Hanrahan v Hillock

[2012] NZHC 404

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2011-425-000507 [2012] NZHC 404

BETWEEN  VICKIE HANRAHAN Plaintiff

ANDJOHN RICHARD HILLOCK AND MARGARET ANNE HILLOCK AND MCCULLOCH TRUSTEES LIMITED Defendants

Hearing:         10 February 2012 (Heard at Invercargill)

Appearances: P M James for Plaintiff/Applicant

N H Soper for Defendants/Respondents

Judgment:      12 March 2012

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

ON PLAINTIFF’S SUMMARY JUDGMENT APPLICATION

Introduction

[1]      At the heart of this case is the correct construction and application of a vendor’s warranty that there would be no easements granted over the lot it was selling.  Title was issued subject to an electricity easement.  The purchaser cancelled the contract  following  a requisition  procedure  when  the vendor  could  not  clear easements off the title to the lot.   The purchaser seeks by summary judgment the return of her deposit.

Summary judgment – the principles

[2]      The starting point for a plaintiff’s summary judgment application is r 12.2(1) High Court Rules, which requires the plaintiff to satisfy the Court that the defendant

HANRAHAN V HILLOCK HC INV CIV-2011-425-000507 [12 March 2012]

has no defence to any cause of action in the statement of claim or to a particular part of that cause of action.

[3]      I  summarise  the  general  principles  which  I  adopt  in  relation  to  this application:

(a)       Commonsense, flexibility and a sense of justice are required (Haines v

Carter [2001] 2 NZLR 167, (CA) at 187).

(b)The onus is on the plaintiff seeking summary judgment to show that there is no arguable defence.  The Court must be left without any real doubt or uncertainty on the matter.

(c)      The  Court  will  not  hesitate  to  decide  questions  of  law  where appropriate.

(d)The Court will not attempt to resolve genuine conflicts of evidence or to assess the credibility of statements and affidavits.

(e)      In determining whether there is a genuine and relevant conflict of facts, the Court is entitled to examine and reject spurious defences or plainly contrived factual conflicts.   It is not required to accept uncritically every statement put before it, however equivocal, imprecise, inconsistent with undisputed contemporary documents or other statements, or inherently improbable.

(f)      In assessing a defence the Court will look for appropriate particulars and a reasonable level of detailed substantiation.

(g)In weighing these matters, the Court will take a robust approach and enter  judgment,  even  where  there  may  be  differences  on  certain factual matters, if the lack of a tenable defence is plain on the material before the Court.

(h)Where a last-minute, unsubstantiated defence is raised and an adjournment would be required, a robust approach may be required for the protection of the integrity of the summary judgment process.

(i)Once the Court is satisfied that there is no defence, the Court retains a discretion to refuse summary judgment but does so in the context of the general purpose of the High Court Rules which provide for the just, speedy and inexpensive determination of proceedings.

What the parties agree on

[4]      The parties entered an agreement for sale and purchase of the purchaser’s lot adopting the REINZ/ADLS form of agreement, 8th  ed. 2008(3).  The agreement is dated 25 March 2011.

[5]      Ms Hanrahan agreed to purchase a lot in a proposed subdivision which the Hillocks were undertaking at Lake Hayes.  The purchaser’s lot (one of two in the proposed subdivision) was to be 0.95 ha (more or less). The subdivision was to be as per a proposed plan attached to and forming part of the contract (Appendix 1 to this judgment).

[6]      The Further Terms of Sale (typed in after the General Terms of Sale) included cl 17.4 as to easements.  It provided:

17.4The vendor warrants that there will be no easements granted over the lot and that no land covenants will be registered against the lot.

[7]      The Further Terms also created an obligation upon the Hillocks to complete the subdivision in these terms:

17.2     The vendor will proceed forthwith, at their cost, to:-

(a)      Complete all works required to subdivide the land;

(b)      Comply  with  the  conditions  of  the  Subdivision  Consent; (subject to clause 17.7);

(c)      Prepare and submit a land transfer plan in accordance with the application plan to the Council for its approval.

Clause 17.7 (to which 17.2 was subject) contained additional agreements relating to the subdivision which are not relevant in this case.

[8]      The “Subdivision Consent” referred to in cl 17.2 arose through the decision

of commissioners dated 13 May 2008.

