Zhang v Zhai - [2014] NZHC 1026

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-6491 [2014] NZHC 1026

BETWEEN
SHAOHE ZHANG

Plaintiff

AND

XIAOJUN ZHAI and AIDONG ZHANG Defendant

Hearing:
2 - 5 December 2013

Plaintiff's further submissions in reply: 8 December 2013

Appearances:

E St John and D Liu for Plaintiff
C Henry for Defendants

Judgment:

16 May 2014

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 16 May 2014 at 3:00 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

ZHANG v ZHAI [2014] NZHC 1026 [16 May 2014]

Table of Contents Paragraph

Number

Introduction and result [1] Result [5] Factual background [6] The agreement for sale and purchase [6]
Steps taken by the defendants [9] Steps taken by the plaintiff [17] Deposit repaid [18]

The plaintiff’s claims [19]

The defendants’ arguments [21]

What are the obligations of the parties under the agreement?

Did a settlement date arrive so as to trigger settlement obligations?

Is the claim for specific performance barred by analogy under s 4 of the Limitation Act 1950?

[25] [29]

[40]

Is the claim barred by laches? [44]

Has the defendants’ performance of the agreement been frustrated or become impossible?

[54]

Other matters raised in the evidence or submissions [63] Should the claim for specific performance be granted? [69] Orders [70]

Introduction and result

[1] On 3 August 2003, the plaintiff, Mr Shaohe Zhang, and the defendants, Mr Xiaojun Zhai and his wife Ms Aidong Zhang, entered into an agreement for sale and purchase of a residential property in the Auckland suburb of New Lynn (“the agreement”). Although the plaintiff paid a deposit, a long period of inactivity followed. The delay was attributable to both parties at various times. During this period the defendants continued to live in the property and it was not until May 2012 that the plaintiff arranged service of a settlement notice on them. The defendants refused to settle and on 1 November 2012 the plaintiff filed the present proceeding.

[2] It is accepted that the plaintiff has equitable title to the property. He now seeks specific performance of what he says is the defendants’ contractual obligation to transfer legal title to him.

[3] The defendants raise a number of affirmative defences which, they argue, justify declining the plaintiff relief. First, they say that because the cause of action accrued more than six years before the commencement of this proceeding, the proceeding is barred by analogy under s 4 of the Limitation Act 1950. Alternatively, they submit that the plaintiff’s delay in seeking to settle the transaction and pursuing his claim is such that the remedy should be barred by laches. They also argue that the performance of the agreement has been frustrated because changes in the Council’s requirements under the Building Code have made performance impossible.

[4] The defendants’ principal ground for arguing that the discretionary remedy of specific performance should not be granted is that, whereas the property is…

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: [2014] NZHC 1026
Decision Date: 16 May 2014

CaseChat Overview and Summary

In Zhang v Zhai, the plaintiff, Shaohe Zhang, and the defendants, Xiaojun Zhai and Aidong Zhang, were involved in a dispute over the sale and purchase of a residential property in New Lynn, Auckland. The parties had entered into an agreement for sale and purchase on 3 August 2003, with the plaintiff paying a deposit of $20,000. However, the transaction did not proceed smoothly, and the defendants continued to live in the property while the plaintiff sought to enforce the agreement. The plaintiff filed the present proceeding on 1 November 2012, seeking specific performance of the agreement, and the defendants raised various affirmative defences.

The court examined the obligations of the parties under the agreement, and found that the plaintiff's claim for specific performance could not be barred by analogy under s 4 of the Limitation Act 1950, as the nature of specific performance as an equitable remedy made such limitation inappropriate. The court also held that the defendants' claim of laches was not sufficient to bar the plaintiff's claim, as the delay in seeking settlement was not as significant as in other cases, and the defendants had not demonstrated sufficient prejudice to outweigh the plaintiff's right to specific performance. Furthermore, the court found that the defendants' performance of the agreement had not been frustrated or rendered impossible, as the building had been completed and the defendants were not required to transfer the property with a certificate of compliance.

The court concluded that the plaintiff was entitled to specific performance of the agreement for sale and purchase, and directed the defendants to settle the agreement with the plaintiff forthwith. The plaintiff was also awarded costs, and disbursements as fixed by the Registrar. Leave was reserved for any party to apply for further orders as may be necessary or desirable to give effect to the judgment.

Orders