|
|
Home
| Databases
| WorldLII
| Search
| Feedback
High Court of New Zealand Decisions |
Last Updated: 7 July 2023
|
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
|
|
CIV-2022-404-2167
[2023] NZHC 1639 |
|
BETWEEN
|
ELYSIAN PROPERTY TRUSTEE LIMITED
Plaintiff
|
|
AND
|
DABIN WANG
Defendant
|
|
Hearing:
|
9 June 2023
|
|
Appearances:
|
S C I Jeffs for the Plaintiff
Marisa Brugeyroux / KLChiu for the Defendant
|
|
Judgment:
|
29 June 2023
|
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
Application for summary judgment
This judgment was delivered by me on 29 June 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
............................... Registrar/Deputy Registrar
Solicitors:
Speakman Law (Peter Speakman), Auckland, for the Plaintiff
McVeagh Fleming (Marisa Brugeyroux/C R Andrews/K L Chiu), Auckland, for the Defendant
Copy for:
Sam Jeffs, Bankside Chambers, Auckland, for the Plaintiff
ELYSIAN PROPERTY TRUSTEE LIMITED v WANG [2023] NZHC 1639 [29 June 2023]
TABLE OF CONTENTS
Introduction [1]
Background [2]
EPTL’s application for summary judgment [6] Affidavit of Susan Ava Dickson, dated 7 November 2022 [8] Affidavit of Michael William Nees, dated 10 November 2022 [15] Affidavit of Benjamin Richard Johnson, dated 25 May 2023 [17] Supplementary affidavit of Susan Ava Dickson, dated 25 May 2023 [18]
Mr Wang’s opposition [25]
Affidavit of
Eryanto Kurnia Widjaya, dated 29 May 2023 [26]
Legal principles [27]
Analysis [30]
Liability [32]
Conclusion
in relation to liability [38]
Quantum [39]
Conclusion in relation to quantum [55]
Result [56]
Orders [57]
Introduction
[1] Elysian Property Trustee Limited (EPTL) seeks summary judgment against Dabin Wang (Mr Wang) for breach of contract arising from his non-compliance with a sale and purchase agreement (the Agreement).
Background
[2] EPTL is the trustee of Elysian Property Trust (the Trust) and is the registered owner of the properties at 18 and 20 Northcroft Street, Takapuna (the Properties).
[3] On 20 October 2020, EPTL and Mr Wang entered into the Agreement by which Mr Wang agreed to purchase the Properties for $15,000,000 plus GST (if any). Mr Wang paid the deposit but failed to settle the purchase on 2 June 2022.
[4] On 27 June 2022, after Mr Wang failed to comply with a settlement notice, EPTL cancelled the Agreement, retaining the deposit. EPTL initially attempted to resell the Properties through Bayleys, but eventually decided to retain them pending improvement of the market.
[5] EPTL now seeks summary judgment against Mr Wang for damages it claims to have suffered as a result of his failure to settle the purchase of the Properties.
EPTL’s application for summary judgment
(a) That judgment be given against the Respondent on the first cause of action in the Applicant's statement of claim;
(b) That the Respondent pay the costs of and incidental to this application, including disbursements; and
(c) Such other orders as the Court sees fits.
[7] The grounds on which the orders are sought are:2
(a) The Applicant is the trustee of the Elysian Property Trust.
(b) The Applicant is the registered proprietor of the properties at 18 and 20 Northcroft Street, Takapuna (the Properties).
(c) On 20 October 2020, the Applicant and the Respondent entered into an agreement for sale and purchase of the Properties (the ASP). The ASP was on the ADLS standard form for the agreement for sale and purchase of real estate (tenth edition 2019(2)).
(d) Material terms of the ASP included:
2 At [2].
(e) On 2 December 2020, the Respondent satisfied the due diligence condition and the ASP became unconditional.
(f) Between December 2020 and August 2021, the parties varied the deposit clause in the ASP. Between 19 December 2020 and 6 September 2021, the Respondent paid deposit monies of $2,000,000.
(g) Settlement of the ASP was to occur on 2 June 2022. The Respondent did not pay any part of the balance of the purchase price on the settlement date in breach of clause 3.8.
(h) On 3 June 2022, the Applicant (through its solicitors) issued the Respondent with a settlement notice. The Respondent did not comply with the Settlement Notice in breach of clause 11.2.
