DMST Internationals Limited v Sampson Property Investments Limited
[2025] NZCA 381
•1 August 2025 at 9.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA42/2025 [2025] NZCA 381 |
| BETWEEN | DMST INTERNATIONALS LIMITED |
| AND | SAMPSON PROPERTY INVESTMENTS LIMITED |
| Court: | Courtney and Katz JJ |
Counsel: | P A Morten for Applicant |
Judgment: | 1 August 2025 at 9.00 am |
JUDGMENT OF THE COURT
AThe application for leave to appeal is declined.
BThe applicant must pay the respondent costs for a standard application for leave to appeal on a band A basis together with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Katz J)
Introduction
The applicant, DMST Internationals Ltd (DMST), applies for leave to appeal a High Court decision of Associate Judge Skelton declining to grant defendant’s summary judgment against the respondent, Sampson Property Investments Ltd (Sampson).[1] Sampson opposes the application.
Relevant leave provisions
[1]Sampson Property Investments Ltd v DMST Internationals Ltd [2024] NZHC 1699 [judgment under appeal]; leave to appeal having been declined by the High Court in Sampson Property Developments Ltd v DMST Internationals Ltd [2024] NZHC 3652. We note that the High Court presumably referred to the applicant as “Sampson Property Developments Ltd” in error.
As the High Court decision was made on an interlocutory application, leave to appeal is required under s 56(3) of the Senior Courts Act 2016. The ultimate question is what the interests of justice require. Relevant principles include that:[2]
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value; and
(d)the significance or implications of such error either for the particular case or for the applicant or as a matter of precedent must warrant incurring further delay.
Background
[2]Greendrake v District Court of New Zealand [2020] NZCA 122 at [6]; and Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [17].
The parties entered into a sale and purchase agreement for a property in Wellington in May 2022. Under the agreement, a unit plan over land owned by Sampson was to be cancelled and the land divided into two freehold lots. DMST was to purchase Lot 1 and Sampson would retain Lot 2. Relevantly, cl 23.8 of the agreement (as varied) provided:
It is not expected that any easements, covenants, encumbrances, rights or interests will be necessary to enable the New Titles to issue. Should this not be the case, [DMST] reserves the right to approve the Title within 5 working days of notice of any requirement of any easements, covenants or encumbrances, rights or interests required to be registered over the new Titles. [DMST] will not unreasonably withhold their approval if such easements, covenants, encumbrances, rights or interests will not affect [DMST’s] proposed project on the land. This condition is inserted for the benefit of [DMST]. For the avoidance of doubt and notwithstanding anything to the contrary, if the Title has no easements, covenants, encumbrances or rights or interests registered on the Title, [DMST] has no right of approval and is deemed to have accepted the Title. [Sampson] will meaningfully consult with [DMST] during the cancellation of unit title and subdivision process, including providing [DMST] with the resource consent and draft survey plan.
Clause 23.10 recorded that the parties agreed that cl 23 was an “essential term”, though whether the consultation requirement in cl 23.8 is in itself essential is disputed.
The Wellington City Council issued a resource consent decision in respect of the proposed subdivision on 19 October 2022. It included a consent condition that noted that it would be the developer’s responsibility to provide Lot 1 with connections to water, wastewater and stormwater appropriate for the nature of the development. This condition was included at the request of Sampson’s surveyors, Spencer Holmes Ltd. DMST says that it was not provided with a copy of the resource consent condition until 19 April 2023 and that it was not consulted during the resource consent process.
DMST purported to cancel the agreement on 23 May 2023, on the basis that the consultation obligation included in cl 23.8 had not been complied with. Sampson then brought proceedings for breach of contract. It sought specific performance of the agreement, or damages in the alternative. In response, DMST counterclaimed for the return of the deposit it had paid. DMST also applied for defendant’s summary judgment in respect of Sampson’s breach of contract claim, essentially on the basis that Sampson’s claim could not succeed as DMST had validly cancelled the contract.
Judge Skelton declined DMST’s summary judgment application. He first set out the relevant legal principles (which are well established, and not in dispute).[3] The Judge then identified three issues as key to the determination of whether DMST was entitled to cancel the contract:[4]
(a)What the scope of the consultation required under cl 23.8 was.
(b)Whether Sampson complied with the obligation to consult.
(c)Whether the performance of the obligation to consult, in and of itself, was essential to DMST and/or what was required to “satisfy” cl 23.
