Yu v Bradley

• Jurisdiction: New Zealand
• Judge: Palmer J
• Judgment Date: 28 July 2020
• Neutral Citation: [2020] NZHC 1822
• Court: High Court
• Docket Number: CIV-2017-404-1125
• Date: 28 July 2020

Between

Jing Jun Yu

First Plaintiff

Andrew Investments (2004) Limited

Second Plaintiff

and

Dale Gordon Bradley and Jillian Anne Bradley

Defendants

[2020] NZHC 1822

Palmer J

CIV-2017-404-1125

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA

TĀMAKI MAKAURAU ROHE

Contract, Property — application for return of a deposit under a dialed sale and purchase agreement — counter-claim by the defendant for damages — the defendant had prevented the applicant from inspecting the property prior to settlement — the defendant issue a settlement notice — the plaintiff purported to cancel the agreement

Appearances:

J F Anderson QC and L R Green for the plaintiffs

H M Z Lanham and J K Grimmer for the defendants

JUDGMENT OF Palmer J

This judgment was delivered by me on Tuesday 28 July 2020 at 11.00am. Pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Summary

1 The property at 471 Whitford-Maraetai Road, Whitford, has lovely views of the Hauraki Gulf and Rangitoto. On 12 November 2016, Mr Jing Jun (Jason) Yu agreed to buy it from Mr Dale Bradley and Mrs Jillian Bradley. But the expansive lawn leading to the bush in the foreground of the sea view did not all belong to the property. When the neighbour who owned a V-shaped part of the lawn issued a Fencing Act notice before settlement, Mr Yu wanted to inspect the effect on the view. On 14 February 2017, the day before settlement, Mr Bradley prevented Mr Yu and his lawyer and valuer from inspecting the property. Mr Yu claimed compensation under cl 8 of the standard form sale and purchase agreement. He issued a settlement notice on 16 February 2017. On 20 February 2017 Mr Yu and his advisers did inspect the property. The next day, the Bradleys issued a settlement notice. Settlement did not occur. On 10 March 2017, Mr Yu purported to cancel the sale and purchase agreement. On 13 April 2017, the Bradleys did the same. Mr Yu accepted that as a repudiation. The Bradleys retained the deposit of $230,000. Mr Yu sues to get it back, plus interest. The Bradleys counterclaim for damages.

2 On the balance of probabilities, I find Ms Yangling (Helen) Han, the Bradley's real estate agent, did not specifically point out the property's boundaries to Mr Yu on a pre-sale visit. But she remedied this before his offer was presented to the Bradleys when she showed him a map clearly illustrating the boundaries. So the misrepresentation was corrected before the agreement was entered and Mr Yu's claim on that ground fails. Under the standard terms of the Agreement, a purchaser is entitled to inspect a property to check they are getting what they agreed to pay for, before settlement. Any written authorisation of another person by a purchaser under cl 3.2 must be for those purposes. Mr Yu did not authorise his valuer, in writing, to inspect the property. But Mr Bradley denied Mr Yu his right to inspect the property before the agreed settlement date. Because of that, Mr Yu was not required to settle then.

3 A claim under cl 8 must be genuine and reasonably arguable, not frivolous or vexatious or an abuse of the process set out by cl 8. Mr Yu did have such a claim for compensation but he did not make the claim unconditionally so it was not made for the purposes of s 8. That means, after inspection occurred and the Bradleys issued their settlement notice, the Bradleys were ready, able and willing to settle and Mr Yu should have been. He was not, because he insisted on a deduction for a claim for compensation he had not made. Mr Yu's cancellation of the agreement was therefore invalid. The Bradleys were entitled to treat it as a repudiation and cancel the agreement themselves. The Bradleys are entitled to damages of $575,672.99 and interest, with certain deductions, for the losses they sustained.

What happened?

The property

4 471 Whitford-Maraetai Road, at Whitford is a 45-minute drive north of Auckland, unless it is rush hour. The brochure advertising its sale in 2016 is titled “[o]n top of the hill with a spectacular sea view”. 1 It advertises a two story, four-bedroom house of approximately 256 square metres on a 2.4 hectare property. It shows a reasonably steeply-sloping lawn down to native bush, with the coastline and sea view beyond that. On page nine is a photo taken with a telephoto lens, of Rangitoto, with the caption “Unobstructed views over the protected native bush to Rangitoto”. The views are mentioned, and shown, on several pages. The sweeping lawns are also mentioned. 2

