Lucas v Kroef
[2018] NZHC 2478
•21 September 2018
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-1905
[2018] NZHC 2478
BETWEEN COLIN JAMES LUCAS and SAMUEL MICHAEL WILLIAM BASSETT as
trustees of the Clement Family Trust ApplicantsAND
LEON KROEF
Respondent
Hearing: 17 September 2018 Appearances:
S Robertson QC for the Applicants
M T Davies and K R Muirhead for the Respondent
Judgment:
21 September 2018
JUDGMENT OF ASSOCIATE JUDGE SMITH
This judgment was delivered by me on 21 September 2018 at 11.00am, pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors / Counsel:
Davenports Harbour Lawyers, Auckland S Robertson QC, Auckland
Meredith Connell, Auckland
LUCAS v KROEF [2018] NZHC 2478 [21 September 2018]
[1] The applicants (the trustees) are the registered proprietors of a property situated at Gillespie Road, Hunua (the property). On 23 August 2018 they signed an agreement for sale and purchase, under which they agreed to sell the property to the respondent (Mr Kroef). Mr Kroef has registered a caveat (caveat no. 11217606.1 – "the Caveat") on the title to the property, and the trustees now apply under s 143 of the Land Transfer Act 1952 (the Act) to have the Caveat removed.
Background
[2] The agreement for sale and purchase (the Agreement) was subject to three conditions, one of which was a finance condition (the finance condition) with a finance date "five days from acceptance of this offer".
[3] The Agreement provided at cl 10.8(4) and (5) that a condition would not be fulfilled until notice of fulfilment had been served by one party on the other party, and that if a condition had not been fulfilled by the date for fulfilment, either party could, at any time before the condition had been fulfilled or waived, avoid the Agreement by giving notice to the other.
[4] The trustees did not receive notice from Mr Kroef by 28 August 2018 that the finance condition had been fulfilled. On 29 August 2018 they gave notice purporting to cancel the Agreement. They immediately then gave notice under a "back-up agreement" they had entered into for the sale of the property, making the back-up agreement unconditional.
[5] Mr Kroef did not accept the trustees' cancellation. He instructed a new firm of solicitors, and on 30 August 2018 the new solicitors (Meredith Connell) wrote to the trustees' solicitors rejecting the trustees' purported cancellation of the Agreement and advising that all conditions in the Agreement were waived. Meredith Connell contended that the Agreement remained on foot, and was now unconditional in all respects.
[6] On the same day, Mr Kroef lodged the Caveat against the title to the property. The estate or interest claimed by Mr Kroef in the Caveat is "an interest pursuant to [the Agreement] in respect of the [property]".
Relevant provisions of the Agreement
[7]The Agreement contained the following relevant provisions:
1.2Time for Performance
…
(2)Any act done pursuant to this agreement by a party, including service of notices, after 5.00pm on a working day, or on a day that is not a working day, shall be deemed to have been done at 9.00am on the next succeeding working day.
1.3Notices
The following apply to all notices between the parties relevant to this agreement, whether authorised by this agreement or by the general law:
(1) All notices must be served in writing….
(3)All other notices, unless otherwise required by the Property Law Act 2007, must be served by one of the following means: …
(b) on the party or on the party's lawyer: …
(iv) by email; or …
(4)In respect of the means of service specified in subclause 1.3(3)(b), a notice is deemed to have been served: …
(d)in the case of email, when acknowledged by the party or by the lawyer orally or by return email or otherwise in writing, except that return emails generated automatically shall not constitute an acknowledgement;
10.0Conditions and mortgage terms
Particular conditions
10.1If particulars of any finance condition(s) are inserted on the front page of this agreement, this agreement is conditional upon the purchaser arranging finance in terms of those particular on or before the finance date.
…
Operation of Conditions
10.8If this agreement is expressed to be subject either to the above or to any other condition(s), then in relation to each such condition the following shall apply unless 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 reasonable 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 waive 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.
13.0Agent
13.1If the name of a licensed real estate agent is recorded on this agreement, it is acknowledged that the sale evidenced by this agreement has been made through that agent whom the vendor appoints as the vendor's agent to effect the sale. The vendor shall pay the agent's charges including GST for effecting such sale.
22.0 Due Diligence
This Agreement is conditional upon the Purchaser being satisfied that the property is suitable for the Purchaser's Intended use of the property at the agreed purchase price following the Purchaser undertaking a due diligence investigation of the property and all aspects relating to the property to the entire satisfaction of the purchaser and confirming the same to the vendor by 4.00pm on that day which is 10 working days after the date of this Agreement. This clause is inserted for the sole benefit of the Purchaser.
23.0 Escape (cash out clause)
If before this Agreement becomes unconditional the Vendor enters into another agreement which is either conditional, or is or has since become unconditional in all respects except for any condition relating to the expiry or termination of this Agreement, and which is otherwise on terms and conditions acceptable to the Vendor, the Vendor may serve on the Purchaser or the Purchaser's solicitor notice in writing requiring the Purchaser to confirm this Agreement as being unconditional. The Purchaser shall have until 4.00pm on the third working day after service of such notice to declare this Agreement unconditional by notice to the Vendor or the Vendor's solicitor, otherwise this Agreement shall terminate, the deposit paid (if any) will be refunded to the Purchaser and neither party will have any claim against the other. This condition is for the sole benefit of the Vendor.
[8] In addition to the finance condition and the due diligence condition at cl 22 of the Agreement, there was a condition relating to a LIM report. Under clause 10.2 of the Agreement, if Mr Kroef did not approve the LIM, he had 15 working days to serve notice on the trustees stating the particular matters in respect of which approval of the LIM report was withheld.
The making of the Agreement
[9] Mr Kroef said in his evidence that he learned on 21 or 22 August 2018 from a real estate agent friend that the property was for sale. He had been looking for over a
year for a property in the area, with which he was very familiar, and he wanted to retire in the area. The property comprises approximately 100 hectares of native bush and pastoral land, and Mr Kroef thought it would be a beautiful escape from the city on which he could build a home.
[10] Mr Kroef contacted Mr Brian Clement, whose trust, the Clement Family Trust, is the registered proprietor of the property, and arranged to inspect it with Mr Clement. After visiting the property, he decided to make an offer.
[11] Mr Kroef met with the Barfoot & Thompson real estate agents who were engaged by the trustees to sell the property, at around lunchtime on 23 August 2018. The real estate agents were Ms Kim Neill and Ms Fiona Ritchie. Ms Ritchie and Ms Neill told Mr Kroef that the property had been listed for sale by tender, but had failed to sell.
