Krause v Brady & Walsh Limited
[2022] NZHC 3587
•21 December 2022
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 necessary to enable the condition to be fulfilled by the date for fulfilment.
(3)Time for fulfilment of any condition and any extended time for fulfilment to a fixed date shall be of the essence.
(4)The condition shall be deemed to be not fulfilled until notice of fulfilment has been served by one party on the other party.
(5)If the condition is not fulfilled by the date for fulfilment, either party may at any time before the condition is fulfilled or waived avoid this agreement by giving notice to the other. Upon avoidance of this agreement the purchaser shall be entitled to the immediate return of the deposit and any other moneys paid by the purchaser under this agreement and neither party shall have any right or claim against the other arising from this agreement or its termination.
(6)At any time before this agreement is avoided, the purchaser may waiver any finance condition and either party may waive any other condition which is for the sole benefit of that party. Any waiver shall be by notice.
[7] The 18-month period following the execution of the contract was nothing if not eventful. For a start, there was the COVID-19 pandemic and related lockdowns, and the flow-on effect of those on the construction industry in terms of the availability of personnel and materials. More recently, there was the early stages of the nation-wide slump in the real estate market.
[8] During the same period there were any number of engagements between the defendant, through one of its directors, Kathleen Walsh, and the plaintiff. In due course, it will be necessary to focus in detail on aspects of these communications.
[9] The critical date in terms of cl 50, 30 June 2021, came and went, without the landmark events referred to therein occurring. No land transfer plan was lodged with the Land Titles Office, and nor was a code compliance certificate issued. On 21 March 2021, a little shy of nine months later, at which time title to the property had still not been issued, the defendant served a notice of cancellation on the plaintiff, purporting to exercise the right contained in cl 50. Incidentally, though strictly irrelevant, as at the date of the hearing before me, title had still not issued.
[10] On the face of things, it seems surprising that, so long after 30 June 2021, the defendant purported to cancel the contract on the basis of cl 50. At very least, the delay would seem to call for some explanation.
Summary judgment applications
[11] The principles that govern summary judgment applications are now well settled. The leading case is Krukziener v Hanover Finance Ltd where the Court of Appeal summarised the essential issues in any application by a plaintiff for summary judgment in these terms:1
[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is not consistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
[27] Under r 141A the defendant need not file a statement of defence. The onus remains on the plaintiff, and summary judgment will be denied if on the hearing of the application it appears that there is an issue worthy of trial.
[12] The question is thus whether the plaintiff can demonstrate that the defendant has no defence. In assessing that, the Court will not generally determine significant factual issues on untested affidavit evidence.2 That said, the cases are clear that the Court is entitled to take a robust view in dealing with unsubstantiated assertions or patently incredible evidence.3 The Court can of course deal with legal issues — even very complex legal issues — on a summary judgment application.4
Election
[13] As already indicated, the plaintiff relies on the doctrine of election, and, in their written submissions, and in the course of argument, counsel referred to a large amount of material — commentaries and cases — relating to the doctrine. However, as the
1 Krukziener v Hanover Finance Ltd [2008] NZCA 187.
2 See Attorney-General v Rakiura Holdings Ltd (1986) 1 PRNZ 12 (HC); and Pemberton v Chappell
[1987] 1 NZLR 1, (1986) 1 PRNZ 183 (CA).
3 See S H Lock (NZ) Ltd v Oremland HC Auckland CP641/86, 19 August 1986.
4 Pemberton v Chappell, above n 2.
argument unfolded both Mr Shiels for the plaintiff and Ms Wroe for the defendant focussed on the principal texts and most obviously relevant authorities, as one might expect. In this regard, I follow counsel’s lead.
[14] At law a number of concepts are referred to as election. Election in the sense in which the plaintiff relies on it in this case is a category of waiver. Here is how Goode and McKendrick describe the principle:5
A party having two alternative rights or remedies may be taken to have waived one by pursuing the other, as where a party having a right to treat a contract as repudiated elects to affirm it. This form of waiver is known as election. Election differs from promissory estoppel in a number of respects. It is not binding unless made with knowledge of the facts giving rise to the choice; it concerns a choice to be made between remedies that have already accrued; it does not depend for its efficacy either on consideration or on reliance.
[15] The relationship between election and other principles including waiver, promissory estoppel, and even variation of contract, is obvious. However, they are distinct principles with their own criteria.