[9]      The     Consent     contained     provisions     as     to     power     supply     and telecommunications.  In particular condition 11c) and 11d) which read:

11        Prior to  certification pursuant to Section  224(c)  of the Resource Management Act 1991, the consent holder shall complete the following:

a)        ... b)       ...

c)The consent holder shall provide a suitable and usable power supply and telecommunications connection to the building platform on Lot 1.  These connections shall be underground from any existing reticulation and in accordance with any requirements/standards  of  Aurora  Energy/Delta  and Telecom.

d)The   overhead   power   lines   shall   be   replaced   with underground cables in accordance with any requirements/standards of Aurora Energy/Delta.

...

[10]     The Consent also provided in condition 13 that:

13. All easements shall be granted or reserved.

[11]     The Further Terms of Sale of the contract contained also a due diligence clause which provided:

18       Purchaser’s Conditions

18.1     This  agreement  is  condition  [sic]  on  the  purchaser  satisfying themselves, following a due diligence inspection of the property and all information which the purchaser deems necessary, that the property is suitable for the purchaser’s requirements.

18.2     ...

[12]     The real estate agent involved in the sale of the purchaser’s lot, Kathleen Cruickshank, has given evidence that a plan was supplied to Ms Hanrahan with all the other information Ms Cruickshank held on the property.  Ms Hanrahan has not denied receipt of the plan.   The document Ms Cruickshank says she gave Ms Hanrahan is attached to this judgment as Appendix 2. (I have reproduced in black and white only, whereas the exhibit is in colour).  It is self-evidently a plan showing a  building  platform  and  vegetation  on  the  purchaser’s  proposed  lot.    Running through the property from north to south is a line with the barely legible notation “Overhead powerlines”.  It appears that the Cruickshank plan is an enlarged version of part of a Landscape Concept Plan which was submitted to the Queenstown Lakes District Council by the Hillocks as part of the consent process.  The version attached to the Commissioners’ decision (in its actual size as exhibited in this Court) is attached as Appendix 3 with the plan smaller and with some areas darker.

[13]     A survey plan was not attached to the contract.  Mrs Hillock’s evidence is that the survey plan was produced by the surveyor after the agreement was signed and that the plan initially did not include the easement which was the subject of this litigation.  She explains that the plan was “subsequently corrected” by the surveyor but that that correction occurred after Ms Hanrahan’s period of due diligence, and after confirmation of the contract, (but before the date for settlement of the contract,

24 August 2011).

[14]     The Hillocks had the subdivision completed and had titles issued on 3 August

2011.  The Title Plans for the purchaser’s lot (Appendix 4A and 4B to this judgment)

contained easements over the lot.  In particular, the title to the purchaser’s lot was:

Subject to a right (in gross) to convey electricity over parts marked M, T and BD on DP 442220 and a right (in gross) to transform electricity over part marked BD on DP 442220 in favour of Aurora Energy Limited created by Easement Instrument 8815722.4 – 3.8.2011 at 9.33 am ...

(“the electricity easements”)

[15]     When she was called upon to settle, Ms Hanrahan, through her solicitors, requisitioned the title.   She required the Hillocks to register surrenders of the easements over the purchaser’s lot.  When the Hillocks indicated that they could not

remove the easements from the title, Ms Hanrahan gave notice of cancellation of contract and called for the return of the deposit.  The Hillocks refused to return the deposit.  Ms Hanrahan then issued this proceeding.

[16]     When Ms Hanrahan notified her requisition, the Hillocks had immediately rejected the substance of Ms Hanrahan’s contention that the easements should be removed. The Hillocks’ solicitors replied in these terms:

Dear David,

Further to your conversation with Kerry, we confirm that the original plan omitted to include the electricity easement needed to service lot 1.

The surveyor original  [sic] inserted these Aurora easements as proposed easements, however upon applying for approval of the plan by Council was required to insert the easements into the Memorandum of easements so that they would be required for the deposit of the plan with LINZ.  Attached is a copy of the survey-approved plan showing the easements in the memorandum.

Accordingly, the easements were required to be registered upon the subdivision of the land.

We trust this satisfies your concerns.  Let us know if you require any further information.

[17]     The Hillocks’ solicitors wrote further by email the following day.  They made additional points:

It was not accepted that Ms Hanrahan was entitled to requisition the title in

respect of the easement.

It would be a different story if the easement had been voluntarily placed on

the title by the Hillocks.

Clause 17.2 of the contract required the Hillocks to do all things necessary to

comply with the Consent and to obtain the deposit of the plan.

