Dyer v Messham HC Whangarei CIV-2010-488-628

[2010] NZHC 2431

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2010-488-628

UNDER  the District Courts Act 1947, s 72

IN THE MATTER OF     an appeal from the District Court

BETWEEN  JAALA FERNANDE DYER AND BGH TRUSTEESHIP LIMITED AS TRUSTEES OF THE CEDAR LODGE TRUST Appellants

ANDRAEWYN MESSHAM AND THOMAS EDWARD MESSHAM

Respondents

Hearing:         6 December 2010

Counsel:         J Browne for the Appellant

R Bowden for the Respondent

Judgment:      10 December 2010 14:45:00

JUDGMENT OF WOODHOUSE J

This judgment was delivered by me on 10 December 2010 at 2:45 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:

Mr J Browne / Mr S Henderson, Henderson Reeves Connell Rishworth, Solicitors, Whangarei

Mr R Bowden, Barrister, Whangarei

DYER AND BGH TRUSTEESHIP LIMITED AS TRUSTEES OF THE CEDAR LODGE TRUST V MESSHAM AND MESSHAM HC WHA CIV-2010-488-628 [10 December 2010]

[1]      The appellant trustees, as purchaser, and the second named respondent, Mrs Messham, as vendor, are parties to an agreement for sale and purchase of farmland. The first named respondent, Mr Messham, is Mrs Messham’s husband  and was involved in negotiations leading to the agreement.

[2]      The relevant description of the land being conveyed is “172.26 ha more or less” followed by particulars of six certificates of title and then handwritten words “plus balance of land contained in deed of title as yet not identified – 15-20 ha more or less”.

[3]      The  agreement  was  settled  on  8  May  2006.    The  trustees,  by  way  of counterclaim arising out of a separate dispute, brought six causes of action against Mr  and  Mrs  Messham  founded  on  an  alleged  failure  to  deliver  title  to  land containing the additional 15-20 hectares.

[4]      The separate dispute just mentioned arose from an agreement by the trustees to sell a property at Ngunguru to Mr and Mrs Messham.  The agreement for sale and purchase of the Ngunguru property was independent of the agreement for sale and purchase of the farmland, although settlement of the two took place on the same date.

[5]      The Messhams applied for preliminary questions to be determined in respect of the trustees’ counterclaims.   That application was opposed by the trustees, but succeeded. The preliminary questions for determination in the District Court were as follows:

Did  the  defendants  by their conduct and  representations, including their emails of 5 May 2006 …:

(1)       agree to receive the land comprised in the six titles specified in the agreement for sale and purchase (regardless of the size of that land), and waive any contractual right to further land; and

(2)       waive any claim against either or both plaintiffs in relation to their representations that the land was about 195 hectares in size.

[6]      Following a defended hearing, including a limited amount of oral evidence with cross-examination, Judge De Ridder determined both questions in favour of Mr and Mrs Messham.  From that decision the trustees have appealed.

Facts and evidence

[7]      The conclusion I have reached is that the appeal should be allowed and that the questions posed as preliminary questions should be remitted for re-determination in the District Court in conjunction with all remaining issues between the parties. For reasons I will come to, I do not consider it appropriate for final determinations arising from the preliminary questions to be  made by this Court on  an appeal. Because of this, what I am recording in this section is not intended as final determinations of fact.   All questions of fact will remain for determination at the substantive hearing in the District Court.

[8]      The farm was in Mrs Messham’s name.  It was advertised for sale by Barfoot and Thompson in 2005 as being approximately 195 hectares.  Negotiations on behalf of the trustees were conducted by Mr and Mrs Kinnon.  Mrs Kinnon is the appellant trustee Jaala Dyer.  She is now married to Mr Kinnon.  Negotiations for the vendors were conducted by Mr and Mrs Messham.  In the course of discussions between the Messhams and the Kinnons, the Messhams said that they were confident that the total area of land was around 195 hectares.  Mr Messham referred to calculations of the actual area he said he had made from an old Lands and Survey map.

