A man from New Zealand has been ordered to pay over $1.1 million in damages and legal fees after withdrawing from a property purchase agreement. This decision came after Paljeet Singh reneged on buying a home from Robert and Margaret Smallridge, situated in Auckland’s Avondale suburb. Singh had initially bid $1.925 million for the property during an auction in November 2021.
The transaction was set to be finalized a year later; however, Singh backed out six weeks before the settlement date. He claimed that the Smallridges violated a critical agreement by denying him reasonable access to the house, which he needed to market and resell it.
Unfortunately for the Smallridges, the real estate market took a downturn, and the four-bedroom residence eventually sold for just $1.13 million. This figure was a staggering $800,000 less than the original auction price from a year and a half earlier.
Six weeks out from the settlement date, Singh pulled out of the sale, claiming that the vendors had breached an essential agreement by not allowing reasonable access to the property to enable him to market and on-sell it.
By then, property values had plummeted and the four-bedroom house later sold at $1.13million – almost $800,000 less than what it initially sold for 18 months prior.
The Smallridges launched a claim for damages for wrongful cancellation, prompting a counterclaim from Singh for the return of his $96,250 deposit, according to High Court documents.
The couple denied breaching the sales agreement and told the court last year that Singh had only once requested access, which they immediately co-operated with.
Their claim was refuted by a real estate agent engaged by Singh to on-sell the property, telling the court that he attended in March 2022 to ask if a potential purchaser could visit.
Robert and Margaret Smallridge’s home sold for $1,925,000 at an auction in November 2021
The Avondale home later sold for almost $800,000 less after initial buyer Paljeet Singh pulled out six weeks out from settlement
Agent Kapil Rana from Barfoot & Thompson claimed that he was told by Ms Smallridge that a visit could not happen until settlement – an allegation she denied.
Singh told the court that around the same time, a potential buyer offered $2.1million for the property but then backed out due to not being able to access or view it.
The court heard that Singh met the couple at the property in October 2022 to inform them he wanted to back out of the deal, and at that time said it was because he could not obtain financing.
Singh rejected that claim and told the court the purpose of the visit was to express concerns regarding access.
Several weeks later, Singh declined to finalise the purchase on the settlement date and demanded the return of his deposit.
The court heard the Smallridges initially offered to settle at a much lower claim to avoid further stress and delays.
They launched legal action when Singh did not respond.
Justice Tracy Walker ‘had no difficulty’ in ruling that the Smallridges did not breach any agreement terms or deny access to their property.
Paljeet Singh must pay back at least $1.1million in damages and legal costs over the sale of the home (pictured)
A High Court judge sided with Robert and Margaret Smallridge over the sale of the Avondale property
‘They were straightforward witnesses who made appropriate concessions when they were called for and whose evidence was clearly their own given the slight, immaterial differences in detail between their accounts,’ Justice Walker wrote in her findings.
‘I also found their evidence more consistent with the overall chronology of events.
‘There is no evidence that Singh could settle the purchase without on-selling the Property.
‘It was much more likely that settlement depended on that occurring despite his evidence that he intended to settle had there been no alleged breach and could do so through financing.
‘I am satisfied that Singh’s inability to on-sell was a product of a falling market and his own unreasonable price expectations and that the ‘access’ issue was no more than an attempt to find some reason to back out of the agreement to avoid settling.’
Singh was ordered to pay $753,803.25 in out-of-pocket costs to the couple.
He must also fork out an additional $99,604.48 at 14 per cent interest for the 17-month period between the original sale agreement and the date the property sold.
Singh must also pay contractual interest on the net loss of the resale at $268.01 per day from April 15, 2023, until it is paid.
The figure currently stands at $270,958.