[16] As the above quote from Goode, the other commentaries and the leading cases indicate, election applies in the contractual context where: 6
(a)a contracting party has available two (or possibly more) courses of action that are mutually inconsistent;
(b)that contracting party knows of the alternative courses of action, and that they are entitled to elect between them;
(c)the party’s election between those courses of action will affect the other contracting party’s rights or obligations;
5 Ewan McKendrick and Roy Goode Goode and McKendrick on Commercial Law (6th ed, Lexis Nexis, Croydon, 2020) at [3.93].
6 Piers Feltham, Daniel A Hochberg & Tom Leech, Spencer Bower’s Law Relating to Estoppel by Representation, 4th ed, Lexis Nexis, London, 2004 at XII.1.7; Motor Oil Hellas (Corinth Refineries SA & Shipping Corporation of India (The “Kanchenjunga”) [1990] 1 Lloyd’s Rep 391 per Lord Goff at 397–398.
(d)by words or actions, the electing party unequivocally elects between the courses of action; and
(e)the election is communicated to the other contracting party.
The plaintiff’s case – a summary
[17] The plaintiff says that once 30 June 2021 had passed without the defendant procuring the issue of title to the property, the defendant had two options (as did she). It had the right to affirm the contract. It also had the right to cancel. Ultimately, if not immediately, these, the plaintiff says, were mutually exclusive entitlements. She says that, well before 21 March 2022, the defendant elected to take the former course, and having done so, was precluded thereafter from taking the latter. Thus, the plaintiff contends, the defendant’s notice of cancellation pursuant to cl 9.10(5) was a nullity.
[18] It is common ground that the defendant made no express election, and that the plaintiff must rely on the defendant’s actions to establish an imputed election. In order to do so, the plaintiff points to several actions on the part of the defendant between the relevant dates. It is the evidence concerning the relevant exchanges between the parties to which it will be necessary to return later in this judgment.
The defendant’s case – a summary
[19] The defendant’s case is that the plaintiff’s application for summary judgment cannot succeed.
[20]The defendant advances three reasons:
(a)first, that the doctrine of election can only apply in cases where the party said to have made an election was faced with two irreconcilable options — the metaphorical fork in the road. Here, the defendant contends, essentially in reliance on cl 9.10(5), that when a right to cancel arises, the party concerned may exercise that right “at any time”, and that, whatever it may or may not have done consistent with the contract remaining on foot, the right to cancel survived;
(b)second, the defendant contends that none of the events to which the plaintiff points constitute sufficiently unequivocal evidence of an election;
(c)third, the defendant contends that, to the extent that the plaintiff’s case ultimately turns on whether she can establish that the defendant unequivocally elected one course and waived the right to take the other, the issue is fundamentally factual. The defendant says that, in order to reach a conclusion in relation to that issue, the Court will need to deal with a number of disputes of fact. Foremost amongst these, the defendant says, is a dispute as to the extent to which the defendant expressly reserved its position in relation to its right to cancel. Such disputes, it is contended, are not capable fairly of being dealt with on a summary judgment application.
Analysis
[21] I accept Mr Shiels’ starting proposition that this is a case in which, at least potentially, the doctrine of election applies.
[22] As Ms Wroe submits, it is difficult to see how, as at 30 June 2021, the defendant faced a fork in the road in the form of a choice between two mutually exclusive options. Certainly it had the two options already identified. But I accept Ms Wroe’s argument that these two options were not, at that stage, mutually exclusive. It was open to the defendant to continue to perform the contract whilst retaining the right to cancel. Initially, that is no doubt what it did. However, in my judgment, that does not mean that the doctrine of election can have no application.
[23] The leading cases such as The Kanchenjunga7 talk of election applying to situations in which a party has two inconsistent rights or remedies, and elects one. Nowhere in any of the cases is there a suggestion that the two inconsistent rights or remedies must exist from the outset for the doctrine to apply. At the very heart of the doctrine is the act of election. That is the critical factor. It is once the election is made
7 See above n 6.
that the electing party is treated as having forgone or waived the right to take an inconsistent path.
[24] Turning then to the proper interpretation of the relevant clauses in the contract, this appears to me to be a straightforward exercise.