[12] Mr Kroef told the agents that he wanted to make an offer of $1.6 million, and wanted a little bit of time to do due diligence. He told them that he was not particularly interested in including a finance condition, because he didn't need it. He had a source of funds in Australia that he could use to complete the purchase. However he didn't want to be caught out by any hiccups or delays in having money transferred to New Zealand, so, at the agents' suggestion, the finance condition was included in the offer.
[13] One of the agents completed a form of agreement for sale and purchase at an offer price of $1,600,000, with the balance to be paid in cleared funds 14 days from the unconditional date. The finance date ("five days from acceptance of this offer") was written into the form of offer by one of the agents.
[14] Mr Kroef signed the offer at Barfoot & Thompson's offices, and gave it to Ms Ritchie and Ms Neill to take to the trustees.
[15] The Agreement was signed by both trustees on 23 August 2018. In a reply affidavit, Mr Bassett explained that the trustees received two purchase offers that day. One was from Mr Kroef and the other was from Shannon Chambers. He said that the
agent called this a "multi-offer". Both offers had been signed by the respective offerors, and each purchaser had also signed a "Multi-Offer Acknowledgment".
[16] The Multi-Offer Acknowledgment form signed by Mr Kroef contained the following:
I … confirm that, prior to making this offer on [the property]:
· Barfoot & Thompson Ltd have made me aware that there is another offer or offers being presented on the above property.
· I have been made aware that the Vendor may
(a)Accept one of the offers without further consideration and or consultation with me.
(b)Accept or reject any offer at the Vendor's sole option.
(c)May counter offer and negotiate with one of the Purchasers at the sole choice and discretion of the Vendor.
· I understand that I may not have a chance to better my offer prior to the vendor's acceptance.
· I further acknowledge that the offer I [am] making is [my] highest and best offer.
[17] Mr Bassett said that he and Mr Lucas considered that aspects of each offer were not ideal. They asked Ms Neill to speak to the purchasers to see if either of the offers could be improved.
[18] Mr Bassett said that he and Mr Lucas received an email from Ms Neill at 4.00pm on 23 August advising that neither Mr Chambers nor Mr Kroef were prepared to change their offers. After discussing the matter, Mr Lucas and Mr Bassett decided to accept Mr Kroef's offer. Mr Lucas signed and initialled the offer, and forwarded it to Mr Bassett for him to sign.
[19] Mr Bassett said that he received the email from Mr Lucas attaching Mr Kroef's offer, at 4.42pm on 23 August 2018. It had been signed and initialled by Mr Lucas. Mr Bassett then printed out the Agreement, and initialled and signed it. He returned the completed Agreement to Ms Neill by email at 5.56pm on 23 August 2018.
[20] Mr Bassett said that he does not recall exactly when he signed the copy of the Agreement, but it would have been sometime between 4.42pm and 5.45pm.
Communications between the real estate agents and Mr Kroef after the Agreement was signed
[21] Mr Kroef said that he received a call from Ms Neill at 7.30pm that same evening. She told him that the trustees had accepted his offer price.
[22] The following day, 24 August 2018, Mr Kroef checked his emails at around mid-morning. He saw that Ms Neill had sent him several emails. He found one from Ms Neill sent at 8.02pm the previous evening. It read:
Good evening Leon
Congratulations, please find a copy of the signed multi-offer for [the property]. I will process in the morning and forward a copy to your solicitor. [The Agreement] will be dated 23rd August and your due diligence and finance period will start from today.
[23] Mr Kroef found that Ms Neill had sent him a further email, at 8.46am on 24 August 2018, telling him that the deposit of $160,000 was now payable.
[24] A third email from Barfoot & Thompson was received by Mr Kroef at 10.19am on 24 August. Mr Kroef's evidence was that he could not remember when he looked at it. A dated copy of the Agreement was attached. Ms Ritchie said in the email:
These are the significant dates in the agreement:
Finance date – 5 days from acceptance (30/8/18) Due Diligence date – 10 working days (6/9/18)
[25] Mr Kroef said that he understood from Ms Ritchie's email that he had until 30 August 2018 to satisfy the finance condition. He paid the deposit the same day.
[26] Mr Kroef said that he understood that Barfoot & Thompson emailed a copy of the Agreement to his solicitors, Rice Craig, on 24 August 2018. However it appears that Rice Craig did not contact Mr Kroef about the Agreement until 28 August 2018.
[27] Mr Kroef said that Ms Neill telephoned him on Monday 27 August. He thought it was some time in the evening. She told him that the trustees had received another offer for the property, and that they were triggering the escape clause in the Agreement. She explained that that meant that he would have three working days to declare the Agreement unconditional or he would lose the sale. Ms Neill told him that his lawyers would be receiving formal notice about that.
[28] Mr Kroef's evidence was that he told Ms Neill that that would be no problem, as he was ready to complete the purchase. He said that the finance condition could be declared satisfied at any time. He told Ms Neill that he was waiting for a legal review to be completed, and he expected that would happen well before the three working day period ended.
[29] Mr Kroef said that, to the best of his recollection, Ms Neill did not refer in this telephone conversation to any particular date on which he had to declare the Agreement unconditional. She simply told him that he had three working days to do that.
[30] Following his receipt of the email from Ms Ritchie sent on 24 August, and his discussion with Ms Neill on 27 August, Mr Kroef said that his understanding was that the three working day period Ms Neill had referred to would end on 30 August 2018, and that he would also have until 30 August to declare any unsatisfied conditions (including the finance condition) satisfied or waived.
The trustees activate the escape clause
[31] On 27 August 2018 the trustees' lawyers sent a fax to Rice Craig, timed at 2.56pm. The fax gave notice under cl 23 of the Agreement requiring Mr Kroef to declare the Agreement unconditional by 4.00pm on the third working day "after the date of this letter, being 30 August 2018, otherwise the Agreement between our respective clients shall terminate".
Cancellation of the Agreement
[32] The solicitors who acted initially for Mr Kroef contacted him about the Agreement late on the morning of 28 August 2018. A secretary from the solicitor's firm called Mr Kroef and told him that they had a letter for him to pick up. She also told him that a notice activating the escape clause in the Agreement had been received.
[33] Mr Kroef said that he could not get away from his work, so he asked his nephew's wife to pick up the letter on her way home. The letter was in an envelope, and Mr Kroef did not open it until about 8.00pm on the evening of 28 August 2018.
[34] The letter reviewed the Agreement in some detail. Under the heading "Conditions" the solicitors advised Mr Kroef as follows:
The agreement is subject to the following conditions being satisfied by the relevant dates:
(a)Your arranging finance by 28 August 2018.
(b)Your being satisfied with your due diligence enquiries by 6 September 2018.
