Geneva Healthcare Ltd v Essential Assets Ltd
[2014] NZHC 3236
•16 December 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-2833 [2014] NZHC 3236
BETWEEN GENEVA HEALTHCARE LIMITED
Applicant
AND
ESSENTIAL ASSETS LIMITED Respondent
Hearing: 2 December 2014 Appearances:
L A O'Gorman and A L Harlowe for the Applicant
J L Foster for the RespondentJudgment:
16 December 2014
JUDGMENT OF WOODHOUSE J
This judgment was delivered by me on 16 December 2014 at 2:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.
Registrar/Deputy Registrar
……………………………………
Solicitors / Counsel:
Ms L A O’Gorman and Mr A L Harlowe, Buddle Findlay, Solicitors, Auckland
Ms J L Foster, Barrister, Auckland
Mr D W Snedden (respondent’s instructing solicitor), Snedden & Associates, Solicitors Auckland
GENEVA HEALTHCARE LTD v ESSENTIAL ASSETS LTD [2014] NZHC 3236 [16 December 2014]
[1] This is an application by Geneva Healthcare Ltd (Geneva) to sustain a caveat lodged against title to seven properties owned by Essential Assets Ltd (EAL).
[2] Geneva contends that it has a beneficial interest in the land pursuant to an agreement for sale and purchase made on 22 September 2014. EAL contends that there is, and was, no such agreement.
Background
[3] Geneva leases the seven properties, and one other property, from EAL. The properties are operated by Geneva as residential homes for physically and intellectually disabled people. One of Geneva’s directors says in an affidavit in support of the application:
It is important for the continuity of care that these residents remain in the properties. There are limited properties available for the care of these residents and it would be extremely difficult to find alternatives. Many of these residents have lived in these properties for many years.
This evidence is not challenged on this application. There is no evidence in opposition for EAL. EAL’s argument turns on construction of a letter and emails between the parties.
[4] It will assist to record the contents of the letter and emails in reasonable detail. Geneva says that these communications, commencing with a letter from EAL of 18 August 2014 and concluding with an email from Geneva on 22 September
2014, provide the evidence of the agreement for sale and purchase which Geneva says was made on 22 September. EAL says that its original letter was not an offer to sell capable of being accepted by Geneva to form a contract and at no other point was a contract formed. The letter and emails are recorded or summarised under the following sub-headings.
18 August: EAL to Geneva
[5] EAL advised that it had decided “that all properties now owned by EAL will
be sold”. The emphasis is in the original. EAL said:
This decision has not been made lightly. EAL is fully aware of the impact this will have on you, as tenant, and your clients.
… EAL is offering Geneva Healthcare first option to purchase the properties which you currently lease. The price will be at the last valuation as at April
2014, and in the case of Cameron Road as at September 2013.
[6] The address of and price for each property was recorded in a schedule sent with the letter. EAL continued:
Please consider the offer and respond either way within the next 7 days. Should you choose not to accept the option to purchase the residential
properties, we are bound to proceed to inspect all properties and prepare
them for marketing to the open market. …
The residential properties will be marketed for sale with sitting tenant and current lease, or vacant possession, and you will be given 42 days’ notice to vacate following an offer becoming unconditional if sold with vacant possession. Tauranga will be sold subject to the terms of the lease currently in place.
At all times, EAL will keep you up to date with progress so you are fully informed.
Should Geneva find suitable alternative accommodations for your business prior to any sale being confirmed, then the required notice period to end the residential tenancy with Essential Assets is 21 days on each individual property. Once again, Tauranga has a commercial lease and will be treated in accordance with that.
We look forward to your response. If we do not hear from you by close of business on Monday 25th August 2014, we will assume your historic position on property purchases has not changed and will proceed with our marketing plan.
18 August: Geneva to EAL
[7] Geneva confirmed that EAL’s advice of its intention to sell had a “dramatic impact” on EAL and its clients. It was described as “shocking and devastating news”. The email, written in the first person by Geneva’s chief executive, continued:
I very much appreciate EAL offering us the properties at the valuation from April 2014 and in the interest of our clients I would very much like the opportunity of taking this offer up.
However 7 days is an extremely short time frame to commit to such a significant decision and change in direction of the company to become owners of property.