[25] Clause 50 is amongst the special conditions. It is a unique clause which the parties agreed to incorporate in their contract. On the other hand, cl 9.10 is amongst the standard clauses in the pre-printed section of the contract. That is not to say that either is less significant than the other. However, to the extent that there is any conflict between them, the natural course is to treat the special conditions as having a degree of precedence, given that they are unique in the sense already described. It is fair to say that the inclusion of cl 50 indicates an intention by the parties to award it a degree of precedence.8
[26] However, it is not strictly necessary to emphasise any hierarchy between the two clauses in this case. Simply, cl 50 confers on both parties a right to cancel if either of the events identified in the clause are not fulfilled by 30 June 2021. Then, cl 9.10(5) provides that where a right to cancel under cl 50 arises, the relevant party may exercise that right “at any time before the condition is fulfilled or waived by giving proper notice”.
[27] Ms Wroe emphasised the words “at any time” and argued, as I understood her, that those words precluded waiver by any action that was consistent with performance of the contract. That, however, ignores the obvious point that cl 9.10(5) talks about cancellation at any time before the condition is fulfilled or waived. So, if, after the right to cancel arises, the condition is waived, then the right to cancel no longer exists.
[28] Plainly, the defendant was aware of the terms of the contract and its right of election, and no argument was advanced to the contrary. Equally, an election by the defendant was always going to have a material effect on the plaintiff’s rights and obligations.
8 See Bathurst Resources Ltd v L & M Coal Holdings Ltd [2021] NZSC 85 at [76].
[29] That brings me to what, in my view, is the core issue, that is to say whether the evidence establishes, as the plaintiff contends, that, between 30 June 2021 and 21 March 2022, the defendant elected to affirm the contract and thereby waived its right to cancel.
[30] In his submissions, Mr Shiels helpfully categorised the evidence relied upon by the plaintiff.
[31] As a starting point, he said that the plaintiff relied on the respondent’s “conduct in the whole period between 1 July 2021 and 21 March 2022”. If nothing else, this probably takes us full circle back to the observation made earlier that the length of time between the right to cancel arising and the purported cancellation is a relevant contextual feature.
[32] The plaintiff relies on correspondence between the parties concerning the expected dates for the issue of title and the completion of the build. The plaintiff was after all engaged in the purchase of a new home, and was obviously anxious to secure possession.
[33]This correspondence included:
(a)An email from the defendant’s Kate Walsh to the plaintiff dated 20 July 2021 in which she explains that the defendant had surveyors at the property “to start the process for title”. Ms Walsh said, “It seems the house is a metre further back on the site than what was on the resource consent application”, and then went on to explain that this meant the defendant would need to apply for an amendment to the resource consent, which would cause further delay. Ms Walsh said that the “houses will be ready at the end of August”. I take this to have meant that the building work would be complete by that time.
(b)An email exchange over 27–30 September 2021 between Ms Walsh and the plaintiff, during which the plaintiff asked about progress. This request appears to have been precipitated by her wish to arrange for her
internet provider to get fibre to the house and the difficulty that was presented by the fact that title had not issued. Ms Walsh’s response was to say that the defendant was “at the mercy of councils, planners etc”. She explained that her belief was that the application had gone in very recently but that she could not confirm that. She acknowledged in apologetic terms that the process had been lengthy and assured the plaintiff that as soon as she had more news she would let her know. The plaintiff’s response was in very measured terms. She said that she understood the defendant’s frustration and that it was “just nice to know that something somewhere had progressed as the order for Fibre to the subdivided section can now be progressed with Chorus — always look for the positive!”.
(c)An exchange on 8–9 November 2021, whereby the plaintiff enquired of Ms Walsh whether she had had “any update how things are progressing with the Council? Is there likely an end in sight this month?” Ms Walsh responded that the defendant had received the amended resource consent the previous Thursday. She said that, “Builders should be back on site now. So now the slow progress for title. Starts with the surveyor, who can’t come for two to three weeks. So at least a few months into the New Year before anything happens. Christmas break doesn’t help!”