5 In 2016, there was nothing physically indicating that the boundary of the property stopped before the sloping lawn reached the native bush. But, in fact, a V-shaped wedge of the lawn, pointing upwards and reaching about half way up towards the house, was part of a neighbouring property below. The sloping lawn was visible from the upstairs master bedroom in the house; but not from the downstairs or the lawn immediately outside the house, due to a hedge and the slope. 3 The distance between the apex of the V and the hedge was 18 metres. 4 It was approximately represented in the photograph below, sent by the lawyer for the neighbours to the purchaser, as explained below. 5

The parties

6 Mr and Mrs Bradley bought the property in 2000. Mr Bradley's evidence is that they never treated the sloping lawn as their own but they kept it tidy as good neighbours. 6 He says they agreed with the then-neighbour to remove a broken down fence that used to be on both sides of the V and a contractor, acting on the neighbour's

instructions, smoothed out the area from where the fence was removed. 7 In 2016, the Bramwells bought the property which included the V in the sloping lawn. Mr Bradley continued to mow the sloping lawn sometimes, as he had done when the previous two neighbours were there. 8 He did not understand the Bramwells to be unhappy with that arrangement. 9

7 Mr Yu is an Auckland businessman. He emigrated to New Zealand 20 years ago, and is the managing director of a travel company that has provided travel services to visitors, mainly between New Zealand and China. He is also the sole director of Andrew Investments (2004) Ltd, an investment company. He describes himself as having experience purchasing properties but said under cross-examination that his lawyer thinks he is a very gullible person and once shouted at him not to sign anything until the lawyer had seen it. 10 Mr Yu's evidence is that he makes “lots of mistakes” and has previously bought three leaky homes. 11

Mr Yu visits the property

8 In February 2016, the Bradleys listed the property for sale with Mr Tzong-Wen (Daniel) Huang at the Meadowlands branch of Barfoot and Thompson. 12 Mr Bradley's evidence is that he walked around the property with Mr Huang, showed him the boundary line, made clear not all the sloping lawn was on his land and told him about the arrangement that he mowed the sloping lawn to keep it looking tidy. 13 Mr Bradley relied on Barfoot and Thompson's advice about what to put in the brochure and approved the description of the property, and photographs, in the brochure. 14 Around October 2016, the Bradleys rejected an offer for the property of $2.1 million from another adjoining neighbour, Mr Kelvin Mackie, who seems to have had subdivision plans for his properties. 15 The Bradleys counter-offered at $2.3 million but no agreement was reached.

9 On 9 November 2016, Mr Yu visited the property. Ms Han showed him around. They spoke in Mandarin. 16 There is a conflict in the evidence about what happened and what was said. Mr Yu's evidence is that she told him the boundary followed the line of trees to the west, down to the trees. 17 He says they walked all the way to the trees (down the sloping lawn), and through bushes which would have been on the adjoining property though he did not know it. 18 Mr Yu and Ms Han agreed she showed him a map of the property on the Property Guru app on her phone. 19 It shows the boundaries to the property. She says she texted a screenshot to Mr Yu. 20

10 Ms Han's oral evidence was somewhat difficult to follow as she did not make a practice of directly answering questions. Under cross-examination, she stated she positively pointed out the boundaries to Mr Yu and specifically told him the lawn was not part of the property. 21 This went further than her evidence in chief, or her evidence for a summary judgment hearing in 2017, which was that she told Mr Yu she “could” point out the boundaries but he would need to talk to a surveyor to know the exact boundaries. 22 Mr Bradley had only pointed out the boundaries to Mr Huang, not to Ms Han. 23 Neither Ms Han nor Mr Huang recalled discussing the boundaries with each other. 24 Ms Han also appears to agree that she had shown Mr Yu around part of the adjoining property and said she could not recall exactly where they walked. 25

11 I find, on the balance of probabilities, Ms Han did not specifically point out the boundaries to Mr Yu on 9 November 2016. Her evidence under cross-examination was not convincing. It had the air of being a retrospective justification. The fact it had not previously been offered suggests it owed something to wishful thinking at the time of cross-examination.

Mr Yu makes an offer and the Bradleys accept it

12 On 10 November 2016, Mr Huang told the Bradleys that his associate, Ms Han, had a written offer for the property from Mr Yu for $2.15 million. 26 On Friday 11 November 2016, Ms Fitzpatrick at Barfoot and Thompson told the Bradleys there was now a multi-party offer situation. 27 On Saturday 12 November 2016, Ms Fitzpatrick chaired a meeting at which the Bradleys received two offers, from Mr Mackie and from Mr Yu. Both offers were at $2.3 million but Mr Mackie's proposed settlement date was too soon for the Bradleys. Mr Yu's offer was conditional on a solicitor's approval within two days. Mr Yu later nominated...