Could I ask that EAL reconsider the 7 day deadline and allow us 21 days to formally respond to you with a definitive response regarding the purchasing of the properties, which will allow us time to seek and organise financial assistance where needed.
19 August: EAL to Geneva
[8] EAL agreed to the requested extension of time for what EAL described as
“the option”. The email continued:
A decision from you to proceed with a purchase or not is therefore now required by 5pm Monday 8 September 2014.
8 September: Geneva to EAL
[9] Geneva provided a substantive response. The email began:
Further to your email dated 18 August 2014 … and subsequent
correspondence, we wish to propose the following arrangement:
[10] The “arrangement” was in two parts. The first was to buy four of the eight
properties listed in EAL’s original letter. Geneva said:
We have arranged finance with our bankers for Geneva to purchase the following properties at the valuation price. Settlement to be 30 January
2015.
The four properties were identified with the addresses and with the same prices
recorded in EAL’s original schedule.
[11] The other part of the “arrangement” related to the remaining four properties, Geneva asked that sale be deferred until 2015 to provide time to find alternative accommodation for the residents.
9 September: EAL to Geneva
[12] EAL thanked Geneva for the “response to our offer to Geneva to purchase the property”. EAL advised that it would get back to Geneva after considering Geneva’s “proposed arrangement”.
15 September: EAL to Geneva
[13] EAL said:
The initial offer was made on an ‘all or nothing’ basis due to the very favourable prices; we are not comfortable therefore with your proposal to pick up only the selected four residential properties.
The motivator for the ‘all or nothing’ offer was a win-win for both parties.
[14] The “win-win” from EAL’s perspective was expressed as follows:
We would have an immediate sale and lose money due to the valuations of some but offset by removing agents’ fees and taking immediate steps to reach our long term portfolio position.
[15] After setting out suggested advantages for Geneva, EAL continued:
As a compromise, we are willing to withdraw Tauranga from the picture since this is a commercial property and comes with a fixed term Agreement to Lease; with regard to the remaining properties (two at Church, and Puhinui), your proposed arrangement leaves EAL with no certainty on the timing for selling these ones and is not at all comfortable with that uncertainty.
However as the Board’s decision is to dispose of all the properties, EAL will in the meantime move to get current market assessments on all properties. …
As the company’s reason for existence is to be commercial and achieve the best result for its shareholder, EAL must make commercial decisions. If you wish to reconsider, I’m sure there remains a very good upside here for Geneva. …
If you wish to reconsider then please advise. We will of course liaise with managers later in the week for suitable timings for the assessments and will ensure the processes we undertake will minimise the disruption to your services.
15 September: Geneva to EAL
[16] Geneva requested “one more additional week in order to respond to your offer” because of Geneva’s need “to go back and talk to our bankers”.
15 September: EAL to Geneva
[17] EAL agreed to an extension as follows:
Yes – another week is fine. We will make a start to gather the CMA’s [current market assessments referred to in EAL’s preceding email] discretely (and discreetly) but will not sign a formal listing authority with any agent until after I hear from you on 23 September.
Thanks for reconsidering …
22 September: Geneva to EAL
[18] This is the email which Geneva says constituted acceptance of an offer from EAL and with a contract resulting. The most relevant part of the email was as follows:
Further to your email dated 18 August 2014 regarding the sale of all Community Living houses owned by Essential Assets Ltd, and subsequent correspondence, we wish to propose the following arrangement:
…
We have arranged finance with our bankers for Geneva to purchase the following properties at the valuation price. Settlement to be 27 February
2015.
[19] The seven properties, excluding the property in Tauranga which EAL had said it was “willing to withdraw”, were then listed with the addresses and the prices as recorded in the schedule received from EAL with the 18 August letter.
23 September: EAL to Geneva
[20] EAL acknowledged receipt of the 22 September email, advised that the “proposal” had been sent to EAL’s board and there would be a reply when a decision had been reached. EAL added:
As mentioned in my last communication, we proceeded with obtaining current market assessments on the Auckland properties. The results indicate a significant increase in values since the April valuations.
