PHOTO: 34 Hamilton Road, Herne Bay. SUPPLIED
A purchaser who had agreed to a $5.7 million deal for a residence in Herne Bay, Auckland, has been instructed to pay over $700,000 to the seller after defaulting on the payment.
The property, situated at 34 Hamilton Road, Herne Bay, belonged to NZ Tourist Investments Ltd. On March 12, 2022, NZ Tourist entered into a sales agreement with Vast Investment Ltd. for the property, valuing at $5.7 million.
Dabin Wang serves as the sole director and shareholder of Vast.
Vast failed to make the payment by the settlement deadline of June 30, 2022. Despite NZ Tourist issuing a settlement notice, Vast defaulted.
Subsequently, NZ Tourist relisted the property, and it eventually sold on January 24, 2023, for $4.9 million.
NZ Tourist then took legal action against Vast to recover its losses.
While Vast acknowledged its liability for breach of contract, it contested a summary judgment for losses, asserting that NZ Tourist could have obtained a higher price on the resale by keeping the property on the market for a longer duration.
The case was heard by Associate Judge Grant Brittain in the High Court at Auckland.
In a recent decision, Judge Brittain stated that for Vast to succeed, it needed to prove that NZ Tourist had acted unreasonably during the resale process.
Vast argued that NZ Tourist sold the property at a substantially below-market value at the time and, therefore, could not recover an amount equivalent to the undervalue.
Judge Brittain observed that it was widely accepted that property prices were declining in 2022, and the anticipation of a weakening economy and property market justified NZ Tourist’s swift actions.
Vast’s criticisms of specific aspects of the resale process, based on hindsight, were deemed insufficient to support a finding of unreasonable conduct. The defense of a failure to mitigate loss was considered not arguable by Brittain.
Consequently, Vast was ordered to pay NZ Tourist $681,136.83, covering the loss on resale, interest on the unpaid purchase price between the original settlement date and the resale settlement date, costs for rates, water charges, and insurance between those dates, as well as the expenses associated with the resale process.
Additionally, Vast was directed to pay 14% interest per annum on $230,000 from January 23, 2023, until the date of payment, along with $18,218.25 in court costs and disbursements.
SOURCE: STUFF