(c)Your obtaining and being satisfied with a L.I.M. report by 13 September 2018.
[35] The solicitors then referred to the escape clause in the Agreement, and advised Mr Kroef, in bold type, that the escape clause had been activated and would expire at 4.00pm on Thursday 30 August 2018.
[36] Mr Kroef said that the letter did not cause him any concerns when he read it, because it told him, in bold type under the heading "Early Termination Clause", that the notice issued by the trustees would expire on 4.00pm on Thursday 30 August, and that if Mr Kroef wanted to purchase the property he would need to declare the Agreement unconditional by that time.
[37] Mr Kroef rang the solicitors sometime after 10.00am on the morning of 29 August 2018. He was told in the course of that call that the trustees' solicitors had
issued a cancellation Notice first thing that morning.1 Mr Kroef said that he was shocked and confused, as he thought he had until 30 August 2018 to declare the Agreement unconditional for all conditions, including the finance condition.
Mr Kroef's arguments
[38]Mr Kroef has two arguments:
(a)he says that on 24 August 2018 and 27 August 2018 the real estate agents represented that he had until Friday 30 August 2018 to satisfy (or waive) the finance condition. Mr Kroef says that he reasonably relied on these representations, and that the trustees are estopped from denying that he had until 30 August 2018 to satisfy the finance condition; and
(b)alternatively, the Agreement, bearing the date 23 August 2018, was not in fact made until 24 August 2018. On that interpretation, the first of the "five days" for satisfaction of the finance condition would have been 25 August 2018, and the last of the five days would have been Wednesday 29 August 2018. Mr Kroef had until 5.00pm on the last of the "five days" to give notice of fulfilment (or waiver) of the finance condition, and the trustees' purported cancellation notice, which was given before 5.00pm on 29 August 2018, was invalid and of no effect. No further notice was given by the trustees before Mr Kroef gave notice of waiver of the conditions in the Agreement on 30 August 2018. Thereafter it was too late for the trustees to purport to cancel the Agreement.
1 A fax cover sheet produced by Mr Lucas shows that the cancellation notice was sent at 9.06am on 29 August 2018.
Applications to remove caveats – legal principles
[39]Section 143 of the Act materially provides:
143 Procedure for removal of caveat
(1)Any … registered proprietor, or any other person having any registered estate or interest in the estate or interest protected by the caveat, may, if he thinks fit, apply to the High Court for an order that the caveat be removed.
(2)The court, upon proof that notice of the application has been served on the caveator or the person on whose behalf the caveat has been lodged, may make such order in the premises, either ex parte or otherwise, as to the court seems meet.
[40] In the leading case of Sims v Lowe, the Court of Appeal said that an order for removal of a caveat should not be made unless it is "patently clear" that the caveat cannot be maintained either because: 2
(a)there was no valid ground for lodging it; or
(b)the ground upon which it was lodged no longer applies.
[41] The Court of Appeal also confirmed in Sims v Lowe that the onus under s 143 lies on the caveator.3
[42]The following additional principles were noted by Associate Judge Osborne in
Huang v Dawson Builders Ltd:4
(a)the caveator must show an entitlement to, or beneficial interest in, the estate referred to in the caveat by virtue of an unregistered agreement or an instrument or transmission, or of any trust expressed or implied;
(b)the summary procedure involved in an application of this nature is wholly unsuitable for the determination of disputed questions of fact;
2 Sims v Lowe [1988] 1 NZLR 656 at 659-660.
3 At 660.
4 Huang v Dawson Builders Ltd [2017] NZHC 1444 at [43].
(c)the Court retains a discretion whether to remove the caveat. That discretion will be exercised cautiously;
(d)The Court has jurisdiction to impose conditions when making orders.
Mr Kroef's estoppel argument
Submissions for the trustees
[43] Ms Robertson submitted that the elements required to establish an estoppel are:5
(a)a belief or expectation has been created or encouraged by words or conduct;
(b)to the extent an express representation is relied upon, it is clearly and unequivocally expressed;
(c)that the party contending for the estoppel reasonably relied to its detriment on the representation;
(d)it would be unconscionable for the party against whom the estoppel is alleged to depart from the belief or expectation engendered by its words or conduct.
[44] She submitted that the representation relied upon must be sufficiently unequivocal to justify the other party's reliance.6
[45] Furthermore, the other party's reliance must be reasonable. The reasonableness of the reliance may be broken down into three aspects:7
(a)the belief or expectation must have been reasonably held;
5 Referring to Wilson Parking New Zealand Ltd v Fanshawe 136 Ltd [2014] 3 NZLR 567 (CA).
6 Referring to Huang v Dawson Builders Ltd, above n 2.
7 Sheridan Park Ltd v Dickson (1980) 1 NZCPR 154; Dollars & Cents Finance Ltd v Nathan [2008] NZSC 20 at 39.
(b)it must have been reasonable for the representee to have relied on the belief or expectation;
(c)ongoing reliance must also have been reasonable.
[46] Applying those principles to this case, Ms Robertson first submitted that a real estate agent has no ostensible authority to make contractual arrangements for his or her principal.8
[47] Secondly, she submitted that Mr Kroef cannot rely on the letter from the trustees' solicitors activating the escape clause: a vendor's notice given under an escape, or "cash out", clause, does not operate to extend the time for fulfilment of any contingent conditions due during the notice period under the cash out clause.9 Any estoppel argument, then, would have to be based on Ms Ritchie's email of 24 August 2018 or Ms Neill's statements made in the telephone call on the evening of 27 August.
[48] Ms Robertson submitted that the email from Ms Ritchie to Mr Kroef on 24 August 2018, in which she referred to "5 days from acceptance (30/8/2018)" as the finance date, cannot give rise to an estoppel. First, Barfoot & Thompson did not have express authority to make any representations about the conditions, or fulfilment of the conditions, in the Agreement, and their implied authority did not extend to creating or affecting the legal and binding contractual relationship between the trustees and Mr Kroef (or to making any collateral contract or warranty).
[49] Secondly, the email from Ms Ritchie dated 24 August was internally inconsistent. It correctly referred to the finance date as "five days from acceptance", and also correctly stated that the time for fulfilment of the due diligence condition was 10 working days (correctly calculating the expiry of the 10 working days allowed for due diligence as "6/9/18"). The email also correctly drew the distinction between "days" and "working days". However the email incorrectly stated that five days from acceptance was "30/8/18". So part of the email was correct, and part of it was incorrect. In those circumstances the email was neither clear nor unequivocal.