(d)Then, on 30 November 2021, there was a further exchange between Ms Walsh and the plaintiff in which the plaintiff enquired whether the defendant had, “… any update on expected timelines for the title? Has the surveyor been on site? I need to touch base with Jonathon (solicitor) about some other matters, but I will find out what their Christmas close down period is and when they are back in the office in January. Everything is getting closer to being finalised … very exciting”. Ms Walsh replied providing information from the surveyor and saying that once the ‘as-built’ plan was approved, she could progress the land transfer title plan, and apply for certification from the Council. She added that this would take a further week to complete, but that she did
not know how long the Council would take to approve matters. She went on to say that once that was received the defendant could complete the LINZ data set but that would take an additional week, and that LINZ take between three and four weeks to “approve the survey and then process the solicitor’s documents for the issuing of the new Titles”.
(e)On 26 January 2020, Ms Walsh provided the plaintiff with further information about progress relating to title. Her final email in this sequence ended on an obviously frustrated note. She said, “God knows” and then continued, guessing that “title through in a month to keep this going and I will sign [the] form as well. As I said you have both paid fee and [we are way] down the track. I thought I had signed the consent?.”
(f)On 27 January 2022 there was another exchange between Ms Walsh and the plaintiff. The plaintiff said in the first email in this sequence that she was, “… just trying to avoid the situation where we finally get a settlement date, and because of delays in getting contractors etc on site to complete sometime in those 2–3 weeks prior, it delays my moving in just that little bit longer, especially if the house is going to be sitting empty for possibly the next three months”. Ms Walsh replied saying that that was a problem for her and that she was, very unhappy that the houses were sitting empty. She said, “I will be harassing anyone I can to get this title through so will be well aware of the dates. Geordie is very busy and doesn’t need to double up on jobs, so think he wants to go in and get everything done at the same time”.
(g)Finally, between 3–8 March 2022, there was an exchange of correspondence between the parties’ solicitors dealing, amongst other things, with a proposed variation to the contract. By this stage, the plaintiff was contemplating leasing and moving into the property pre-settlement, and in that context her solicitors proposed an amendment to cl 50 which would have given her additional protection. The defendant’s solicitors responded on 8 March 2022 indicating that
the defendant did not agree to the proposed variation but agreeing to the extension of time of the existing condition to 30 September 2022.
[34] In broad terms, then, over the relevant period of time there was extensive communication between the parties as to the settlement of the contract, particularly regarding the issuing of title. Nowhere in this correspondence did the defendant reserve its position in any way or suggest that the ultimate outcome would be anything other than settlement of the sale and purchase of the property.
[35] Over the same period of time there was correspondence between the parties relating to additional fittings and fixtures. This included:
(a)An exchange of emails between Ms Walsh and the plaintiff on 2 August 2021, in which the plaintiff indicated that she would like her builder to have access to the property to install a walk-in wardrobe. In her response, Ms Walsh did not object to or express any concern relating to this, except to warn of the need to make arrangements for insuring her own goods on the property and saying that she would talk to the defendant’s insurers about that.
(b)In an exchange between Ms Walsh and the plaintiff on 19 and 20 October 2021, the plaintiff made arrangements for the installation of “the UV sun filter to the windows” and again Ms Walsh did everything to facilitate this, raising no objections.
(c)On 9 November 2021, an exchange took place concerning the plaintiff having furniture delivered to the property, and the relocation of certain appliances. At the end of this exchange, Ms Walsh said, “That’s fine re appliances. All Happening. All we need is title!”.
[36]The parties also communicated about variations:
(a)On 20 July 2021, Ms Walsh emailed the plaintiff attaching an invoice from the builders in respect of extras. This totalled $35,190.74. On
2 August 2021, Ms Walsh emailed the plaintiff saying that the defendant had had to pay the builder for the extra work involved in the variations, and that it would “be good to invoice you”.
(b)On 23 November 2021, there was a further exchange of emails between Ms Walsh and the plaintiff, primarily dealing with power to the property, but in the context of that exchange, Ms Walsh indicated to the plaintiff that there would likely be a further account in respect of extras.
(c)On 29 November 2021, Ms Walsh forwarded a further account for extras from the builder to the plaintiff and provided the defendant’s account details so that this could be paid by her. The amount involved this time was modest, being $1,104.00.
(d)In addition, over the relevant period of time the correspondence indicates that the parties agreed that the plaintiff would secure power and internet to the property and assume responsibility for the cost of these.
