TVDC Limited (in receivership) v Osborne

[2012] NZHC 367

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-8517 [2012] NZHC 367

BETWEEN  TVDC LIMITED (IN RECEIVERSHIP) Plaintiff

ANDPHILIP OSBORNE Defendant

Hearing:         13 March 2012

Appearances: T J G Allan for Plaintiff

T J Herbert for Defendant

Judgment:      13 March 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:

Grove Darlow (TJG Allan) P O Box 2882 Auckland 1140, for Plaintiff

Email:    [email protected]

Kemps Weir, P O Box 62566 Kalmia Street, Auckland 1546 for Defendant

Email:    [email protected]

Copy for:

T J Herbert, P O Box 3320 Auckland 1140, for Defendant

Email:   [email protected]

TVDC LIMITED (IN RECEIVERSHIP) V OSBORNE HC AK CIV-2010-404-8517 [13 March 2012]

[1]      The plaintiff applies for an “unless” order debarring the defendant from defending, unless the defendant provides better particulars and also discovery.   I have now been advised that the defendant has provided the required discovery and that matter is no longer being pursued.

[2]      The  defendant  has  applied  for  non-party  discovery  against  Mr  Vegar,  a former director of the plaintiff, now bankrupt.

[3]      The substantive proceeding is a claim by the plaintiff under an agreement for sale and  purchase of a 28  hectare property in  Marlborough.   The plaintiff was formerly called The Vines Development Company Ltd.   It is now in receivership. The receivers initiated the present proceeding.   Under the agreement for sale and purchase entered into before receivership the company is said to have agreed to sell the property to the defendant for $1,820,000 plus GST.  The defendant defaulted on settlement.  The plaintiff issued a settlement notice.  When the settlement notice was not complied with, the plaintiff cancelled and re-sold the property within a year of cancellation.  The property was re-sold for $500,000 plus GST.   The plaintiff is now claiming damages of about $1.5 million for its loss incurred on re-sale.

[4]      The defendant denies that he entered into an agreement to buy the land.  He has put his denial in various forms.  Initially, he maintained that he had not signed the agreement for sale and purchase – but that defence has gone by the wayside after an independent document examiner found that the purchaser’s signatures on the agreement for sale and purchase matched the defendant’s signatures.   The matter now  concerns  the  defendant’s  amended  pleading  to  the  statement  of  claim. Paragraph 3 of the statement of claim pleads that the parties entered into the agreement for sale and purchase.  Paragraph 3 of the amended statement of defence of 7 November 2011 says:

(a)       On the basis of the report of David Boot (of New Zealand Police) dated

20 October 2011, he is bound to concede (although he continues to have no recollection) that he affixed his signature and initials to various pages of a purported written agreement for sale and purchase (Agreement), particulars of which are set out in the paragraph;

(b)      He says that he never saw the Agreement in full until it was provided to him

by the Plaintiff’s then solicitors in or around April 2010/

(c)       He says that the Agreement was compiled by the Plaintiff (through its agent, Paul Frederick Vegar (Mr Vegar)), without the Defendant’s knowledge from:

(i)        Documentation in Mr Vegar’s or the Plaintiff’s control, containing the  Defendant’s  signature and/or  initials, that  had been  obtained from the Defendant in relation to other transactions, over a period of time prior to the date of the Agreement;  and

(ii)       Documentation upon which the Defendant’s signature and/or initials had been obtained by erroneous or fraudulent misrepresentations by Mr Vegar, on behalf of the Plaintiff, over a period of time prior to the date of the Agreement.

(d)       The  Defendant  had  no  intention  that  these  pages  should  be  compiled together to form an Agreement or any knowledge that such compilation was to occur.

(e)       The Defendant’s mind did not follow the signature or the initials on the

Agreement as finally compiled.

[5]       The defendant has also separately pleaded defences of non est factum and mistake. The defence of non est factum also relies in part on the matters pleaded in paragraph 3 of the statement of defence.

[6]      The plaintiff says  that  it  is  embarrassed by the pleading of paragraph  3 because it does not understand what documents the defendant is relying on in his allegations that Mr Paul Vegar had compiled documents with the defendant’s signature in them, which Mr Vegar used to make it appear as though the defendant entered into this agreement for sale and purchase.

[7]      I accept that the plaintiff will be embarrassed if the case goes to hearing on the present pleading of paragraph 3.  The plaintiff will have the burden of proving that the parties entered into an agreement for sale and purchase.   In the face of allegations that there was not an agreement (because the document relied on constitutes something which was not a contractual document entered into by the defendant),  the  plaintiff  will  be  in  difficulty  at  trial  unless  it  is  given  better particulars.    I  take  into  account  Mr Allan’s  submission  that  the  allegations  in paragraph 3 amount to allegations of fraud or similar reprehensible conduct.  There

is a need to ensure that such allegations are presented responsibly and that when such allegations are put into pleadings they are properly focused.

[8]      Mr Herbert accepts the thrust of that as well.   I give directions that the defendant is to provide particulars to the plaintiff.  These particulars can be simply a statement of particulars as to paragraph 3 or they can be an amended pleading – it is the defendant’s option.  The particulars to be given are to identify which agreements the defendant relies on as constituting agreements which he says Mr Vegar relied upon to bind him into the agreement in the statement of claim, or if there are parts or extracts of those agreements, similarly to identify those agreements.  In identifying the agreements he should identify who the parties to the agreements are and the approximate times when they were entered into.  If they are agreements for the sale and purchase of land, the properties they relate to should be identified.  If there are other kinds of agreements or documents, then the nature of those agreements or documents is to be identified.

[9]      I set a date by which the defendant is to provide those particulars or amended pleading.   The deadline is 2 April 2012.   If the defendant has not provided those particulars, then at trial the defendant will not be entitled to rely on paragraph 3 of the amended statement of defence.

[10]     The other matter today is the defendant’s application for non-party discovery against Mr Vegar.  Mr Vegar has not yet been served.  The application for non-party discovery is to be given a call date in the chambers list on 30 March 2012 at

2:15pm.

[11]     The plaintiff has succeeded on the application for particulars and is entitled to costs on a 2B basis.  Mr Herbert opposes any costs being awarded.  He says that the plaintiff did not seek costs in its application and that the defendant has always been willing to provide the particulars.

[12]     The first point is that costs can be awarded even though not expressly sought. The second is that the plaintiff has had success today in that it has got a direction for particulars to  be provided,  with  consequences  for the defendant  if  they are not

provided  –  something  the  plaintiff  did  not  have  before  the  hearing  today. Accordingly, I award costs to the plaintiff on a 2B basis.

[13]     One final matter – the bundle of documents on the court file prepared for this hearing is to remain on the file for the judicial settlement conference.

..........................................

R M Bell

Associate Judge