Zhang v Zhai [2014] NZHC 2156 (8 September 2014)

Last Updated: 16 October 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-6491 [2014] NZHC 2156

BETWEEN	SHAOHE ZHANG Plaintiff
AND	XIAOJUN ZHAI and AIDONG ZHANG Defendants

Hearing:	8 August 2014
Appearances:	E St John and D Liu for Plaintiff C Henry for Defendants
Judgment:	8 September 2014

_{JUDGMENT OF TOOGOOD J}

This judgment was delivered by me on 8 September 2014 at 3:0 pm

Pursuant to Rule 11.5 High Court Rules

_{Registrar/Deputy Registrar}

ZHANG v ZHAI & ANOR [2014] NZHC 2156 [8 September 2014]

Introduction

[1] In 2003, the plaintiff, Mr Shaohe Zhang, and the defendants, Mr Xiaojun Zhai and his wife Ms Aidong Zhang, entered into a sale and purchase agreement (“the agreement”) for a property in Auckland. Although the plaintiff paid a deposit, the transaction was never completed. In 2012, the plaintiff served a settlement notice on the defendants. When they refused to settle, the plaintiff filed an application for specific performance. I granted that application in a judgment delivered on 16 May

2014 (“the principal judgment”).¹ The defendants have since appealed that decision.

[2] In the principal judgment, I reserved leave to the parties to apply for any further orders that were necessary or desirable to give effect to the order for specific performance.² The parties have been unable to agree on precisely what the order requires. That is the subject of this decision.

Facts

[3] The facts are described fully in the principal judgment at [6]-[18]. They may be briefly restated. On 3 August 2003, the plaintiff agreed to buy the defendants’ property in New Lynn, Auckland (“the property”) for a price of $348,000. The agreement was unconditional except for the issuing of a new title. The agreed possession date was the later of 3 November 2003 or five days after the issue of the title. Title was issued on or about 22 June 2004. The defendants did not notify the plaintiff that the title had been issued but the plaintiff and his solicitor soon became aware that this was the case.

[4] Construction of the house on the property was completed in December 2003. Under the agreement, the defendants warranted that at the date of possession the property would comply with the requirements set out in the Building Act 1991 and would have a code compliance certificate (“CCC”). However, the property failed final code compliance inspections and the Council declined to issue a certificate. A

_{notice to rectify was issued by the Council.}

¹ _{Zhang v Zhai [2014] NZHC 1026, [2014] 3 NZLR 69.}

² At [71].

[5] On 27 January 2004, the defendants claimed through their solicitors that the agreement was frustrated and sought confirmation that the plaintiff would “withdraw from the alleged agreement”. The plaintiff declined to regard the agreement as frustrated. A determination on behalf of the Chief Executive of the Department of Building and Housing, released on 28 October 2005, held that the refusal to grant the CCC was justified because of identified defects attributable to poor workmanship. The determination held that rectification of the defects to the Council’s approval would likely result in compliance with the Building Code but the remedial work was not undertaken and no CCC has ever been issued for the property.

[6] It appears the defendants moved into the property when construction of the dwelling was complete and that they lived there until sometime in 2008. In about March 2008, the defendants listed the property for sale on the open market but withdrew the listing in May 2008. The property was rented out by the defendants from 2008 and at the date of hearing they were receiving rent from the property of

$700 per week.

[7] Not long after becoming aware that the defendants had misgivings about the transaction in November/December 2003, the plaintiff lodged a caveat against dealing which lapsed in mid-2004. The plaintiff lodged a second caveat on 4 March

2008 but he never tendered the amount to settle required by the agreement and did not demand performance by the defendants at that stage. There was a further long period of inactivity and it was not until 11 May 2012 that the plaintiff arranged for service of a settlement notice on the defendants. The defendants refused to settle the transaction and on 1 November 2012 the plaintiff filed the present proceeding.

The principal judgment

[8] The plaintiff sought specific performance of the agreement. I said in the principal judgment that:

[19] ... It is common ground that equitable title to the property has already passed. The plaintiff seeks an order compelling the defendants to transfer legal title to the property to him on the basis of the purchase price that was agreed in 2003, namely $348,000. He also says, however, that interest payable by the defendants for late settlement has accrued at the default rate

set out in the agreement and that at the date of hearing it amounted to not less than $283,000. In effect, therefore, the plaintiff seeks an order compelling the defendants to transfer legal title to him for net consideration of around $65,000 for the property, calculated as at the date of hearing.

