Y&P NZ Limited v Wang - [2019] NZCA 659

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA451/2019
[2019] NZCA 659

BETWEEN	Y&P NZ LIMITED Appellant
AND	YANG WANG AND CHEN ZHANG Respondents

Hearing: Further submissions:	20 November 2019 27 November and 3 December 2019
Court:	Gilbert, Dobson and Whata JJ
Counsel:	B P Rooney and E Y Deng for Appellant G P Blanchard QC and J A Zwi for Respondents
Judgment:	18 December 2019 at 3 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.
BThe appellant must pay costs to the respondents for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)

Table of Contents

Introduction  [1]
           The appeal  [7]
           Was the vendor ready, willing and able to settle?
  Statutory provisions  [12]
  Terms of the agreement   [17]
  The facts  [18]
  High Court judgment  [26]
  Submissions  [28]
  Assessment  [31]
           Did the vendor waive the requirement to tender settlement?      [35]
           Is there any basis to provide relief from the contractual
           requirement to pay interest for late settlement?  [38]
           Result  [54]

Introduction

By four separate agreements dated 2 May 2016, the appellant, Y&P NZ Ltd, agreed to sell to Yang Wang or nominee four adjoining blocks of bare land in Henderson, Auckland.[1] The respondents were nominated as purchasers. To assist understanding, we will refer to the appellant as “the vendor” and the respondents as “the purchasers”.
[1]The agreements were in the form of the third version of the ninth edition of the standard form agreement for sale and purchase of real estate approved by the Real Estate Institute of New Zealand and the Auckland District Law Society.
The purchase price in each agreement was expressed to be “plus GST^[[2]] (if any)”. The face page of the agreements recorded that “[t]he vendor is registered under the GST Act^[[3]] in respect of the transaction evidenced by this agreement and/or will be so registered at settlement”. The GST information completed by the purchasers in schedule 2 of the agreements indicated that they were not currently registered and would not be registered at settlement. Further, they did not intend to use the property for making taxable supplies. Under cl 14 of the agreements, the vendor and purchasers warranted that their respective statements as to GST were correct at the date of the agreements. Based on this information, the transactions would attract GST at the standard rate of 15 per cent.
[2]Goods and Services Tax.
[3]Goods and Services Tax Act 1985.
The day before the settlement date stipulated in the agreements, the purchasers advised the vendor that they were now registered for GST and the transactions should be zero-rated. The vendor ultimately took the position that it was too late to give notice of this change, relying on a clause in the agreements requiring any such notice to be given no later than two working days before settlement. The vendor insisted that the purchasers pay GST on the purchase price…

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] NZCA 659
Decision Date: 18 December 2019 at 3 pm

CaseChat Overview and Summary

In Y&P NZ Limited v Wang, the Court of Appeal dismissed the vendor's appeal against a High Court order for specific performance of the sale of four adjoining blocks of land in Henderson, Auckland, and an order that the vendor pay interest at a contractual rate. The vendor had refused to settle unless the purchasers paid GST at the standard rate, contrary to the requirements of the Goods and Services Tax Act 1985. The purchasers sought specific performance of the agreements and were awarded interest in accordance with the contractual interest provision.

The vendor's appeal hinged on three main issues: whether it was ready, willing, and able to settle; whether it had waived the requirement for the purchasers to tender settlement; and whether there was any basis to provide relief from the contractual requirement to pay interest for late settlement.

The Court held that the vendor was not ready, willing, and able to settle as it insisted on the purchasers paying GST at the standard rate as a condition of settlement, despite the purchasers' assertion that the transactions should be zero-rated. The Court found that the vendor had not waived the requirement for the purchasers to tender settlement, as the vendor had made it clear that settlement on any other basis would be rejected. Finally, the Court held that there was no basis to provide relief from the contractual requirement to pay interest for late settlement, as the interest provision was specifically enforceable, and none of the exceptions to the general rule of specific performance applied.

The appeal was dismissed, and the vendor was ordered to pay the purchasers' costs for the appeal on a band A basis and usual disbursements.

Orders