The Consent requires the lots to have a reticulated electricity system and “for

all easements to be granted or reserved”.

The warranty in cl 17 needed to be read in conjunction with the Hillocks’

obligation to meet the requirements of the Council and the Consent.

The practical result was that the Hillocks could not remove the electricity

easement.

The Hillocks looked to Ms Hanrahan to settle that day.

[18]     When Ms Hanrahan continued to refuse to settle, the Hillocks’ solicitors wrote again.  They commented that in light of the obligations under cl 17.2 of the contract and the requirement to comply with conditions of the Consent the Hillocks were required to:

(a)       Install a suitable and usable power supply necessary to service the lots;

(b)underground  the  overhead  power  lines  “in  accordance  with  any requirements/standards of Aurora Energy Limited”; and

(c)      grant easements in respect of all services.

[19]     The Hillocks’ solicitors commented that those requirements were significant for two reasons:

(a)       Your clients were aware of the existence of the overhead power lines and knew that they would be installed underground (so your clients were always aware that there would be electricity lines running in this area);

(b)       Aurora Energy Limited as is entirely usual in this case has required its lines to be protected by easement (and as you have pointed out yourselves, your clients were aware that the power companies had in any case legislative rights to protect its works).

[20]     The Hillocks’ solicitors commented further:

In addition the Council consent requires both the installation of services and for those services to be protected by easements, i.e. the registration was also required by the subdivision consent and needed to complete our client’s obligations under 17.2.

The Scheme Plan attached to the consent is simply that, i.e. a schematic plan showing the proposed lots’ boundaries and building platform. As you will be aware, it is the survey plan that shows the details of the easements, and these were not requested.

[21]     The Hillocks’ solicitors went on to conclude that if a requisition was available to Ms Hanrahan, then they were now giving notice pursuant to cl 5.2(3) of the contract (that is, notice that the Hillocks were unable or unwilling to remove the easements).

[22]     The parties agree that the requisition procedures themselves were followed correctly.  It is also common ground that the incorrect existence of an easement is a requisitionable defect.[1]

[1] Ashburner v Sewell [1891] 3 Ch 405. Pearson v Raymer (1979) 1 NZCPR 46. D W McMorland

Sale of Land (3rd ed, Cathcart Trust, Auckland 2011) at 9.09(b).

[23]     The issue between the parties is whether the contract required Ms Hanrahan to accept a title subject to the electricity easement.

The arguments for Ms Hanrahan

[24]     Mr   James’s   submissions   for   Ms   Hanrahan   contained   the   following propositions:

Clause 17.4 constituted a clear and express requirement that there be no

easements or covenants over the title to the purchaser’s lot.

The Consent (of 13 May 2008) did not require the electricity easement to

be registered against the title.

Any requirement of the council that the Hillocks create the electricity easement against the title to the purchaser’s property came after the Consent and the contract so the registering of the electricity easements

was not a compliance with the conditions of the Consent itself.

The Consent requirement (condition 11c) for provision of suitable and

usable power supply to the purchaser’s and the adjoining lot did not

require the creation of easements.

The Consent requirement (condition 11d) for the undergrounding of the overhead powerlines in accordance with Aurora’s requirements did not require the powerlines and associated easements to be routed across the

purchaser’s lot.

In  any  event,  there  is  no  evidence  to  justify  any  suggestion  by  the Hillocks that Aurora required the powerlines/easements to run across the purchaser’s lot.   The evidence indicated that Aurora would have been prepared to re-route the electricity lines/easements along the boundary

with the second lot provided the costs of doing so were met.

Ms Hanrahan having requisitioned the title and the Hillocks being unable to  remove the easements, Ms Hanrahan had validly exercised her right

under the requisition provisions of the contract to cancel the agreement.

Alternatively, in terms of s 7 of the Contractual Remedies Act 1979, the parties had expressly or impliedly agreed that the performance of cl 17.4 of  the  contract  was  essential  to  Ms  Hanrahan,  or  the  effect  of  the Hillocks’ breach of cl 17.4 was to substantially reduce the benefit of the contract to Ms Hanrahan or to increase the burden of Ms Hanrahan under the contract.  Therefore Ms Hanrahan was entitled to cancel the contract

as she did.

