Du v Yoon & anor [2025] NZHC 621 concerned the operation of clauses in a standard form agreement for the sale and purchase of land that apply when damage is caused to the property by natural events occurring between the making of the agreement and settlement, and when settlement does not take place on the settlement date.
The plaintiff, Ningfei Du, says he is entitled to the return of the deposit of $1,063,000.00, which he paid following his successful tender to purchase the property at 149A Arney Road, Remuera, Auckland from the defendants, David Youn and his wife, Miji Sunwoo, in accordance with an agreement for the sale and purchase. Mr Du seeks specific performance of what he says is the defendants’ obligation to return the deposit after he cancelled the ASP, following damage to the Arney Road Property caused by the extreme weather events that took place over the Auckland Anniversary Day weekend in late January 2023. Mr Du says these events made the property untenantable, which entitled him to cancel the ASP. Mr Du also seeks interest on the amount of the deposit from the date of cancellation to the date of payment, plus costs. The defendants say the property was not untenantable and Mr Du had no right to cancel the ASP. They say the purported cancellation was a repudiation of the ASP and the deposit was forfeit. The defendants counterclaim for damages of $391,764.19 for losses they say they suffered as a result of Mr Du’s repudiation of the ASP and for interest on those losses.
The court found that the settlement date under the ASP was and remained 31 January 2023 and that there was no valid late settlement notice under cl 13 of the ASP that would have required Mr Du to settle on a date other than 31 January 2023. On 31 January 2023, the Arney Road property was under a Red Placard because it was considered that the building was at risk from an external hazard and that part of the building foundation structures was likely compromised. The Red Placard meant access was not permitted without written authorisation from the Civil Defence Emergency Management Controller or another Responsible Person. Under s 133BT of the Building Act, neither the defendants nor any other person could occupy the property while it was subject to the Red Placard. In terms of the test approved by the Supreme Court in Bahramitash v Kumar, as at the settlement date the property as a whole had been rendered unfit for the occupation and use of someone assumed to want the property for the same purposes as Mr Du.
The Arney Road Property was untenantable on the settlement date (as well as in March 2023), it follows that Mr Du was fully entitled, under cl 7.2(1)(b), to cancel the ASP. The terms of cl 7.2(1)(b) are clear. If the property is untenantable on the settlement date, the purchaser may cancel the ASP by serving notice on the defendants — as was done by Glaister Ennor on 27 March 2023. The fact this right was exercised after the settlement date is of no consequence. Nor was there any need for Mr Du to file a settlement notice just because the settlement date was passed.
It follows that Mr Du is also entitled to the return, in full, of the deposit he paid of $1,063,000 plus interest, from the date of cancellation to the date of payment in accordance with s 10 of the Interest on Money Claims Act 2016.
