Northlake drops appeal against Wānaka Medical

Northlake Development had sued Wānaka Medical over its refusal to agree on the terms of a lease of a proposed medical centre in the Northlake centre. Credit: Northlake Development

On June 23 Northlake Investments abandoned its appeal of the judgment of the Invercargill High Court in which Justice Rob Osborne dismissed Northlake's claims against the Wānaka Medical Centre

Justice Osborne later also awarded Wānaka Medical Centre a 50 per cent uplift on its recoverable legal costs, reflecting the lack of merits associated with Northlake's claims. Northlake has paid those court-ordered costs for $114,791, to the Medical Centre.

Chris Meehan is the CEO of Winton, a privately owned property developer based in Auckland and responsible for the Northlake development in Wānaka. 

Northlake had sued Wānaka Medical over its refusal to agree on the terms of a lease of a proposed medical centre in the Northlake development. By the time of the trial in late 2019, Northlake had reduced its cl.aims to being the costs it had incurred in developing the designs of the proposed medical centre.

 Morrison Mallett acted for the Wānaka Medical. Michael Morrison was lead counsel and appeared for Wānaka Medical together with Jason Zwi. Morrison commented that the doctors "were outstanding people and significant contributors to the Wānaka community.

"They behaved honourably throughout and were not prepared to roll over when dealing with this property developer, whether when negotiating with Meehan or facing the meritless claims that were then brought against them."  

The court's findings have confirmed the doctor's integrity and honesty throughout.

 Justice Osborne heard the case in the Invercargill High Court in a six-day trial from October 29 to November 5 2019.

 Northlake sued Wānaka Medical under a Heads of Agreement that the parties had signed, which was expressed to be "subject to contract" and "not legally binding", and which granted Wānaka Medical an "option" to lease on commercial terms to be agreed" which needed to be "acceptable to both parties". 

 Osborne held that Northlake had no right to sue Wānaka Medical under that Heads of Agreement.  It was not contractually binding, and the parties were never able to agree on the commercial terms of a lease. Nor was Northlake entitled to any other damages from the doctors simply because they had refused to accept the terms that Northlake had put to them, which included a rental rate that Meehan had told them was "non-negotiable".  

 Osborne found that the doctors had taken Meehan at his word when he told them the rent was "not negotiable", despite Northlake arguing at trial that this was a bluff or negotiating strategy.  

 The two doctors who gave evidence for Wānaka Medical, Andrew McLeod and Mark Feeney, were both found to have provided honest and reliable evidence, which Osborne accepted. The judgment made repeated reference to the fact that Meehan had not appeared and given evidence.    

Wānaka Medical declined to accept Meehan's terms because the "non-negotiable" rent was too high and not financially viable for the medical centre. Osborne observed that they were "beyond criticism" in doing so and that "the directors of Wānaka Medical made a prudent decision in the interests of the company." 

Osborne described Meehan as having "adopted an aggressive negotiating position that brought both verbal and non-verbal aggression to the discussion." His Honour went on to conclude that "the ultimate termination of the parties' relationship is directly attributable to the decisions made by Meehan for Northlake and to his conduct in implementing those decisions.".

The abandonment of Northlake's appeal brings the proceeding to a conclusion with all of Northlake's claims against the doctors having been entirely unsuccessful.

Read edition 981 of the Wānaka Sun here.

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