[9]      The trustees made a written offer to buy for $1 million.  The area of land and the certificates of title for five titles were typewritten on that offer.  The area was recorded as “190 ha more or less”.

[10]     Following a counter offer, agreement on the price was reached at $1,050,000. Mr Kinnon gave evidence, which at present does not appear to be challenged, that when he and Mrs Kinnon went to the office of Mrs Messham’s real estate agent, to put their further offer of $1,050,000, they and the agent discovered that the area recorded in the known certificates of title, including a sixth title which by then had been found, totalled 172.26 hectares.   This resulted in the agent’s amending the

description of the land and the legal titles in the manner recorded at [2] above. I will set out in full the relevant part of the agreement with the handwritten portions shown in italics:

190  ha  172.26  ha  more  or  less.  CT  NA579/187,  CT  NA888B/478, CT NA1090/234,  CT  NA31B/400,  CT  NA1066/6  CT  NA780/593  plus balance of land contained in deed of title as yet not identified – 15-20 more or less.

There is also a typewritten deposited plan reference 148568.

[11]     The agreement is dated 27 May 2005, but settlement was not due to take place until 5 May 2006.  Agreement was reached for the trustees to take possession prior to settlement.   Discussions about the true area of the land continued.   The Messhams maintained their contention that the actual area of land was around 195 hectares.  For example, in January 2006 Mrs Messham sent to the Kinnons a copy of an e-mail she had sent in July 2005 headed “title information”.  Attached to this are copies of calculations relating to the six titles showing the area of 172.2425 hectares based on the areas recorded in each certificate of title and an area of 198.0916 hectares under a heading “as old map”.

[12]     The description in the agreement for sale and purchase is ambiguous.   It could mean that there is a further “15-20 ha more or less” in the land covered by the certificates of title, and therefore with errors in the areas recorded in the titles, or there was a missing title to account for the extra land.  It seems that by May 2006 the Kinnons accepted the Messhams’ position that there were no more than six titles and that the difference between the 172 hectares (I will use round figures) and 190 hectares, more or less, arose from errors in the areas recorded in the certificates of title, which was also the position maintained by Mr and Mrs Messham.  It is relevant in this regard that two of the six titles are limited as to parcels.

[13]     On 4 May 2006, the day before settlement was due to take place, there was a discussion between Mrs Messham and Mr Kinnon.   The discussion related to the area of land and whether settlement would take place in accordance with the agreement on the following day.  There is a conflict of evidence as to exactly what was said.  Mrs Messham said that she was told by Mr Kinnon that he was happy with

what he was buying; in effect, that there was no further issue in respect of the area of land.  Mr Kinnon disputed this.  The Judge did not record any findings on the details of the discussion but he did state:

[26]      As at 4 May 2006, the day before settlement, it is clear that the trust had not waived  its rights as to the total area of land.   In two separate facsimile transmissions from the solicitors for the trust that was abundantly clear.

[14]     I will note the content of these facsimiles below.  The evidence relating to this discussion on 4 May is also relevant as context, whatever the precise content of the discussion may have been.  The Judge recorded that Mrs Messham accepted that she became angry during this discussion when it appeared that the area was in dispute and could delay settlement.

[15]     The Judge recorded Mr Kinnon’s evidence as follows:

[22]     Mr Kinnon accepts that he spoke to Mrs Messham at the Ngunguru property on 4 May 2006, but disputes her recollection of the conversation. He says he had been in discussions with Mr Hong, a trustee and also the solicitor acting for the trust in the transaction, about the area and that Mr Hong  had  suggested  to  him  that  the  trust  should  withhold  funds  on settlement until the issue of the area of the land was resolved.   He denies saying that he considered Mr Hong was being pedantic, and in fact told Mrs Messham that Mr  Hong had  suggested the  some  [sic]  of  the  settlement monies be withheld until the issue was resolved.  At that point he says that Mrs Messham became very agitated, making derogatory comments about Mr Hong.  He asked Mrs Messham how much land she had and she said there was 195 hectares, and that any survey would confirm this.