8 Citing Sheridan Park Ltd v Dickson, above n 7.
9 Referring to McMorland, Sale of Land (2 ed 2011) at [5.18].
[50] Thirdly, Ms Robertson submitted that the reliance Mr Kroef says he placed on Ms Ritchie's email of 24 August 2018 was not reasonable. From 24 August Mr Kroef was represented by solicitors, and it was their responsibility to advise Mr Kroef about the conditions in the Agreement. From the time Mr Kroef was represented by a solicitor, it was no longer reasonable for him to place reliance on any representation made by the real estate agents.
[51] As for the letter from the trustees' solicitors dated 27 August 2018 activating the escape clause, the letter was only concerned with the operation of the escape clause. It only affected conditions that had a satisfaction date after 30 August 2018, and did not effect a waiver or variation of the date for fulfilment of the finance condition.
Submissions for Mr Kroef
[52] Mr Davies relied on the "(30/8/18)" notation in Ms Ritchie's email of 24 August 2018, and the statement from Ms Neill on the evening of 27 August 2018 that Mr Kroef had three working days from 27 August 2018 (that is, to 30 August 2018) to declare the Agreement unconditional.
[53] He submitted that these representations were clear, and they were made with the trustees' apparent authority. He submitted that it was reasonable for a person in Mr Kroef's position to rely on them, given:
(a)the clarity, consistency and repetition of the 30 August date by the agents;
(b)the trustees' failure to correct the agents' error in the calculation of the date for satisfaction of the finance condition; and
(c)the fact that Mr Kroef did not become aware that the date for satisfaction of the finance condition being adopted by the trustees was in fact 5.00pm on 28 August 2018, until around 8.00pm on 28 August 2018.
[54] Mr Davies submitted that Mr Kroef would suffer detriment if the trustees were allowed to resile from their agents' representations, and it would be unconscionable to allow them to do so.
[55] Mr Davies rejected Ms Robertson's submission that the 24 August 2018 email was "internally inconsistent", to the point that Mr Kroef should have realised that Ms Ritchie had made a mistake. In his submission that would be a counsel of perfection, and it is not the test. Mr Kroef was entitled to rely on the actual date set out in the email.
[56] Mr Davies emphasised in his submissions that Ms Ritchie's email of 24 August 2018 should not be considered in isolation. When read together with the 27 August 2018 communications, it is reasonably arguable that a reasonable person in Mr Kroef's shoes would have been left with the impression that all conditions, including the finance condition, were due for satisfaction by 30 August 2018. Each representation involved a "30 August 2018" due date: the representations were consistent and clear on that, whether read separately or together. Nor did the agents or the trustees' solicitors seek to correct Ms Ritchie's advice as to the date for fulfilment of the finance condition.
[57] Mr Davies pointed out that Mr Kroef did not receive his solicitors' letter of advice, including advice that the date for confirmation of the finance condition was 28 August 2018, until the night of 28 August 2018. All Mr Kroef had to rely on up to the close of business on 28 August was the agents' representations.
[58] Finally on the estoppel issue, Mr Davies noted that the Agreement expressly identified Ms Ritchie and Ms Neill as the salespersons representing the real estate agent. Consequently, the trustees gave express authority to Ms Ritchie and Ms Neill under the Agreement to "effect the sale"10 (including follow-up communications with Mr Kroef while the Agreement remained unconditional11). Ms Ritchie and Ms Neill did communicate with Mr Kroef on behalf of the trustees about the terms of the offer, acceptance of the offer by the trustees, and arranging for payment and receipting the
10 Referring to the wording of the Agreement, cl 13.
11 Referring to James v Campbell HC Auckland CP No. 465-SD/99; 2 December 1999.
deposit. Having being vested with express authority to carry out those tasks, it is at least arguable that the trustees cloaked the agents with apparent authority to manage communications with Mr Kroef in respect of the dates for satisfaction of the conditions in the Agreement.
[59] Furthermore, Mr Kroef plainly believed that the agents were authorised to communicate with him about such matters, and if the trustees believed that the agents were acting outside of the scope of their authority, they were under a duty to bring this to the attention of Mr Kroef. They did not do so.
[60] In all of those circumstances, it was reasonable for Mr Kroef to believe that the agents had apparent authority to tell him when the conditions in the Agreement were due to be satisfied.
Discussion and conclusions on the estoppel issue
[61] I accept Ms Robertson's submission that one of the requirements where a party seeks to set up an estoppel based on an express representation, is that the representation must have been clearly and unequivocally expressed. In my view, Ms Ritchie's email of 24 August 2018, one of the representations on which Mr Kroef relies, does not meet that test.
[62] The starting point must be the Agreement itself. The Agreement was emailed to Mr Kroef at 8.02pm on 23 August, and the covering email told Mr Kroef that his due diligence and finance period would start from 23 August.
[63] If Mr Kroef had looked carefully at the first page of the Agreement, he would have seen that both the finance date and the date for settlement were expressed in terms of "days", not "working days". The settlement date was said to be "14 days from unconditional date" and the finance date was "5 days from acceptance of this offer". 14 days would have been an odd period to choose if the person writing in these handwritten provisions had intended to refer to 14 "working days", and I think the clear intention for the settlement date provision was that settlement would take place two weeks (10 working days) after the unconditional date. In other words, the agent who wrote these words intended to refer to 14 days, not 14 "working days". If that is
so, I can think of no reason why anyone would read the finance date provision any differently: "5 days" meant exactly that, not "5 working days".
[64] Ms Neill's email sent to Mr Kroef at 8.02pm on 23 August did not suggest any different interpretation.
[65] Turning to Ms Ritchie's email, sent at 10.19am on 24 August, I note first that the email did not purport to advise that there had been some change to the Agreement. It did not suggest that the trustees had agreed to extend the time for fulfilling the finance condition to 30 August 2018. The email simply attempted to describe particular conditions in the Agreement, and a mistake was made when the date "30/8/18" was put in brackets after the words "5 days from acceptance".
[66] I accept Ms Robertson's submission that, read with the Agreement, there was a clear conflict in the email between the expressions "5 days from acceptance" and "(30/8/18)". In those circumstances, Mr Kroef was clearly on enquiry, and it was for him to take the matter up with his solicitor or with the trustees or the agents, so that he fully understood his obligations. For those reasons, I do not think the alleged representation in the 24 August 2018 email could be described as either a clear representation or an unequivocal representation.
[67] For the same reasons, I do not consider it was reasonable for Mr Kroef to have relied (solely) on the 24 August 2018 email, at least without more. Mr Davies submitted that there was more, in that the 30 August date was repeated by the agents, and the trustees failed to correct the error in Ms Ritchie's 24 August email. Mr Davies also submitted that the fact that Mr Kroef did not realise that the trustees were relying on the finance period terminating at 5.00pm on 28 August 2018 until some hours after that period had expired, is an additional factor that made it reasonable for him to rely on the agents' reference to 30 August as the date for satisfaction of all conditions.