[20] In July 2011 the property was assessed as having a current capital value for rating purposes of $540,000.

[9] According to the latest documents presented by the plaintiff, as at 23 May

2014 the default interest owed by the defendants had increased to $331,221.64.³

[10] The defendants argued various affirmative defences to the plaintiff’s claim – that it was barred by analogy under s 4 of the Limitation Act 1950; that it was barred by laches; and that performance of the agreement was frustrated. They also argued that the plaintiff had failed to comply with his own contractual obligations. None of these defences succeeded. In respect of the Limitation Act argument, I held that claims for specific performance are not barred by limitation by analogy.⁴ In dismissing the laches argument, I relied on Supreme Court authority that equity has been most reluctant to accept that an equitable interest in land can be “lost or

destroyed by mere inaction” and that this defence requires not just delay but also prejudice;⁵ financial hardship suffered by the defendants was not sufficient. I held that the defendants must have been aware that under the agreement they were liable to pay default interest but they chose to ignore that risk. I also found that the delay was not attributable to the plaintiff alone and in any event he had taken steps to demonstrate his interest in settling the transaction by lodging two caveats against dealings.⁶ I found that frustration was not made out either, as the authorities are clear that “it is not sufficient that the contract has become more burdensome or performance more expensive”.⁷ Specific performance was ordered in the following terms:⁸

I direct that the defendants shall settle the agreement with the plaintiff for the sale and purchase of the property at 23A Margan Avenue, New Lynn (CT NA854/224) forthwith...

³ _{Letter from the plaintiff ’s solicitor, dated 19 May 2014.}

⁴ _{P & O Nedlloyd BV v Arab Metals Co (No 2) [2006] EWCA Civ 1717, [2007] 1 WLR 2288.}

⁵ _{Eastern Services Ltd v No 68 Ltd [2006] NZSC 42, [2006] 3 NZLR 335.}

⁶ _{Zhang v Zhai, above n 1, at [52].}

⁷ _{The Power Co Ltd v Gore District Council [1997] 1 NZLR 537 (CA) at 553.}

⁸ Zhang v Zhai, above n 1, at [71].

Defendants’ submissions

[11] Claiming to be entitled to further consideration of the remedy granted under the leave reserved, the defendants submit that substantial amendments should now be made to the terms of the agreement which they have been directed to perform. They ask that:

(a) the agreed purchase price for the property be revised to reflect today’s

market value;

(b) they be relieved of their contractual obligation to pay default interest to the plaintiffs, or that both parties are ordered to pay default interest to each other; and

(c) they be relieved of their contractual obligation to secure a CCC for the property.

[12] While Mr Henry acknowledges that he is asking the Court to rewrite key terms of the agreement in its order for specific performance, he submits this is possible because the underlying agreement is unenforceable at law due to the operation of the Limitation Act 1950. He argues that the order for specific performance meant no more than that the defendants must transfer legal title to the plaintiff. It follows, in counsel’s submission, that the terms of the transfer can be determined by the Court on the basis of what is equitable between the parties, with reference to the principle that specific performance is intended to put both parties in the same position as if their respective contractual obligations had been timeously

performed by both of them. The defendants cite Singh v Nazeer⁹ for the proposition

that the original agreement must yield to whatever conditions are set by the Court in the order for specific performance, and point to other authority stating that specific

_{performance “may be granted subject to conditions”.}¹⁰

⁹ _{Singh v Nazeer [1979] Ch 474.}

¹⁰ R Meagher, D Heydon and M Leeming Meagher, Gummow & Lehane’s Equity: Doctrines and

Remedies (4th ed, Butterworths LexisNexis, Chatswood (NSW), 2002) at [20-275].

[13] On that basis, it is submitted that it is inequitable to allow the plaintiff to have the property according to the agreement’s original terms because of the substantial increase in property values that has occurred since the agreement was signed. To do so would allow the plaintiff to have the benefit of both the capital gain and the property’s purchase price (less the deposit), which he never paid over to the defendants. The defendants also submit that, had the plaintiff transferred the purchase price to them in 2004, they would have used it to purchase another property which would have enjoyed a similar increase in value. As things stand they have missed this opportunity. Relevant also to the consideration of the respective equities, they submit, is the fact that the plaintiff did not seek to “mitigate his loss” after signing the agreement.

