To v Huang - [2015] NZHC 929

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000249

CIV-2015-404-000278 [2015] NZHC 929

BETWEEN
THI KIM PHUONG TO

Applicant

AND

DONGLING HUANG and ZHIGAO LU Respondents

Hearing: 23 April 2015

Appearances:

Mr Hickson for Applicant
Mr O'Callahan for Ms Huang and Mr Lu

Date:

6 May 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
06.05.15 at 4.30 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

TO v HUANG and Anor [2015] NZHC 929 [6 May 2015]

Introduction

[1] Mr To (whom I will refer to as the purchaser) entered into an agreement for the sale and purchase of the property at 431 Mill Road, Takanini on or about 12
December 2014 with the other parties to the agreement; being Ms Huang and Mr Lu

(whom I will refer to in this judgment as the vendors).

[2] The vendors have declined to proceed with the agreement for sale and purchase and have since purported to cancel it in the circumstances which I shall describe below. As a consequence, the purchaser lodged a caveat on the title to the vendor’s property. He seeks orders that the caveat not lapse. He also applies for summary judgment in the form of an order for specific performance, requiring the vendors to transfer the property to him pursuant to the agreement for sale and purchase. Both of these applications are opposed.

Background

[3] I will describe aspects of the agreement for sale and purchase in detail at the appropriate point in this judgment.

[4] Neither party made any reference in submissions to the principles that govern the making of orders for sustaining caveats or for the grant of specific performance because it was accepted that, in the circumstances of this case, the outcome will depend solely on an interpretation of the parties’ contract. The parties both accept there are no residual issues of disputed fact, which means that the Court needs to be concerned with arguable defences.

[5] The agreement that the parties entered into was conditional on the following: (a) satisfactory finance by 7 January 2015 (cl 9.1);
(b) a satisfactory LIM by 14 January 2015 (cl 9.2);

(c) a satisfactory building report by 7 January 2015 (cl 9.3,); and

(d) Satisfactory due diligence by 14 January 2015 (cl 22).

[6] The dispute between the parties centres upon the correct interpretation of the due diligence provision. The due diligence clause in the contract was to the following effect:

22. DUE DILIGENCE

This Agreement is entirely conditional upon the purchaser determining that the purchase of the property described in this Agreement comprises a commercially acceptable and viable project suitable to the Purchaser. It will be solely for the purchaser to make this determination and the Vendor will not require the Purchaser to justify or substantiate the Purchaser’s decision. Should this condition not be satisfied by 5.00pm after 15 working days from the date of this Agreement signed by both parties, this Agreement…

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 To v Huang

Details

AGLC: To v Huang [2015] NZHC 929
Case: [2015] NZHC 929
Decision Date: 6 May 2015

CaseChat Overview and Summary

The case of To v Huang involved a dispute over the sale and purchase agreement of a property at 431 Mill Road, Takanini. The purchaser, Mr To, had entered into an agreement for the sale and purchase of the property with the vendors, Ms Huang and Mr Lu, which was conditional on certain conditions being met by specified dates. The central dispute was regarding the interpretation of the due diligence provision, which allowed the purchaser to determine if the purchase was commercially acceptable and viable. The purchasers sought to sustain a caveat on the property title and obtain an order for specific performance. The vendors opposed these applications.

The legal issues in the case revolved around the interpretation of the due diligence clause and whether the purchaser complied with the notice requirement before the conditions were due. The court had to determine if the purchaser’s failure to give explicit notice of the satisfaction of the due diligence condition justified the vendors’ decision to cancel the agreement. Additionally, the relationship between the due diligence clause and other conditions in the agreement needed to be examined.

The court found that the purchaser did not give the required explicit notice regarding the due diligence condition, which was essential for certainty in the contract. The court emphasized that the purchaser’s unilateral right to cancel the agreement was not absolute and required notification to the vendors. The court rejected the argument that the deposit payment implied the purchaser’s acceptance of the contract's unconditional status. Therefore, the vendors were justified in cancelling the agreement due to the purchaser's failure to comply with the notice requirement. The purchaser’s applications for sustaining the caveat and specific performance were dismissed. The court directed the parties to confer on the issue of costs, with submissions to be filed if an agreement could not be reached.

Orders