25 September: EAL to Geneva
[21] EAL advised that it did not accept Geneva’s “latest proposed arrangement”
and said:
Since terms between Geneva and EAL have not been agreed upon, the Board withdraws from any further negotiation.
I will keep you advised of the open market auction or tender dates should you wish to purchase any of the properties in the future.
26 September: Geneva to EAL
[22] The email commenced:
Thanks for your email. We are somewhat confused by your response. EAL by way of your letter of 18 August 2014 and subsequent emails, requested us to buy the seven properties at the valuation price and we had until Monday September 22nd to respond. We advised you on Monday that we would acquire these properties at the price you have set. It is our clear understanding that we do have a binding agreement to purchase these properties from EAL at the agreed price. There were no other conditions set by EAL on the purchase of these properties therefore there was no other conditions that we were required to fulfil by the 22nd September. EAL have given no reason why they have withdrawn their offer after we had accepted it.
[23] Geneva referred to difficulties for the residents in the homes, then continued:
We have bent over backwards to meet your requirements so that we can continue to house these residents. It is a very harsh position that you are taking that even after we agree to your terms in purchasing these houses, that you feel you can walk away from your offer to us and completely disregard the well-being of these residents…
I would urge that your board reconsider their position on this matter. Failing that we would have no choice but to pass the matter to our legal advisers to seek enforcement of our acceptance of your offer.
[24] There is no evidence of any response from EAL to Geneva’s 26 September email.
[25] A caveat was lodged against the titles to the seven properties on 1 October
2014. The interest claimed is recorded as follows:
Pursuant to a sale and purchase agreement relating to the said land made between Essential Assets Limited as vendor and Geneva Healthcare Limited as purchaser dated 22 September 2014.
[26] On 29 October Geneva filed its originating application for an order that the caveat not lapse.
Sustaining Caveats: Principles
[27] The principles are well established and were not debated by Ms O’Gorman for Geneva and Ms Foster for EAL. One matter only warrants noting. The onus is on Geneva. But this is not an onus to prove its case. It is an onus to establish that it has a reasonably arguable case that it has an interest in the land of the kind referred to in s 137 of the Land Transfer Act 1952.
[28] The general principle was explained by the Court of Appeal in Orams Marine
(Auckland) Ltd v Ports of Auckland Ltd as follows:1
The approach to this type of application has been settled by this Court in
Sims v Lowe [1988] 1 NZLR 656 where Somers I said at page 660:
“The caveator seeks to clog or fetter the proprietary interest of another. As a matter of principle it seems tight that he must justify the continued existence of his caveat. He will do that if he can show he has a reasonable arguable case for the interest he claims. The issue is the same as that which arises under s145.”
Other cases in this Court Castle Hill Run Ltd v NE Finance Ltd [1985] 2
NZLR 184, Holt v Anchorage Management Ltd [1987] 1 NZLR 108, and Shell Oil New Zealand Ltd v Wordcom Investments Ltd [1992] 1 NZLR 129 confirm that while consideration of the balance of convenience may be required in exceptional cases, once a reasonably arguable case has been established, justice will require the maintenance of the caveat. However where the evidence shows that on the evidence before the Court the caveator cannot succeed at trial, the caveat should be allowed to lapse, or be discharged.
[29] The interest claimed by Geneva is an interest as a purchaser pursuant to the agreement for sale and purchase which it says was made on 22 September. There is no doubt that the interest of a purchaser in an agreement for sale and purchase is a caveatable interest. The critical question on this application is whether Geneva has a reasonably arguable case that there is such an agreement.
Submissions
[30] Ms O’Gorman submitted that Geneva’s letter of 18 August was an offer to
Geneva to sell the properties to Geneva, with the offer made on the basis that, if
accepted by Geneva, there would be a contract. She submitted that EAL’s intention