(i) On 27 June 2022, the Applicant gave notice cancelling the ASP in accordance with clause 11.4(1)(b).
(j) The Respondent forfeited the deposit monies to the Applicant due to its failure to settle.
(k) In July 2022, the Applicant engaged Bayleys to market the Properties. Between 21 July 2022 and 11 May 2023, Bayleys was engaged to sell the Properties. Bayleys was unable to obtain a sale of the Properties at an acceptable price.
(l) The Applicant has elected to retain the Properties and to sue the Respondent for damages for breach of the ASP.
(m) As a result of the Respondent's breaches of the ASP, the Applicant has suffered losses of $3,904,310.03 as follows:
(n) The Respondent is liable to pay damages of $3,649,310.03 to the Applicant.
(o) The Respondent has no defence to the first cause of action in the Applicant's statement of claim. The Applicant is entitled to judgment on the first cause of action in the statement of claim.
(p) Costs should follow the event.
Affidavit of Susan Ava Dickson dated 7 November 2022
[8] Ms Dickson, a director and sole shareholder of EPTL, has made an affidavit in support of EPTL’s summary judgment application.3
[9] She deposes that in early October 2020, Barfoot and Thompson’s Bruce Jiao (Mr Jiao) approached her on behalf of Mr Wang to make an offer to purchase the Properties. The Agreement was then entered into by EPTL and Mr Wang on 20 October 2020 for $15,000,000 plus GST (if any). She then outlines some variations that were agreed to between the parties. Ultimately, she accepts that Mr Wang paid the $2,000,000 deposit in instalments.
[10] She deposes that Mr Wang is the director and shareholder of Panstar 15 Ltd, who he nominated as purchaser. Without prejudice to EPTL’s later right to bring proceedings against Panstar 15 Ltd, Ms Dickson says that currently the claim is against Mr Wang personally.
[11] The settlement date under the Agreement was 2 June 2022. Ms Dickson deposes that there were some discussions around the possibility of varying the settlement date at Mr Wang’s request. However, ultimately the date was not varied,
and Mr Wang did not settle on the settlement date, nor in response to the settlement notice. On 27 June 2022, the Agreement was cancelled.
[12] Ms Dickson says that she attempted to negotiate further with Mr Wang to purchase the Properties but that no further agreement could be reached. She then engaged Bayleys to market the Properties, which commenced on 21 July 2022 for a deadline private treaty sale with an end date of 25 August 2022. After that end date passed, Bayleys continued marketing the Properties. The highest offer obtained was for $9,295,000 on 25 August 2022, which she was told may rise but not to anywhere near Mr Wang’s offer — EPTL declined the offer. At the date of Ms Dickson’s affidavit, EPTL continued to passively list the Properties with Bayleys, but no further offers were forthcoming.
[13] Ms Dickson deposes her view that Mr Wang contributed to the EPTL’s difficulties with selling the Properties because after the Agreement was signed Mr Wang approved new leases and renewals which lacked demolition clauses and were too cheap.
[14] Finally, Ms Dickson sets out additional alleged losses which EPTL claims for, which include Barefoot and Thompson’s commission, wasted legal costs in relation to the Agreement and its cancellation and Bayley’s marketing costs. She admits there are further losses not currently claimed for including wasted management time, lost tenancies, and the costs of borrowing to finance other property purchases, which would have been avoided if Mr Wang had paid all deposit instalments on time.
Affidavit of Michael William Nees dated 10 November 2022
[15] Mr Nees, an Associate Director of Bayleys North Shore Commercial (Bayleys), has made an affidavit in support of EPTL’s application.4 Mr Nees deposes that Ms Dickson approach Bayleys to market EPTL’s Properties in July 2022. He confirms that Bayleys listed the Properties for sale by deadline private treaty by 25 August 2022 and that the highest offer was for $9,295,000. He says that in his view
that offer may have been increased by up to $500,000, however it was obvious to Bayleys that the offeror would not offer an amount that EPTL would accept, something closer to $15,000,000.
[16] As at the date of his affidavit, Mr Nees was continuing to passively list the Properties for sale, but with increasingly difficult market, inflation and lending restrictions, Bayleys had not received any further offers.