The arguments for the Hillocks

[25]     For  the  Hillocks,  Mr  Soper  submitted  that  there  were  answers  to  Ms Hanrahan’s claim based purely on the contractual documentation read as a whole but also  based  upon  the  contractual  documentation  when  read  in  its  context.    For

reference  to  external  context,  Mr  Soper  invoked  principles  enunciated  by  the

Supreme Court in Vector Gas Ltd v Bay of Plenty Energy Ltd.[2]

The arguments on the contractual documentation

[2] Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] 2 NZLR 444 (sc).

[26]     Mr Soper’s submissions as to the contractual documentation involved the

following propositions:

The warranty as to an absence of easements in cl 17.4 of the contract has

to be read alongside cl 17.2.

Clause  17.2  required  the  Hillocks  to  complete  all  work  required  to subdivide the land; to comply with the conditions of the Consent; and to prepare and submit a land transfer plan in accordance with the resource

consent application to the Council for approval.

The Consent required (condition 11d) the Hillocks to have the overhead powerlines replaced  with  underground  cables  in  accordance with  any requirements/standards of Aurora and further required (condition 13) that

all easements were to be granted or reserved.

Any  undergrounding  of  overhead  lines  would  inevitably  require  an

easement.

The  documentation  relating  to  the  resource  consent  application  and provided to the plaintiff by Ms Cruickshank and the Commissioners’ decision  itself,  through  the  attached  Landscape  Concept  Plan,  clearly

showed the position of the overhead lines required to be buried.

The plaintiff was required to undertake due diligence which reasonably included inspection of the Council’s Resource Consent file, and the Commissioners’ decision which expressly included the requirement to

underground the powerlines.

The Hillocks’ arguments as to the external context

[27]     Mr Soper submitted that matters of admissible external context of which the plaintiff had knowledge included –

The existence of a plan showing the overhead power lines (which the

Consent required to be buried) running across the purchaser’s property –

provided to Ms Hanrahan by the agent.

Mrs Hillocks’ evidence that Ms Hanrahan was aware of the existence of the overhead power lines from her inspection of the purchaser’s property at the time the agreement was entered into and would have known that resulting easements were inevitable (“awareness” which Ms Hanrahan

has denied in her evidence).

To the extent that Ms Hanrahan gave evidence that it was important to her not to live in close proximity to power lines because her studies have indicated that high voltages and leukaemia might be linked, there had been time for Ms Hanrahan to canvass the agent, the Hillocks and the Hillocks’ solicitors in relation to powerline issues before the agreement

became unconditional.

Ms Hanrahan had been adequately notified that the overhead power lines would  be  buried  and  an  easement  would  result,  such  notification occurring through the documentation (including the Consent) which she received  or  was  otherwise  available  to  her  during  the  due  diligence

period.

Discussion of the meaning of the contractual provisions

[28]     I begin with the contractual documentation itself.

[29]     When cl 17.4 is read on its own its meaning is clear – the Hillocks were to ensure that there were no easements or covenants registered against the title.   Mr Soper did not suggest that the clause when read on its own is ambiguous.

[30]     Mr Soper’s primary ground for departing from the plain meaning of cl 17.4 was his contention that the clause must be read in conjunction with cls 17.2 which imposed upon the Hillocks the obligation to satisfy the conditions of the Consent. Mr Soper invited the Court to find that the Aurora easement (as it came to be) across the purchaser’s lot was required by the Consent.   With cls 17.2 and 17.4 then in apparent conflict, Mr Soper’s submission was that cl 17.4 must be read subject to the Hillocks’ obligation to complete the subdivision, thereby producing the titles, in accordance with the Consent.  In according the provisions of cl 17.2 primacy over cl

17.4, Mr Soper referred to matters of context, including the evidence for the Hillocks suggesting Ms Hanrahan had knowledge of overhanging and buried power lines at the time of the agreement and accordingly would have known that the resulting easement was inevitable.

[31]     It is thus necessary to examine cl 17.2 and the conditions of the Consent which are incorporated into cl 17.2.

[32]     Clause 17.2(b) required the Hillocks to comply with the conditions of the

Consent.

[33]     The first difficulty with the Hillocks’ case is that the Subdivision Consent did not state that the power lines had to be undergrounded across the purchaser’s lot or consequentially – pursuant to condition 13 – supported by an easement over the purchaser’s lot.