1 Orams Marine (Auckland) Ltd v Ports of Auckland Ltd (1994) 6 TCLR 88 (CA) at 92.
in making that offer, and subsequently, was that a contract would be formed if there was acceptance by Geneva sufficient to constitute acceptance in contractual terms, and that Geneva had the same intention at all relevant times. She argued that, in consequence, this was not a case where the parties intended that their arrangements would have no legal effect until all terms had been recorded in a signed written
agreement for sale and purchase.2
[31] Ms O’Gorman submitted that the email from Geneva of 22 September constituted acceptance of an extant offer from EAL and acceptance in terms sufficient to create a contract.3
[32] Ms O’Gorman submitted that there was no difficulty in relation to certainty of terms because the essential terms for an agreement for sale and purchase of land were recorded in the communications: the parties; the price; and the interest being sold.4
[33] The remaining requirement for an enforceable contract was compliance with s 24(1) of the Property Law Act 2007: the need for the contract to be in writing, or its terms recorded in writing, and for the written record to be signed by the party against whom the contract is sought to be enforced. Ms O’Gorman submitted that the
communications, when read together, met the requirements of s 24.5
[34] Ms Foster submitted that EAL’s letter of 18 August was not an offer from EAL capable of being accepted in a legal sense so that a contract would result. She submitted that the 18 August letter was no more than an invitation to treat, although
the price was not negotiable and all eight properties had to be purchased.
2 Compare Carruthers v Whittaker [1975] 2 NLZR 667 (CA) and Cromwell Corporation Ltd v
Sofrana Immobilier (NZ) Ltd (1992) 6 NZCLC 67,997 (CA).
3 Reference was made to Hinde McMoreland & Sim (ed) Land Law in New Zealand (online looseleaf ed, LexisNexis) at [11.159] and [11.161]; Reporoa Stores Ltd v Treloar [1958] NZLR
177 (CA).
4 See Country Club Apartments Ltd v MFT Properties Ltd [2011] NZCA 560, (2011) 13 NZCPR 1 at [47]; Laws of New Zealand Sale of Land (online ed) at [5].
5 Ms O’Gorman referred to s 18 of the Electronic Transactions Act 2002 and she cited Country Club Apartments Ltd v MFT Properties Ltd, above n 4, at [50]; MFT Properties Ltd v Country Club Apartments Ltd [2012] NZSC 9, (2012) NZCPR 19 at [2]; Welsh v Gatchell [2009] 1
NZLR 241 (HC); J Pereira Fernandes SA v Mehta [2006] EWHC 813 (Ch), [2006] 1 WLR
1543.
[35] Ms Foster further submitted that, if it was assumed that there was a contractual offer, it was brought to an end by Geneva’s 8 September proposal to buy only four properties. The submission was that this amounted to a counter-offer and EAL’s 15 September response did not revive the assumed offer in the 18 August letter.
[36] Ms Foster’s submission in relation to EAL’s 15 September email was that this was, again, no more than an invitation to treat, with that construction supported by Geneva’s 22 September email which was presented as a proposal – Geneva said “we wish to propose” (as it had in the 8 September email referring to four properties).
[37] The third step in this central argument for EAL was that, even if there was an offer capable of being accepted by Geneva at 22 September, the 22 September email was not an acceptance of the offer assumed at this point to have been made by EAL. This was because Geneva introduced a new term of contractual significance – a proposal for settlement on 27 February 2015. Ms Foster agreed with Ms O’Gorman’s submission that, if there had been a contractual offer from EAL, the three matters essential for a contract for sale of land had been identified. Ms Foster acknowledged that a settlement date was not an essential term for certainty because, in the absence of a stipulated date, a reasonable time for settlement could be implied. She also accepted that the 27 February date proposed by Geneva could be assessed against the implied term of a reasonable time for settlement. The primary submission was that this date was not reasonable when assessed against the content of EAL’s letter and subsequent emails.
[38] Ms Foster also submitted that there was no enforceable contract for the following reasons:
(a) There was no intention to be contractually bound until a formal agreement for sale and purchase, with all relevant terms, had been signed by both parties. In other words, in the expression often used, the agreement, or arrangement, was “subject to contract”.
(b)There is no written record signed by EAL sufficient for the purposes of s 24 of the Property Law Act.
(c) The caveat does not accurately describe what is claimed because there
is no “sale and purchase agreement … dated 22 September 2014”.
Discussion
[39] The issues arising from the submissions for the parties are conveniently considered under three headings:
(a) Did Geneva’s email of 22 September constitute acceptance of an existing offer from EAL? This is a broad statement of an issue which incorporates more focussed, or particular, issues identified in the submissions. It requires an assessment in contractual terms of the series of communications.
