TEAM CLAVEL MOTORSPORT V NEIL ALLPORT MOTORSPORTS LTD HC AK CIV-2010-404-002823

TEAM CLAVEL MOTORSPORT V NEIL ALLPORT MOTORSPORTS LTD HC AK CIV-2010-404-002823 7 May 2010IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2010-404-002823BETWEEN TEAM CLAVEL MOTORSPORT Plaintiff AND NEIL ALLPORT MOTORSPORTS LTD Defendant Hearing: 7 May 2010 Appearances: M I S Phillips and J K Goodall for Plaintiff No appearance for Defendant Judgment: 7 May 2010ORAL JUDGMENT OF VENNING JSolicitors: Asco Lawyers, Auckland Bruce Dell Law, Auckland Copy to: M I S Phillips, Auckland J K Goodall, Auckland[1] This is an application for interim injunction which has been brought before the Court on an urgent basis today. It was served on a Pickwick basis on Mr Dell, solicitor for the defendant. There is no appearance by Mr Dell this afternoon although I am informed by counsel Mr Phillips that Mr Dell agreed to a letter from his firm addressed to the plaintiff's solicitors dated 7 May to be put before the Court as recording the defendant's position.Background[2] I set out the background briefly. The plaintiff, a motorsports team based in New Caledonia, agreed to buy a rally car off the defendant. The agreed purchase price was $95,000. The invoice recorded payment was due by 7 December 2009. It also recorded all goods remained the property of the defendant until paid in full and that interest would be charged on all overdue accounts at two per cent per month. [3] It was the plaintiff's intention to rally the car in the Pacific Cup starting with a rally in Whangarei between 2 and 3 July 2010. [4] For reasons it is unnecessary to go into in detail the plaintiff was dilatory in making payment of the agreed purchase price. An initial payment of $50,000 was paid by way of electronic transfer on 11 December 2009. There then followed an email exchange between the parties on 23 February regarding payment of the balance. In early March the defendant raised with the plaintiff the possibility of a client of the defendant leasing the car for use in the Rally of New Zealand on the basis that the defendant would look after it:The car needs some money spent on it to rebuild it before you can use it and this would be a good way of getting that work done and it not cost you any money. Please let me know if you would be interested.[5] The plaintiff advised that it would agree to the proposal but would like to know the conditions of the lease, particularly the type of insurance and coverage value. He requested a number of parts be exchanged following the rally and also asked that he be permitted to retain the old parts.[6] The matter was not pursued because on 8 March the defendant advised the plaintiff that they did not now need to use the car in Rally New Zealand. [7] There was further correspondence between the parties regarding payment. Ultimately the plaintiff paid the balance by three further instalments on 12 March, 6 April and 29 April. In total the plaintiff apparently paid $98,000 including an interest factor of $3,000 for the late payment. [8] The plaintiff then made arrangements to come to New Zealand to uplift the car on 5 May. When the plaintiff's president sought to uplift the car on that day the defendant declined to make the car available. The defendant had apparently made arrangements to use the car in Rally New Zealand and said it would not be available to be collected by the plaintiff until 21 May. [9] Further discussions followed between the parties, their counsel and solicitors. For the reasons that follow the plaintiff does not accept any resolution was achieved. The Rally of New Zealand has started. The plaintiff is concerned that if the car, which it has now paid for, is damaged in that rally it will not be able to use it for the purposes that he bought it which was to engage in the Pacific Cup Rally. Quite apart from the Pacific Cup rally starting in July the plaintiff also wishes to train in the car in advance of the rally. [10] Against that background the plaintiff seeks orders:• restraining the defendant from making the car available further to participate in Rally of New Zealand;• requiring the defendant to take all necessary steps to recover possession of the car;• restraining the defendant from making any further use of it that is not first authorised by the plaintiff;• restraining any other person served with the order of the Court from using the vehicle in the Rally of New Zealand; and• reserving the costs of the application. [11] There are aspects of the injunction which, if granted, will effectively determine the particular issue between the parties as to the car's use in Rally of New Zealand. So that, apart from arguments as to damages, the use of the car in the rally will effectively be determined. For that reason the Court must be satisfied