Affidavit of Benjamin Richard Johnson dated 25 May 2023
[17] Mr Johnson, a registered valuer and Senior Director at Jones Lang LaSalle, has made an affidavit in support of EPTL’s application.5 He annexes a copy of Jones Lang LaSalle’s valuation of the Properties, separately valued at $4,750,000 and $4,800,000 (totalling $9,550,000) as at 21 March 2023.
Supplementary affidavit of Susan Ava Dickson dated 25 May 2023
[18] Ms Dickson has made a further affidavit to update the Court on further unsuccessful efforts EPTL has taken to sell the Properties.6 Ms Dickson deposes that since her first affidavit the commercial property market has deteriorated.
[19] In February 2023, she deposes that a Chinese based company, LDW Limited (LDW), offered $13,000,000, but upon a counter-offer from EPTL seeking to change the terms of the deposit and settlement period, LDW stated they were no longer interested. Later in February, she instructed Bayleys to more actively advertise the Properties based on her revised expectations as to their value. Bayleys then listed them for sale at auction on 12 April 2023.
[20] At auction, two phone bidders from China, Mia Xia Yu and Lisa Li, were extremely aggressive and the Properties were sold to Mia Xia Yu for $13,200,000. Two days after the auction the bidders stopped communicating with Bayleys and despite attempting to pursue the contract initially, Mia Xia Yu never paid the deposit and EPTL cancelled the agreement.
5 Affidavit of Benjamin Richard Johnson dated 25 May 2023.
6 Supplementary affidavit of Susan Ava Dickson dated 25 May 2023.
[21] Given the offer and auction, Ms Dickson suspects that these instances were a deliberate attempt by someone to interfere with the sale and make it appears as if EPTL had sold the Properties for more than $13,000,000. She is suspicious of Mr Wang as this may impact the amount of damages claimed against him by EPTL.
[22] Only one further offer for $10,000,000, which EPTL declined in May 2023, was obtained by Bayleys before Ms Dickson terminated EPTL’s agreement with Bayleys. She says she has decided EPTL will retain the Properties until the market recovers, estimating two to three years.
[23] Ms Dickson deposes that on 22 December 2022, Mr Wang’s lawyers confirmed that he had instructed them to write to EPTL in the new year. On 23 February 2023, they wrote confirming Mr Wang would not dispute liability for breaching the Agreement and would instead file a defence as to quantum. She deposes that never eventuated and no compromise could be reached with Mr Wang.
[24] After deciding not to sell the Properties, EPTL obtained a valuation from Jones Lang LaSalle for $9,550,000 as at 21 March 2023, which it used to amend its summary judgment claim to $3,649,310.03.
Mr Wang’s opposition
[25] Mr Wang opposes the application on the following grounds:7
$13,000,000;
7 Notice of opposition to application for summary judgment dated 29 May 2023 at [1]–[3].
$13,000,000;
$13,200,000;
Affidavit of Eryanto Kurnia Widjaya dated 29 May 2023.
[26] Mr Widjaya, a solicitor at Mr Wang’s current lawyers familiar with the case, has made an affidavit in support of Mr Wang’s opposition.8 He annexes a copy of a TelferYoung valuation of the Properties, which were valued at $16,270,000 on 26 May 2022. He further annexes screenshots from Bayleys’ website showing the sale of the Properties at auction for $13,200,000.
Legal principles
[27] Rule 12.2(1) of the High Court Rules 2016 provides:
12.2 Judgment when there is no defence or when no cause of action can succeed
(1) The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[28] The relevant principles governing a summary judgment application are well established:9
The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will
8 Affidavit of Eryanto Kurnia Widjaya dated 29 May 2023.
have to respond if the application is to be defeated: MacLean v Stewart. The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable: Eng Mee Yong v Letchumanan. In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel.
[29] The wording of r 12.2 “may give judgment” indicates a residual discretion.
Having regard to the various authorities, the position appears to be as follows:10
(a) The discretion implied by the use of the word “may” is to be restrictively applied. In a great majority of cases, once the court is satisfied the defendant has no defence, there is no room for the exercise of discretion.