The Judge did not say that he rejected this evidence and his finding at [26] (para [13]

above) in broad terms upholds the general content of Mr Kinnon’s evidence.

[16]     Whether anything in the end will turn on this discussion will be for the trial Judge to determine.  But it led to matters being recorded in correspondence between the solicitors for the Messhams and the trustees.   In the following paragraphs I record the most relevant portions of the correspondence with a note of intervening events.  I will include the time recorded on some of this correspondence where the time is relevant. The correspondence is set out in the sequence in which I understand it was sent.

[17]     4 May : trustees’ solicitor to Mrs Messham’s solicitors:

The parties have not yet reached a solution for the additional 20 ha for your

clients’ property (as per the sale and purchase agreement).

[18]     4 May : Mrs Messham’s solicitors to the trustees’ solicitor:

I confirm that our respective clients are at the Ngunguru property today, and have advised that the issue of the additional 20 hectares has long been resolved, and the parties agree that the property size was 172.26 ha for an amount of $1,050,000, plus stock plus plant and machinery, all zero rated for GST.

[19]     4 May : trustees’ solicitor to Mrs Messham’s solicitors:

I have spoken to Mr Kinnon after your telephone call and was advised that they have not agreed to accept the purchase price without the additional 20 hectares. …

[20]     The two preceding communications would appear to record the essence of the conflicting views as to what was discussed between Mr Kinnon and Mrs Messham on 4 May.

[21]     The first relevant event on 5 May was a telephone discussion between Mr Kinnon and the solicitor for the trustees, Mr Hong.  Mr Kinnon’s evidence in relation to this discussion, in respect of which there do not appear to be any adverse findings by the Judge, was as follows (it is contained in an affidavit):

24.After discussions with BG [Mr Hong, the trustees’ solicitor], Jaala and I decided to settle the purchase of the farm withhold [sic – the word should obviously be “without”] holding back any money.  We had obtained finance from the bank and it was getting close to the expiry of the letter of offer.  Lending rates were then on the way up and so we wanted to take advantage of the lower rate that we had approval for. Also, since were [sic] already in possession of the farm by virtue of the lease arrangement, we thought it best to take possession as soon as possible.

25.After conferring with Jaala, I spoke with BG in the morning and instructed him to settle on a basis that was without prejudice to our rights in relation to the size  of the land.   BG requested  written instructions confirming the conversation we had had. …

[22]     5  May  2006  :  Mrs  Kinnon  to  her  solicitor  at  12:33,  being  the  written instructions just referred to:

Subject: settlement Ngunguru/Otangaroa today

Following on from your discussion with Doug [Mr Kinnon] earlier today we have agreed to accept the six titles listed on the sale and purchase agreement as they are in the agreement.

The “subject” reference to “settlement Ngunguru/Otangaroa today” is reference to settlement of the two agreements for sale and purchase due to take place on that date. Otangaroa  is  the  farm  being  purchased  by  the  trustees  from  Mrs  Messham. Ngunguru is the property being sold by the trustees to Mr and Mrs Messham.

[23] The next 5 May letter in the sequence recorded in the case on appeal is from Mrs Messham’s solicitors to the trustees’ solicitor. It refers to the letter of 4 May from the Kinnons’ solicitors, noted at [19] above, and says:

My client instructs that as she pointed out to Doug and Jaala Kinnon at the time  they  came  to  see  the  farm,  the  current  certificate  of  titles  [sic] (Electronic versions) misrepresent the acreage by between 15-20 hectares. She  showed them paper  documents  which  confirmed  this.   Your  clients confirmed that they were happy with what she had supplied to them.

There is then reference to the discussion between Mrs Messham and Mr Kinnon on 4

May.