[3]The Judge cited Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [63]–[64]; Stephens v Barron [2014] NZCA 82, (2014) 21 PRNZ 734 at [9]; Jones v Attorney-General [2003] UKPC 48, [2004] 1 NZLR 433 at [10]; Body Corporate No 207624 v North Shore City Council [2012] NZSC 83, [2013] 2 NZLR 297 at [4]; Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26]; Jowada Holdings Ltd v Cullen Investments Ltd CA248/02, 5 June 2003 at [29]; and Jessica Gorman and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR12.2.07(1)] for the relevant principles.
[4]Judgment under appeal, above n 1, at [17].
The Judge found that Sampson had tenable arguments on each of these three issues.[5] If one or more of those arguments were ultimately successful, the result would be that DMST was not entitled to cancel the contract (and hence Sampson would be entitled to judgment on its breach of contract claim). Summary judgment was accordingly declined, and the Judge directed that the matter proceed to trial.
[5]At [72].
In this application, DMST submits that the Judge erred in making these findings and that its summary judgment application should have been granted. In essence, DMST submits that the merits of its proposed appeal are strong and that leave to appeal should be granted accordingly.
We will address the strength of the proposed appeal on issues (a) and (c) above first, as they both relate to the interpretation of cl 23. We will then consider the strength of the proposed appeal on issue (b), which is a factual issue.
The Judge’s finding that it is arguable that cl 23.8 did not require Sampson to consult with DMST regarding the resource consent process
The High Court decision
The Judge found that Sampson had a tenable argument that it had no obligation to consult with DMST over the resource consent process because, in essence, this was a separate (and prior) process to the cancellation of the unit title and subdivision process. The Judge’s key reasons for this finding were that:
(a)there was no express reference to the resource consent process in the terms “cancellation of unit title and subdivision process”;[6]
(b)the only express reference to the resource consent process in the consultation obligation was that Sampson would provide the “resource consent and draft survey plan”, which, in the Judge’s view, appeared to be a reference to the resource consent as issued, once issued;[7]
(c)the parties were experienced and would have been aware that Sampson would be applying for a resource consent;[8] and
(d)communications between the parties’ solicitors did not suggest any common mutual understanding that consultation was required during the resource consent process.[9]
DMST’s proposed appeal
[6]At [24].
[7]At [24].
[8]At [27].
[9]At [30].
DMST submits the Judge erred by finding it arguable that the phrase “subdivision process” in cl 23.8 of the agreement did not include the resource consent process. DMST submits that the factual context establishes that the term “subdivision process” in cl 23.8 must include “the resource consent process”. Without resource consent, new titles could not be issued. The parties must therefore have intended “meaningfully consult … during the subdivision process” to include consultation during the resource consent process. The express requirement imposed on Sampson in cl 23.8 to provide DMST with a copy of the resource consent and draft survey plan does not mean that Sampson was not required to consult with DMST during the process leading up to the obtaining of the resource consent.
Our view
Sampson’s view is that its obligation to consult “during the cancellation of unit title and subdivision process” commenced from the point the cancellation of the unit plans was lodged, which coincided with the provision of the resource consent to DMST on 19 April 2023. On this interpretation, consultation during the “subdivision process” would require consultation primarily related to the physical subdivision and title issuance, rather than the initial resource consent application stage.
In our view the Judge was correct to find that Sampson’s interpretation of cl 23.8 of the agreement is arguable. While DMST’s interpretation is clearly also an available interpretation, it cannot be said to be the only interpretation reasonably available on the plain wording of the clause. Further, the factual context may be relevant to the interpretation of the clause. While correspondence between the parties’ solicitors regarding the clause was before the Judge, the possibility that oral evidence or broader contextual information may assist in the interpretation exercise cannot be excluded. That can only occur at trial. DMST’s prospects of success on this ground of appeal therefore appear to be limited.
The Judge’s finding that it is arguable that performance of the obligation to consult, in and of itself, was not essential to DMST and/or what was required to “satisfy” cl 23
The High Court decision
The Judge found that Sampson had a tenable argument that performance of the cl 23 consultation obligation was not, in itself, essential to DMST or to the satisfaction of the condition subsequent. Sampson contended that determining precisely what (within cl 23) was intended to be “essential” had to be assessed with reference to the purpose of the consultation requirement. It submitted that the relevant purpose was to protect DMST against instruments registered over the new title. While consultation might help mitigate such an outcome, it was not essential in and of itself. DMST, on the other hand, contended that it was.[10]
[10]At [58]–[59].