[37] In relation to this issue, Mr Shiels referred the Court to and relied on the Court of Appeal’s judgment in Jansen v Whangamata Homes Ltd.9
[38] That the plaintiff relies on Jansen in this case is scarcely surprising. The facts of that case and the present case are very similar. Here is the headnote summary of the factual situation that appears in the report of the Court of Appeal’s judgment:
The Jansens entered an agreement to purchase a unit from Whangamata Homes Ltd. It was contemplated that titles would be issued under the Unit Titles Act 1972. Clause 22 of the contract contained a provision allowing either party to terminate the agreement by notice in writing if settlement had not occurred by a certain date.
Settlement did not take place by the due date. A week later, Whangamata Homes sent the Jansens an invoice for extras and variations undertaken at their request. About two months later, the solicitor for Whangamata Homes wrote to the Jansens’ solicitor, advising that the unit was close to completion and requesting the solicitor to forward the memorandum of transfer as required by the agreement. Ten days later, the solicitor wrote once again, advising that
9 Jansen v Whangamata Homes Ltd [2006] 2 NZLR 300.
title had been issued, but that the code compliance certificate was not yet available.
Three weeks after that, Whangamata Homes purported to cancel the agreement pursuant to cl 22, and attempted to return the Jansens’ deposit. The Jansens asserted that the right to terminate the agreement pursuant to cl 22 had been lost, and issued proceedings seeking specific performance and applied for summary judgment. The High Court Judge considered that there was an arguable defence. The Jansens appealed to the Court of Appeal, arguing that Whangamata Homes was bound by its election.
[39] In Jansen, the Court of Appeal said that both the vendor’s demand for payment for extras and the correspondence concerning title to the property were conclusive evidence of the vendor having elected to confirm the contract and waive its right to cancel. That conclusion was reached against the back-drop of the relevant clause of the contract which provided as follows:
If the settlement has not occurred by the 30th day of June 2003 either party may by notice in writing to the other cancel this agreement.
In that event the deposit and all monies paid by the purchasers shall be refunded to the purchaser and neither party shall have any right or claim against the other.
[40] Ms Wroe cautioned against too heavy a reliance on Jansen in this case. She submitted that because the contract here entitled the defendant to cancel “at any time”, at least until it did so, it was entitled to proceed on the basis that the contract remained on foot without losing the right to cancel. She added, that being so, it was illogical to refer to the actions of the cancelling party which were merely performance of the contract as constituting evidence of an election.
[41] That is not an argument that persuaded the Court of Appeal in Jansen in which cl 12 was, for all intents and purposes, to the same effect as the contract in the present case. It seems to me that all of the cases indicate that even in such a situation, if a contracting party with a right to cancel takes steps which unequivocally demonstrate an intention to affirm the contract and not exercise that right, that constitutes a waiver.10 After all, the principle under examination is directed at ensuring fairness
10 See in particular Teihotua v Morning Star (St Lukes Garden Apartments) Ltd (2007) 8 NZCPR 311 where, as in this case, the relevant claims in the contract entitled the party said to have made an election the right to terminate “at any time”.
between the parties. In this regard, the following passage from Burrows, Finn and Todd Law of Contract in New Zealand is illustrative: 11
8.2.4 Waiver of conditions
It is common practice in conditional contracts in this country for the terms as originally agreed between the parties not to be adhered to strictly by one or both parties. The cases reveal a willingness on the part of the courts to consider non-compliance as not preventing the contracts from having binding effect so long as the non-compliance with the precise terms can be said to be excused or permitted by the doctrine of waiver. Thus, in cases where there has been non-compliance with the time limits within a contract for the fulfilment of a condition relating to performance or even a lack of satisfaction of the condition itself the contract may still be enforced if there has been conduct which the court accepts as amounting to a waiver of the time limit or the condition. Yet the law relating to waiver of conditions is neither clear nor entirely consistent. Much of this lack of clarity has been caused by the tendency of the courts to use waiver in a number of different senses, some of which overlap with estoppel, variation, or election.
[42] As indicated earlier on, Ms Wroe argued that there were a series of factual disputes which could not fairly be addressed on affidavit evidence in the context of a summary judgment application.
[43] Ms Wroe submitted that the defendant had reserved its right to cancel. In her evidence, Ms Walsh says that at all times and in particular from 30 June 2021 she “knew that the sunset clause was there and … had always known about it.” She says that throughout she had hoped that the defendant would never need to invoke the clause and that no decision was made about that straightaway. She then said that there were at least two, and perhaps as many as three, conversations with the plaintiff after 30 June 2021 in which she told the plaintiff that the company had an option to cancel but did not intend to do so “at the moment”. She says that these conversations took place on site. She says that the plaintiff replied that it was “good to know”.