(b)If there was offer and acceptance in contractual terms, did the parties intend immediately to be bound, or were the arrangements “subject to contract”?
(c) Was there compliance with s 24 of the Property Law Act 2007? (d) Does the caveat adequately describe the interest claimed?
Offer and acceptance
[40] In my judgment the 18 August letter was an offer which, if accepted, would result in the formation of a contract, subject to the presence of the other elements required for the formation of a contract – consideration, intention to create legal relations and certainty of terms. Consideration and certainty of terms were both present. If there was a contractual offer and acceptance it was not in issue that there would be consideration and, as earlier noted, there was no issue as to certainty of the essential terms. The content of the 18 August letter, read in its entirety, cannot be construed as an invitation to treat.
[41] There is a possible ambiguity as to whether it was a term of the offer that, if Geneva accepted it, it would have to be for purchase of all eight properties. It seems reasonably clear that the offer was, as subsequently described by EAL, “all or nothing”. On this basis Geneva’s substantive response to the offer, in its 8
September email, would have brought EAL’s original offer to an end – it would no longer be available for acceptance – if the 8 September email amounted to a counter-offer, rather than a proposal not intended to remove EAL’s original offer from the table. It is trite law that a counter-offer brings an original offer to an end.
[42] Whether the 8 September email amounts to a counter-offer, or something short of a counter-offer which left the original offer on the table, does not require consideration. This is because in my judgment the substantive response from EAL, in its 15 September email, constituted a new offer capable of being accepted in legal terms. I consider that it can reasonably be argued to have amounted to an offer which revived the 18 August offer with only one change, being removal of the requirement that Geneva agree to buy the Tauranga property as well as the other seven properties. In the 15 September email EAL did refer to its intention to “move to get current market assessments on all properties”. This had not been referred to in the 18 August letter, but it has no apparent bearing on the terms of what was offered to Geneva. The 15 September email from EAL was not an invitation to treat. It was expressly referred to as “a compromise”. This was a compromise in relation to the
18 August condition that Geneva agree to buy all eight properties. The only change was the withdrawal of the Tauranga property.
[43] The importance of these considerations, involving a conclusion that there was in substance a revival of the 18 August offer with only the one adjustment, is that the terms of the new offer are to be construed by reference to the 18 August letter as well as the 15 September email. This in turn has an important bearing on the question whether the parties intended that, if there was acceptance by Geneva, a contract would be created, or whether any agreement would be subject to contract.
[44] The remaining question under the broad offer and acceptance heading is whether Geneva’s email of 22 September was acceptance of the offer. Two aspects
of the 22 September email could be taken to indicate that it was not acceptance in legal terms.
[45] The first is Geneva’s use of the words “we wish to propose”. I do not construe those words as meaning that Geneva was not committing itself, but wanted first to discuss with EAL what Geneva went on to set out in its email. Apart from the settlement date of 27 February 2015, what followed was unambiguous acceptance of the terms of EAL’s offer original made in the 18 August letter and revived, with the compromise, on 15 September.
[46] The inclusion of the settlement date of 27 February is the other matter bearing on the question whether there was contractual acceptance. In my judgment it is reasonably arguable that the inclusion of this settlement date did not make the 22
September response a counter-offer. I did not understand Ms Foster to argue, at least in express terms, that it did make the email a counter-offer. The essence of Ms Foster’s argument was along the lines earlier recorded. The issue arising from the argument presented by Ms Foster is whether it is reasonably arguable that the 27
February date would be held to be a reasonable date for settlement of an agreement for sale and purchase of those six properties having regard to the available evidence of the relevant circumstances. I am satisfied that this is reasonably arguable.