The Judge considered it arguable that the consultation requirement in cl 23.8 was not essential to DMST. Instead, what was essential was the right to approve the new title if it would be affected by new rights or interests.[11] On this interpretation, cl 23 was arguably satisfied when the unit plan was cancelled and the new title issued, provided that no rights or interests were required to be registered against the new title that would affect DMST’s proposed project. The Judge accordingly did not accept DMST’s argument that a lack of consultation meant that cl 23 could never be satisfied and therefore that DMST was entitled to cancel the contract for failure to satisfy cl 23 as a condition subsequent.[12]
DMST’s proposed appeal
[11]At [66].
[12]At [71].
DMST submits that the Judge erred in his analysis, and that cl 23 as a whole (including the consultation requirement) is an essential term of the contract. The parties expressly agreed in cl 23.10 that cl 23 was essential. Hence, if cl 23.8 required Sampson to consult regarding the resource consent process (the issue addressed above), and Sampson failed to do so, it will have breached an essential term of the agreement, giving rise to a right of cancellation.
Our view
Clause 23.8 records that the parties anticipated that no additional easements, covenants, encumbrances, rights or interests would need to be created for the new titles. In the event that such interests did arise, however, DMST was given the right to approve them within five working days of being notified. The clause specified that DMST could not unreasonably withhold approval, however, if the relevant interest did not adversely affect its proposed development on the land. Further, if the new titles were issued without any such encumbrances, DMST was deemed to have accepted the titles and had no approval right.
Sampson’s obligation to “meaningfully consult” with DMST during the cancellation of unit title and subdivision process, including providing DMST with the resource consent and draft survey plan, must be assessed with reference to the apparent purpose of cl 23.8. It is at least arguable, in our view, that what the parties objectively intended to be “essential” was that DMST have the right to refuse to approve the new title (and hence complete the purchase) if the title included an easement, covenant, encumbrance, right or interest that was adverse to DMST’s interests as purchaser. There is a clear rationale for such an essential condition. DMST agreed to purchase the property on the understanding that there were no easements, covenants, encumbrances, rights or interests that would adversely impact its plans for the property. If that situation changed, the parties agreed that DMST would, in essence, have the right to decide whether it wished to continue with the purchase. It is that right which, on Sampson’s interpretation, is essential. The consultation requirement in cl 23.8, on Sampson’s interpretation, is essentially a procedural requirement that supported and facilitated the exercise of DMST’s approval right but was not in itself an independent “essential” requirement. Hence, a failure to consult would not in itself give rise to a right of cancellation if, for example, no additional easements, covenants, encumbrances, rights or interests (adverse or not) were in fact registered against the new title.
In our view the Judge was correct to find that Sampson’s interpretation is tenable, namely that performance of the obligation to consult, in and of itself, was not an essential term of the agreement. The words of the clause and its apparent purpose both provide some support for Sampson’s interpretation. As with the previous interpretation issue, it is also possible that the broader factual context, in respect of which further evidence may be available at trial, may cast light on the correct objective interpretation. Accordingly, DMST’s prospects of success on this ground of appeal, given the summary judgment context, also appear to be limited.
The Judge’s finding that it was arguable that, if there was an obligation to “meaningfully consult” during the resource consent process, Sampson had complied with it
The Judge found that even if there was an obligation to consult during the resource consent process, there was a factual controversy as to whether consultation had occurred. That controversy could not be resolved summarily.
DMST’s third proposed ground of appeal challenges that finding. It proceeds on the basis that DMST’s interpretation of cls 23.8 and 23.10 is correct (and no other interpretation is reasonably available). We have concluded otherwise. It is therefore not necessary for us to engage further with this issue. Resolving this factual controversy (or even expressing any preliminary views on it) is a matter best left for trial.
Conclusion
As noted above, a high threshold exists for a grant of leave to bring an interlocutory appeal. Here, to succeed on appeal, DMST would need to establish that none of the three key issues identified above are reasonably arguable and that the Judge erred in finding otherwise. In our view the prospects of DMST overturning all three of the Judge’s key findings are remote. It is therefore not in the overall interests of justice to grant leave to appeal.
Result
The application for leave to appeal is declined.
The applicant must pay the respondent costs for a standard application for leave to appeal on a band A basis together with usual disbursements.
Solicitors:
Costa Varuhas & Co, Wellington for Applicant
JB Morrison Lawyers, Wellington for Respondent
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