[68] As to the last of those factors, I think the wording of the Agreement, and in particular the use of the expression "5 days", was clear enough, and Mr Kroef was, or should have been, clearly on notice that there was a need for clarification when he received Ms Ritchie's email of 24 August. I note that Mr Kroef's solicitors apparently
had no difficulty understanding the relevant part of the Agreement – in their letter of advice to him dated 28 August 2018 they calculated the date for fulfilment of the finance condition at 28 August 2018. They told him late in the morning of 28 August that they had a letter for him to pick up, and I think it is a matter between Mr Kroef and his solicitors that he elected not to pick up that letter until the evening of 28 August. I do not think he can use that election in support of an argument that it was reasonable for him to have relied on earlier statements by the agents which he thought meant that he had until 30 August to satisfy all conditions.
[69] Mr Davies submitted that the statement about the finance period in the email of 24 August has to be read with Ms Neill's statements in the telephone call on the evening of 27 August.
[70] Mr Kroef said that Ms Neill told him that he would have three working days to declare the Agreement unconditional or he would lose the sale, and that his lawyers would be receiving formal notice about that. Mr Kroef said that he told Ms Neill that that would be no problem, as he was ready to complete. He said that he told her that the finance condition could be declared satisfied at any time, and he was waiting for a legal review to be completed. He said he expected that would happen well before the three working day period ended. Mr Kroef's recollection was that Ms Neill did not refer to any particular date by which he had to declare the Agreement unconditional – she simply told him that he had three working days to do that. Mr Kroef says that he came away from that discussion with the belief that he had until 30 August 2018 to meet all conditions.
[71] It appears then, that Ms Neill did not tell Mr Kroef that he had until 30 August 2018 to satisfy the conditions (including the finance condition). Mr Kroef's evidence is that Ms Neill did not mention the date 30 August 2018 at all. It was Mr Kroef who calculated the date 30 August. This was not a situation where the earlier reference to "(30/8/18)" was reinforced by an express reference to that same date.
[72] Mr Kroef has not given evidence of any statement by Ms Neill in the telephone conversation of 27 August specifically directed to the finance date. At best for Mr Kroef, the evidence shows only that Ms Neill appears to have made the (accurate)
statement that the effect of the activation of the escape clause was that Mr Kroef would have 3 working days to satisfy all conditions in the Agreement.12 There was apparently no specific mention of the finance condition by Ms Neill, nor any mention of "5 days" or "30 August 2018". Ms Neill told Mr Kroef that his solicitors would be receiving the escape clause activation letter, and I think she was entitled to expect that, between them, Mr Kroef and his solicitors would be aware that activating the escape clause would not have the effect of extending the time for satisfying the finance condition. In the end, I think I am left with a submission that Ms Neill might have misrepresented that the trustees were agreeable to time for satisfying the finance condition being extended to 30 August, but Mr Kroef, who was a party to the relevant conversation, has not been able to give evidence that she did. Even allowing for the fact that disputed questions of fact cannot be resolved on a caveat removal application, I think Mr Kroef needed to do more than he has done to establish an arguable case for the retention of the Caveat, particularly where the threshold estoppel question is whether it is arguable that there was a "clear and unequivocal" representation.
[73] If (contrary to my view) there is sufficient evidence of clear and unequivocal representations made by Ms Ritchie and/or Ms Neill to the effect that the trustees were agreeable to the date for satisfying the finance condition being treated as 30 August 2018, the remaining questions are whether Ms Ritchie and Ms Neill had express, implied or apparent authority to make such representations, and whether (if they did not have such authority) statements by them were nevertheless capable of creating the estoppel for which Mr Kroef contends. The latter question in particular raises the issue of whether it was reasonable for Mr Kroef to have relied on the agents' statements relating to the time for satisfaction of conditions in the Agreement.
[74] I do not consider there is any evidence or suggestion that the real estate agents had express authority to extend the finance condition date. Mr Lucas, who is an officer of the Court, said in his affidavit that acceptance of the offer was conveyed to the purchaser by [Ms Neill] on 23 August 2018. He went on to say "therefore the finance date was 28 August 2018". Mr Lucas went on to say that, on 24 August 2018, "another
12 As Ms Robertson submitted, a vendor's notice given under an escape clause does not operate to extend the time for fulfilment of any contingent conditions due during the notice period under the escape clause.
real estate agent sent an email to the purchaser. I understand the purchaser relies on this email, therefore it is annexed marked E". And the trustees' solicitors, in a letter dated 30 August 2018 to Meredith Connell, said: "The finance condition was due on 28 August 2018, being 5 days (not working days) from the date of the agreement." I think it is implicit in that evidence that the trustees did not give express authority to their agents to tell Mr Kroef that the date for satisfaction of the finance condition was 30 August 2018.
[75] Nor do I think there is evidence of either implied or apparent authority. Mr Davies relied on the wording of cl 13 of the Agreement, under which Ms Ritchie and Ms Neill were authorised by the trustees to act as their agent "to effect the sale". He also relied on the judgment of Randerson J in James v Campbell, in which the Learned Judge said:13
In my view, it is at least implicit within the real estate agent's appointment as the vendor's agent to effect the sale that the agent has authority to receive on behalf of the vendor an oral waiver of condition inserted for the sole benefit of the purchasers. That would be consistent with the customary practice of a real estate agent in facilitating the satisfaction of any conditions as part of the agent's appointment to effect the sale.
[76] Randerson J, then, considered that the wording of the standard cl 13 envisaged an ongoing role for the agent, to effect the sale, at least to the point where the agreement became unconditional.
[77] But it is clear from the same judgment that Randerson J did not consider that the agent's general authority to "effect the sale" would extend to creating some new binding contract of sale, the making of any collateral contract or warranty binding the principal, or effecting on the vendor's behalf any variation to the agreement.14
[78] In this case, the finance condition was inserted for the benefit of Mr Kroef, and I accept that if the issue had been whether the agent could accept from Mr Kroef a waiver of the finance condition, the agents' implied authority might have extended that far (on the authority of James v Campbell). But that is not the argument Mr Kroef ran. The case was not that Mr Kroef declared the finance condition satisfied in the course
13 James v Campbell, above n 11, at [14].
14 At [18] and [19].
of the discussion with Ms Neill on the evening of 27 August; rather, it was that Ms Neill misrepresented the situation in telling him that all conditions could be satisfied by 30 August.
[79] As the finance condition was a condition inserted for the benefit of the purchaser, it could not normally be waived by the vendors. Any statement about extending the time for finance would accordingly have effected a variation to the Agreement, and on the authority of James v Campbell the agents' implied authority did not extend that far.
