11 Maunganui Road Ltd v Evaroa

JurisdictionNew Zealand
JudgeJudge Faire
Judgment Date20 September 2010
Neutral Citation[2010] NZHC 1715
Docket NumberCIV 2010-404-001678
CourtHigh Court
Date20 September 2010
Between
11 Maunganui Road Limited
Plaintiff
and
William Mataiopo O Takau Ariki Evaroa and Kathryn Lesley Evaroa
First Defendants

and

Malcolm Ellerslie Eden and Raewyn Mayvis Eden
Second Defendants

[2010] NZHC 1715

CIV 2010-404-001678

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

Application for summary judgment seeking an order for specific performance of an agreement for sale and purchase — the defendants all entered into agreements for the sale and purchase of apartments in a high rise property developed and sold by the plaintiff. The agreements were subsequently cancelled due to variations in design between the plans and actual building. Orders were sought for the specific performance of all three sale and purchase agreements — whether the cancellation orders were justified due to misrepresentation or breach of contract under the Contractual Remedies Act 1979.

Counsel:

RJ Hollyman and S McLaughlin for plaintiff CA Murphy for defendants

JUDGMENT OF ASSOCIATE Judge Faire [on application for summary judgment]

The application
1

The plaintiff applies for summary judgment against the first and second defendants.

2

In respect of the first defendants, an order for specific performance is sought in respect of a sale and purchase agreement relating to apartment P25 in the unit title complex at Mt Maunganui known as Eleven, together with interest in accordance with clause 6.3 of the agreement for sale and purchase. In addition, the plaintiff seeks specific performance against the first defendants in respect of apartment P26 in the unit title complex at Mt Maunganui known as Eleven, together with interest in accordance with clause 6.3 of the agreement for sale and purchase.

3

In respect of the second defendants, the plaintiff seeks specific performance of a sale and purchase agreement relating to apartment N9B in the unit title complex at Mt Maunganui known as Eleven, together with interest in accordance with clause 6.3 of the agreement for sale and purchase.

The court's approach to a plaintiff's summary judgment application
4

Rule 12.2 of the High Court Rules requires that a plaintiff satisfy the court that a 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. The rule permits the entry of judgment in respect of part of a claim, as was made clear by the amendment introduced by r 5 of the High Court Amendment Rules 2009 (SR 2009/75). The obligations imposed by the rule have been examined by a number of authorities.

5

The correct approach to an application for summary judgment by a plaintiff was recently summarised in Krukzeiner v Hanover Finance Ltd 1 where the court said:

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 [1987] 1 NZLR 1 at 3 (CA). 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 have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). 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 [1980] AC 331 at 341 (PC). 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 (1987) 1 PRNZ 84 (CA).
6

In Pemberton v Chappell 2 the court also commented on the position where a defence is not evident on a plaintiff's pleading and said:

If a defence is not evident on the plaintiff's pleading I am of opinion that if the defendant wishes to resist summary judgment he must file an affidavit raising an issue of fact or law and give reasonable particulars of the matters which he claims ought to be put in issue. In this way a fair and just balance will be struck between a plaintiff's right to have his case proceed to judgment without tendentious delay and a defendant's right to put forward a real defence.

7

That position was further reinforced in Australian Guarantee Corporation (New Zealand) Ltd v McBeth 3 where the court said:

Although the onus is upon the plaintiff there is upon the defendant a need to provide some evidential foundation for the defences which are raised. If not, the plaintiff's verification stands unchallenged and ought to be accepted unless it is patently wrong

8

Hypothetical possibilities in vague terms, unsupported by any positive assertion or corroborative documents advanced by defendants will not frustrate the obligation on a plaintiff to discharge the onus of proof: SH Lock (NZ) Ltd v Oremland. 4

9

In Tilialo v Contractors Bonding Ltd 5 the court raised a caution and said:

The Courts must of course be alert to the possibility of injustice in cases in which some material facts to establish a defence are not capable of proof without interlocutory procedures such as discovery and interrogatories. That

does not mean that defendants are to be allowed to speculate on possible defences which might emerge but for which no realistic evidential basis is put forward.
10

A court is not required to accept uncritically any or every disputed fact: Eng Mee Yong v Letchumanan. 6 However the court will not reject even dubious affidavit evidence, even though there must be suspicion as to the good faith of the deponent, if there is an essential core of complaint that supports a defence. In essence, the inquiry is whether or not the person's assertion passes the threshold of credibility: Pemberton v Chappell; 7 Orrell v Midas Interior Designs. 8

11

In Tilialo v Contractors Bonding Limited 9 it was observed:

Drawing the line between mere assertions of possible defences and material which sufficiently raises an arguable defence so that the defendant should not be denied the opportunity to employ interlocutory procedures and have a trial is a matter of judgment. Views may well differ.

Amendment
12

The plaintiff's submissions in support concluded shortly after 4pm on the first day of the fixture. Ms Murphy signalled a challenge to one of the main points advanced by Mr Hollyman.

13

Mr Hollyman advanced the case that though there were conflicts in so far as the evidence was concerned regarding representations, for the purpose of the summary judgment hearing the plaintiff would not rely on this. The plaintiff, instead, supported its case in the following way, namely:

  • a) There was no breach by the plaintiff that entitled the defendants to cancel pursuant to the Contractual Remedies Act 1979;

  • b) There were no representations by the plaintiff that entitled the defendants to cancel pursuant to the Contractual Remedies Act 1979; and

  • c) Alternatively, there had been an affirmation by the defendants so that it was not possible for them to cancel.

14

Ms Murphy challenged the plea of affirmation on the basis that it did not specifically appear in the statement of claim or notice of application for summary judgment. Further, she submitted that not all evidence on the basis that affirmation was a possible plea was before the court. She submitted that the position occurred because of the lack of a clear pleading of affirmation either in the statement of claim or in the summary judgment application.

15

In a minute that I issued directly following hearing counsel I noted that this case raised a problem for summary judgment applications. There was no provision that allows further evidence to be adduced where a plaintiff raises an affirmative answer in the plaintiff's reply affidavits to the defendant's opposition.

16

In the minute that I issued I briefly recorded the three hurdles which an applicant for amendment must meet as set out in Elders Pastoral Ltd v Marr. 10 I also recorded that Cegami Investments Ltd v AMP Financial Corporation (NZ) Ltd 11 confirmed that amendments to proceedings were possible in the summary judgment procedure. A short adjournment was then granted. Its purpose was to see whether the plaintiff wished to carry on with summary judgment and, if so, what amendments were sought.

17

On 16 July 2010, at the subsequent conference, Mr Hollyman advised that his client wished to proceed with the summary judgment application and that he would seek permission to amend to cover affirmation and, in particular, the application of the Contractual Remedies Act 1979, s 7(5) to this case. Although Ms Murphy did not consent, she did not raise particular prejudice having regard to the fact that an

adjournment of the hearing had to be granted because we had run out of time. Directions were then made for the filing and service of an amended pleading or application as appropriate, an amended notice of opposition, and for additional evidence. In addition, provision was made for the filing of additional submissions covering the position in relation to affirmation
18

In its amended application for summary judgment in respect of the first defendants, the plaintiff added to the grounds in support the following:

  • (b) Insofar as the first defendants may have had a right to cancel (which is denied), the first defendants have affirmed their agreements for sale and purchase by their conduct, which is inconsistent with cancellation and which made it clear that they wished to hold the contract open, rather than cancel it. The plaintiff relies in particular on the...

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