[47] Ms Foster sought to persuade me that this was a question able to be answered from the content of the communications alone, but I am satisfied that this is not so. This is one of the matters of consequence which will require more evidence than is available from the letter and emails. At this stage it is reasonably arguable from EAL’s own letter and emails that what was important for EAL in terms of timing, for which it wanted an early answer, was whether it had an agreement with Geneva for sale of the properties, not whether it had an early date for settlement of the sale. The alternative for EAL, as indicated in its communications, was that it would need to get on with marketing and sale by other means, with consequential uncertainties of timing in getting an agreement for sale and purchase, quite apart from the date of settlement for an agreement. For EAL these uncertainties, if there was no agreement with Geneva, were compounded by the fact that EAL was wishing to sell eight properties. Further, it may reasonably be inferred that all of the properties had been
modified for Geneva’s specialised purposes and evidence, not presently available, may indicate that this possibly added to difficulties in promptly getting agreements for sale, quite apart from the timing of settlement dates.
[48] For these reasons I am satisfied that it is certainly reasonably arguable for Geneva that its 22 September email was, in contractual terms, acceptance of an offer to sell the seven properties, with a contract then arising, subject to the three further points made by Ms Foster, discussed under the following sub-headings.
Intention to create legal relations
[49] Both counsel referred to one of the leading authorities on this question, the decision of the Court of Appeal in Carruthers v Whitaker.6 In that case the Court held that in certain circumstances relating to agreements for sale and purchase of land, there is a rebuttable presumption, or a prima facie inference, that the parties do not intend to be contractually bound until a formal written contract has been drawn up, with all of the usual details, and signed by the parties.
[50] The circumstances described by the Court in Carruthers in which the inference will arise have no application in this case. The relevant passage is as follows:7
It is established by the evidence to which I have earlier referred that at the time when the parties instructed their respective solicitors they all had in mind only one form of contract which would govern the sale and purchase of the farm, namely, a formal agreement in writing to be prepared and approved by the solicitors. When parties in negotiation for the sale and purchase of property act in this way then the ordinary inference from their conduct is that they have in mind and intend to contract by a document which each will be required to sign. It is unreasonable to suppose that either party would contemplate that anything short of the signing of the document by both parties would bring finality to their negotiations. Furthermore both parties would expect their solicitors to handle the transaction in a way which would give them proper protection from the legal point of view. There is no evidence whatever in the present case to rebut this prima facie inference.
[51] There is nothing to indicate from the evidence present available that either party had in mind the need to draw up a formal contract before there would be a
6 Carruthers v Whitaker, above n 2.
7 Carruthers v Whitaker, above n 2, at 671.
contract in law. There are numbers of statements, and in particular in EAL’s communications, in fact indicating the contrary. What EAL was wanting was a commitment from Geneva to buy the properties. EAL’s statements as to what it wanted in terms of commitment, and why it wanted the commitment, are not consistent with the effective proposition that negotiations would then follow for all the terms of an agreement to be settled and incorporated into a written agreement to be signed.
[52] I am satisfied that Geneva has a reasonably arguable case, based on the direct evidence of intention contained in the communications, that the parties did intend to create legal relations if Geneva accepted EAL’s offer.
[53] There is a further consideration supporting this conclusion arising from the fact that all essential terms had been agreed. In Fletcher Challenge Energy Ltd v Electricity Corporation of NZ Ltd the majority in the Court of Appeal said that the question of intention to be bound cannot be divorced from consideration of what was agreed.8 The point was discussed more fully by Gleeson CJ in Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd, in a passage cited in Fletcher Challenge:9
It is to be noted that the question in a case such as the present is expressed in terms of the intention of the parties to make a concluded bargain: see, eg, Masters v Cameron [(1954) 91 CLR 353, 360]. That is not the same as, although in a given case it may be closely related to, the question whether the parties have reached agreement upon such terms as are, in the circumstances, legally necessary to constitute a contract. To say that parties to negotiations have agreed upon sufficient matters to produce the consequence that, perhaps by reference to implied terms or by resort to considerations of reasonableness, a court will treat their consensus as sufficiently comprehensive to be legally binding, is not the same thing as to say that a court will decide that they intended to make a concluded bargain. Nevertheless, in the ordinary case, as a matter of fact and commonsense, other things being equal, the more numerous and significant the areas in respect of which the parties have failed to reach agreement, the slower a court will be to conclude that they had the requisite contractual intention.
8 Fletcher Challenge Energy Ltd v Electricity Corporation of NZ Ltd [2002] 2 NZLR 433 (CA) (judgment of Richardson P, and Keith, Blanchard and McGrath JJ, delivered by Blanchard J) at [50].