[24]     5 May 2006 : Letter from the trustees’ solicitor to Mrs Messham’s solicitors

at 14:21:

We are still awaiting written confirmation of instructions from our client who has verbally agreed to settle on the following basis:

a.Waiving the requirement of the inclusion of the addition 15-20 ha so settlement could be proceeded with on the titles as are [sic] but on a strictly without  prejudice  [basis][1]   as  my  client  wishes  to  further discuss that issue with yours.

[1] The word “basis” is not in the letter but both counsel accepted that this was obviously what was

intended.

…

The above will become operative once we received [sic] the said instructions from our client in writing.

The “written confirmation of instructions” referred to was written confirmation of the telephone instructions from Mr Kinnon.  The present evidence is that the solicitor

at the time this letter was sent was not aware that Mrs Kinnon had sent her e-mail at

12:33.  For this reason the settlement did not proceed on 5 May.  In my judgment this

letter is crucial.  I will call it “the Hong letter”.

[25]     There were discussions  between  Mrs Messham and Mr Kinnon over the weekend.  What was discussed may in the end be of importance and both counsel in the  hearing  before  me  accepted  that  the  discussions  could  be  of  importance. However, although the Judge referred to these discussions, he did not make any findings in relation to them.  I invited Mr Bowden to take me to any relevant cross- examination of Mr Kinnon on these discussions which might support the case for the Messhams, but there did not appear to be any material cross-examination.

[26]     Mr Kinnon’s evidence about the discussions was that Mrs Messham was not convinced by Mr Kinnon when he said that the trustees would proceed to settlement on Monday.  Mr Kinnon said that written instructions had been given to the trustees’ solicitors to proceed to settlement and he, Mr Kinnon, would reassure Mrs Messham on that point by sending a copy of the e-mail that Mrs Kinnon had sent on 5 May to the  trustees’ solicitor.    On  Monday,  8  May,  Mr  Kinnon  sent  an  e-mail  to  Mrs Messham forwarding the e-mail that had been sent to the trustees’ solicitor on 5 May at 12:33, with the following message to Mrs Messham:

Good morning

As promised I am forwarding instructions sent from our work computer on

Friday.

Kind regards Doug

The judgment under appeal

[27]     The Judge commenced his discussion as follows:

[25]      The issue for determination is on what basis did the parties settle the transaction on 8 May 2006?  As at settlement, had the trust waived its right to receive not only the area of land described in the certificates of title, but also the further “15-20 hectares more or less”?  In order to determine that issue, the conduct of the parties leading up to settlement in [sic] crucial.  In particular, correspondence from the trust’s solicitors and the comments of Mr Kinnon are of the most significance.

[28]     He said, as fully recorded at [13] of this judgment, that at 4 May 2006 it was “clear that the Trust had not waived its right as to the total area of land”.  He then said:

[27]      But on the next day, 5 May 2006, when settlement was to proceed the position had shifted distinctly.   On that day, the solicitors for the trust indicated that settlement of the farm sale and purchase could proceed on the basis of waiving the inclusion of the 15-20 hectares “but on a strictly without prejudice [sic] as my client wishes to further discuss that issue with yours.” The expression in the letter in those terms is somewhat contradictory as, on the one hand, it appears to indicate a waiver of the requirement to provide the further 15-20 hectares but, on the other hand, appears to reserve the position to enable further discussions.   On that same day however, Mrs Kinnon had sent an e-mail to the trust solicitors advising that the trust had “agreed to accept the six titles listed on the sale and purchase agreement as they are in the agreement.”

[28]     Settlement  then  took  place  the  following  Monday  without  any further reference to the issue of the area of the farm.   However, over the weekend, the parties agreed that they had discussed the issue further.

[29]     The Judge referred to authorities on waiver and noted that “waiver involves a clear, unequivocal and unambiguous representation which indicates that the party making the representation will not insist on its strict legal rights arising out of the relationship”.

