SUPREME COURT ACTION

Press, Volume LXXXIII, Issue 25269, 22 August 1947, Page 5

SUPREME COURT ACTION

SALE OF BUSINESS DISPUTED

PURCHASER SEEKS ORDER ENFORCING CONTRACT An order for specific performance of a contract by Edward James Abell, storekeeper, to sell n*s property, or, in the alternative, £suo as aamages, was sougnt oy Louis Deimonie, fruiterer, in the supreme Court yesterday, before Mr Justice Flenung. The plaintiff, Delmonte, was represented by Mr T. A. Gresson and Mr G. C. Weston. The defendant was represented by Mr W. J. Sim, K.C., and Mr F. J. Kember, of Wellington.

The defendant denied that Delmonte had suffered any damage. He contended that he had not accepted the Sales Court order, and that the order was made without jurisdiction and was null and void. The defendant counter-claimed for £7l 10s rent.

“This case raises a novel question and is of great importance regarding contracts for the sale of land. It involves the construction of a number of sections in the Servicemen’s Settlement and Land Sales Act, 1943, and the 1946 amendment to that act,” said Mr Gresson. “The precise point has not previously been considered oy tlie Supreme Court, though some oi the questions which arise have been discussed in ceitain judgments of the Land Sales Court itself and also in at least two magistrates’ decisions.”

On May 16, 1946, the plaintiff bought a storekeeper’s business from the defendant for £lB5O, this priqe to include the plant and equipment. The plaintiff was to have a lease of the premises for one year and 11 months at a rental of £3 5s a week, said Mr Gresson. Delmonte took possession of the shop on June 4, 1946, and some time in August, 1946, Abell suggested that he should buy the freehold, including the house and shop. On September 20, 1946, the two entered into a contract by which Delmonte was to purchase from Abell the property at 134 Opawa road for £1640. This was the contract which the plaintiff sought to have specifically performed by the defendant. The offer was subject to thi consent of the Land Sales Committee to the price, and. if the price was lower than the vendor was prepared to accept, he had seven days to notify his refusal of the price. The Christchurch Urban Land Sales Committee heard the application on November 20. and it gave its consent to the sale at £1640, on condition that credit be given Delmonte for £738 overpaid by him when he purchased the business. Ng appeal was lodged by either party, and the Land Sales Court sealed its order. Once the time for an appeal had lapsed, the order of the Land Sales Court was final, submitted counsel. In March the plaintiff’s solicitor wrote to the defendant stating that, failing a settlement, the plaintiff would consider himself free to take proceedings in the Supreme Court. On June 10 the vendor's solicitor wrote to Delmonte. telling him that rent was still owing and that Abell did not recognise as binding the contract for the sale of the freehold, as the conditions imposed by the Land Sales Committee permitted him to repudiate the contract.

Plaintiff’s Evidence The plaintiff* gave evidence on his negotiations with Abell and. in reply to Mr Sim, said that Abell wanted to buy back the business. A man had offered him £2OOO for the business, but he was not interested. Abell bought the property and business from a man named Hall in 1945 for £2350.

Mr Gresson submitted that, when the Land Sales Committee required Abell to credit Delmonte with £738 overpaid in the first transaction, it was not reducing the consideration or Interfering with the contract price of the land, but was merely invoking its statutory powers under the 1946 amendment. If Abell ever had the right to repudiate the contract he had forfeited that right by his silence and inaction.

Frederick F.verard Dale, solicitor for Abell, said he had made it clear to the plaintiff’s solicitor that Abell repudiated the contract after the Land Sales Court ord«»r was made.

Mr Sim submitted that ihe planitiff had only a conditional contract, the condition imposed by the Land Sales Court not having been accepted by the defendant. Further, the Land Sales Court order was ultra vires and was made in excess of the Land Sales Court’s jurisdiction. The I.and Sales Court was not a Court for »he reshaping of contracts—it was a Court for fix'ng the price of land and keeping down the price of land. There was such a variation of the contract that it was not binding on t ie vendor until he gave his uneouivocal acceptance. in lieu of the vendor receiving. £540 in cash and having his mortgage cleared, he was to find £lPg as partial reduction of the morteaee. That was a comn’ete variation of the payment nrlce. and had never been accented hv the defendant. His Honour reserved his decision.