[34]     Beginning with condition 11c) of the Consent, Mr Soper appropriately did not pursue a submission that the domestic power supply and telecommunications connection for the purchaser’s lot was to require an easement.  Mr Soper accepted that that would not normally be the case and the Consent did not require it.

[35]     It was Consent condition 11d) (when read with condition 13) upon which Mr

Soper placed his reliance. What condition 11d) in fact required was that:

The overhead power  lines shall be replaced with underground cables in accordance with any requirements/standards of Aurora Energy/Delta.

[36]     That requirement did not of itself stipulate a route for the powerlines, let alone a route which had to run over the purchaser’s lot.  The Hillocks have produced no evidence to indicate that an alternative route, such as around the western side of the purchaser’s lot, could not have been used.

[37]     Perhaps to overcome an absence of any specific Consent requirement that the power lines be undergrounded across the purchaser’s lot and that the easement be created on that route, the Hillocks placed emphasis upon the survey plan.  But as I have recorded (above [13]), the survey plan was not attached to the contract and did not form part of it by reference.   The Hillocks’ evidence that the plan was “subsequently corrected” by the surveyor after the contract was entered into and indeed after Ms Hanrahan’s period of due diligence means that the survey plan can be of no assistance as an aid to interpretation of the contract.

[38]     The Hillocks also placed emphasis upon the Landscape Concept Plan which was submitted to the Council.  That document is incapable of creating a contractual requirement that the power lines and easement be routed across the purchaser’s lot for at least three reasons:

(a)       The document is what its title indicates - a Landscape Concept Plan –

it does not purport to deal with issues which might go to title; and

(b)In  contrast  to  features  which  are  expressly  “proposed”  such  as “proposed curtilage area” and “proposed building platform”, the “overhead powerlines” are described simply as that, that is to say descriptively of what is already there rather than a statement of what is proposed for the future; and

(c)      I am not satisfied that any information about electricity presented so collaterally to the Council could be taken to have been incorporated into Consent conditions by implication.

[39]     Mr Soper further submitted that although the undergrounding of the power lines and the creation of an easement across the purchaser’s lot might not have been required by the direct words of the Consent itself, those matters were incorporated through  the  condition  11d)  reference  to  “any  requirements/standards  of Aurora Energy/Delta”.  The Hillocks did not produce any evidence as to a requirement by Aurora that the power  lines and  easement  be  routed across the purchaser’s  lot. Responsibly, Mr Soper did not seek to elicit such an Aurora requirement from the evidence. The highest he put it in his submissions was that –

The consent required that the overhanging power lines be buried.  Aurora would require an easement in gross to be registered in accordance with policy.  It was impossible for the Defendants to have the easement removed. The easement is not a defect on the title.

[40]     In short, there is nothing to suggest that Aurora required that its power lines

and its easement be routed across the purchaser’s lot.

[41]     There is, in fact, some evidence to the contrary.  Ms Hanrahan gave evidence as to steps which she and her solicitors took to seek to resolve difficulties when the Hillocks  issued  their  settlement  notice.    Enquiries  were  made  of Aurora.    Ms Hanrahan says that she and her solicitors were advised by Aurora that the easement did not have to go where it was located on the new title but was placed there as the most convenient direct route between two points and the cheapest option.  Aurora indicated the routing of the easement could be carried out at a cost of “the best part of $20,000”.   This information was put to the Hillocks’ solicitors along with a proposal that the purchase price be reduced by $20,000 to go towards the cost of re- re-routing the easement line.

[42]     The  Hillocks’  solicitors,  in  their  subsequent  correspondence,  did   not challenge  the  accuracy  of  what  Ms  Hanrahan’s  solicitors  had  said  as  to  the possibility of re-routing the power lines and easement.  Nor did Mrs Hillock in her affidavit challenge Ms Hanrahan’s understanding as to the possibility of having the

easement re-routed.   Rather her evidence indicates that the Hillocks rejected the request for a $20,000 reduction on the simple basis that they had already reduced the purchase price considerably during the purchase negotiations.   Mrs Hillock considered a further reduction as “unnecessary and superfluous to my obligations under the Agreement”.  Mr Soper’s submissions on this point were similarly to the effect that Ms Hanrahan could have had the easement re-routed at her own expense.

[43]     In his submissions as to the correct construction of cls 17.2 and 17.4, Mr Soper, in invoking the principles enunciated in Vector Gas[3]  invited the Court to consider a number of matters which he placed in the category of:

[3] Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] 2 NZLR 444 (sc) at [19].