[30]     He then recorded his reasons for finding in favour of the respondents, Mr and Mrs Messham, on the preliminary questions.   The essence of his reasons was as follows:

[31]      As at 4 and 5 May 2006 it is clear that  settlement  of the farm transaction was at risk because of the issue of the area of the farm.  It is also clear that Mrs Messham was considerably vexed by that, and that she did not agree to any part of the purchase price being withheld until the issue was resolved.  She contemplated the prospect of settlement not proceeding if the trust did not accept that the area of the land was that which was contained in the six titles.  There is clear evidence that Mrs Kinnon, who is a trustee of the trust, advised the trust solicitors that the trust would accept the six titles. That  specifically precluded  the  possibility that  there  was  a  seventh  title which would contain the extra land, but still left open the possibility that the extra land might be contained in one of the six titles if the area in one of those titles was misstated.   However, settlement took place on Monday 8

May 2006 without any further issue being raised as to the area, and without any part of the purchase price being withheld.

[32]      … on settlement, there was absolutely no reference whatsoever as to when and how any further discussions regarding the area that were [sic]

referred to in the e-mail from the solicitors for the trust on 5 May were going

to take place. …

[33]      Subsequent to settlement, there was no mention whatsoever about the issue again until it was raised by the solicitors in October 2006, a period of some five months by which time the issue of the outstanding work necessary for the Code of Compliance certificate had become contentious.

[The reference to the Code of Compliance certificate is a reference to the dispute between the trustee and Mr and Mrs Messham relating to the sale of the Ngunguru property by the trustees to the Messhams.]

[34]      The trust had all the material information before it as at settlement to determine whether or not it would accept the land as described in [the] titles, or insist on a further 15-20 hectares.

[31]     The Judge summarised his view as follows:

[34]      … In the overall circumstances, I am of the view a clear inference can be drawn from all of the circumstances that the trust clearly settled on the 8th of May on the basis of the land as contained in the six certificates of title, and expressly waived any right to insist on the provision of a further

15-20 hectares. …

[32]     The Judge went on to consider the question whether the trustees would be entitled to withdraw their waiver and insist on strict compliance with the terms of the agreement.   In that regard the Judge referred to Connor v Pukerau Store Ltd[2]  and

[2] [1981] 1 NZLR 384 (CA).

Charles Rickards Ltd v Oppenheim.[3]He held that the trustees would not be entitled

[3] [1951] All ER 420 at 423.

to insist on strict compliance because the position that existed before waiver could not be restored.  He said:

[35]     … Mrs Messham clearly relied on the waiver, and proceeded to settlement, thus she was no longer able to consider possible cancellation of the agreement on the basis that it was impossible to provide the extra land as it simply did not exist.

Discussion

[33]     The claims of the trustees against Mr and Mrs Messham are as follows:

(a)       Against Mrs Messham for breach of contract; a failure on settlement to  transfer  at  least  15  hectares  of  land  that  were  agreed  to  be

transferred and which were included in the price the trustees agreed to pay.

(b)      A claim of misrepresentation under the Contractual Remedies Act

1979 against Mrs Messham being alleged misrepresentations through

Mrs Messham’s real estate agent.

(c)       A claim against Mr Messham alleging negligent misrepresentation.

(d)      A claim  against  both  plaintiffs  alleging  breach  of  s 9  of  the  Fair

Trading Act 1986.

(e)      A claim expressed to be against both plaintiffs, although presumably intended to be against Mrs Messham only, alleging unilateral mistake in respect of the actual area of land being conveyed.

(f)      A sixth claim founded on an allegation of common mistake in respect of the area of land.

[34] The two preliminary questions are recorded at [5] above. Although the Judge in a formal sense answered both questions “yes”, and therefore in favour of both respondents, the second question was not in any substantial way addressed in the judgment. The questions to be answered were in considerable measure reframed as a single question focused on the settlement: see [27] above. The reasons given for answering both questions positively do not in my judgment provide grounds for answering the second question positively, and although there are two claims against Mr Messham, these are not addressed at all. The focus is on the contractual relationship between Mrs Messham and the trustees, and in particular the troublesome description of the land, but this does not address, or sufficiently address, other causes of action.