[80] On the agents' authority point then, Mr Kroef has to rely on ostensible, or apparent, authority, if he is to succeed in sheeting home to the trustees responsibility for any statement Ms Neill might have made on 27 August about the time for fulfilment of the finance condition.
[81]In New Zealand Tenancy Bonds Ltd v Mooney the Court of Appeal said:15
The doctrine of apparent or ostensible authority applies where a person by words or conduct represents or permits it to be represented that another person has authority to act on his behalf: in such a case he is bound by the acts of that person with respect to anyone dealing with him as an agent on the faith of any such representation, to the same extent as if that other person had the authority that he was represented to have, even though he had no actual authority … A representation by the agent that he has authority cannot create apparent authority unless the principal can be regarded as having in some way instigated or permitted it, or put the agent in a position where he appears to be authorised to make it. No representation by the agent as to the extent of his authority can amount to a "holding out" by the principal. … It is of the essence of the doctrine that the principal has made a representation as to the extent of the agent's authority. An agent cannot by simply asserting that his authority exceeds the limits laid down by the principal and notified to the contracting party create an apparent or ostensible authority wider than that. In this case the actual authority and the ostensible authority coincide. As between purchaser and vendor the vendor has set the limits of that ostensible authority by the express terms of the representation conveyed to the purchaser through the contract itself.
[82] And in Sheridan Park Ltd v Dickson, Chilwell J said that it is clear from that a real estate agent has no ostensible authority to make contractual arrangements for his principal.16
15 New Zealand Tenancy Bonds Ltd v Mooney [1986] 1 NZLR 280 (CA).
16 Sheridan Park Ltd v Dickson, above n 7, at 154.
[83] In this case, there is no evidence of any "holding out" by the trustees of Ms Ritchie or Ms Neill as having authority to vary the Agreement. Indeed, there is no evidence of any communication at all from the trustees to Mr Kroef – the communications on behalf of the trustees appear to have been communications between their solicitors and the solicitors acting for Mr Kroef. Nothing in those communications in my view assists on the "holding out" argument. The only communication of the extent of the agents' authority was that communicated by the Agreement itself, namely the cl 13 authority to "effect the sale" on the trustees' behalf. And of course it is clear enough from the passage quoted from New Zealand Tenancy Bonds Ltd above that the real estate agents themselves could not confer authority on themselves to vary the Agreement by extending the finance condition date.
[84] Can an estoppel exist based on a statement made by an agent outside of his or her authority? A case with some similarities to the present, in which the extent of an agent's authority was in issue, is Peach v Batten.17 In that case, Mr Blackler, the real estate agent acting for a vendor, told the purchaser that an extension for meeting a contract condition would be agreed to by the vendors, because the vendors were keen to sell. The District Court Judge found that Mr Blackler did leave the purchaser, Mrs Batten, with a clear assurance that the extension would be granted. In the event, it was not. William Young J noted that Mr Blackler, by his conduct, extended the time available to Mr and Mrs Batten under the special condition to terminate the contract. His Honour referred to James v Campbell, noting that that case is not authority for the proposition that a real estate agent has authority to grant, on behalf of a vendor, an extension of time. His Honour expressed "real reservations as to whether a real estate agent does have such authority", and went on18 to refer to the following passage from McMorland, Sale of Land:
The implied authority of a real estate agent does not extend to creating the legal and binding contractual relationship for the sale of the property, or the making of any collateral contract or contractual warranty binding the principal, though there can be express authority given in those terms … where such express authority is found, it extends only to making a contract on such terms as to price and other details are as specified by the authority. The agent has no implied authority materially to vary those instructions, or to enter into a contract binding the principal/vendor to terms materially different from
17 Peach v Batten HC Wellington AP 89/01; 16 August 2001.
18 At [24].
those instructions … the implied authority of an agent employed by the vendor extends only to finding a willing purchaser, in carrying offers or counter offers, and eventually an acceptance from one to the other.
[85] William Young J went on to note that if Mr Blackler did not have actual authority to grant an extension, "there may well be difficulty with the view that he could so indirectly by creating a situation in which [the vendors] were estopped from relying on the contract as executed".
[86] While those statements made were clearly obiter, and did not express any final view on the legal point, I respectfully accept and apply the view tentatively expressed by the Judge that, if an agent does not have authority to vary a sale contract, nor does the agent have authority to create a situation in which the vendors are estopped from relying on the contract as executed. Mr Davies submitted that the emphasis in estoppel cases should be on the effect of the representation on the representee, and whether it would be unconscionable for the representor to resile from his or her earlier statement. I accept that submission as far as it goes, but I think the representation must still be a representation for which the representor is responsible. It is difficult to see how that could be the case where the representation is made by an agent who had no authority (actual, implied or apparent) to make it.
[87] Mr Davies relied strongly on Minaret Resources Ltd v McLellan,19 a case which was said to have many similarities with this case. In that case, the parties' agreement for sale and purchase of land was conditional on the plaintiff completing due diligence within 10 working days of the agreement date. By two facsimile letters, the defendant's solicitor advised the plaintiff's solicitor of the date from which the time would run, and then the date for confirmation – the 3rd September. While the plaintiff's solicitor calculated the due day as being one day earlier, he understood this advice as giving an extra day for confirmation. Subsequently, the defendant's solicitor realised he was mistaken, and on Friday 30th August by facsimile letter he attempted to advise the plaintiff's solicitor accordingly. The plaintiff's solicitor was at home ill and, despite the facsimile he did not learn of this until returning to work on the Monday.
19 Minaret Resources Ltd v McLellan 5 NZCPR 161 (HC).
[88] In those circumstances, Chisholm J found that the defendant was estopped from resiling from the date for confirmation. When read together the two facsimile letters constituted a clear and unequivocal representation of the extended period for confirmation on which the plaintiff relied. The later facsimile letter, advising of the mistake and new date for confirmation, was inadequate notification. It should have been marked urgent, or at least there should have been an attempt to contact the plaintiff's solicitor personally.
[89] As in this case, the defendant's counsel submitted that the facsimiles, whether viewed individually or collectively, could not constitute a clear and unequivocal assurance that the plaintiff had until 5.00pm on 3 September to confirm due diligence.
[90] Chisholm J took a different view. His Honour considered that, when the two facsimiles were read together, there was a clear and unequivocal indication by the defendant's solicitor that even though the contract was dated 19 August the day for confirmation of due diligence would be 3 September. As His Honour put it, "that date was precise and unequivocal".
