Sullivan v Brandon

[2023] NZHC 751

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-43

[2023] NZHC 751

BETWEEN

GRETCHEN RHEA AROHA SULLIVAN

Plaintiff

AND

PHILLIP BERNARD BRANDON

Defendant

Hearing:

4 April 2023

Appearances:

P J Bellamy for Plaintiff

No appearance for Defendant

Judgment:

5 April 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 5 April 2023 at 2.15 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

SULLIVAN v BRANDON [2023] NZHC 751 [5 April 2023]

[1]    The plaintiff seeks specific performance of an agreement for sale and purchase of real estate by auction dated 3 November 2021 by which the defendant agreed to sell to the plaintiff a property at 1/13 Ashmole Street, Woolston, Christchurch. The agreement required payment of a purchase price of $316,000 with a deposit of $31,600 (which was paid) and settlement on 17 November 2021.

[2]    Prior to settlement the defendant went overseas and has not given any further instructions to his solicitors. There is nothing to suggest he has or will ever return to this country.

[3]    The plaintiff is ready, willing and able to settle the agreement, and there being no way to advance the matter, this proceeding was filed on 7 February 2023 seeking specific performance.

[4]    The plaintiff was unable to serve the defendant and applied for and was granted an order for substituted service of the proceedings. The proceedings were then served by substituted service in accordance with the Court’s order.

[5]    The defendant has taken no steps and when the application for summary judgment came before me on 4 April 2023 there was no appearance for or on behalf of the defendant either.

[6]    Anticipating that the defendant will not respond to an order for specific performance, the plaintiff’s lawyers have been negotiating with ANZ Bank New Zealand Ltd, which holds a mortgage over the property, for a release of the mortgage. Contrary to the terms of a memorandum filed with the Court on behalf of ANZ Bank, I am told by Counsel that the amount owing under the mortgage is greater than the balance of the purchase price payable under the agreement. There are ongoing negotiations with ANZ Bank as to the terms upon which the mortgage will be released. It is likely that even if satisfactory arrangements are made with ANZ Bank, the plaintiff will require assistance from the Court to complete a transfer of the title.

[7]    There are three issues that were raised at the hearing which I must mention. First, the plaintiff is claiming penalty interest for late settlement at a flat rate of 14 per

cent per annum. The relevant provision in the agreement, cl 5.13(2), is more nuanced than that approach acknowledges, and the plaintiff’s Counsel will need to consider it closely and provide further evidence to substantiate any claim for penalty interest.

[8]    Second, costs are sought on a 2B basis with a 50 per cent uplift. There is nothing complex about this case nor any grounds to award an increase on scale costs under r 14.6 of the High Court Rules 2016. Indeed, there is an argument that under r

14.13 costs should be calculated on the District Court scale. As I pointed out to Counsel, it appears to me that the claim for increased costs conflates damages as costs and that if damages are sought they will need to be proved. In my discretion, however, costs are awarded on a 2B basis according to the High Court Rules.

[9]    Finally, I was asked to make an order transferring the title of the property to the defendant which Counsel is confident would mean that there will be no need for the Court to be further involved in steps to complete the sale, discharge the mortgage and transfer title. I am not prepared to make such an order. It is not what is claimed in the statement of claim and it is proper the Court does have oversight over such matters; if for no other reason than to protect the interests of ANZ Bank and the defendant.

[10]   Despite those matters, I am satisfied the defendant has no arguable defence to the plaintiff’s claim for summary judgment to the extent set out below.

Result

[11]   There shall be judgment for the plaintiff by way of specific performance that within three working days of service of the sealed judgment upon him, the defendant shall transfer to the plaintiff all his right, title and interest in the property at 1/13 Ashmole Street, Woolston, Christchurch (being all the land in Certificate of Title CB32F/1039, Canterbury Land Registration District) on the terms and conditions set out in the agreement for sale and purchase dated 3 November 2021.

[12]   Service of the sealed judgment shall be effected on ANZ Bank New Zealand Limited forthwith.

[13]Service of the sealed judgment shall also be effected on the defendant by:

(a)leaving the sealed judgment to the offices of the defendant’s former solicitors, Cameron & Co; and

(b)by transmitting the sealed judgment to the defendant’s email address as set out in the sealed order for substituted service dated 20 February 2023.

[14]   In the event the defendant does not comply with the sealed judgment, I reserve leave to the plaintiff to apply to the Court on an ex parte basis for such further orders as are necessary to give effect to a transfer of the property to the plaintiff in accordance with the terms of the agreement.

[15]   The plaintiff is entitled to 2B scale costs of the proceeding plus disbursements as fixed by the Registrar.

O G Paulsen Associate Judge

Solicitors:

Stallard Law Ltd, Nelson

Cameron & Co, Christchurch