By Paul McBeth
Auckland property moguls Hugh Green and Don Ha are set to square off in court next year after the High Court gave each group a victory in the fight over unpaid commissions.
Judge Graham Lang let Ha’s Top One Real Estate Ltd. pursue Green’s Arranmore Developments Ltd. over unpaid commissions on property sales, though he threw out several claims and said Top One will have to put up $20,000 as security for costs. The judgement was made on Sept. 16 in the High Court in Auckland and published on the Ministry of Justice’s website last week.
Top One is carrying on the claim by Don Ha Real Estate Ltd., whose businesses it bought from a receivership for $1.3 million earlier this year, saying Arranmore is liable to pay commissions on subdivisions the realtor sold from the Flatbush development in Auckland East Tamaki.
Green’s Arranmore bought the subdivision from Prema Developments Ltd. for $10.9 million plus GST in 2008 after the developer struggled to keep up with debt repayments to Hugh Green’s Castle Finance Ltd.
In 2007, Prema entered into an agreement with Don Ha Real Estate to enable the sale of sections in the subdivision, though Arranmore contends it didn’t assume liability to pay the commissions.
Judge Lang granted Top One the right to pursue a claim that Arranmore’s purchase implied it would take on the liability, and left the door open for Ha to pursue claims that his agency completed work for which it wasn’t paid in a reworked statement of claim.
He struck out Top One’s interpretation of the Arranmore agreement, saying it didn’t expressly assign the obligation to Green’s vehicle, and also turned down a bid claiming Arranmore promised to pay the commissions.
Arranmore was successful in its application for Top One to front security for legal costs, given the failure of Don Ha Real Estate, and Judge Lang said it was appropriate as “my impression is that Top One’s chances of success are finely balanced.”
He turned down Ha’s assertion that it had already earned commissions of $870,000 since it started operating in June, with some 220 listings on its books worth more than $106 million.
“It would have been helpful for Mr Ha to provide the court with details of the company’s overall financial evidence,” Judge Lang said. “In the absence of such evidence, I proceed on the basis that there is a real prospect that Top One will not be able to meet Arranmore’s costs in the event that it fails at trial.”
Judge Lang didn’t award costs, saying “both parties have succeeded to some extent.”
A pre-trial conference will be held on Oct. 25, and the trial will be set down for Feb. 20.
A Vietnamese refugee, Ha came to New Zealand in 1980 before finding his feet in real estate during the 1990s. In 2007 he entered the NBR Rich List, when the business newspaper estimated his worth at $50 million, though he dropped from the list the subsequent year, and struggled to stay solvent this year with real estate agency put into receivership in March.
An Irish migrant and former contractor, Green has investments in a range of different sectors, though the bulk of his wealth is in property, which was estimated to be worth some $350 million in this year’s NBR Rich List, up from $220 million in 2010.
(BusinessDesk)
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