Sanderson v Neutze
[2019] NZHC 2471
•30 September 2019
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2019-419-0186
[2019] NZHC 2471
BETWEEN IAN SANDERSON and MARIANNE JEANETTE THORNE
PlaintiffsAND
PAUL JOHN NEUTZE
Defendant
Hearing: 30 September 2019 Appearances:
Ms L M Fischer for the Plaintiff No appearance for the Defendant
Judgment:
30 September 2019
ORAL JUDGMENT OF ASSOCIATE JUDGE SMITH
This judgment was delivered by me on 30 September 2019, pursuant to r 11.3 of the High Court Rules
Registrar/Deputy Registrar
Solicitors / Counsel:
Harkness Henry, Hamilton
Copy to:
Mr P Neutze
SANDERSON v NEUTZE [2019] NZHC 2471 [30 September 2019]
[1] This is an application by the plaintiffs for summary judgment. The proceeding was duly served on Mr Neutze, but the date of service did not allow Mr Neutze the required 25 working days before the hearing within which to file a notice of opposition. When the case was called on 19 August 2019, I adjourned the application to today's list. The plaintiffs have since advised Mr Neutze of the adjourned date.
[2] Notwithstanding the adjournment, Mr Neutze has not filed a notice of opposition or taken any other step in the proceeding.
[3] The proceeding arises out of an agreement for sale and purchase of certain land at Tamahere, under which the plaintiffs were the vendors and Mr Neutze was the purchaser. Mr Neutze failed to obtain finance by the agreed date, and an extension was sought and granted. On 11 March 2019 the defendant's solicitor confirmed that finance had been approved and that the agreement was unconditional. A deposit was payable that day, but it was never paid.
[4] On about 12 April 2019 the defendant advised through his solicitors that he was unable to settle. He requested an extension of time for settlement and the plaintiffs agreed to that on the basis that interest would be payable on the purchase price in the interim period.
[5] When the defendant failed to settle on the postponed settlement date, the plaintiffs issued a settlement notice under the agreement for sale and purchase, requiring the defendant's default to be remedied within 12 working days (on or before 9 May 2019).
[6] The defendant did not settle within the 12 working days, and the plaintiffs have now issued a proceeding against him seeking specific performance of the agreement. Because they believe he has no defence to their claims, they have applied for summary judgment.
[7] Originally, the statement of claim sought only an order for specific performance requiring the defendant to settle in accordance with the agreement, together with an inquiry into damages caused to the plaintiffs as the result of the
defendant's breach of the agreement. However, on 25 September 2019 Ms Thorne filed a further affidavit seeking to add certain additional claims for damages (broadly, rates and insurance payments in the period since settlement should have occurred). Those claims were not pleaded in the statement of claim, and the claim would need to be amended and re-served on Mr Neutze for them to be considered. I am not prepared to enter summary judgment on the unpleaded additional claims relating to rates and insurance (and also additional maintenance costs referred to by counsel in her memorandum dated 25 September 2019).
[8] However, it seems to me that the application for an order for specific performance requiring the defendant to settle in accordance with the agreement for sale and purchase should be granted.
[9] I note first that the agreement for sale and purchase specifically provided that one of the rights of the vendors on a failure of the purchaser to comply with a settlement notice, would be to seek an order for specific performance.
[10] Ms Fisher has referred me to the judgment of Hammond J in Butler v Countrywide Finance Ltd, where the learned Judge indicated that the adequacy or otherwise of damages for the plaintiff is no longer necessarily the "watershed", on which informed judicial decisions are to be made on specific performance claims.1 As I understand it, the Court has a discretion to act in the overall justice of the case, and may take into account all factors, including the following:
(a)Plaintiff autonomy.
(b)Economic efficiency.
(c)The relative severity of the remedy on the parties.
(d)The nature and right being supported by the remedy.
(e)The moral view to be attached to the interests at stake.
1 Butler v Countrywide Finance Ltd [1993] 3 NZLR 623 at 632 and 633.
(f)The effect of a given remedy on a third party (or the public).
(g)Difficulties of calculation.
(h)The practicability of enforcement.
(i)The conduct of the parties.
[11] The defendant has not put forward anything to suggest that he might suffer hardship, or that an order for specific performance might be regarded as unnecessarily severe. And factors such as plaintiff autonomy seem to me to favour the making of an order, especially when the parties have themselves agreed that the plaintiffs could seek specific performance in the event of default by the defendant. I do not understand that there are any third parties to be considered, or that there would be difficulties of calculation or in the practicability of enforcement.
[12] Furthermore, the conduct of the parties favours the plaintiffs. As the settlement notice produced by Mr Sanderson shows, they were ready willing and able to settle, and Mr Neutze, having initially indicated that finance was confirmed, has not offered any explanation for his failure to complete (at least to the Court).
[13] While specific performance in contracts relating to land may generally be considered to be a remedy more frequently sought by purchasers (on the basis that a piece of land is generally regarded as unique), the learned authors of Equity & Trusts in New Zealand note:2
Vendors are equally entitled to specific performance against defaulting purchasers and standard form contracts for sale and purchase of land commonly provide for such a remedy.
[14] In the absence of any defence from Mr Neutze, the provision in the contract entitling the plaintiffs to specific performance is an important consideration. In that regard, I note that the learned authors of Spry on Equitable Remedies say:3
2 Andrew Butler, Equity & Trusts in New Zealand, 2nd ed 2009, at 744.
3 Spry on Equitable Remedies (9th ed, 2014) at 79-80.
… So it is sometimes provided in a contract that the parties agree to its enforcement by specific performance or by an injunction. A stipulation of this kind does not limit the Court's discretion to grant or withhold specific relief, but it is a matter of importance to be taken into account in exercising that discretion. In particular the fact that specific performance has been adverted to and deliberately stipulated tends to diminish the weight of such considerations as hardship to the defendant, although those considerations do not become immaterial.
[15] As I have said, there is no evidence that an order will cause undue hardship to Mr Neutze in this case.
[16] I mention also that Ms Fisher did refer to me one authority in which an order for specific performance was made in favour of a plaintiff vendor under an agreement for sale and purchase of land. That was the decision of McKenzie J in BFMG Ltd v Speirs.4 The plaintiff's entitlement to an order for specific performance if the defendants' defences were rejected was not in fact disputed in that case, and accordingly there is no specific discussion of the circumstances in which a vendor is entitled to specific performance. The case may perhaps be noted simply for the fact that it appeared to have been accepted by experienced counsel that specific performance was available as a remedy for a vendor of land.
[17] For all of those reasons, I enter summary judgment for specific performance, requiring the defendant to settle in accordance with the agreement for sale and purchase. The plaintiffs may submit draft orders for my consideration, together with a memorandum setting out any necessary particulars or details of the specific performance order, within 5 working days.
[18] To the extent that the plaintiffs seek an inquiry as to damages and/or specific orders for damages, I do not consider those are matters to be dealt with on a summary judgment application. The summary judgment application will be dismissed to the extent that relief is sought additional to specific performance and costs.
4 BFMG Ltd v Speirs [2014] NZHC 2503.
[19] On the question of costs, there seems to me to be nothing out of the ordinary in this case. There will be an order for costs in favour of the plaintiffs on a 2B basis, plus disbursements to be fixed by the registrar.
Associate Judge Smith
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