Nakhle v Nadin-Harvey - [2023] NZHC 1904

ORDER SUPPRESSING THE RESERVE PRICE SPECIFIED IN PARAGRAPH 26 PENDING AN UNCONDITIONAL SALE AND PURCHASE AGREEMENT IN RESPECT OF THE SUBJECT PROPERTY.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-000376

[2023] NZHC 1904

UNDER
Part 12 of the High Court Rules and

Sections 339–343 of the Property Law Act 2007

IN THE MATTER OF

an application for an order for the sale of a property

BETWEEN

DAVID ELIAS NAKHLE

Plaintiff

AND

JOEL MICHAEL NADIN-HARVEY

Defendant

Hearing: 19 July 2023

Appearances:

M Singh and P S Kim for Plaintiff M T R Campbell for Defendant

Judgment:

25 July 2023

REDACTED JUDGMENT OF MUIR J

This judgment was delivered by me on 25 July 2023 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

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

NAKHLE v NADIN-HARVEY [2023] NZHC 1904 [25 July 2023]

Introduction

[1] Mr David Nakhle and Mr Joel Nadin-Harvey are tenants in common in equal shares in a Campbells Bay property, which they purchased as an investment in July 2021. They planned to live in the property for a period of time before selling it for an expected profit.

[2] Approximately a year after the purchase, personal differences resulted in Mr Nakhle moving out the property, and subsequent attempts to negotiate a sale to Mr Nadin-Harvey were unsuccessful. In February 2022, Mr Nakhle applied by way of summary judgment for orders under s 342 et seq of the Property Law Act 2007 (PLA).

[3] The written submissions filed by the parties indicated substantial agreement in relation to the necessity for a sale and in respect of proposed methodology. During the course of discussions on the day of the hearing, all further terms were agreed but for two relatively minor matters relating to the quantum of occupation rent payable by Mr Nadin-Harvey over two defined periods. The parties asked me to adjudicate on these reserved issues. Mr Nakhle also seeks an award of costs on the application which Mr Nadin-Harvey opposes, and again my decision is required in that respect.

[4] Against this background, it is not necessary for me to embark on a substantive s 342 analysis. The orders that I make are by consent except in the very limited areas identified.

Quantum of occupation rent

[5] Mr Nakhle vacated the property on 16 July 2022. From 28 September 2022, Mr Nadin-Harvey commenced paying an occupation rent premised on a rental value for the property of $1,150 per week, which was the sum agreed by the parties. The accounting was handled “internally” in the sense that Mr Nakhle’s half share of this sum was credited against his liability for outgoings (primarily mortgage interest but also rates and insurance).

[6] During the course of discussions on the day of hearing, Mr Nadin-Harvey, responsibly in my view, agreed to backdate his rental liability to the date on which he assumed sole occupation (16 July 2022). The relevant sum is quantified in order 10(b)(i)…

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 1904
Decision Date: 25 July 2023

CaseChat Overview and Summary

Mr David Nakhle and Mr Joel Nadin-Harvey, who own a Campbells Bay property jointly, sought an order for the sale of the property and the resolution of certain outstanding issues. The primary legal issues before the court were the determination of the fair occupation rent for the property for two defined periods and the quantum of costs to be awarded to the plaintiff. The court considered the submissions and evidence provided by both parties, including an appraisal by Cooper & Co Limited, trading as Harcourts, which estimated the market rent for the property.

The court determined that the fair occupation rent for the first period (1 February 2023 to 19 July 2023) should be $1,250 per week, and for the second period (20 July 2023 onwards) should be $1,300 per week. The court based its decision on the rapid increase in interest rates, the continuing inflationary environment, and the discounts considered appropriate for continuity of rent in a private agreement. The court also assessed the costs, considering the negotiations that took place before the proceedings were issued, and concluded that the plaintiff was justified in issuing the proceedings. The court awarded costs to the plaintiff, reducing the quantum by 30 per cent to reflect the settlement achieved between the parties.

The court made several orders, including the sale of the property by auction, with a reserve price to be kept confidential pending an unconditional sale. The parties were required to share the costs of the sale and contribute equally to the mortgage interest and other outgoings until the settlement. The net proceeds from the sale were to be divided equally between the parties, after deducting costs and other liabilities. The court also granted leave for either party to apply for further directions or variations of the orders if necessary.

Orders