SM & T Homes Limited v Nguyen
[2014] NZHC 2269
•18 September 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-1422- [2014] NZHC 2269
UNDER The High Court Rules 12.2 IN THE MATTER
of an Application for Summary Judgment
BETWEEN
SM & T HOMES LIMITED Plaintiff
AND
THI KIM CHI NGUYEN and VINH HGOC NGUYEN
Defendants
Hearing: 8 September 2014 Appearances:
Mr S Dench for the Plaintiff
Mr N King for the DefendantJudgment:
18 September 2014
JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE
This judgment was delivered by me on
18.09.14 at 4 pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
SM & T HOMES LIMITED v NGUYEN & Anor [2014] NZHC 2269 [18 September 2014]
[1] This is an application for summary judgment. The plaintiff has brought proceedings seeking the specific performance of a contract that it said it entered into with the defendants who are the registered proprietors of a property situated at 42
Church Street, Otahuhu (“the property”).
[2] The plaintiff asserts that an auction was held for the sale of the property and that they purchased it on 3 December 2013. The principal terms of the contract were that the price was $450,000, the deposit was $44,000 and that settlement date was 22
January 2014. The plaintiff paid the deposit. The plaintiff alleges that it was at all times ready, able and willing to proceed to settle the contract. The defendants failed to settle on 22 January 2014, or thereafter.
[3] In the notice of opposition, the defendants claim that they have an arguable defence to the application for summary judgment. The principal grounds of defence are these:
(b) The defendants were not shown, did not sign any pages or alterations of the agreement but signed prior to the sale one page they were presented pre sale [sic].
(c) No agreement by defendants to sell, written or verbal.
[4] Apart from raising the specific matters about execution of any agreement for sale and purchase, the first named defendant has set out other matters in her affidavit in answer to the application for summary judgment. She claims that whilst she initially agreed to sell the property, she later changed her mind but was unable to get the real estate agents, Barfoot and Thompson and, in particular Mr Yap from that firm, to agree to cancel the auction.
[5] Not only are these matters not raised in the notice of opposition, but I agree with Mr Dench for the plaintiff who says that disagreements between the defendants and its real estate agent do not affect the question of the validity of the contract. The plaintiff was entitled to assume that the auction was properly carried out and with the authority of the defendants.
[6] Essentially, the one ground upon which the defendants are able to defend the application is on the basis that there was never a written agreement entered into. While the defendants did not expressly raise the question of non-compliance with s 24 of the Property Law Act 2007, Mr Dench, properly, was not disposed to take that point. In the course of his able submissions, Mr Dench put forward arguments which I will summarise below to the effect that there was a sufficient contract in writing or a memorandum of the terms of the contract to satisfy the requirements of the section that I have referred to.
Summary judgment principles
[7] Under r 12.2 of the High Court Rules, the plaintiff is required to satisfy the Court that a defendant has no defence to a cause of action in the statement of claim or to a particular part of a cause of action. The applicable principles are well settled and are set out by the Court of Appeal in Krukziener v Hanover Finance Ltd:1
The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated. The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable. In the end the Court's assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it.
[8] I intend to be guided by the above statement of principle.
Contract in writing
[9] Section 24 Of the Property Law Act provides:
24Contracts for disposition of land not enforceable unless in writing
(1) A contract for the disposition of land is not enforceable by action unless—
1 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26] per Miller J (citations omitted).
(a) the contract is in writing or its terms are recorded in writing; and
(b) the contract or written record is signed by the party against whom the contract is sought to be enforced.
(2) In this section, disposition does not include—
(a) a short-term lease; or
(b) a sale of land by order of a court or through the Registrar.
[10] A key issue in this case is whether the contract which the plaintiff seeks to enforce is enforceable in light of the defendants’ contentions that the contract was not in writing nor was its terms recorded in writing signed by the defendants.
[11] It was accepted for the plaintiff that the provisions of s 24 apply and that the fact that the alleged sale was as a result of an auction does not affect that issue.
[12] The way in which the defendants state the issue in their notice of opposition requires some elaboration.
[13] The real estate agents who were engaged by the vendors did in fact draw up a document which was headed “particulars and conditions of sale of real estate by auction”. This correctly stated the names of the vendors and identified the property. It also set out the terms upon which the auction was to be conducted and provided that, subject to the reserve price being met, the highest bidder whose bid was accepted by the auctioneer was to be the purchaser.2
[14] The real estate agent involved did not give evidence. The plaintiffs produced copies of the conditions of sale and also of the document which assumed importance in this case, entitled “Memorandum of Contract” which I will refer to as MOC. The plaintiff proceeded on the assumption that the memorandum of contract was annexed to the particulars and conditions of sale. I refer to that assumption because there is no express evidence on the point about whether the MOC was annexed to the particulars and conditions of sale.
