James Developments Ltd v Mana Property Trustee Ltd - [2009] NZCA 483

IN THE COURT OF APPEAL OF NEW ZEALAND
CA 241/2009
[2009] NZCA 483
BETWEENJAMES DEVELOPMENTS LTD

Appellant

ANDMANA PROPERTY TRUSTEE LTD

Respondent

Hearing:15 September 2009

Court:Hammond, Harrison and Miller JJ
Counsel:C S Withnall QC and R Ahdar for Appellant

J McCartney SC for Respondent

Judgment:19 October 2009 at 2.15 pm

JUDGMENT OF THE COURT

ATHE APPEAL IS ALLOWED. THE SUMMARY JUDGMENT ENTERED IN THE HIGH COURT IS SET ASIDE.
BCounsel may file memoranda as to costs in accordance with the timetable in paragraph [39].

____________________________________________________________________
REASONS OF THE COURT
(Given by Miller J)
Introduction
[1]        The purchaser under an agreement for sale and purchase of land appeals against a summary judgment granted in the High Court. The issue is whether a stipulation that the area of the property sold “must not be less than” a certain size was essential, such that any shortfall permitted the purchaser to cancel.
The narrative
[2]        The property is situated at 11 McNulty Road, Cromwell, and forms part of an industrial subdivision undertaken by the Central Otago District Council (CODC). Mana Property Trustee Ltd (Mana) agreed to purchase part of the subdivision – lots 5 and 11 - from the CODC. Under an agreement for sale and purchase dated 15 October 2007 Mana agreed to onsell lot 11 to James Developments Ltd (James). The agreed sale price was $4.5 m plus GST. James paid the deposit of $450,000.
[3]        The sale required a further subdivision under which lot 11 would become approximately 4.7161 ha. The property was accordingly described as:
Lot 11 as shown on the attached plan coloured blue (dimensions not necessarily to scale) being part of a subdivision of Lot 3 RC060431 Otago District containing 4.7161 Ha more or less

[4] The agreement was in the standard REINZ-ADLS form (8ed). There were a number of special conditions. Clause 15.2 provided that the special conditions prevailed over the general conditions in the event of conflict:
If there is a conflict between the general terms of sale of this agreement and these further terms of sale, these further terms of sale will prevail.

[5] One of the special conditions was cl 16.1, which assigned to Mana responsibility for securing the CODC’s approval of the subdivision and for having the title issued. It provided, so far as relevant:
16. SUBDIVISION
16.1The vendor is purchasing from the CODC the vendor’s land. The CODC has obtained subdivision Resource Consent for its proposed subdivision of lot 3 RC060431 (“proposed subdivision”) into lots including the vendor’s land. The vendor has agreed with the CODC that the CODC will alter the boundaries between lot 5 and lot 11 of the proposed subdivision to enable lot 11 to become approximately 4.7161 Ha at the CODC’s or the vendor’s cost:
16.1.1as soon as practicably possible after signature of this agreement by both parties, require the CODC to vary the resource consents to the proposed subdivision to accommodate increase to the size of lot 5 to not less than 7.481 m²; and

Grounds of appeal

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

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

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

Consideration

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

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

Continue reading James Developments Ltd v Mana Property Trustee Ltd

Details

AGLC: James Developments Ltd v Mana Property Trustee Ltd [2009] NZCA 483
Case: [2009] NZCA 483
Decision Date: 19 October 2009

CaseChat Overview and Summary

James Developments Ltd (James) appealed against a summary judgment granted to Mana Property Trustee Ltd (Mana) in the High Court. The crux of the appeal was whether a clause stipulating that the area of the property sold "must not be less than" a certain size was essential, thereby permitting James to cancel the agreement if there was any shortfall. The High Court ruled against James, finding that the shortfall did not go to the heart of the contract and was not essential. The Court of Appeal disagreed, finding that the parties had expressly agreed that performance of the stipulation was essential. The appeal was allowed, and the summary judgment granted in the High Court was set aside. The Court of Appeal held that the agreement provided for compensation on a per-metre basis and prescribed that the area must not be less than 4.7150 ha, while the area actually provided was 171 m2 less than the minimum. The parties had agreed that any breach, however immaterial, permitted the affected party to cancel. Costs were to be dealt with on the papers.

Orders