Radics v Radics
[2023] NZHC 1759
•7 July 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2022-409-600
[2023] NZHC 1759
BETWEEN ELEANOR ROSE RADICS
Plaintiff
AND
DAMIEN LEE RADICS
Defendant
Hearing: 6 July 2023 Appearances:
D M Jackson for Plaintiff
No appearance for Defendant
Judgment:
7 July 2023
JUDGMENT OF ASSOCIATE JUDGE LESTER
RADICS v RADICS [2023] NZHC 1759 [7 July 2023]
[1] The plaintiff, Eleanor Radics (Eleanor), is the grandmother of the defendant, Damien Radics (Damien). Eleanor says that under pressure from Damien she sold her property in Rangiora to him in 2020. Eleanor provided 100 per cent vendor finance to Damien and that loan is recorded in a formal loan agreement which requires Damien to make monthly payments over a 30-year term, interest free.
[2] Damien has defaulted on his payment obligations under the loan agreement. Damien has for at least the last couple of years made no payments whatsoever.1 Eleanor says that, in practical terms, Damien has “gone off the rails” having got into drugs which compounded his mental health issues. Eleanor says Damien is living, as she understands it, as a vagrant on the streets of Sydney and she has not seen him for some time. Damien’s mother has no means of contacting Damien, albeit he contacts her from time to time.
[3] Prior to Damien going to Australia the wider family managed to get him, in September 2021, to sign an agreement for sale and purchase to transfer the Rangiora property back to Eleanor. I refer to this agreement as the “repurchase agreement”. Eleanor remains living in the property pursuant to a life interest which was part of her 2020 arrangement with Damien.
[4] The repurchase agreement is unconditional but has not settled given Damien has departed to Australia. Damien’s present lifestyle meant Eleanor was unable to serve Damien personally with her proceedings, which seek specific performance of her repurchase agreement. An order dispensing with service, albeit on conditions similar to an order for substituted service, was made.2
[5] An issue identified in the judgment dispensing with service was the interrelationship between Eleanor’s obligation to pay the purchase price under her repurchase agreement and the term loan entered with Damien. The two obligations are not expressed to cancel each other out. Accordingly, as matters stand, in order to obtain specific performance of the repurchase agreement Eleanor would have to pay
1 It seems Damien may have made a few initial monthly payments but at his request the payments were returned to him. I treat him as not having met any of the payments due under the loan agreement.
2 Radics v Radics [2023] NZHC 1337.
Damien the purchase price specified in the repurchase agreement (which is the same sum under which she sold the Rangiora property to Damien).
[6] To address that issue Eleanor has given notice to Damien cancelling the term loan agreement.
[7] I am satisfied that Damien has no arguable defence to Eleanor’s right to cancel. As I have said, no payments have been made under the term loan agreement. This represents a fundamental breach of obligation by Damien.
[8] Section 41 of the Contract and Commercial Law Act 2017 (the Act) provides that cancellation does not take effect until notice is given. However, s 41(1)(b)(i) provides:
41 When cancellation may take effect
(1)The cancellation of a contract by a party does not take effect—
…
(b)before the time at which the party cancelling the contract shows, by some clear means that is reasonable in the circumstances, an intention to cancel the contract, if—
(i)it is not reasonably practicable for the cancelling party to communicate with the other party;
…
[9] I am satisfied, given the circumstances leading to service being dispensed with, that it is not reasonably practicable for Eleanor to give notice cancelling the contract. That said, email notification of cancellation has been sent to an address previously used by Damien and, indeed, that is the email address specified for notices in the agreement for sale and purchase under which Damien purchased from Eleanor.
[10] The loan agreement having been validly cancelled means the Court has available to it the broad remedial provisions under s 43 of the Act. Section 43 provides:
43 Power of court to grant relief
(1)When a contract is cancelled by any party, the court may, if it is just and practicable to do so, make an order or orders granting relief under this section.
(2)The relief may be granted in the course of any proceeding or on application made for the purpose.
(3)An order under this section may—
(a)direct a party to pay to any other party the sum that the court thinks just (subject to section 35):
(b)direct a party to do or refrain from doing, in relation to any other party, any act or thing that the court thinks just:
(c)vest the whole or any part of any relevant property in a party:
(d)direct a party to transfer or assign the whole or any part of any relevant property to any other party:
(e)direct a party to deliver the whole or any part of the possession of any relevant property to any other party.
…
[11] Mr Jackson initially relied on ss 43(3)(c) and (d). However, I do not consider they apply as the contract that was cancelled did not of itself deal with the Rangiora property that is the “relevant property” referred to in the above section.
[12] The objective Eleanor seeks to achieve is to be able to meet her obligations to pay the defendant the purchase price under the reacquisition contract from the same amount owed to her by Damien.
[13] I am satisfied this is an appropriate case to make an order under s 43(3)(a) requiring Damien to repay to Eleanor the entire sum he borrowed from her to purchase the property. Again, that amount is the same amount Eleanor has to pay to reacquire the property. This order is consistent with what the loan agreement provides Eleanor can do in the event of breach as she has the ability to call up the entire balance in the event of default.
[14] The order I have made under s 43(3)(a) may be made subject to such terms and conditions as the Court thinks fit pursuant to s 44(1).
[15] I make a condition in respect of the s 43(3)(a) order that the amount due from Damien to Eleanor is to be set off by her against the amount she is obliged to pay Damien under her repurchase agreement.
[16] The intent of these orders is to permit Eleanor to apply the amount she is owed by Damien under the term loan agreement, which I have ordered is to be paid in full, against the purchase price she must pay Damien in order to obtain an order for specific performance under the present proceeding.
[17] These orders, as I have said, mean Eleanor is now in a position to settle the repurchase agreement. There is an order by way of specific performance that Damien settle the agreement for sale and purchase dated 29 September 2021. I record the purchase price to be paid by Eleanor is to be set off against the judgment in her favour entered against Damien above. Again, the amount to be paid by Eleanor under her repurchase agreement is the same amount as the judgment entered against Damien under the loan agreement.
[18] There is a further order that the Registrar of the High Court at Christchurch is appointed agent for Damien to complete on his behalf any documentation necessary to give effect to settlement of the agreement.
[19] Mr Jackson is to table draft proposed orders for consideration, which are to also address how the mechanics of the conveyancing from the vendor’s point of view are to be dealt with.
Costs sought
[20] The plaintiff has succeeded. There is an order of costs to the plaintiff on a 2B basis plus disbursements as fixed.
[21]Leave is reserved further for the plaintiff to apply to give effect to these orders.
Associate Judge Lester
Solicitors:
Brandts-Giesen McCormick Lawyers, Rangiora Copy to:
D Jackson, Christchurch
0