[35]     In respect of the matters that were directly addressed by the learned Judge, I respectfully disagree with his approach and his conclusion.   On the basis of the evidence presently before the Court, and including any findings that might be open

to this Court on appeal, the question as to what the trustees were agreeing to do when they settled on 8 May, and in particular whether they had agreed to modify their rights in any way (whether by waiver or otherwise) turns in considerable measure on a single communication – the Hong letter.

[36] This letter is the formal communication between solicitors recording the position of the purchasers immediately before settlement. The Judge himself observed that the terms of this letter are “somewhat contradictory”: para [27] of the judgment recorded at [28] above. As an ambiguous communication it cannot found a waiver of an entitlement of the purchasers to sue for a failure to transfer to them title a total of approximately 190 hectares. The argument for waiver fails at this point in the absence of evidence of anything else of relevance being communicated to Mrs Messham, or her solicitors, before settlement which modifies the Hong letter.

[37]     On the basis of the evidence as it stands at present, and putting this letter into its full context, including the terms of the agreement for sale and purchase, I am also not persuaded that the letter is necessarily contradictory.  This is a communication relating  to  a  conveyancing settlement.    In  terms  of the agreement  for sale  and purchase, which is the governing document for the settlement, the trustees as purchasers could have insisted on transfer of titles recording a total of around 190 hectares.  The solicitor’s letter can be read as not insisting on titles to that effect, but without waiving other rights or remedies that might be available if, following a full survey, it was found that the actual area of land transferred was less than around 190 hectares.

[38]     In my judgment Mrs Kinnon’s e-mail of 5 May to her own solicitor, which was passed on to Mrs Messham on Monday 8 May, did not alter what is recorded in the Hong letter.  The Judge’s conclusion in relation to Mrs Kinnon’s e-mail is at [31] of his judgment, recorded above.  He said this e-mail “precluded the possibility that there was a seventh title which could contain the extra land, but still left open the possibility that extra land might be contained in one of the six titles if the area in one of those titles was misstated”.   I agree with the Judge’s conclusion.   And it is consistent with the position that seemed to have been adopted by the trustees at least by 5 May; that is, that Mrs Messham had only six titles for the farm.  But of course

the other possibility which the Judge said was left open would mean that there is no clear evidence of waiver.  In addition, I do not consider that the fact that this letter was passed on to Mrs Messham alters the import of the Hong letter in light of the evidence presently available.

[39]     The Judge, in the paragraphs I have recorded, referred to other considerations which he considered supported his conclusion.  In my judgment these are insufficient to remove what is at least ambiguity in the Hong letter and Mrs Kinnon’s e-mail. And that ambiguity is sufficient to lead to a conclusion, if at this stage I was coming to a definitive conclusion, that there was no waiver of rights, or abandonment of rights in some other way.  I have recorded the essence of the other correspondence and Mr Kinnon’s evidence of his instructions to Mr Hong.  This context at this stage of the proceeding would appear to support the trustees’ position and make the other considerations relied on by the Judge of doubtful significance.

[40]     Because I am reaching a conclusion different from that of the Judge I will nevertheless record some observations in relation to the other considerations, but again emphasising that I am not intending to express any concluded view.

[41]     I do not regard the fact that the trustees did not withhold any part of the purchase price on settlement as indicative of waiver.  To have done so would in fact have been contrary to what the trustees say they decided to do – to settle on the basis of the titles as presented but otherwise reserving their rights.  And that is one of the two broad courses of action always open to a party in the circumstances contended for by the trustees; they could have declined to settle or proceeded to settle reserving rights.