Plaintiff ’s submissions

[14] The plaintiff submits that the order for specific performance requires the contract to be performed according to its terms so far as that is possible and he resists any amendments being made to the agreement. He submits that even if the Court had the power to rewrite the agreement, equity would not support the conditions contended for by the defendants, because:

(a) Had the agreement been settled in a timely manner, the plaintiff would have had the benefit of being able to either live at the property or receive rental income for the past 10 years.

(b) The authorities confirm the principle that the fruit of the property, including any capital gain, belong to the purchaser from the agreed date of settlement.

(c) There is no support for the defendants’ argument that the plaintiff

ought to have mitigated his loss by purchasing another house.

(d) There is no reason why the defendants should be relieved of their obligation under the agreement to provide a CCC.

Amending the terms of the agreement

[15] Specific performance is a discretionary remedy that is awarded according to equitable principles.¹¹ However, there is no basis for the defendants’ submission that when ordering specific performance the Court can embark on a wholesale rewrite of the contract. Specific performance is a means by which parties are held to the bargain they entered into. It is a remedy which requires a party “to act consistently with the contract of sale”.¹² In the words of Miller J, “It is not for the Court to modify the agreement before ordering that it be performed.”¹³ If the court were to do so, it would risk holding the parties to an agreement they never intended to make.

[16] But in some instances it is necessary for the Court to amend the terms of the agreement in order that it can be performed. Singh v Nazeer¹⁴ is authority for this limited proposition – not for the wider interpretation favoured by the defendants. The relevant passage by Megarry J is worth quoting at length:¹⁵

First, it seems clear that when an order for the specific performance of a contract for the sale of land is made, the contract continues to exist and is not merged in the order... That, however, does not conclude the point before me. To say that a contract still exists does not necessarily mean that the exercise of the rights that it confers remains unaffected by an order for specific performance of that contract.

Second... By applying to the court for an order of specific performance, and obtaining it, I think that the applicant has put it into the hands of the court how the contract is to be carried out. As the court has become seized of the matter, and has made an order, it seems to me that subject to anything that the parties may then agree, the working out, variation or cancellation of that order is essentially a matter for the court. The continued existence of the contract is one thing, its working out is another.

Third, it seems plain that in ordinary circumstances the machinery provisions of a contract for the sale of land are intended to govern the carrying out of the contract between the parties out of court, and are not directed to carrying it out when an order for specific performance has been made. That order is made, of course, by reference to the rights of the parties under the contract;

¹¹ _{Laws of New Zealand Specific Performance (online ed) at [5].}

¹² Tom Bennion and others New Zealand Land Law (2nd ed, Thomson Reuters, Wellington, 2009) at

_[1.5.06].

¹³ _{Serepisos v Steele (No 1) HC Wellington CIV-2003-485-1335, 13 August 2004 at [75].}

¹⁴ _{Singh v Nazeer, above n 9.}

¹⁵ At 480-1.

but, when made, it is the provisions of the order and not of the contract which regulate how the contract is to be carried out. Provisions in the contract as to the deduction of title, the preparation and delivery of the conveyance, the mode and date of completion and many other matters must all, it seems to me, yield to any directions on these matters which are given in or under the order for specific performance. Mr. Ritchie attempted to drive a wedge between compliance with contractual obligations and compliance with the order for specific performance, emphasising that a failure to comply with the order was not a breach of contract but was a contempt of court, and so on. I think that this approach is ill-founded. It gives little or no weight to the consideration that the order of the court is not independent of the contract, but is the court's order as to how that contract is to be carried out, replacing the mode in which it should have been carried out had no order been made.

[Emphasis added.]

[17] Two points are evident. First, when an order for specific performance is made, the underlying contract continues to exist and is not merged in the order.¹⁶

This indicates that, generally speaking, the relationship between the parties continues to be governed by the terms of the contract. Second, the contractual terms the court may rewrite in order to give it effect are what might be called the “machinery provisions” of the contract, such as “deduction of title, the preparation and delivery of the conveyance, the mode and date of completion and many other matters”. Amending these terms will often be a matter of practical necessity because disputes have meant that the contract can no longer be carried out according to the timetable and in the way initially envisaged by the parties. As Megarry J said, “The continued existence of the contract is one thing, its working out is another.” Rewriting the essential terms of the contract, such as the purchase price and the obligation to provide a CCC, would be to substitute the original contract with another.

