SB Properties Ltd (in liq) v Holdgate - [2009] NZCA 327

For a Court ready (fee required) version please follow this link

IN THE COURT OF APPEAL OF NEW ZEALAND
CA453/2008
[2009] NZCA 327
BETWEENSB PROPERTIES LIMITED (IN LIQUIDATION)

Appellant

ANDANDREW NICHOLAS HOLDGATE

First Respondent
ANDTHE OFFICIAL ASSIGNEE

Second Respondent

Hearing:19 May 2009

Court:Baragwanath, Hugh Williams and Winkelmann JJ
Counsel:R B Hucker and L F A Yaqub for Appellant

P L Rice for First Respondent
G S Caro for Second Respondent

Judgment:24 July 2009 at 3pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant is ordered to pay the first respondent costs for a standard appeal on a band A basis and usual disbursements

____________________________________________________________________
REASONS OF THE COURT
(Given by Baragwanath J)
[1]       The primary issue on this appeal concerns the effect of an assignment by a building contractor, JR Construction Ltd (JRC), to its contracts manager, Mr Holdgate, of “all its rights, title and interest” in a contract to perform site works on premises at Mt Wellington, Auckland for SB Properties Ltd (SBP). Both companies are now in liquidation and Mr Holdgate is bankrupt.
[2]       SBP claims that the combined effect of the assignment and s 11 of the Contractual Remedies Act 1979 (CRA) was to impose JRC’s obligations on Mr Holdgate, so that it can recover from him damages for breach of JRC’s obligations.
[3]       In the High Court Courtney J gave judgment in favour of Mr Holdgate: (Holdgate v Blocassa Ltd HC AK CIV-2005-404-002693 4 July 2008). SBP now appeals to this Court.
Context
[4]       SBP claimed JRC had refused to complete its work. SBP gave notice purporting to terminate the contract.
[5]       Having been called on to meet guarantees of JRC’s debts, Mr Holdgate took the assignment from JRC. No notice of the assignment was given to SBP. SBP claimed that it was obliged to engage a substitute contractor to complete the contracts and to perform necessary remedial work at a cost $130,195 greater than JRC’s price.
[6]       Learning of the assignment, SBP claimed that sum from JRC as damages. Because JRC was in liquidation, SBP contended that s 11 of the CRA entitled it to sue Mr Holdgate as assignee from JRC and filed proof of debt in his bankruptcy for the $130,195.
[7]       The proof was accepted by the Official Assignee, but Mr Holdgate’s application to the High Court under s 89(5) of the Insolvency Act 1967 for an order reversing that decision was successful.
[8]       As well as appealing against the High Court’s decision, SBP seeks an order remitting to the High Court a further issue which counsel agree was argued but not determined in that Court, namely whether the notice to terminate the contract was effective. Mr Holdgate asks this Court to determine that issue.
[9]       While the termination issue logically precedes the s 11 point, because only the latter issue was determined by the High Court it is convenient to deal with it first.
Further facts
[10]     On 21 December 2004, SBP and JRC entered into two contracts…

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.

Keep reading for free

Create a free CaseChat account to read SB Properties Ltd (in liq) v Holdgate and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2009] NZCA 327
Decision Date: 24 July 2009

CaseChat Overview and Summary

The case of SB Properties Ltd (in liq) v Holdgate involved a dispute between the liquidator of SB Properties Ltd and Mr Andrew Holdgate over an assignment of contractual rights and obligations. The primary issue was whether Mr Holdgate, as the assignee of JR Construction Ltd's (JRC) contracts, was liable for JRC's contractual obligations under a construction contract with SB Properties Ltd. The Court of Appeal was required to decide if Section 11 of the Contractual Remedies Act 1979 imposed JRC's obligations on Mr Holdgate, allowing SB Properties Ltd to recover damages for breach of contract from him.

The Court of Appeal held that while Section 11(1) of the Act does allow an assignee to be liable for the assignor's breach, this liability is limited by Section 11(2) to the value of the performance of the assigned contract to which the assignee is entitled by virtue of the assignment. The Court found that Mr Holdgate did not derive any value from the assignment as all payments during the course of the contract were paid to JRC. Consequently, the Court concluded that Mr Holdgate's liability was nil, and the High Court's decision was correct. The appeal was dismissed, and SB Properties Ltd was ordered to pay costs to Mr Holdgate.

Orders