9 Australian Broadcasting Corporation v XIVth Commonwealth Games Ltd (1988) 18 NSWLR
540 (CA) at 548 per Gleeson CJ, cited in the Fletcher Challenge case, above n 8, at [59].
[54] In the final sentence Gleeson CJ outlined circumstances indicating a possible absence of intention to create legal relations. The passage as a whole, together with the observation in the Fletcher Challenge case, indicates that the opposite conclusion is more likely to be drawn where all essential terms have been agreed. Such is the position in this case.
Property Law Act 2007, s 24
[55] Section 24 of the Property Law Act 2007 requires that a contract for the disposition of land is not enforceable unless the contract is in writing, or its terms are recorded in writing, and the contract or written record is signed by the party against whom the contract is sought to be enforced.
[56] Geneva seeks to enforce a contract against EAL. There is no written contract in the usual sense of those words. Ms O’Gorman submitted that there is a written record signed by Geneva contained in Geneva’s original letter and its subsequent emails. She further submitted, by reference to the authorities earlier noted, that, in addition to a signature on the letter, the typed email names constituted signing by, or on behalf of, EAL.
[57] Ms Foster accepted that the authorities established that the email names were sufficient to constitute signing by EAL in terms of s 24. The argument for EAL was that the written and signed record must come into existence after the contract was made. Ms Foster cited a statement of the Court of Appeal to that effect in Country Club Apartments Ltd v MFT Properties Ltd.10 Ms Foster noted that in the present case Geneva contends that the contract was made when it sent its acceptance in the email of 22 September and there was no written record of the terms signed by EAL
which came into existence after Geneva’s acceptance.
[58] The rule referred to by the Court of Appeal is a general rule subject to well established exceptions. One was stated in another Court of Appeal decision, Boote v
R T Shiels & Co Ltd as follows:11
10 Country Club Apartments Ltd v MFT Properties Ltd, above n 4, at [47]. The Court of Appeal in turn cited Munday v Asprey (1880) 13 Ch D 855 at 857.
11 Boote v R T Shiels & Co Ltd [1978] 1 NZLR 445 (CA) at 451.
It is well established that a written offer, signed by a party, is sufficient for this purpose as against that party although the contract has been made by acceptance of that offer orally or by conduct.
[59] The exception described in Boote clearly applies in this case. [60] I am satisfied that there is a sufficient record signed by EAL.
The wording of the caveat
[61] The interest claimed in the caveat is an interest “pursuant to a sale and purchase agreement … dated 22 September 2014”. Ms Foster’s argument was that there is no such agreement and that the caveat should lapse for that reason. It is an argument that may be open on one, strictly literal, construction of the words used. And if the word “agreement” is construed as meaning a document signed by EAL and Geneva, there is no such document dated 22 September. However, the substance is quite clear. On Geneva’s argument, which I have held as reasonably arguable, an agreement was made on 22 September and it could be said to be an agreement “dated” 22 September. Probably the expression should have been “made on 22
September” rather than “dated 22 September”. But nothing turns on this.
Result
[62] There is an order, in terms of the application, that the caveat not lapse.
[63] There were no submissions on costs. My conclusion, subject only to any submissions that EAL may wish to make, is that Geneva is entitled to costs on a 2B basis and reasonable disbursements. If EAL opposes costs being awarded at this stage, submissions for EAL should be filed and served within four weeks (allowing in the usual way for the Christmas vacation) and any response for Geneva within a further two weeks.
Directions
[64] If Geneva wishes to pursue a substantive claim for enforcement of the agreement for sale and purchase it claims was made, or in other respects, a substantive claim should be filed and served without delay. Leave is reserved to
EAL to apply for further directions in this proceeding, and for review of the order sustaining the caveat, if EAL considers that there has been material default by Geneva in expeditiously pursuing a substantive claim.
[65] If no further steps have been taken in this proceeding by 20 February 2015 the case officer should contact counsel to enquire whether any steps are to be taken and whether this file may be closed. If Geneva commences substantive proceedings before 20 February 2015 the Registry should be notified, on filing of the substantive proceedings, that this caveat file should be combined with the substantive
proceeding file.
Woodhouse J
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