Waimauri Ltd v Mahon - [2020] NZHC 1170

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000454

[2020] NZHC 1170

BETWEEN
WAIMAURI LIMITED

Plaintiff/First Counterclaim Defendant

TIMOTHY LAIRD EDNEY
Second Counterclaim Defendant

WAIKORO LIMITED
Third Counterclaim Defendant

AND

NEVILLE CHRISTOPHER MAHON

First Defendant

BEACH ARENA LIMITED

Counterclaim Plaintiff

Hearing:
3-6, 9-13 & 16 March 2020

Further submissions 19, 20, 24, 25, 27 and 31 March, 17 and 27 April

Appearances:

D Chisholm QC and M J Lenihan for Waimauri Ltd, Edney and Waikoro Ltd

A Glenie and A C van Ammers for Mahon and Beach Arena Ltd

Judgment:

29 May 2020

JUDGMENT OF MUIR J

This judgment was delivered by me on Friday 29 May 2020 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:…………………………

WAIMAURI LIMITED v MAHON [2020] NZHC 1170 [29 May 2020]

TABLE OF CONTENTS

Introduction 1

Background 2

Overview 2

The lease 9

The representations about the hotel which Mr Mahon says were made by
Mr Edney  15
The problems with the hotel  20
The loan agreement  22
The alleged variation  23
The 2014/2015 period  24
2016 sales and the parting of the ways  29

The issues 31

Was there a November 2013 agreement in the terms alleged by Mr Mahon? 33

BAL and Mr Mahon’s estoppel pleading 63

Conclusion on estoppel 125

Conversion of sums from Waikoro to Waimauri 128

Introduction 128
The background in detail 129

Discussion 159

What then is owing under the Loan Agreement? 178

The alternative counterclaim – Quantum Meruit 199

Result 216

Costs 218

Introduction

[1] This is a difficult case. It pits a particularly hard-headed and unsympathetic property investor and money lender, Mr Timothy Edney, against a long-term business associate, Mr Neville Mahon. The latter is no neophyte himself, but he says he has been treated so shabbily by Mr Edney that the Court should intervene on his behalf. In particular, he says that Mr Edney has breached the terms of an agreement varying obligations under a lease and loan and has so conducted himself that he should not only be estopped from recovery under the loan and associated guarantee, but should be required to disgorge a substantial profit ultimately made on sale of the relevant premises.1

Background

Overview

[2] The litigation has as its backdrop the old Station Hotel (now known as the “Arena”), situated on Beach Road, Auckland City and adjacent two development lots.2 Mr Edney’s company Waikoro Limited (Waikoro) had reluctantly acquired these properties as part of a trade which he was obliged to take in order to secure a prime development opportunity in the inner city. The hotel was very much past its glory days and was being run essentially as student accommodation.

[3] For 30 years Mr Edney and Mr Mahon had enjoyed a business relationship and seeming friendship. Mr Mahon likewise had property and business interests, including some offshore. He clearly regarded Mr Edney as something of a muse, but with his own significant experience,…

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 Waimauri Ltd v Mahon

Details

AGLC: Waimauri Ltd v Mahon [2020] NZHC 1170
Case: [2020] NZHC 1170
Decision Date: 29 May 2020

CaseChat Overview and Summary

In Waimauri Ltd v Mahon, the High Court of New Zealand considered a complex dispute between two business partners, Mr Edney and Mr Mahon, regarding a lease and loan agreement for a property. The case involved several issues, including the existence of a variation agreement, estoppel claims, and the quantum of sums owing under the loan agreement. The Court found that there was no variation agreement as pleaded, and that BAL/Mr Mahon failed to establish an estoppel claim. The Court also determined that certain sums transferred to the loan account were not part of the loan agreement and could not be recovered. The Court amended the quantum of the loan amount to reflect the actual sum advanced, and awarded Waimauri Ltd a judgment for the amount owing under the loan agreement, plus interest. The Court dismissed the counterclaim and noted that the parties may need to reconsider their application for indemnity costs.

Orders