B S Developments No 12 Ltd v P B & S F Properties Ltd - [2006] NZCA 106

IN THE COURT OF APPEAL OF NEW ZEALAND
CA73/05
BETWEENB S DEVELOPMENTS NO.12 LIMITED

Appellant

ANDP B & S F PROPERTIES LIMITED

Respondent

Hearing:16 March 2006

Court:Hammond, O'Regan and Cooper JJ
Counsel:R A Dobson QC and E J Horner for Appellant

D G Dewar and B A Corkill for Respondent

Judgment:30 May 2006

JUDGMENT OF THE COURT

A        The appeal is dismissed.
B        We award costs to the respondent of $6,000 plus usual disbursements.
REASONS
(Given by O’Regan J)
Introduction
[1]       This is an appeal against a decision of MacKenzie J (HC WN CIV-2003-485-2279 8 April 2005) in which he dismissed an application by the appellant for an order for specific performance of a contract for the sale of land.
Parties
[2]       The appellant is a property development company associated with, and managed by, Mr R J Burrell. It was the intending purchaser of land, under an agreement for sale and purchase, from the respondent, P B & S F Properties Limited, a company associated with Mr and Mrs P B and S F Hawkes. Horsfalls Limited which was the first third party in the High Court, is a real estate agency. Wayne Dyer, who was the second third party in the High Court was the real estate agent at Horsfalls who was actually involved in the intended transaction.
The Agreement
[3]       The agreement was on the standard form of Agreement for Sale and Purchase of Real Estate (7^th Edition (2) July 1999) approved by the Real Estate Institute of New Zealand and the Auckland District Law Society. It provided for the sale of a vacant property at 170-172 Thorndon Quay, Wellington (the property) by the respondent to the appellant for $1,800,000, plus GST. It provided for a deposit of $100,000 to be paid when the agreement became unconditional. Horsfalls was named as the agent.
[4]       In addition to the printed conditions, there was an additional set of “Special Conditions of Sale” attached. Of relevance to the present case is condition 14.0, dealing with due diligence. That condition provided:
14.0     Due Diligence
14.1     This agreement is conditional upon the purchaser being entirely satisfied with the property as a suitable property investment at the agreed purchase price following the Purchaser carrying out a due diligence investigation of the property, including (but not limited to) an investigation of the following:
(a)The proposed physical use of the property;
(b)The state of the title of the land;
(c)The overall financial suitability of the Purchaser’s proposed investment in the property and business;
(d)The overall financial suitability and commercial viability of the Purchaser’s proposed involvement of the property.

14.2The parties acknowledge that the condition in clause 14.1 above is inserted for the absolute and sole benefit of the Purchaser and may at any time prior to this agreement being avoided, be waived by the Purchaser giving written notice of waiver to the Vendor.
14.3The parties agree that satisfaction of the condition contained in clause 14.1 shall be at the sole and absolute discretion of the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading B S Developments No 12 Ltd v P B & S F Properties Ltd

Details

AGLC: B S Developments No 12 Ltd v P B & S F Properties Ltd [2006] NZCA 106
Case: [2006] NZCA 106
Decision Date: 30 May 2006

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, the case of B S Developments No 12 Ltd v P B & S F Properties Ltd involved an appeal against a High Court decision that dismissed the appellant's application for an order of specific performance of a contract for the sale of land. The appellant, B S Developments No 12 Limited, sought to purchase land from the respondent, P B & S F Properties Limited. The agreement for sale and purchase included a due diligence clause, which required the appellant to be entirely satisfied with the property within a specified period. The legal issues in the case were whether the agreement was void or voidable after the due diligence period, and whether the fax sent on 11 July brought the agreement to an end. The Court of Appeal found that the agreement was voidable, not void, after the expiry of the due diligence period, and that the 11 July fax was sufficient notice of the avoidance of the contract and brought it to an end. The Court of Appeal dismissed the appeal and awarded costs to the respondent.

Orders