... the commercial or other context in which the contract was made and of all the facts and circumstances known to and likely to be  operating on the parties’ minds.

The invitation to the Court was to find, in the event that the written contract was otherwise plain and unambiguous, that the external context indicated that the parties had intended some other construction to apply.

[44]     Matters of external context upon which Mr Soper particularly relied may be summarised in this way:

(a)      The power lines were already in their current position at the time the contract was entered into; and

(b)At the time of the contract there were two obvious power poles at the north and south of the purchaser’s lot with power lines going into the ground from each; and

(c)      Ms Hanrahan had time and opportunity to make reasonable enquiry as to the overhead and undergrounded power lines.

[45]     Against  this  background,  Mr Soper submitted that  if  a sensitivity to  the presence of power lines (which Ms Hanrahan asserted she felt) had been an issue of

significance, then she would have canvassed such with at least the agent or the

Hillocks prior to the agreement becoming unconditional.  Mr Soper submitted that in the absence of any knowledge on the part of the Hillocks as to Ms Hanrahan’s alleged sensitivity to power lines, Ms Hanrahan had been adequately notified by the terms of the Consent and the other documentation provided or otherwise available during due diligence, that the overhead powerlines had to be buried and an easement would result.

[46]     Drawing all Mr Soper’s submissions together, I find nothing inconsistent between the provisions of cls17.2 and 17.4 so as to require a reading down of one or the other.  The terms of the Subdivision Consent did not require the Hillocks to route the electricity lines or easement across the purchaser’s lot and it was therefore open to them to comply with the terms of the Consent while giving effect to their warranty as to no easements over the purchaser’s property. There is nothing in the background circumstances identified by Mr Soper to suggest that the parties intended that the combined effects of cls 17.2 and 17.4 be something other than appears on their combined plain meaning.

[47]     The manifest presence of power poles at the northern and southern ends of the purchaser’s lot and the undergrounding of power lines at those points is not inconsistent with a routing of underground power lines around the purchaser’s lot. The failure of Ms Hanrahan to enunciate the concerns which led her to include a “no easements” provision does not detract from the force of an otherwise clear provision. Equally, the steps she did or did not take during due diligence or otherwise after the contract do not in this case cast any different light on the meaning the parties must objectively be taken to have understood at the time the contract was entered into. Ms Hanrahan’s post-contract conduct was entirely consistent with an understanding that she already had a contractual entitlement to having no easements on her title.

General and specific provisions

[48]     Were I to have found any inconsistency between cl 17.2 and 17.4, Mr James submitted that the Court should view cl 17.4 as a provision specifically dealing with the absence of easements and therefore a provision which should prevail to the extent it may be inconsistent with cl 17.2.

[49]    Mr James’s submission was an invitation to apply the maxim generalia specialibus  non  derogant.    Although  that  maxim  appears  to  have  been  most frequently referred to in the context of statutory interpretation, Lord Cooke, in Effort Shipping Co Ltd v Linden Management SA and another; The Giannis NK[4] confirmed that the maxim is not a technical rule peculiar to English statutory interpretation.  His Lordship adopted the following explanation from Francis Bennion’s Statutory Interpretation:[5]

A linguistic canon of construction reflects the nature or use of language generally. It does not depend on the legislative character of the enactment in question, nor indeed on its quality as a legal pronouncement. It applies in much the same way to all forms of language … Linguistic canons of construction are not confined to statutes, or even to the field of law. They are based on the rules of logic, grammar, syntax and punctuation; and the use of language as a medium of communication generally.

[4] Effort Shipping Co Ltd v Linden Management SA and another; The Giannis NK [1998] 1 All ER

495 (HL) at 513.

[5] Francis Bennion Bennion on Statutory Interpretation (5th ed, LexisNexis, London, 2008) at 1155.

[50]     Lord Cooke described the maxim as representing “simple common sense and

ordinary usage”.[6]

[6] Effort Shipping Co Ltd v Linden Management SA and another; The Giannis NK, above n 5.

[51]     The maxim has its greatest relevance when not all words or provisions of a contract (or statute) can be given a consistent meaning.   I accept the force of Mr James’s submission that in this case the evident purpose of cl 17.4 was to deal specifically with the possibility of easements and covenants (and to exclude them). The provisions of cl 17.4 might fairly be seen as a more general provision relating to the achievement of the subdivision and the issuing of titles generally.