[18] Specific performance may be ordered on conditions. Spry’s Equitable

Remedies says:¹⁷

... in many cases specific performance may be ordered in a conditional or limited form. [Citing Hutchinson v Payne [1975] VicRp 17; [1975] VR 175 (SC).] For example, a condition may be appropriate that the plaintiff should pay interest in order not to obtain an unjust benefit. [Citing Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd [1986] 1 AC 207 (HL).] Further,

¹⁶ This was followed in Jansen v Whangamata Homes Ltd HC Hamilton CIV-2003-419-1511, 22 May

2006 at [39]: “A decree of specific performance does not cause the contract to merge with the order. The contract remains operative and enforceable unless varied by the Court...”

¹⁷ ICF Spry The Principles of Equitable Remedies (9th ed, Lawbook Co, Pyrmont (NSW), 2014) at

207.

specific performance may properly be ordered of agreements for the sale of land, although there has been a misdescription of quantity or title, where justice can be sufficiently done through the payment of compensation or through an abatement of the purchase price.

[19] Issuing an order for specific performance is an exercise of judicial discretion and must be carried out in a principled way.¹⁸ The cases cited in the passage by Spry provide some concrete examples. Conditions concerning compensation or abatement of the purchase price may be justified on the basis that there is a deficiency in what the vendor promised to convey.¹⁹ In other instances the adjustments are made on the basis of the equitable principle that, subject to any contractual provision to the contrary, from the date of settlement in a contract of sale the fruits of the property belong to the purchaser and the fruits of the purchase money belong to the vendor.²⁰

_{Hutchinson v Payne,}²¹ _{for example, concerned a sale and purchase agreement for a}

property. Delay in settlement was the fault of the defendant vendor, but the plaintiffs were ordered to pay interest on the purchase money for the period of the dispute because they had for that time lived in the property rent free. In Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd,²² when the defendant vendor had caused delay in the transfer of a parcel of shares – although it had not acted unreasonably – and the value of those shares had risen substantially in the interim,

the plaintiff purchaser was ordered to pay interest on the purchase price. Lord Templeman said: “Harvela are not entitled to the benefit of interest attributable to the purchase money as well as the profits attributable to the contractual property.”²³

[20] There is force in the defendants’ submission that the plaintiff should not have the benefit both of the property’s capital gain and the purchase money that it has retained all these years. However, the agreement addresses that issue at cl 3.10, which governs the payment of interest for late settlement when the vendor is in default. The clause states:

3.10 (1) For the purposes of this subclause 3.10: (a) the default period means:

¹⁸ _{Attorney-General for England & Wales v R [2002] 2 NZLR 91 (CA) at [94] per Tipping J.}

¹⁹ _{See for example Peacock v Penson [1848] EngR 859; (1848) 11 Beav 355, 50 ER 854 (Ch).}

²⁰ _{Harvela Investments Ltd v Royal Trust Company of Canada (CI) Ltd [1986] 1 AC 207 (HL) at 236.}

²¹ _{Hutchinson v Payne [1975] VicRp 17; [1975] VR 175 (SC).}

²² _{Harvela Investments, above n 20.}

²³ At 237.

(i) in subclause 3.10(2), the period from the possession date until the date when the vendor is able and willing to provide vacant possession and the purchaser takes possession; and

...

(2) If this agreement provides for vacant possession but the vendor is unable or unwilling to give vacant possession on the possession date, then, provided that the purchaser is not in default:

(a) the vendor shall pay the purchaser, at the purchaser’s

election, either:

(i) compensation for any reasonable costs incurred for temporary accommodation for persons and storage of chattels during the default period; or

(ii) an amount equivalent to interest at the interest rate for late settlement on the entire purchase price during the default period; and

(b) the purchaser shall pay the vendor an amount equivalent to the interest earned or which would be earned on overnight deposits lodged in the purchaser’s solicitor’s trust bank account on such portion of the purchase price (including any deposit) as is payable under this agreement on or by the possession date but remains unpaid during the default period less:

(i) any withholding tax; and

(ii) any bank or legal administration fees and commission charges; and

(iii) any interest payable by the purchaser to the purchaser’s lender during the default period in respect of any mortgage or loan taken out by the purchaser in relation to the purchase of the property.

[21] By the terms of the agreement, the defendants’ liability to pay interest for late settlement is offset against the plaintiff’s liability to pay interest on the purchase money for the period in which he has had the benefit of it.

