the defendant, Mr McIlroy. He decided to engage Mr McIlroy because he lived locally, appeared to have an extensive knowledge and experience of apartments and had previously operated two LJ Hooker branch offices.

[5] The agreement reached between Mr Murray and Mr McIlroy was that in exchange for Mr McIlroy’s services Mr Murray would pay him 10 per cent of the gross of all sales made by the business. The agreement was concluded on or around
23 May 2013. It was sealed with a handshake and never reduced to writing. Mr Murray states that he intended Mr McIlroy would continue in this role until at least when Mr Murray had completed his qualifications and was able to operate to the business on his own.

[6] It appears the arrangement initially worked well and amicably. Mr McIlroy managed the trust account and the paying of commissions to the company and other

contractors. Mr Murray effectively ran the balance of the business. Apparently the new business grew very well and was highly profitable.

[7] However in July 2015, at a meeting convened to discuss the issue, Mr Murray raised with Mr McIlroy the question of reducing his percentage. It seems this suggestion was driven by Mr Murray’s concern that Mr McIlroy’s actual contribution to the business was limited and would be more appropriately reflected…

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 Murray v McIlroy

Details

AGLC: Murray v McIlroy [2016] NZHC 2877
Case: [2016] NZHC 2877
Decision Date: 30 November 2016

CaseChat Overview and Summary

In the High Court of New Zealand, Andrew Spencer Murray, the plaintiff, brought an action against Lewis Robert McIlroy, the defendant, in relation to a business arrangement between the two men. Mr Murray, a real estate agent, engaged Mr McIlroy as a licensed agent to supervise him and administer the trust account pending completion of his qualifications. The agreement between them was that Mr Murray would pay Mr McIlroy 10 per cent of the gross of all sales made by the business. The court had to decide whether to set aside the judgment by default and whether to grant a freezing order. In relation to the application to set aside the default judgment, the court held that it was not just in all the circumstances to set aside the judgment as the failure of Mr McIlroy to defend the proceeding was not excusable and he had not demonstrated a substantial ground of defence. In relation to the freezing order, the court held that the application should be dismissed as there was no real risk of dissipation of the assets. The application to set aside the default judgment and the application for freezing orders were both dismissed.

Orders