Awakino Fortune Ltd v Rising (NZ) International Investment Development Co Ltd [2020] NZHC 1204

Awakino Fortune Ltd v Rising (NZ) International Investment Development Co Ltd [2020] NZHC 1204 [2 June2020]IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYI TE KŌTI MATUA O AOTEAROAKIRIKIRIROA ROHECIV-2019-419-008[2020] NZHC 1204BETWEEN AWAKINO FORTUNE LIMITEDPlaintiffAND RISING (NEW ZEALAND)INTERNATIONAL INVESTMENTDEVELOPMENT CO LIMITEDDefendantHearing: 2 June 2020Appearances: DM O'Neill for the PlaintiffNo appearance for the DefendantJudgment: 2 June 2020ORAL JUDGMENT OF ASSOCIATE JUDGE SMITHThis judgment was delivered by me on 2 June 2020 at 11.45ampursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors / Counsel:D O'Neill, Hamilton[1] This is a summary judgment application in which no notice of opposition hasbeen filed. The summary judgment has been properly served, but there has been nocontact at all from the defendant, whose principal operatives appear to be based inChina.[2] The case arises out of an agreement for sale and purchase under which thedefendant agreed to purchase a 29 hectare property from the plaintiff for $8.5 million.A deposit of $425,000 was paid by the defendant.[3] The agreement was conditional on the defendant obtaining consent to thepurchase of the property from the Overseas Investment Office (the "OIO") under theOverseas Investment Act 2005, on terms which were acceptable to the defendantacting reasonably.[4] No consent was ever obtained by the defendant under the Overseas InvestmentAct 2005, and after several extensions granted by the plaintiff, the plaintiff eventuallycancelled the contract. In its statement of claim, it pleads that the defendant wasobliged to use all commercially reasonable endeavours, take all steps and diligentlypursue such steps to obtain the OIA consent. The plaintiff says that the defendant didnot take reasonable steps to satisfy the OIA consent condition; indeed it withdrew theconsent application in July 2018, and thereafter took no further steps to pursue theapplication.[5] The plaintiff then cancelled the contract. It has provided affidavit evidencefrom a registered valuer, Mr Coakley, who has expressed the view that the marketvalue of the property as at 2 September 2019 is now only $4 million.[6] The plaintiff originally claimed the difference between the purchase price of$8.5 million and the current market value of the property ($4 million), but in amemorandum of counsel dated 26 May 2020 Mr O'Neill advised that he had receivedinstructions to reduce the amount sought to $750,000.[7] I am satisfied from the affidavits filed in support that the plaintiff's claim hasbeen sufficiently made out. In particular, Mr Reipen's affidavit in support attaches anemail received from Dr John Xing on behalf of the defendant, in which Dr Xingeffectively acknowledged that the defendant did not pursue the OIA application withappropriate diligence. Dr Xing referred to his mother's serious illness in August, thedefendant's lawyer being on vacation, and the fact that if the application to the OIOwas not approved, it would be announced on the OIO website. That was said to be amatter that gave the defendant concern over future applications or business operationsin New Zealand. In addition, Dr Xing said the lawyer instructed for the defendant inNew Zealand refused to give advice.[8] In the absence of any opposition to the claim, I am satisfied that the claim ofbreach of contract is made out, and that the plaintiff was entitled to cancel. Theevidence of the registered valuer showing a loss of approximately of $4 million as at2 September 2019 amply supports the plaintiff's reduced claim for $750,000, and Igive summary judgment to the plaintiff accordingly for the sum of $750,000.1[9] For the foregoing reasons, I give judgment for the plaintiff for the sum of$750,000, together with interest on that sum under the Interest on Money Claims Act2016 to today's date. Costs are also awarded to the plaintiff on a 2B basis.Associate Judge Smith1 Mr O'Neill told me at today's hearing that the plaintiff's decision to reduce the claim to $750,000merely reflects its acceptance that there would be significant difficulties for it in attempting toexecute any higher judgment.