Krause v Brady & Walsh Limited - [2022] NZHC 3587

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-342

[2022] NZHC 3587

BETWEEN
JANE MEREDITH KRAUSE

Plaintiff

AND

BRADY & WALSH LIMITED

Defendant

Hearing: 9 December 2022

Appearances:

T J Shiels KC for Plaintiff S Wroe for Defendant

Judgment:

21 December 2022

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Introduction

[1] The issue in this case is whether the defendant company was entitled to terminate a sale and purchase agreement for a townhouse, as it has purported to do, or whether, as the plaintiff contends, the defendant had elected not to terminate, thereby waiving the right to do so.

[2] This being an application by the plaintiff for summary judgment, the immediate issue for determination is whether she can establish that the defendant has no arguable defence to her claim for specific performance.

The factual background

[3] The defendant is a property developer. In the first quarter of 2020, it was engaged in the development of a property at 66 Para Street, Miramar, Wellington. This

KRAUSE v BRADY & WALSH LIMITED [2022] NZHC 3587 [21 December 2022]

involved the demolition of a single dwelling on the property and the construction of multiple townhouses. The defendant was marketing these townhouses for sale through its agents, Tommy’s Real Estate. Advertising indicated that the units were scheduled for completion by 30 June 2021, and invited offers in excess of $1,250,000 per unit. The plaintiff became interested in acquiring one of the units, and contacted the defendant’s agents.

[4] On 25 August 2020, the parties executed a sale and purchase agreement. The contract was based on the ubiquitous Real Estate Institute of New Zealand form. The defendant agreed to sell and the plaintiff agreed to purchase Unit 4 for $1,321,000. There are only two terms of the contract which are material for present purposes.

[5]The first is cl 50 which is amongst the special conditions:

50.This agreement is conditional upon:

(a)the deposit of the land transfer plan in the Land Titles Office and the issue of a new title for the property; and

(b)the issue of a code compliance certificate for the dwelling and Unit 3.

If any of the conditions in this clause 50 are not fulfilled by 30 June 2021 either party may avoid this agreement by notice in writing to the other party whereupon the purchaser shall be entitled to the immediate return of the deposit paid by the purchaser and neither party shall have any right or claim against the other arising from this agreement or its termination.

[6]The second is cl 9.10 which is amongst the general conditions:

9.10Operation of conditions

If this agreement is expressed to be subject either to the above or to any other conditions(s), then in relation to each such condition the following shall apply unless to otherwise expressly provided:

(1)The condition shall be a condition subsequent.

(2)The party or parties for whose benefit the condition has been included shall do all things which may reasonably be…

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.

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Details

Case: [2022] NZHC 3587
Decision Date: 21 December 2022

CaseChat Overview and Summary

In the High Court of New Zealand, the plaintiff, Jane Meredith Krause, brought a claim against the defendant, Brady & Walsh Limited, for specific performance of a sale and purchase agreement for a townhouse. The defendant had purported to terminate the agreement on 21 March 2022, claiming that it was entitled to do so under a condition in the agreement that allowed for termination if certain conditions were not fulfilled by 30 June 2021. The plaintiff applied for summary judgment, arguing that the defendant had elected not to terminate the agreement and had waived its right to do so. The court had to determine whether the plaintiff could establish that the defendant had no arguable defence to her claim.

The court found that the doctrine of election applied in this case, as the defendant had two inconsistent rights or remedies available to it and had elected one. The court interpreted the relevant clauses in the contract and found that the defendant's right to cancel arose after 30 June 2021, but that the right no longer existed if the condition was waived. The court found that the defendant had elected to affirm the contract by its conduct over the nine-month period between 30 June 2021 and 21 March 2022, and had waived its right to cancel. The court rejected the defendant's argument that it had reserved its right to cancel, finding that the plaintiff's evidence was more credible on this point.

The court granted summary judgment in favour of the plaintiff and ordered the defendant to complete the sale and purchase agreement. The court also ordered the defendant to pay the plaintiff's costs.

Orders