[15] This point assumes some importance and I will therefore need to look at the evidence in some detail.
[16] It is correct that the particulars and conditions of sale make reference to the requirement that the purchaser shall immediately on completion of the auction:3
a)Sign the Memorandum of Contract failing which the auctioneer may sign on behalf of the purchaser.
[17] Given that there is no definition of what was intended by the expression MOC, an inference, but not a strong one, arises that it was probably a document that was annexed to the particulars and conditions of sale. The evidence for the defendants by the first named defendant concerning the MOC is to the following effect. She says that after placing the property in the hands of the agent, and after the first open home, the agent said to her that he had a buyer for $440,000. She says she told him that she would not accept that price. She says that the agent, Mr Yap:
… said for me to sign the piece of paper so when auction started he would start at this price, but get a much higher price. We went over to my brother’s house and my brother also signed the piece of paper.
[18] I interpolate that her brother is the second named defendant.
[19] She then says that the piece of paper to which she was making reference was the MOC.
[20] That document was produced by the plaintiff in evidence. It was dated 3
December 2013 which both parties accepted was the date of the auction. The name of the plaintiff has been entered into the document in handwriting as follows:
Purchaser’s Name: SM and T Homes Ltd … became the purchaser of the property by being the highest bidder, or by agreeing with the vendor to purchase the property.
The vendor agrees to sell and that the purchaser agrees to purchase the property and the chattels included in the sale of the purchase price stated below in accordance with these Particulars and Conditions of Sale …
Purchase price: $450,000
Deposit: $44,000
[21] At the foot of the document there is provision for two sets of signatures. On the left of the page is a heading:
Signature of vendor(s) or auctioneer:
[22] On the right-hand side is a heading:
Signature of purchaser(s) or auctioneer:
[23] The defendants say that they signed this page of the document before the auction and that this was the only document that was shown to them. The first named defendant says the purchaser’s name was not on the document and nor was the date when she signed the document. While the affidavit has been provided by one of the defendants only, I assume in the absence of evidence to the contrary that it is their common evidence.
[24] The first named defendant says that she contacted the agent “four days after I signed the paper” and attempted to cancel the auction. She says she told the agent that she would not sell for $440,000. Further, on auction day she went to Barfoot and Thompson, was placed in a private room and did not see what happened at the auction or who was there. She says her brother did not come to the auction. She says that the agent eventually came back to the room and said that her house had sold for $450,000. She says this caused her distress. She says:
I think I signed a piece of paper, I do not know what it was. My brother did not sign anything more, he was not at the auction.
[25] The first-named defendant says of the MOC that the purchaser’s name, date and price were added to the “papers after I signed the paper when I agreed to an auction.”
[26] The account which the plaintiff gives of the matter is that they have attempted to obtain an affidavit from the salesperson at Barfoot and Thompson without success. They were provided with a copy of the “Reserve Authority” which
was a document dated 29 November 2013 signed by the defendants in anticipation of the auction occurring on 3 December 2013. In that document the defendants stated their “request” for a reserve price of $440,000. Mr Piner who gave the affidavit on behalf of the plaintiff in reply says that he signed the agreement on behalf of the plaintiff and initialled the change from $440,000 to $450,000. He says he also signed the agreement “when the plaintiff made its offer of $440,000 before the auction”.
[27] The parties therefore appear to be in agreement that the MOC had been drawn up prior to the auction. They do not agree about what was contained in the document at various points of time. Mr Piner says he had written in the original price of $440,000 into the document and the deposit of $44,000 together with the plaintiff’s name as purchaser. He says that before the auction when he signed this document, it did not contain the signatures of the vendors.
[28] He says that after the auction at which their bid of $450,000 was the successful one, he and his wife were ushered into a room. The real estate agent Mr Yap brought the agreement in to be completed. Mr Piner says that by then, it had been signed by the vendors. The price of $450,000 had been written into the MOC. Because he says that he “initialled the change”, it would seem to be his evidence that the figure of $440,000 had been written in but had been altered to the $450,000. He says he did not recall whether the change was made before Mr Yap came into the room or whether it was made in the presence of himself and his wife. It may further be inferred from his evidence that the MOC was annexed to the particulars and conditions of sale because he says that he also “initialled the two changes on the front of the agreement”.
Analysis of evidence on signing memorandum
[29] There is a direct conflict in the evidence between the plaintiff and the defendants on the question of whether the MOC was signed in circumstances that satisfies the requirements for a memorandum under s 24 of the Property Law Act.
[30] On the one hand the plaintiff alleges that the defendants had signed it prior to the point when it was brought to Mr Piner for signature after the property had been knocked down to the plaintiff at the auction.