[91] In my view Minaret is distinguishable on several grounds. First, there could have been no question in that case of the ability the defendant's solicitor to bind his client. The representations in question were not made by a real estate agent, where the agent's authority will be limited (unless some express additional authority has been conferred on the agent by the vendor, which is not the case here) to "effecting the sale", in the sense described by Randerson J in James v Campbell. Secondly, the representation in the two facsimiles was "precise and unequivocal". Again, that is not the position here. The 24 August email was neither clear nor unequivocal, and nor in my view is there evidence of a clear and unequivocal statement relating to the finance date made by Ms Neill in the 27 August conversation.
[92] A further distinguishing factor is that there does not appear to have been any issue in Minaret of the plaintiff having acted unreasonably in relying on the representation in the facsimiles. In my view, that is not the position here, where Mr Kroef was faced with advice from the agents which in my view would have led a reasonable person in his shoes to have sought clarification.
[93] In my view a reasonable person in Mr Kroef's position would have sought legal advice, or at the very least gone back to the agents and asked them to confirm with the trustees what the trustees' understanding was. The discussion with Ms Neill on 27 August appears to have been in the context of the trustees' solicitors notice activating the escape clause, and Mr Kroef knew from the discussion that his solicitors had received, or would be receiving, a notice activating the escape clause. He had also asked his lawyers to prepare a report on legal aspects of the Agreement. Particularly having regard to the latter aspect, I do not think it was reasonable for Mr Kroef to have relied solely on anything Ms Neill might have told him. On his own evidence it appears that what Ms Neill told him on 27 August was not clear and unequivocal, and he was or should have been aware of the conflict between the Agreement and Ms Ritchie's "(30/8/18)" calculation. He knew that his solicitors had the Agreement and were preparing a report on it for him, and in my view a reasonable person in his shoes would have immediately sought legal advice on the issue of when the various conditions, including the finance condition, had to be fulfilled.
[94] Mr Davies next submitted that the trustees had a duty to correct the "(30/8/18)" statement in Ms Ritchie's 24 August email. First, it appears that the trustees were not aware of the email at the time. Secondly, I have held that the 24 August email did not convey a clear and unequivocal finance date in any event. In those circumstances, there was no clear and unequivocal misrepresentation which called for correction: there was just Ms Ritchie's (manifestly incorrect) interpretation of the Agreement when she inserted "(30/8/18)" in her email. Mr Kroef and his solicitors were perfectly capable of forming their own view of what the Agreement meant in the relevant respects.
[95] As far as the alleged representation on 27 August is concerned, there is again no sufficient evidence that there was anything clear or unequivocal said by Ms Neill to Mr Kroef that would have called for correction. Mr Kroef's evidence that he told Ms Neill that the finance condition could be declared satisfied any time was entirely consistent with him being aware that that would have to be done by 28 August, and Ms Neill's statement that he had three working days to declare "the Agreement" unconditional appears to have been both correct and apt in the context of the discussion (which was concerned with the trustees' notice activating the escape clause).
[96] Mr Davies submitted that the knowledge of Ms Ritchie and Ms Neill as duly authorised agents must be imprinted to the trustees (relying on the Court of Appeal decision in Hansard v Hansard 20). But the knowledge referred to in the relevant passages in Hansard was the knowledge of an agent acting within the scope of his or her authority, and I do not think it was within the scope of the authority of Ms Neill or Ms Ritchie to either extend the time for Mr Kroef to satisfy a condition in the Agreement or give him legal advice on the meaning of the condition.
[97] In any event, Mr Kroef has not shown that this was arguably a case where the statements of the agents created a duty on the trustees to "speak up" (being a duty of the kind discussed by Associate Judge Osborne in Huang v Dawson Builders 21). Mr Kroef was known to have solicitors acting for him, and the statement in Ms Ritchie's 24 August email clearly represented her interpretation of the relevant part of the Agreement (it did not convey that the trustees were proposing an alteration to that part of the Agreement). The situation was a situation of the kind referred to at [55](d) in Huang, namely one where the mistaken party had the ability to correct his error and discover the true situation. Mr Kroef had only to consult his solicitors – the evidence shows that they told him in their letter of 28 August that the finance condition was to be satisfied by 28 August 2018 – in a reasonably timely fashion. To borrow from the language of the Court of Appeal in Purewai BS & JK Ltd v Connell Street Ltd,22 the situation is not one where the true situation was "solely in the domain of the silent party, where the silent party is aware that the mistaken party's primary avenue of enquiry will be futile, or where the silent party is deliberately concealing the true situation".
[98] Finally on the estoppel argument, I am not satisfied that Mr Kroef has shown that it was (arguably) unconscionable for the trustees to insist on 28 August 2018 as the date for fulfilment of the finance condition. First, the "(30/8/18)" interpretation in Ms Ritchie's 24 August email was not so clear and unequivocal in the context of the email as a whole, that it was reasonable for Mr Kroef to have relied on it, Secondly, Mr Kroef had the ability to correct the situation. He should have clarified what was a
20 Hansard v Hansard [2015] 2 NZLR 158 at 176 and 177 (paras [15] and [17]).
21 Huang v Dawson Builders Ltd, above n 6, at [55].
22 Purewai BS & JK Ltd v Connell Street Ltd [2012] NZCA 42; (2012) 13 NZCPR 108, at [66].
timing contradiction in the 24 August email with his solicitors (or at least with the trustees) rather than relying on what proved to be a mistaken interpretation of the relevant part of the Agreement by a lay person (Ms Ritchie).
[99] Having considered all of the submissions and evidence, I am not satisfied that Mr Kroef has made out an arguable case to retain the caveat based on the estoppel ground.
The date of the Agreement issue
Submissions for the trustees
[100] Ms Robertson submitted that the parties must be taken to have intended that the Agreement would become binding upon the trustees' acceptance of the offer. That was said to be because the parties were contracting in the context of a multi-party offer situation. Mr Kroef's offer was signed by the trustees at the latest by 5.45pm on 23 August 2018, and that was the date of the Agreement. There was no back-dating of the Agreement as Mr Kroef has suggested.
[101] If (contrary to that submission) communication of the trustees' acceptance was required, the provisions of the Agreement relating to notices (set out at cl 1.3 of the Agreement) did not apply to the communication of the acceptance. Communication of the acceptance of an offer could not be a notice under the Agreement; cls 1.2 and
1.3 of the Agreement only have an effect once an agreement has come into existence. The clauses do not apply to acts which occur before any agreement has been formed. Ms Robertson referred specifically to cl 1.2(2), which refers, under the heading "Time for Performance", to "Any act done pursuant to this agreement, including service of notices". The Agreement was not in existence at the time of the relevant communication.