[44] In her reply affidavit the plaintiff denies this. She says that there was only one conversation on 22 February 2022, to which, I might add, she had referred in her original affidavit. She repeats what she said in that affidavit that as soon as there was any mention of a right to cancel by the defendant, she consulted her solicitor about it.
11 Burrows, Finn and Todd on the Law of Contract in New Zealand (7th ed, Lexis Nexis, Wellington, 2022) at [8.2.4].
[45] This is a genuine evidential conflict concerning a relevant issue — if the narrative evidence, supported by contemporaneous correspondence, established that the defendant has, or might have, an arguable case that it had reserved its position, that would put a different complexion on matters. However, Ms Walsh’s evidence in relation to this is in the most general terms. It has the appearance of a throw-away line. This is surprising given the potential importance of the matter. And of course, there is no support for what she says in the contemporaneous material. The plaintiff’s evidence is that Ms Walsh mentioned cancellation once, and once only, and that it was of such importance that she sought advice from her solicitors. She does not go on to provide evidence as to the nature of the advice she received. That is entirely appropriate — that advice would be subject to legal professional privilege and any reference to its contents would put that privilege at risk.
[46] Having regard to the nature of Ms Walsh’s evidence, the fact that virtually all of the dealings between the parties appear to have been of a written nature and the inherently self-serving nature of this evidence, I reject Ms Walsh’s description of events. I have no doubt that her evidence is given honestly. However, the ability of witnesses to recollect exactly what was said on various occasions when there is no contemporaneous record is always up for question, and in my view the overwhelming likelihood is that Ms Walsh’s evidence is overstated. Whatever was said on the one occasion that I accept the defendant referred to an ongoing right to cancel is insufficient to undermine what I regard as the overwhelming evidence that the company elected to go down one path rather than the other.
[47] In my assessment, the dispute relating to the extent to which the defendant reserved its position is the only factual dispute that is relevant to the issues before the Court. In order to illustrate why I have come to that conclusion, it is only necessary to make reference to one other factual dispute. This concerns whether, when the defendant purported to cancel the contract on 21 March 2022, the plaintiff acquiesced in this. The defendant says that the plaintiff did so. The plaintiff does not accept that.
[48] There are issues around what was said and done, and how these things should be interpreted. However, if, prior to that, the defendant elected to affirm the contract and thereby waived its right to cancel, then, as Mr Shiels submitted, the defendant’s
notice of 21 March 2022 was of no effect and the plaintiff’s reaction was and is irrelevant. To the extent that there are other genuine factual differences between the parties, they fall into the same camp.
Conclusion
[49] Standing back from the matter, the view I have reached is that over the nine-month period between 30 June 2021 and 21 March 2022, the defendant company unequivocally represented to the plaintiff that it had decided to hold fast to the contract and not exercise its right to cancel under cl 50. In reaching that conclusion, I have relied on the cumulative effect of all of the evidence canvassed in this judgment.
[50] Putting the matter in another way, and drawing on the sort of analysis illustrated by Burrows, Finn and Todd, the view I take is that it would be doing a serious injustice to the plaintiff for the defendant to be able, at the end of that nine-month period, after everything that had transpired between the parties, to cancel the contract. In my view, the law does not allow that.
[51] In the language of summary judgment, the plaintiff has satisfied me that there is no arguable defence to her claim.
[52] For those reasons, I enter summary judgment for the plaintiff in the terms sought in the prayer for relief contained in her statement of claim dated 10 June 2022.
[53] As to costs, my preliminary view is that the plaintiff is entitled to costs. On her behalf, Mr Shiels submitted that the plaintiff should be awarded indemnity costs. I can see no basis for that. The plaintiff has been wholly successful, but there do not appear to me to be any grounds upon which it could be said that increased costs should be allowed in this case. The defendant company was fully entitled to defend the application and, on its behalf, Ms Wroe said everything that could be said and nothing more. In the event the parties are unable to agree on costs they may file memoranda in the event counsel are unable to agree on costs, they may file memoranda in the usual
way.
Associate Judge Johnston
Solicitors:
Fanselows, Wellington for Plaintiff
O’Regan Arndt Peters and Evans, Wellington for Defendant
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