(b) The residual discretion may be invoked to avoid oppression or injustice to the defendant where:
(i) The proceeding involves the actions or possible liability of a third party which is not before the court;
(ii) The proceedings are such that the opportunity should be given to allow discovery or other interlocutory applications to be concluded;
(iii) The circumstances of the case disclose very unusual features, the presence of which leads the court to conclude that the entry of summary judgment would be oppressive or unjust; or
(iv) The combination of complex issues of fact and law justify the dismissal of the application for summary judgment, either as a matter of discretion or because the court cannot be satisfied that the defendant has no defence.
(c) Even where the court is not satisfied that a defence has been made out, in exceptional circumstances the application may be adjourned to allow for other processes to be followed.
Analysis
[30] The issues to be determined in this judgment are:
(a) should summary judgment be entered against Mr Wang in respect of liability for breach of contract? and
(b) should summary judgment be entered against Mr Wang for the quantum of damages claimed by EPTL for the breach?
[31] I deal with each of these in turn.
Liability
[32] Mr Jeffs, for EPTL, submits that judgment should be entered against Mr Wang for liability as he cannot contest liability for breaching his settlement obligations under the Agreement. He submits the reasons for this are as follows:
(a) acknowledgments by Mr Wang’s solicitors that Mr Wang would not dispute liability:
(i) on 23 February 2023, Mr Wang’s solicitors advised EPTL’s counsel by email that Mr Wang would not dispute liability; and
(ii) on 27 February 2023, Mr Wang’s solicitors confirmed that position in a joint memorandum of counsel, which stated that Mr Wang would only contest quantum but not liability;
(b) it is indisputable that Mr Wang breached his obligations under the Agreement which entitled EPTL to cancel the Agreement for the following reasons:
(i) cl 3.8(1) of the Agreement required Mr Wang to pay the balance of the purchase price on the settlement date. EPTL had tendered a settlement statement showing that Mr Wang was required to pay the amount of $12,963,930.03 and, in breach of that clause, Mr Wang did not pay that amount on the settlement date;
(ii) cl 11.1(1) of the Agreement entitled EPTL to issue a settlement notice and it gave such notice to Mr Wang on 3 June 2022. Clause 11.2(1) required Mr Wang to settle on or before the
twelfth day after the service of the notice, time being of the essence, and he did not do so;
(iii) in the circumstances, under cl 11.4(1)(b) of the Agreement, EPTL was entitled to cancel the Agreement, forfeit and retain the deposit and sue Mr Wang for damages. EPTL gave notice cancelling the Agreement on 27 June 2022 and since 13 July 2022 Mr Wang has been on notice that EPTL might bring a claim against him.
[33] For the above reasons, Mr Jeffs submits that Mr Wang cannot dispute liability for breach of the Agreement.
[34] Ms Brugeyroux, for Mr Wang, in relation to liability submits that as it is reasonably arguable that EPTL has not suffered any loss as a result Mr Wang’s failure to settle the purchase of the Properties (which is discussed in detail below, in relation to quantum), judgment for liability only should not be entered against Mr Wang and the Court should exercise its residual discretion to refuse summary judgment.
[35] Ms Brugeyroux submits that in this instance, proof of its loss is one of the elements of the cause of action pleaded against Mr Wang and refers to the decision in Kelly v Edge Computer Ltd, where the High Court approved the approach taken in Morahan v Stubbs:11
The learned Judge reversed a decision of a Master entering judgment by default. In the course of his decision Anderson J said, referring to rr 463 and 464:
The true effect of rr 463 and 464, in my opinion, is to define the scope of trial in terms where liability need not be established by a plaintiff and where the issues may be confined to damages. There are, of course, certain causes of action where liability is dependent on proof of loss. One could not contemplate the entry of judgment in respect of liability when no loss has been proven since no cause of action could have arisen in such cases without proof of loss.
With respect, that comment must, of course, be correct. The question is whether on the facts of the case the plaintiff’s causes of action require proof of loss, and if they do whether the plaintiff has put sufficient evidence before the Court to establish loss.
[36] Ms Brugeyroux also refers to Westpac Banking Corporation v Clark which, she submits, was a case of summary judgment on application for solicitor’s negligence, which was declined because it was not clear whether the plaintiff had suffered loss as a result of the defendant’s breach of undertaking.12 She refers to the following passage from the judgment:
[24] The plaintiff’s claim has been brought by an action at law. The essence of its claim is that the defendant’s breach has caused it loss. The plaintiff must prove that the loss was caused as a result of such breach. Without such proof (at this summary judgment stage) the claim must fail. Accordingly loss must be the only outcome even in the circumstances where a breach is acknowledged because it is trite law that causation is an essential element in the recovery of damages for breach of duty.
