North Harbour Motors Limited (in liquidation) (North Harbour) issued a statutory demand against Moffat Road Limited (Moffat) in respect of two separate $30,000 deposits paid by North Harbour to Moffat on the purchase of two properties pursuant to agreements for sale and purchase dated 6 July 2015 (the Agreements).
On 18 September 2015, Moffat was specifically incorporated to develop the properties. North Harbour and Moffat entered into a heads of agreement expressing the terms relating to the development of the properties. On the same day, North Harbour entered into a nomination deed where North Harbour assigned the benefit of the Agreements to Moffat (Nomination Deed). The Nomination Deed provided that Moffat would be deemed to be the purchaser under the Agreements and would duly complete the purchase of the properties.
The liquidator of North Harbour argued that North Harbour had obtained no benefit for the payment of the deposits. Moffat therefore has been unjustly enriched. Moffat argued any obligation to repay must exist at the time the money is paid or given. Here, Moffat was not incorporated until after the deposit was paid. Further, there was no express provision referring to the deposits in the Nomination Deed.
The High Court set aside the statutory demand relying on the interpretation of the wording of the Heads of Agreements and the Nomination Deed. The Court held the Nomination Deed did not expressly mention the refund of the deposits and one would expect a businessman not to overlook such as sum. Further, the Nomination Deed looked forward referring to 'price owing' therefore only included the balance of the purchase price that remained unpaid.
A copy of the decision can be found here.