[102] In the alternative, if time for fulfilment of the finance condition did run on the basis that the Agreement was accepted "on 24 August 2018", the time for fulfilment would have expired on 29 August 2018. The Meredith Connell letter purporting to waive all conditions was not sent until 30 August 2018, and the cancellation notice the
trustees had already given (on 29 August) was effective to avoid the Agreement once the finance condition had not been fulfilled or waived by 5.00pm on 29 August.
Submissions for Mr Kroef
[103] The "multi-offer acknowledgment" form did not have the effect of avoiding the need for the trustees' to communicate acceptance of Mr Kroef's offer. All the form did was put Mr Kroef on notice that the trustees would not be required to negotiate or debate the terms of his offer, or any other offer they might receive. The form did not clearly and unambiguously waive the need for communication of acceptance.
[104] A binding contract for the sale and purchase of land exists immediately after the second party to sign has done so and the other party, or perhaps their agent, has been informed of that. An intentional communication from the acceptor to the offeror is essential, and the contract is made when the communication is received by the offeror.23
[105] Mr Davies submitted that Mr Kroef did not receive formal communication of acceptance of his offer until 24 August 2018. That is because Ms Neill's telephone call to him on the evening of 23 August 2018 did not confirm that his offer had been accepted: Ms Neill simply advised that the trustees had accepted Mr Kroef's "offer price". No evidence has been provided by Ms Neill, and it is likely that such evidence would be required in order to finally determine what was said. Secondly, Mr Kroef did not actually become aware that the Agreement had been signed by the trustees until he checked his emails on the morning of 24 August 2018 and found Ms Neill's email sent overnight attaching a signed copy of the Agreement.
[106] In the alternative, Mr Davies relied on cls 1.1(2), 1.1(32), 1.2(2), and 1.3(1) of the Agreement, in support of an argument that any effective communication of the trustees' acceptance had to be made before 5.00pm on 23 August 2018 if it was to be regarded as having been given that day. The communication of acceptance is an "act done pursuant to the [Agreement]" (or it is at least reasonably arguable that it is). Mr Bassett's evidence cannot exclude the likelihood that he only signed the Agreement
23 McMorland, Sale of Land, at [3.10].
after 5.00pm, and that would clearly be an act done pursuant to the document. Under the clauses in the Agreement referred to above, the relevant acts are all deemed to have taken place on the following day, 24 August 2018. Mr Davies noted also that the demand for payment of the deposit (payable "on acceptance of this offer") was not in fact made until 24 August 2018.
[107] If Mr Kroef's offer was not accepted until 24 August 2018, the trustees' cancellation notice given (before 5.00pm) on 29 August was invalid. It was not possible for that (invalid) cancellation notice to be "revived" on 30 August 2018 – that interpretation is not open on the plain wording of cl 10.8(5) of the Agreement.
Discussion and conclusions on the date of the Agreement issue
[108] In my view, the Agreement was made on 23 August 2018, as the trustees contend.
[109] The evidence is clear that the Agreement was signed by all parties on 23 August 2018, and Ms Neill telephoned Mr Kroef the same evening and told him that the trustees had accepted his offer price. Mr Kroef said in his evidence "I was really happy when she told me, and so was my 12 year old grandson who was with me when I took the phone call".
[110] I accept Mr Davies' submission that a binding contract for the sale and purchase of land exists immediately after the second party to sign has done so and the other party, perhaps their agent, has been informed of that. An intentional communication from the acceptor to the offeror is essential, and the contract is made when the communication is received by the offeror.
[111] Mr Davies submitted that Ms Neill's telephone call to Mr Kroef on the evening of 23 August 2018 did not confirm that his offer had been accepted – Ms Neill simply advised that the trustees had accepted Mr Kroef's offer price. He submitted that there is no evidence from Ms Neill, and it is likely that such evidence would be required in order to finally determine this factual point.
[112] I think there is an air of unreality about that submission. Mr Kroef had made an offer on a standard form, in a multi-offer situation, and the vendor's agent advised him by telephone that his offer price had been accepted. He said that he and his grandson were happy about that, and I think it reasonable to infer that he and his grandson considered they had something to be happy about. If the trustees had put any conditions on their acceptance of Mr Kroef's offer, or if they were contemplating making a counter offer on altered terms (other than price), there would inevitably have been more to the conversation than simple advice from the agent that Mr Kroef's offer price had been accepted. In my view, the telephone call was sufficient communication of the trustees' acceptance of Mr Kroef's offer, and the Agreement came into effect when that communication was made.
[113] Mr Davies relied on cl 1.2 of the Agreement, which deals with time for performance. Clause 1.2(2) provides that any act done pursuant to [the Agreement] by a party, including service of notices, after 5.00pm on a working day, or on a day that is not a working day, shall be deemed to have been done at 9.00am on the next succeeding working day.
[114] I do not think that provision has any application to the communication of an offeree's acceptance of the purchaser's offer – the communication of acceptance is not an act done "pursuant to this agreement", because no agreement is yet in existence when the communication of the acceptance is sent.
[115] It follows that the five day period for fulfilling the finance condition ran from 23 August 2018, and it expired at 5.00pm on 28 August 2018.
[116] Ms Robertson submitted, based on the "multi-offer" situation, that communication of acceptance was not required in any event. I have found for the trustees on other grounds so the point does not affect the outcome. However I would not have accepted the submission. In my view Mr Davies was correct in submitting that the purpose of the Multi-Offer Acknowledgment form signed by Mr Kroef was simply to put him on notice that the trustees would not be required to negotiate or debate the terms of any offer he might make (or any other offer they might receive).
In signing the acknowledgment form Mr Kroef was not waiving his entitlement to communication of acceptance of his offer before a valid contract came into existence.
[117] Nor would I have accepted Ms Robertson's alternative submission that, regardless of when the Agreement came into existence, the five day finance period ran from the time of actual acceptance by the trustees. I do not think the parties could have intended that a finance period would commence running against the purchaser before the purchaser became aware that a contract was even in existence.
[118] It follows from the foregoing that the five day finance expired at 5.00pm on 28 August 2018, and that the trustees' cancellation notice given on 29 August 2018 was valid.
Result
[119] Mr Kroef has failed to show that he has an arguable case to sustain the Caveat, and I think it is patently clear that his equitable interest in the property no longer existed when the trustees gave the notice of cancellation on 29 August 2018. I therefore make an order under s 143 of the Act that the Caveat (being caveat no. 11217606.1) be removed from the title to the property (being the land in title Identifier NA 128C/337).
[120] The trustees are entitled to their costs, which I fix on a 2B basis, with disbursements to be fixed by the Registrar.
Associate Judge Smith
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