rather more than that there is a serious question to be determined. [12] I am however satisfied on the evidence before the Court ownership and property in the car has passed from the defendant to the plaintiff with the final payment of the purchase price. This is an agreement for sale and purchase of goods. The contract itself provided property was not to pass before payment in full. On the evidence before the Court payment in full has now been made. The property in the car has passed to the plaintiff. It is the plaintiff's car and was from the date of the last payment. [13] While the plaintiff breached the original agreement with the defendant as to the date for payment, the defendant did not cancel the contract or otherwise seek to bring it to an end. Indeed in the last email exchange on 30 April the defendant effectively acknowledged that the car was to be provided to the plaintiff in accordance with the agreement but not until 21 May. [14] If the defendant intended to use the car in the rally or lease it for use in the rally then the defendant ought to have advised the plaintiff and obtained its consent as it had in the earlier email on 2 March. [15] In short, I am satisfied on the evidence the plaintiff is the owner of the car and prima facie is entitled to possession of it. [16] The balance of convenience favours the orders sought by the plaintiff. Damages would not be an adequate remedy for the plaintiff in this case because analternative car of the same specifications may not be available to the plaintiff as a replacement if anything were to happen to the car in the course of the rally. [17] There are two remaining issues. The first is the defendant's position. In the letter from the defendant's solicitor, the solicitor says that an agreement was reached with counsel as to the terms upon which the car could be used by the defendant or leased by the defendant for use in the Rally of New Zealand. It is not accepted for the plaintiff that there was such an agreement made. [18] The letter from the plaintiff's solicitor of 6 May attaches a proposed basis for settlement. The defendant's solicitor does not accept that all of those terms were agreed but says that something somewhat less than that was agreed with counsel the day before. There is limited evidence on that matter before the Court but it seems unlikely that counsel would agree to the level of detail that the defendant suggests by way of settlement without final instructions. Further, the letter from the plaintiff's solicitor is consistent with the plaintiff setting out a proposal for resolution rather than recording a pre-existing agreement. [19] On the information before the Court I do not accept that there was any such pre-existing agreement permitting the defendant to use or lease the vehicle for use. [20] The last matter is the issue of any damages that the defendant may claim against the plaintiff on the basis that the plaintiff was not entitled to the injunction and the orders it seeks. [21] The defendant's solicitor has suggested a round figure of $100,000 without any attempt to quantify that. I am, however concerned at the undertaking that has been provided on behalf of the plaintiff given that the plaintiff is an incorporated association based in New Caledonia. I propose to make it a condition of the injunction orders which I make, that the orders will lie in Court until the plaintiff's president provides his personal undertaking. [22] I also note and record that, as discussed with counsel, I consider there is further security for the defendant in relation to any damages claim in that the orderssought do not at present seek delivery up of the car to the plaintiff. I would not have been minded to make such an order without hearing further from the defendant and particularly without hearing argument on the issue of the adequacy of the plaintiff's undertaking in the event of any damages claimed by the defendant. [23] However, given that the orders do not seek delivery up of the vehicle and the defendant will retain possession of the vehicle at present pending further order of the Court it seems to me that the defendant has sufficient security for damages. [24] It follows from the above discussion that I am satisfied the plaintiff is entitled to the injunction orders.Orders[25] The orders made will follow the orders sought in the draft filed with the additional order that leave is reserved to the defendant and any third party affected by this order to seek leave to vary the orders or seek further orders from the Court on four hours notice to the plaintiff's solicitors. [26] The orders are to lie in Court until the plaintiff's president, Mr Clavel, provides his personal undertaking as to damages and it is filed with the Court. __________________________ Venning J