Wakatipu Realty Group Limited v Libra Corporation Limited

[2021] NZHC 3098

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2021-425-100

[2021] NZHC 3098

BETWEEN

WAKATIPU REALTY GROUP LIMITED

Plaintiff

AND

LIBRA CORPORATION LIMITED

Defendant

Appearances:	A V Foote for Plaintiff
Judgment:	17 November 2021
(Determined on the papers)

JUDGMENT OF OSBORNE J

(Freezing order)

This judgment was delivered by me on 17 November 2021 at 4.00 pm Pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date

WAKATIPU REALTY GROUP LTD v LIBRA CORPORATION LTD [2021] NZHC 3098 [17 November 2021]

[1]The plaintiff applies without notice for a freezing order.

The substantive claim

[2]The plaintiff is a real estate agent. It is suing for recovery of a commission of

$586,500, representing a 3 per cent commission on the sale of two properties at

$17,000,000.

[3]                 The plaintiff’s director, Sebastian Smith, has provided a supporting affidavit. He exhibits the agency agreement entered into between the plaintiff and the defendant. He exhibits the agreement for sale and purchase which relates to the property sales in question. The agreement, as executed on behalf of the defendant and the purchaser, contains a statement that the sale was by the plaintiff.

[4]                 Mr Smith gives evidence as to dealings with Tom Welo of Switzerland, the sole shareholder of the defendant. He refers to communications with Mr Welo and the defendant’s solicitors. He exhibits records relating to a statutory demand issued by the plaintiff to the defendant for payment of the commission and the application subsequently filed by the defendant to have that statutory demand set aside (which is for first call on 9 December 2021).

[5]                 In communications and correspondence the defendant has raised a number of matters, as disclosed by Mr Smith’s evidence. Of significance in this context is an email sent by Mr Welo to the plaintiff on 28 October 2021 in which Mr Welo suggests that he reached an agreement with the plaintiff that “the commission as invoiced recently for Lot 22 & 25 would be payable upon sale and settlement of Lot 23. This is expected by mid November”. Mr Smith does not accept that such agreement was reached and refers to his own correspondence at the time recording a different understanding of their discussions. But what is significant in the present context is that Mr Welo was saying the payment of the commission would be made upon the sale and settlement of Lot 23.

[6]                 In the setting aside proceeding, Mr Welo has deposed that the sale of Lot 23 was expected to be on 16 November 2021.

[7]                 Hence the filing of this interlocutory application on a without notice basis on 16 November 2021.

Freezing orders – the jurisdiction

[8]                 The plaintiff applies for an order under r 32.2 High Court Rules 2016. The primary requirements for the making of a freezing order, as recognised by the Court of Appeal in Shaw v Narain are:1

(a)a good arguable case on the substantive claim;

(b)assets to which the order can apply; and

(c)a real risk that the respondent will dissipate or dispose of those assets.

[9]                 The Court must look at the overall justice of the case, balancing the need to protect the applicant so as to ensure any judgment is not rendered barren against the prejudice or hardship to the respondent.

Discussion

[10]             On the evidence filed the plaintiff has a good arguable case on its substantive claim. Mr Smith has properly referred to the various arguments raised by the defendant but the plaintiff is entitled to rely on, in addition to its own evidence, acknowledgements made by Mr Welo.

[11]             There is an asset to which the order can apply, namely the equity in Lot 23, which may shortly be converted to proceeds of sale.

[12]             There is a real risk of disposal of assets. The evidence is that the sole shareholder is based overseas and the commission from the sale of the previous two properties, now overdue, has not been paid out of the proceeds of those two sales.

1      Shaw v Narain [1992] 2 NZLR 544 (CA) at 548.

[13]             Given that the without notice injunction which will issue will be of limited duration, the overall justice of the case and the balancing of interests strongly favours the plaintiff.

Order

[14]There is an order in terms of the draft order filed on 16 November 2021.

[15]             I direct the plaintiff forthwith to effect service upon the defendant, and the proceedings with the interlocutory application to now proceed on an on-notice basis. I adjourn the proceeding for mention in the list on 11.45 am on 9 December 2021. That date shall also become the date for inclusion in [8] of the draft order, being the date after which the freezing order will have no effect unless on that date it is continued or renewed.

ADDENDUM

[16]             After the above was recorded, the Court received Mr Foote’s additional memorandum of today’s date. Its contents do not necessitate any alteration to the above discussion and the order made.

Osborne J

Solicitors:
Duncan Cotterill, Christchurch