[25] Causation means more than the mere creation of the opportunity to incur loss. Whether damage and fault are sufficiently connected is a question of fact and it is not appropriate in those circumstances to apply a “but for” test. It is not sufficient to say that but for the failure to promptly attend to registration the plaintiff has suffered loss.
[37] Ms Brugeyroux notes that the High Court’s decision in Westpac Banking Corporation v Clark was upheld by the Court of Appeal and Supreme Court.13
Conclusion in relation to liability
[38] In my view, judgment should be entered against Mr Wang for liability for breach of the Agreement. This is for the following reasons:
(a) notwithstanding Ms Brugeyroux’s argument that loss must be proved as part of the cause of action, this is not the case in a claim for breach of contract. It is not an essential element of the cause of action that loss be proved;
12 Westpac Banking Corporation v Clark HC Auckland CIV-2006-404-2175, 2 August 2006.
(b) for the reasons set out at [32](b), it is clear that Mr Wang breached his obligations under the Agreement to settle on the settlement date, and to settle in response to a settlement notice issued by EPTL;
(c) Mr Wang’s solicitors have on two occasions acknowledged his liability for breach of the Agreement, while reserving Mr Wang’s right to dispute the quantum of damages.
Quantum
[39] Mr Jeffs submits that EPTL seeks damages in two categories:
(a) damages to account for its wasted expenses, including EPTL’s commission to Barfoot & Thompson, wasted legal expenses on the transaction, and wasted marketing expenses trying to sell the Properties; and
(b) damages for diminution in value of the Properties.
[40] As to wasted expenses, Mr Jeffs submits that this is explained in Ms Dickson’s affidavit, and that they do not appear to have been disputed by Mr Wang.
[41] As to the diminution in value, Mr Jeffs makes the following submissions:
(a) Mr Wang agreed to purchase the Properties for $15,000,000. Despite EPTL’s efforts, they have been unable to sell the Properties, partly due to the decline in the commercial property market, and as there was no actual sale price to compare against the contract price, EPTL has led evidence from Mr Johnson of Jones Lang LaSalle New Zealand.
(b) Mr Johnson, a registered valuer, has deposed that the market value of the Properties is $9,550,000, and his evidence states that the value of
18 Northcroft Street is $4,750,000, and 20 Northcroft Street is
$4,800,000.
[42] As to the appropriate date for assessing whether EPTL has suffered any loss, Mr Jeffs submits that an instructive authority is the English Court of Appeal’s decision in Hooper v Oates.14 He submits that in that case, in a claim for damages by a vendor against a defaulting purchaser of land, the Court was required to decide the appropriate point at which to assess the market value of the land and the Court found that damages should be assessed by comparing the contract price with the market value of the property on the date on which the vendor decided to retain the property, after first having tried to re-sell the property. He submits that the Hooper approach ought to be applied in this case.
[43] Accordingly, Mr Jeffs submits that the value of the Properties should be based on the market valuations carried out by Mr Johnson as at 21 March 2023 which, combined with the claim for wasted expenses discussed above, gives a claim for loss of $3,649,310.03.
[44] Mr Jeffs also submits that EPTL seeks default interest at the contractual rate under the Agreement of 14 per cent per annum on the amount claimed from the date of settlement until the date any judgment has been satisfied.
[45] Ms Brugeyroux submits that the Court must answer three questions in determining whether judgment should be given against Mr Wang in respect of quantum:
(a) what is the appropriate date for assessing whether EPTL has suffered a loss?
(b) whether it is reasonably arguable that EPTL has suffered no loss? and
(c) if EPTL has suffered any loss, whether it is reasonably arguable that EPTL failed to mitigate its loss.
[46] As to the appropriate date for assessing damages, Ms Brugeyroux refers to the decision in BCH Investments Ltd v Zhu, in which Associate Judge Bell held that the
14 Hooper v Oates [2013] EWCA Civ 91, [2014] Ch 287.
appropriate date is the date of cancellation of the agreement.15 Ms Brugeyroux submits that accordingly the appropriate date for assessment of damages should be the date of cancellation of the Agreement — in this case being 27 June 2022.