[42]     I do not agree with the Judge’s observation that “it would have been a very straight forward matter” to withhold part of the purchase price.  Numbers of reported cases make clear that this is not always a straight forward matter.  What is more, on the evidence in this case, as the Judge himself observed, Mrs Messham was adamant that she would not settle if any part of the purchase price was withheld.  It was to avoid  this  very problem  that  the  trustees  say  they decided  to  settle  in  full  but otherwise “without prejudice”.

[43]     The Judge considered it was relevant that, on settlement, there was no further discussion about the additional area of land and no machinery was put in place to deal with the issue.   If the purchasers were reserving their rights, what they were doing was reserving the right to sue for damages, rather than cancel the contract for failure to convey clear title recording around 190 hectares.  There was no need to put any machinery in place or, in view of the Hong letter, to have any further discussion about something which was clearly contentious.

[44]     The Judge noted that it was some five months before any question was raised on behalf of the trustees in respect of the additional land and that this occurred after Mr and Mrs Messham had raised concerns relating to the house they had purchased from the trustees.  When all of the evidence is available, including that relating to the sale and purchase of the Ngunguru property, these matters may have relevance to the question whether the trustees waived rights relating to the area of land, although there may be legal issues of relevance.  As matters stand at this point they do not in my judgment alter what is indicated by Mr Hong’s facsimile on 5 May.

[45]     The final point noted by the Judge is that the “trust had all the material information before it as at settlement to determine whether or not it would accept the land as described in those titles, or insist on a further 15-20 hectares”.  That does not appear to bear on the question whether the trustees waived all rights in respect of the total area of land.  It was not necessarily a case of accepting the land as described or insisting on the further 15-20 hectares.   The reason, in conveyancing terms, has already been indicated.   It is also not clear from the available evidence that the trustees did have “all material information”.   If settlement proceeded on the basis contended for by the trustees, it would be necessary to get a comprehensive survey, amongst other things, to have all necessary information.

[46]     The Judge referred to the possibility of a party who has granted a waiver reasserting the right that had been waived and the conditions necessary for that to be permitted.   The Judge concluded that this was  not open to the trustees as Mrs Messham had, in effect, irrevocably altered her position.  It is not apparent from the evidence that that is the case.  The Judge referred to Mrs Messham’s no longer being able to consider possible cancellation of the agreement on the basis that it was

impossible to provide the extra land.  It is at the least doubtful that Mrs Messham would have had a right to cancel for an inability to convey what she had agreed to convey.

[47]     There is one further consideration which I will briefly note.  The issues were approached by considering whether or not there had been waiver by the trustees. That is the way in which the questions were posed and, as I apprehended, the way in which the matter was argued in the District Court.  It was also the way in which the matter was argued before me.   However, it is not clear that the issue is properly analysed as one of waiver, or solely as one of waiver, rather than one of variation of a contract or estoppel.  If what Mrs Messham is contending amounts as a matter of law to a contention that the contract was varied, or that there is an estoppel, there

will be need to consider specific issues which have not so far been considered.[4]   This

includes the question of consideration, if such is required for variation, and questions of alteration of position if the matter is analysed as one of estoppel.   I note these matters in a very general way, and without intending to provide any comprehensive legal analysis, simply to indicate a further reason why I consider that it is appropriate to remit this matter back to the District Court for these issues to be canvassed in full and in conjunction with all other issues, including those arising from the sale of the Ngunguru property.

Result

[4] See Burrows, Finn & Todd, Law of Contract in New Zealand, 3rd ed, 2007; para 19.3 and 4.6.2.

[48]     The appeal is allowed.

[49]     The “preliminary questions” are remitted for determination in the District Court but they are not to be further considered as preliminary questions.   If they remain live issues they are to be determined in conjunction with all other issues that arise in the main hearing of the claims of the respondents and the counterclaims of

the appellants.

[50]     The order for costs in favour of the respondents in the District Court is set aside, with any question of costs in respect of the hearing in the District Court to be determined by the District Court at the conclusion of the substantive hearing.

[51]     The appellants are entitled to costs of and incidental to this appeal on a 2B

basis.

Peter Woodhouse J