[22] As to the Court’s power to revise the default interest clauses to avoid inequity

in ordering specific performance, authorities support the plaintiff’s contention that

the terms of the underlying contract should apply. Varney v Anderson²⁴ and Jansen v Whangamata Homes Ltd²⁵ are cases in which the parties had returned to court for further directions following orders for specific performance of property agreements. In each case, the purchasers had been successful against the vendors in default. The

issue was how much the purchasers were required to pay: the purchase price as stated in the agreement, or that sum offset by the vendors’ contractual liability for default interest. In both cases, the purchasers were held to be entitled to rely on their strict contractual rights and tender the reduced purchase price.

[23] In Varney, it was held that the order for specific performance of a sale and purchase agreement expressed “in terms of the agreement” was just what it seemed – the contract was to be performed on its terms as stated, including provisions as to liquidated damages. In Jansen, the Court similarly held that the purchasers were entitled to pay the purchase price less the penalty interest that had accrued under the

contract. It was said of the Jansens’ right to interest:²⁶

A decree of specific performance does not cause the contract to merge with the order. The contract remains operative and enforceable unless varied by the Court and the Jansens retained their accrued benefit... at the date of the decree Whangamata had been in default since March 2004, even since October 2003, and was vulnerable to the present claim for liquidated damages. If Whangamata had wished to be excused that liability it ought to have raised that with the Court and it did not... The price was not just the nominal sum owing. It was the price properly payable under the agreement. That price was open to be offset by a proper claim for interest for late settlement.

[24] The cases do not state that there is no jurisdiction for a court to vary the contractual provisions governing default interest in ordering specific performance. However, they do demonstrate that, generally:²⁷

Where there has been a dispute leading to litigation, resulting in a finding that the vendor is in default and ordering specific performance, the amount payable on settlement is to be determined in accordance with [the contractual clause concerning default interest] without any express order to that effect by the Court. The clause is a part of the contract and an order for performance in terms of the contract includes the clause; the onus is rather on the vendor at the hearing to seek relief from the consequences of the clause.

²⁴ _{Varney v Anderson (1992) 2 NZ ConvC 191,347 (CA).}

²⁵ _{Jansen v Whangamata Homes Ltd, above n 16.}

²⁶ _{At [39], [46] and [47].}

²⁷ DW McMorland Sale of Land (3rd ed, Cathcart Trust, Auckland, 2011) at 510.

[25] I am not persuaded to think there is any principled basis on which to amend the order for specific performance so as to relieve the defendants of their obligation to pay default interest. The effect of the clause was taken into account when specific performance of the agreement was ordered, in the finding that the defendants must have been aware that they were liable to pay default interest but that they chose to

ignore that risk.²⁸ An assertion of financial hardship was held to be of no particular

significance to the defendants’ claim as the default interest provision was part of the bargain made between the parties. It is relevant that the defendants have had the benefit of the property’s rental income for the period of default. They say that the property is tenanted, so this benefit is ongoing.

[26] I comment briefly on the defendants’ other points of argument. Mr Henry contends that the relief sought by the plaintiff was merely the transfer of legal title, and that the enforcement of the terms of the contract remain barred by express provisions of the Limitation Act 1950. He argues that although specific performance of an obligation to transfer legal title cannot be barred by analogy, the terms of the contract are nevertheless unenforceable at law. There is no merit in the point. The order for specific performance directs the defaulting vendors to perform the entire contract, not just part of it. Taken to its logical conclusion, Mr Henry’s contention would result in the vendors not being entitled to receive consideration for the performance of their obligation to transfer title.

[27] Second, there is no support for the defendants’ submission that the plaintiff was required to mitigate his losses. This principle is relevant to assessing the level of damages, not in the context of an order for specific performance, in which case the claim is not for any “loss”. Reference to the Canadian decisions is misguided as that jurisdiction has taken a different approach in terms of the presumption of specific performance as the appropriate remedy in sale of land cases. In New Zealand law, specific performance is still the primary remedy for breaches of contracts for the sale

_{of land, and issues of mitigating loss do not come in to the equation.}²⁹

²⁸ _{Zhang v Zhai, above n 1, at [52].}

²⁹ See the discussion in John Burrows, Jeremy Finn and Stephen Todd Law of Contract in New

Zealand (4th ed, LexisNexis NZ Ltd, Wellington, 2012) at [21.4.2].

