Wang v Y&P NZ Limited - [2019] NZHC 2112

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-1884

[2019] NZHC 2112

BETWEEN
YANG WANG and CHEN ZHANG

Plaintiffs

AND

Y&P NZ LIMITED

Defendant

Hearing:
8-10 April 2019 and supplementary submissions on 9 and 16 May

2019

Appearances:

G P Blanchard QC and J A Zwi for the Plaintiffs B P Rooney and J S H Hall for the Defendant

Judgment:

27 August 2019

JUDGMENT OF PALMER J

The judgment was delivered by me on 27 August 2019 at 10.00am.
Pursuant to Rule 11.5 of the High Court Rules

……………………………… Registrar/Deputy Registrar

Counsel/Solicitors:
G P Blanchard QC and J A Zwi, Barrister, Auckland B P Rooney, Barrister, Auckland
Yang Lawyers, Auckland Park Legal, Auckland

WANG & ANOR v Y&P NZ LIMITED [2019] NZHC 2112 [27 August 2019]

Summary

[1] In 2016, Mrs Nicole (Chen) Zhang and her husband Mr Yang (Tony) Wang signed sale and purchase agreements buying four vacant properties from Y & P NZ Ltd (Y&P). Mrs Zhang and Mr Wang advised Y&P they were not registered for Goods and Services Tax (GST), so the sale would attract GST. But the day before the proposed settlement, Mrs Zhang and Mr Wang advised Y&P they were registered for GST, so the sale must be zero-rated. Y&P refused to settle on the basis the transaction would be zero-rated. Having sent through settlement forms on a zero-rated basis the day before, on the day of the proposed settlement Y&P’s lawyers objected they had not received notice in writing more than two working days before settlement as required under the standard terms in the sale and purchase agreement. Y&P subsequently purported to cancel the contract. As it turns out, Mrs Zhang and Mr Wang were not registered for GST on 28 July 2016; but they are now, with retrospective effect to that date. Mrs Zhang and Mr Wang lodged caveats over the properties and sue for specific performance of the agreements. Y&P counterclaims for removal of the caveats and for interest.

[2] I find Mrs Zhang and Mr Wang were ready, able and willing to settle their purchase of the properties on 28 July 2016 on a zero-rated basis for GST. Y&P was not willing to settle on that basis and indicated a full tender of settlement on that basis would be futile. Although Mrs Zhang and Mr Wang did not notify Y&P they were intending to use the land as a principal place of residence, they were only required to do so “[a]t or before settlement” which did not occur, so the final occasion for giving notice never arose. Y&P waived the two days’ written notice of a change in Mrs Zhang and Mr Wang’s GST status that was required under cl 14.5 of the standard form contract. Y&P was not lawfully able to refuse to settle at all. The actual tax consequences of the purchasers’ GST status were not for Y&P to inquire into. Y&P’s purported cancellation of the…

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.

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Details

Case: [2019] NZHC 2112
Decision Date: 27 August 2019

CaseChat Overview and Summary

This case involved a dispute between the plaintiffs, Mr Yang Wang and Mrs Chen Zhang, and the defendant, Y&P NZ Limited, regarding the sale and purchase of four vacant properties. The plaintiffs sought specific performance of the sale and purchase agreements, while the defendant counterclaimed for removal of the caveats and for interest. The central issue in the case was whether the plaintiffs were ready, able, and willing to settle the purchase of the properties on a zero-rated basis for Goods and Services Tax (GST) and whether the defendant was entitled to refuse to settle on that basis.

The court found that the plaintiffs were indeed ready, able, and willing to settle their purchase of the properties on a zero-rated basis for GST. The defendant, however, was not willing to settle on that basis and indicated a full tender of settlement on that basis would be futile. Although the plaintiffs did not notify the defendant that they intended to use the land as their principal place of residence, they were only required to do so "at or before settlement," which did not occur. The final occasion for giving notice never arose. The defendant waived the two days' written notice of a change in the plaintiffs' GST status that was required under cl 14.5 of the standard form contract. The defendant was not lawfully able to refuse to settle at all. The actual tax consequences of the purchasers' GST status were not for the defendant to inquire into. The defendant's purported cancellation of the agreement was invalid.

The court ordered specific performance of the contracts and payment of interest. The defendant was required to settle the agreements for sale and purchase for 13 and 15 Lincoln Road, Henderson, Auckland, with GST being zero-rated, within 10 working days of the date of this judgment. The defendant would also pay interest for late settlement under cl 3.14(2) of the agreements until settlement occurred.

Orders