[47] Ms Brugeyroux then submits that if the Court is not minded to follow the BCH Investments decision then, following the approach in Hooper, the appropriate date for assessing damage should be no later than the date EPTL decided to retain the Properties. Ms Brugeyroux submits that this date, from Ms Dickson’s evidence, is the date EPTL decided to retain the Properties after the parties could not negotiate a better price for the Properties than $9,000,000, and accordingly it is reasonably arguable that EPTL decided to retain the Properties on or about 5 September 2022. In any event, Ms Brugeyroux submits that even if EPTL’s date of the decision to retain the Properties was in October 2022, it is earlier than March 2023, the date used by EPTL in its damages calculations.
[48] On the issue of whether EPTL has suffered any loss, Ms Brugeyroux submits it is reasonably arguable that, on the evidence put forward by EPTL, it has not suffered any loss as a result of Mr Wang’s failure to settle the purchase of the Properties. She submits EPTL has retained the $2,000,000 deposit, the amount required to settle the sale was for $12,963,930.03, and it is reasonably arguable that at all material times the Properties have been worth at least $13,000,000 and EPTL has suffered no loss as a result of retaining the deposit and the Properties.
[49] She points to the following evidence:
(a) TelferYoung valuation values the Properties at $16,270,000 as at 26 May 2022;
(b) after cancellation of the Agreement, EPTL declined the following offers for the Properties:
(i) an offer of $9,295,000 (which, after negotiation, may have been as high as $9,795,000 in August 2022);
15 BCH Investments Ltd v Zhu [2019] NZHC 1958.
(ii) an offer or $13,000,000 in February 2023;
(iii) an offer of $10,000,000 in May 2023;
(c) EPTL entered into an unconditional sale and purchase agreement for the Properties for $13,200,000 on or around 12 April 2023.
[50] Ms Brugeyroux submits that the Jones Lang LaSalle valuations as at 21 March 2023 are lower than the offers that had been received for the Properties since cancellation and the price the Properties achieved at auction on 12 April 2023.
[51] Ms Brugeyroux also submits that TelferYoung and Jones Lang LaSalle have adopted different methodologies for valuing the Properties:
(a) TelferYoung has adopted market value, based on the “highest and best use” of the Properties it considers to be “to improve occupancy and cash-flow, whilst considering redevelopment options for the medium- long term”;
(b) Jones Lang LaSalle has adopted a sales comparison approach, based on “assessing value to vacant land/redevelopment sites”;
(c) despite adopting similar passing income figures, the net market rent and rental per square metre adopted by the two valuers is different, leading to markedly different Income Capitalised valuations of $16,270,000 (TelferYoung) and $7,700,000 (Jones Lang LaSalle).
[52] Ms Brugeyroux submits that on the evidence before the Court, there is a reasonably arguable dispute over the value of the Properties, which gives Mr Wang a reasonably arguable defence to EPTL’s claim. She submits that the value EPTL has attributed to the Properties for the purposes of calculating its claim for damages is less than all but one of the offers that EPTL subsequently received for the Properties, and the evidence is that a potential purchaser under that offer would likely have increased its offer if negotiations had occurred.
[53] Finally on this point, Ms Brugeyroux submits that the dispute over the values of the Properties is not appropriate for resolution by summary judgment and refers to the decision in MacLean v Stewart, in which she cites the proposition that summary judgment will not be granted where there is a credible dispute as questions of credibility can be determined only when a witness is in the witness-box on oath and is cross-examined, and the summary judgment procedure does not normally permit that method of testing allegations.16
[54] Ms Brugeyroux submits that it is reasonably arguable that EPTL has failed to take reasonable steps to mitigate its loss for the following reasons:
(a) the Properties were actively marketed from 21 July 2022 for sale by deadline private treaty, with an end date of 25 August 2022. The highest offer received as a result of the deadline was $9,295,000 which was received from Charm Education Limited. EPTL stopped actively marketing the Properties for sale no later than October 2022. Ms Brugeyroux points to the valuation report of Mr Johnson, which says that it is likely the selling period for the Properties is “6 to 12 months, assuming that [the Properties are] presented to the market in accordance with the specific assumptions noted in this report and the appropriate level of marketing”. It is not clear from EPTL’s evidence when the Properties stopped being actively marketed, but no evidence of advertising after 5 September 2022 has been provided. Both Ms Dickson and Mr Nees gave evidence that the Properties continued to be marketed into October 2022, although no evidence of what marketing was undertaken during that period has been provided. Accordingly, Ms Brugeyroux submits that it is reasonably arguable that EPTL retained the Properties no later than this date and thereby crystallised its loss.