Result

Terms of settlement

[28] It follows that I accept the plaintiff’s submissions. The property is to be transferred according to the terms of the agreement, including the parties’ respective liabilities for interest under cl 3.10.

[29] Modifying the agreement to accommodate a settlement many years after the date originally contemplated, I adopt the terms set out in the plaintiff’s amended notice of opposition dated 28 July 2014, which refers to a letter sent by the plaintiff’s solicitors dated 19 May 2014 and which has not been disputed by the defendants.

Order

[30] On that basis, within seven days the defendants shall:

(a) Tender a settlement statement calculated in accordance with the agreement’s provisions as to interest under cl 3.10, with the default interest period running from 29 June 2004 until the date of settlement. The amount owing is to be offset by the amount already paid by the defendants when, on 13 August 2013, their solicitor transferred

$22,161.46 to the bank account of the plaintiff’s solicitors (a sum said to represent the deposit of $20,000 paid by the plaintiff plus interest, payment of which had not been requested by the plaintiff).

(b) Provide undertakings that they have certified, signed and pre- validated:

(i) a discharge of mortgage 5265546.4; and

(ii) a transfer instrument conveying title to the property at 23A Margan Avenue (identifier 78277) from their names into the plaintiff’s name; and

(iii) immediately following receipt of confirmation of the deposit of settlement funds to their trust account, they will:

1. release the discharge of mortgage and transfer instrument from the LandOnline workspace to the plaintiff’s control; and

2. not attempt to withdraw such release or attempt any alteration of those instruments following settlement or release.

Stay of judgment

[31] The defendants seek a stay of execution of the principal judgment and any orders made in this judgment pending the final disposition of their appeal. The plaintiff resists, saying that the property should be transferred to him straight away. He points to an undertaking signed by him on 25 July 2014 that he will not “sell, convey, transfer, mortgage, pledge, exchange or otherwise dispose of the property” until the appeal is determined. He undertakes further that he will transfer the property back to the defendants immediately should their appeal succeed.

[32] It is convenient to adopt the principles applicable to granting a stay set out by Hammond J in Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd³⁰ as follows:

[9] The factors to which Courts conventionally address themselves to find this balance include the following:

(1) If no stay is granted will the applicants’ right of appeal be

rendered nugatory?

(2) The bona fides of the applicants as to the prosecution of the appeal.

(3) Will the successful party be injuriously affected by the stay? (4) The effect on third parties.

³⁰ Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC). The summary was approved by the Court of Appeal in New Zealand Insulators Ltd v ABB Ltd (2006)

[2006] NZCA 330; 18 PRNZ 459 (CA).

(5) The novelty and importance of the question involved. (6) The public interest in the proceedings.

(7) The overall balance of convenience.

[10] I add, that these factors are not comprehensive. A review of them serves merely to show the breadth of the matters which, in any given case, may have to be addressed by a Court to balance the overall interests of justice.

[33] On weighing the factors in this case, I find that it is appropriate to grant a stay, on the condition that the defendants keep up the current momentum in prosecution of their appeal.³¹ The effect on third parties is relevant, as the property is currently tenanted but the terms of the agreement require it to be transferred with vacant possession. The balance of convenience also weighs in favour of granting a stay, given the efforts and costs that will be required to transfer the property – for example, the defendants must defray the cost of the mortgage over the property to discharge it. In the event the defendants are successful on appeal, all that will have

been for nothing. Moreover, the plaintiff’s interest in the property is in the meantime

protected as he has lodged a caveat over it.

[34] Execution of the order for specific performance in the principal judgment and the terms of this judgment shall be stayed subject to the condition, proposed by the defendants, that the case on appeal shall be filed within one month of the date of this judgment (subject to any delays not occasioned by the defendants) and the defendants shall seek a hearing of the appeal at the earliest date available.

Costs

[35] The plaintiff seeks indemnity costs on this application, which he contends was an unwarranted revisiting of matters already decided in the specific performance judgment. However, indemnity costs are exceptional and would require the defendants to have acted “vexatiously, frivolously, improperly, or unnecessarily”.³² I

_{do not think this can be said of their actions in this case.}

³¹ _{The defendants filed their notice of appeal in June and security for costs in July 2014.}

³² See r 14.6(4) of the High Court Rules.

[36] The plaintiff is entitled to costs on a 2B scale basis, with disbursements to be fixed by the Registrar.

..........................................

Toogood J