Maraetai Co Limited v Yu

[2020] NZHC 2870

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-398

[2020] NZHC 2870

BETWEEN

MARAETAI CO LIMITED

Plaintiff

AND

ZUO YAO YU

Defendant

Hearing:	On the papers
Counsel:	G Blanchard QC and J Little for the Plaintiff
Judgment:	3 November 2020

JUDGMENT OF GAULT J

This judgment was delivered by me on 3 November 2020 at 12:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:

Mr G Blanchard QC and Mr J Little, Barristers, Auckland

Ms D Marsden (plaintiff’s instructing solicitor), Alexander Dorrington, Auckland

MARAETAI CO LTD v YU [2020] NZHC 2870 [3 November 2020]

[1]        The Court granted the plaintiff summary judgment on 14 July 2020 ordering specific performance of an agreement for sale and purchase, requiring the defendant to complete the purchase.

[2]Despite the Court’s order, the defendant has failed to do so.

[3]The plaintiff then applied for orders:

(a)vacating the Court’s order for specific performance;

(b)giving leave to the plaintiff to cancel the agreement;

(c)cancelling the agreement;

(d)directing an inquiry into damages; and

(e)adjourning the proceeding to a mention in six months, but granting the plaintiff leave to bring the proceedings back for mention sooner if the plaintiff is able to resell the property, quantify its losses and apply for a fixture at an earlier time.

[4]The defendant has not filed any opposition.

[5]        Following discussion with Mr Little, for the plaintiff, at the first call of the application, the plaintiff has filed a memorandum of counsel confining its application to an order vacating the Court’s order for specific performance.

[6]        An order vacating the earlier order for specific performance is required since the contract is now under the control of the Court.1 By vacating the earlier order for specific performance, the Court is relinquishing such control of the contract. The contract remains extant; it has not been merged in the order for specific performance.2

1      Alexander v Gitmans CA11/04, 17 June 2004 at [21]; and  Pegasus Town  Ltd v Wong  (2010)   11 NZCPR 524 (HC) at [9]-[11].

2      Johnson v Agnew [1980] AC 367 (HL) at 393.

[7]        I consider there is no continuing requirement on the plaintiff to revert again to the Court before seeking to cancel in accordance with the contract and the Contract and Commercial Law Act 2017. Insofar as the cases referred to state that following an order for specific performance only the Court can terminate the contract, they relate to the situation where there is an existing order for specific performance. As William Young J said in Alexander v Gitmans, “the view that only the Court terminate a contract is open to question” and there was no need in that case to “resolve the metes and bounds of the relevant jurisdiction”.3 Of course, as the cases indicate, the Court may, following the discharge of its order for specific performance, authorise and order cancellation of the contract. But I consider it is also possible for the Court to discharge the order for specific performance and leave the plaintiff to proceed to cancel in accordance with the law and without a further Court order. In any event, a plaintiff seeking damages will need to amend its claim and pursue its amended claim to judgment in the ordinary way.

Result

[8]        The plaintiff’s application for an order vacating the Court’s earlier order for specific performance is granted. The order for specific performance is vacated.

Gault J

3      Alexander v Gitmans at [21].