(b) Ms Brugeyroux also points to Mr Nees’ evidence that Bayleys “did not discuss what Mr Lim might actually counter-offer but [Mr Nees expects
16 MacLean v Stewart (1997) 11 PRNZ 66 (CA) at 69.
Mr Lim] might have increased the offer by up to $500,000 if pushed in the negotiation.” Ms Brugeyroux makes the point that this could have increased the offer to $9,795,000 in August 2022, which is more than the market value EPTL has used to calculate its claim for damages.
(c) Ms Brugeyroux also points to transactions with LDW. She submits that in February 2023 EPTL received an offer for the Properties of
$13,000,000 from LDW, with a five per cent deposit payable and a settlement date six months after the unconditional date. LDW provided written confirmation that it had no connection with Mr Wang. EPTL counter-offered by increasing the deposit by $650,000 (five per cent) together with reducing the timeframe for settlement by half (from six months to three months). Ms Brugeyroux submits that EPTL acted unreasonably in that, in order to mitigate its loss, it should have accepted the purchase offer put forward by LDW, it acted unreasonably when it counter-offered, rather than accepting that offer and, by failing to do so, failed to mitigate its loss. Ms Brugeyroux submits that even if EPTL had a suspicion that LDW may have had a connection with Mr Wang, which was denied, that does not relieve EPTL of its obligation to mitigate its loss, including dealing with LDW, and she relies on Wu v Body Corporate 366611 as authority for that proposition.17
Conclusion in relation to quantum
[55] In my view, there is a sufficiently arguable dispute as to quantum of damages to which EPTL is entitled, such that summary judgment should not be given in respect of the quantum of damages. The reasons for this view are:
(a) there is a dispute regarding the correct date on which damages should be assessed and a conflict in approaches between BCH Investments Limited and Hooper v Oates. While I am of the view that the Hooper v Oates approach should be followed, the final date upon which EPTL
17 Wu v Body Corporate 366611 [2014] NZSC 137, [2015] 1 NZLR 215.
decided to retain the Properties is disputed and requires evidence to be finally established.
(b) There is a dispute regarding the valuation of the Properties, with Mr Wang raising a number of issues as to whether the value of the Properties was such that EPTL in fact suffered no loss. In this respect I note the submissions of Ms Brugeyroux (at [49] above) as to the different offers that were received for the purchase of the Properties since the date of cancellation of the Agreement. While there are questions around the seriousness of some of these offers, this is a matter which needs to be explored in evidence at trial and cannot be dealt with in a summary judgment context.
(c) There is an issue regarding whether EPTL took reasonable steps to mitigate its loss and could have done so by accepting offers which were above the valuation presented by Mr Johnson and used in the calculation of EPTL’s damages. Again, this is an issue which requires evidence to be given at trial and cannot be dealt with in the summary judgment context.
Result
[56] As a result of the conclusions I have reached at [38] and [55], I am of the view that EPTL’s application for summary judgment against Mr Wang should be granted as to liability for his breach of the Agreement only, and the issue of quantum of damages for which Mr Wang is liable should be determined at trial.
Orders
[57] I make the following orders:
(a) EPTL’s application for summary judgment is granted in respect of liability of Mr Wang for breach of the Agreement.
(b) EPTL’s application for judgment of the quantum of damages against Mr Wang is declined.
(c) Counsel are directed to endeavour to agree costs within 20 working days of the date of this judgment. If no agreement is reached within the 20 working day period, counsel for EPTL shall file a memorandum as to costs (not exceeding five pages) within 10 working days of expiry of the 20 working day period, and counsel for Mr Wang will file a reply (not exceeding five pages) within five working days of receipt of counsel for EPTL’s memorandum. A decision on costs will then be made on the papers.
................................... Associate Judge Taylor
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZHC/2023/1639.html