[31] On the other hand, the first named defendant says that the defendants signed the MOC prior to the auction. She also says that she, but not her brother, signed “a piece of paper, I do not know what it was”. She makes that statement in a context which would seem to mean that she signed a piece of paper at the auction. It has not been suggested what kind of document would be signed other than the MOC which the real estate agent would be expecting to have signed after completion of the auction.
[32] There are also difficulties with understanding why the defendants would have signed the MOC at any time before the contract price of $450,000 was inserted into it. No doubt, in the usual way, the real estate agent had the purchaser sign the MOC into which had been inserted the initial offer before presenting it to the defendants. The initial offer was the $440,000 offer. It is not possible to understand, though, why the defendants would have signed the document while it was in the form containing the $440,000 offer. They rejected that offer and it would be quite contrary to their so doing to sign the written offer which contained it.
[33] The first named defendant’s explanation appears to be that while the defendants signed the MOC, they did so prior to the auction taking place. Then after the auction, the agreed price, the purchaser’s name and other details were added in.
[34] The plain meaning of s 24 is that when the document is signed, it must contain the written statement of the terms required to make it an enforceable contract. A memorandum which is signed when it does not contain that information but which information is subsequently added, does not in my view suffice. The document which is to be signed pursuant to s 24(1)(b) must be the document that is referred to in s 24(1)(a).
[35] The question upon which the summary judgment application turns is whether it is arguable that the defendants signed the document prior to the insertion into the
document of the auction sale price of $450,000. Mr Piner can say no more than that when the agreement was brought to him for initialling, it had been signed by the vendors and that he cannot recall whether the change from $440,000 to $450,000 was made before the agreement was brought to him or whether the change was made in his presence.
[36] It is not impossible that the defendants were asked to sign what was in effect a blank agreement prior to the auction. If that is so, I do not consider that the plaintiff has established that the defendants have no defence because in those circumstances s 24 would not have been complied with.
[37] The law as stated in the following terms are in Halsbury’s Laws of England:4
358. Alteration before execution
A writing which is intended to be under hand only can be altered by erasure, or interlineation, or otherwise, before it is signed, but it lies upon the party who puts the instrument in suit to explain the alteration and show when it was made.
[38] Laws of New Zealand has an equivalent section:5
43. Alteration and cancellation. An instrument under hand can be altered before it is signed; but the onus is on the party relying on the instrument to explain the alteration and show when it was made. An alteration in a material part of an instrument under hand without the consent of the other party makes the instrument void. If, however, the alteration has been consented to by all parties, it takes effect as altered. …
[39] Contracts for the sale or disposition of land or any interest in land is a transaction for which an instrument under hand is necessary.6 The principle is therefore that the onus lies on the party who seeks to enforce an altered instrument to prove the circumstances under which the alteration took place. Here, the plaintiffs are unable to establish through the evidence of Mr Piner that the signature on the part of the defendants took place in the sequence necessary for the MOC to comply with
the requirements of the above rule and with s 24.
4 Halsbury’s Laws of England (5th ed, 2012) vol 32 Deeds and other Instruments at [358].
5 Laws of New Zealand Interpretation of Deeds and Other Documents (online ed) at [43] (footnotes omittted).
6 At [41]; Contracts Enforcement Act 1956, s 2.
[40] If the foregoing conclusion is correct, the plaintiff has not been able to rule out the existence of an arguable defence on the part of the defendants.
[41] I note Mr Dench’s criticism of the evidence put forward by the defendants concerning its lack of precision and its vagueness. I consider that the defendants’ evidence is in some areas vulnerable to the criticisms that Mr Dench has made. However on the question of the place in the sequence at which the defendants signed the contract, the evidence of the first defendant is clear. Based on that evidence, the purchaser’s name, the date and the contract price were added to the document after the defendants signed the MOC.
[42] I agree that there is an unhelpful vagueness in the evidence on the part of the first named defendant when she says that she thinks she signed a piece of paper, apparently, at the time of the auction. However that assertion does not necessarily negate the express assertion that she has made to the effect that at the time when she and her brother signed the MOC, the contract price and the name of the plaintiff had not been included in it. It may well be that a trial judge could take the view that the evidence on behalf of the defendants is to be rejected for this reason and perhaps others. That however involves considerations that are different from those which I am required to take into account when deciding if the Court is able to conclude that there is no arguable defence available to the defendants at summary judgment stage.
Result
[43] The summary judgment application is dismissed. The parties should confer on the question of costs on the application and also the steps that need to be taken to advance the proceeding to trial. They should also confer on the matter of discovery which should be reasonably confined in the interests of cost and expedition in bringing the matter to trial. The parties should confer on the matter of trial duration so that the proceeding can be allocated an early trial date when the matter next comes before the Court for mention. The next mention of this proceeding is to take place at the first available Chambers list before any Judge of this Court. The issue of costs and timetabling from this point are also able to be determined by any Judge.
J.P. Doogue
Associate Judge
2
0
1