Sun v Peninsula Road Limited - [2014] NZHC 478

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-7991 [2014] NZHC 478

BETWEEN
HO KOK SUN & ORS

Plaintiffs

AND

PENINSULA ROAD LIMITED First Defendant

AND

KAWARAU VILLAGE HOLDINGS LIMTED

Second Defendant

AND

RUSSELL McVEAGH Third Defendant

AND

MELVIEW (KAWARAU FALLS STATION) INVESTMENTS LIMITED Fourth Defendant

Hearing: 10 December 2013

Appearances:

R A Edwards for plaintiff
M G Colson & T B Fitzgerald for second and fourth defendants

Judgment:

14 March 2014

JUDGMENT OF WINKELMANN J

This judgment was delivered by me on 14 March 2014 at 4.00 pm pursuant to
Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar

HO KOK SUN & ORS v PENINSULA ROAD LIMITED [2014] NZHC 478 [14 March 2014]

[1] This judgment determines various applications for security for costs and discovery. The proceeding is brought by 105 plaintiffs, each of whom contracted to purchase one or more apartments in a development at Kawarau Falls Station near Queenstown.

[2] The development was to be an integrated resort comprising spa and resort hotels, town houses, conference and retail facilities. It was to be developed in three stages. Because of the insolvency of one of the developers, only the first stage was ever completed.

[3] The combined purchase price for the units was approximately $85,000,000. The plaintiffs each paid a deposit in respect of their purchase but refused to settle the purchase when called upon to do so. The second defendant, Kawarau Village Holdings (Kawarau), cancelled the agreements, relying upon the refusal to settle as a repudiation of the contract. The plaintiffs allege that they were not obliged to settle, and indeed are entitled to cancel the agreements. They each seek the return of their respective deposits and an order for general damages including an amount for wasted expenditure to be established at trial.

[4] The first and fourth defendants in the proceeding, Peninsula Road Ltd and Melview (Kawarau Falls Station) Investments Ltd respectively, were each original counterparties with the plaintiffs sale and purchase agreement. Peninsula Road is insolvent and is not playing an active part in the proceeding.

[5] Kawarau is the owner of the development and became the vendor under the agreements pursuant to a series of assignments. The third defendant, Russell McVeagh, holds the deposits paid by the plaintiffs as stakeholder, and again is not actively involved in the proceeding.

[6] The plaintiffs plead four causes of action:

(a) Repudiation by wrongful cancellation. The plaintiffs say that Kawarau’s cancellation was wrongful because it was not entitled to call upon the plaintiffs to settle; it was not itself ready, willing and

able to settle, it had not established the settlement date in accordance with the terms of the agreement, and it had failed to serve effective settlement notices.

(b)Anticipatory breach. The essential allegation is that because of various defects in the contractual agreements and fundamental changes to various aspects of the development, the defendants were unable to convey to the plaintiffs what they had contracted for.

(c) Breach of contract. It is alleged…

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.

Continue reading Sun v Peninsula Road Limited

Details

AGLC: Sun v Peninsula Road Limited [2014] NZHC 478
Case: [2014] NZHC 478
Decision Date: 14 March 2014

CaseChat Overview and Summary

This judgment concerns multiple applications for security for costs and discovery in a proceeding brought by 105 plaintiffs who contracted to purchase apartments in a development at Kawarau Falls Station. The development, intended to be completed in three stages, was only partially completed due to the insolvency of one of the developers. The plaintiffs seek the return of their deposits and damages, alleging wrongful cancellation, anticipatory breach, and breaches of contract and the Securities Act 1978. The defendants counterclaimed for damages due to the plaintiffs' failure to settle, arguing that their cancellation was justified. The court addressed the plaintiffs' request for discovery of specific documents related to the development's completion and the calculation of certain fees. The court granted discovery for the first category of documents, finding them relevant to the validity of practical completion certificates, but denied discovery for documents concerning changes to other developments, considering it a fishing exercise. The court also ruled on security for costs for the counterclaim, determining that while the counterclaim was not an independent cross-claim, it added significant new issues that would extend the hearing. The court ordered the defendants to provide security for costs of $109,700 and addressed the defendants' request for additional security from the plaintiffs, setting the amount at $893 per plaintiff, totaling $87,460. The court ordered the plaintiffs to provide the specified discovery by a set date and allowed the parties to argue for a different outcome on costs within 15 days.

Orders