[52]     In the event, I do not need to apply the generalia specialibus maxim as I have found there to be no inconsistency between cls 17.2 and 17.4.

Outcome

[53]     It is common ground between the parties, subject to the Court’s finding on

Ms Hanrahan’s right to have no easements on the purchaser’s title that the requisition clause would apply in this case and that the requisition procedures had been properly

followed, that Ms Hanrahan would be entitled (by cl 5.2(4) in the ADLS/REINZ

form) to the immediate return of the deposit.

[54]     The Court, in giving effect to the requisition provisions, is not concerned with the magnitude or triviality of a matter subject to requisition.   The contractual provisions, such as those in the ADLS/REINZ forms, have extended the common law position in relation to requisitions so as to enable a purchaser to cancel in relation  to  defects  of  title  without  the  aspect  of  title  being  essential  or  its performance being substantial.  I adopt, with respect, the observations of Professor

McMorland[7]:

The  purchaser  must  have  disclosed  the  ground  of  the  requisition,  the particular defect in title objected to, and, if that requisition is valid, that is, if the matter complained of is a defect in the vendor’s title not known to the purchaser before the contract or disclosed in the contract, the plain wording of cl 5.2(3) gives the purchaser a right of cancellation however trivial the particular matter might seem.  The purpose of extending the contractual right of  cancellation  to  the  purchaser  is  to  give  the  purchaser  a  clear  right, avoiding the difficult questions of essentiality or substantiality raised by s

7(4) of the Contractual Remedies Act 1979.

[7] D W McMorland Sale of Land (3rd ed, Cathcart Trust, Auckland, 2011) at 9.17(b).

[55]     The apparently broad right of cancellation under the requisitions clause is not affected or limited by the provisions of s 7 of the Contractual Remedies Act 1979. This is confirmed by the discussion in Walton Mountain Ltd v Apple New Zealand Ltd,[8] by O’Regan J of the vendor’s right to cancel in relation to this form of requisition clause (albeit in relation to a vendor).

[8] Walton Mountain Ltd v Apple New Zealand Ltd (2004) 5 NZ ConvC 193, 853 (HC) at [66]; see also Bennion, Brown, Thomas & Toomey New Zealand Land Law (2nd ed, Brookers, Wellington, 2009) at 13.19.02 (5).

[56]     In relation to cancellation pursuant to the requisitions clause, I therefore do not embark upon an investigation as to essentiality or substantiality.   Had it been necessary to do so, I would have been attracted by Mr James’s submissions that through the provisions of cl 17.4 the parties had impliedly agreed that the absence of easements on the purchaser’s lot was an essential term of the contract, and that the Hillocks’ failure to provide a title without easements either substantially reduced the benefit of the contract to Ms Hanrahan or substantially altered the burden of the

contract.

Relief under the Contractual Remedies Act

[57]     Having regard to my findings, it is unnecessary that I further consider Mr James’s alternative justification of Ms Hanrahan’s cancellation which was based on a right of cancellation under the provisions of the Contractual Remedies Act 1979.  I recognise the force of those submissions but refrain from determining the case on that alternative ground.

Orders

[58]     I order –

(a)       There is judgment for the plaintiff in the sum of $48,000;

(b)There is an order that the defendants pay the plaintiff’s costs of this proceeding on a 2B basis together with disbursements to be fixed by the Registrar.

[59]     The plaintiff ’s statement of claim includes a prayer for “recovery of costs incurred in a sum to be advised”.  To the extent that I have not in this judgment dealt with that item, I reserve the question of any recovery of that nature for further submissions if appropriate.  I do not recall receiving submissions from counsel on that item.  In the absence of evidence before the Court at the hearing it may be that there should be no order in any event in that regard. The plaintiff will also be limited by the express provisions of cl 5.2(4) which disentitle the purchaser from recovering any interest or any expense of investigating the title or any compensation whatever. If counsel are unable to agree upon the outcome of that particular prayer for relief, then memoranda are to be filed and served (plaintiff’s memorandum first) and I will

then determine the issue on the papers.

Associate Judge Osborne

APPENDIX 1

APPENDIX 2

APPENDIX 3

APPENDIX 4A

APPENDIX 4B

Solicitors:

Saunders & Co, PO Box 18, Christchurch 8140 ([email protected])
Anderson Lloyd, PO Box 201, Queenstown 9348 ([email protected])