High Court Orders Buyer to Pay Over $1.1 Million in Property Dispute
A New Zealand man has been directed by the High Court to reimburse more than $1.1 million in damages and legal expenses after he withdrew from an agreement to purchase a family home in Auckland. The case centres on a failed property transaction that resulted in significant financial losses for the original vendors.
Background of the Property Sale
Paljeet Singh acquired the residence of Robert and Margaret Smallridge in the Avondale suburb of Auckland for $1.925 million during an auction in November 2021. Settlement for the deal was slated to occur one year later. However, just six weeks before the scheduled settlement date, Singh opted to cancel the sale.
He asserted that the vendors had violated a crucial term of the agreement by not permitting reasonable access to the property. Singh claimed this access was necessary to market and on-sell the home. By the time of his withdrawal, property values had declined substantially.
Financial Impact and Legal Proceedings
The four-bedroom house was eventually sold for $1.13 million, representing a drop of nearly $800,000 compared to the initial auction price from 18 months earlier. In response, the Smallridges initiated a claim for damages due to wrongful cancellation.
Singh countered by seeking the return of his $96,250 deposit. The couple refuted the allegations of breaching the agreement, informing the court that Singh had only requested access on one occasion, which they promptly accommodated.
Court Hearings and Evidence
During the proceedings, a real estate agent engaged by Singh testified that he had approached the Smallridges in March 2022 to inquire about a potential buyer visiting the property. Kapil Rana from Barfoot & Thompson stated that Margaret Smallridge indicated access could not be granted until settlement, a claim she denied.
Singh informed the court that a prospective buyer had offered $2.1 million for the property but withdrew due to inability to view it. He later met with the couple in October 2022, expressing his intention to back out of the deal, citing difficulties in securing financing.
The Smallridges initially proposed a lower settlement to avoid further stress and delays, but pursued legal action when Singh did not respond.
Judgment and Ruling
Justice Tracy Walker ruled unequivocally in favour of the Smallridges, finding no breach of agreement or denial of access on their part. She described them as "straightforward witnesses who made appropriate concessions" and noted the consistency of their evidence with the event chronology.
The judge determined that Singh's inability to on-sell the property was likely due to a falling market and his own unrealistic price expectations, rather than any access issues. She concluded that the access claim was merely an attempt to exit the agreement and avoid settlement.
Financial Penalties Imposed
Singh has been ordered to pay $753,803.25 in out-of-pocket costs to the couple. Additionally, he must provide $99,604.48 with 14 per cent interest for the 17-month period between the original sale agreement and the eventual property sale.
He is also liable for contractual interest on the net loss from the resale, calculated at $268.01 per day from April 15, 2023, until payment is made. This amount currently stands at $270,958.
The total sum exceeds $1.1 million, underscoring the significant financial repercussions of the cancelled transaction.
