For a Court ready (fee required) version please follow this link
IN THE SUPREME COURT OF NEW ZEALAND
SC 105/2009
[2010] NZSC 90
BETWEENMANA PROPERTY TRUSTEE LIMITED Appellant
ANDJAMES DEVELOPMENTS LIMITED Respondent
Hearing:15 June 2010
Court:Elias CJ, Blanchard, Tipping, McGrath and Anderson JJ
Counsel:J M McCartney SC and D W McMorland for Appellant C S Withnall QC and R Ahdar for Respondent
Judgment:23 July 2010
JUDGMENT OF THE COURT
AThe appeal is allowed. It is declared that the respondent’s purported cancellation on 3 November 2008 of its contract with the appellant was of no effect. The proceeding is remitted to the High Court for outstanding issues to be determined in light of this judgment. The costs order made in the Court of Appeal is set aside.
B Costs are reserved. Counsel should file memoranda.
REASONS
(Given by Blanchard J)
Introduction
[1] The appellant, Mana Property Trustee Ltd (Mana), agreed to sell vacant land in an industrial subdivision in Cromwell to the respondent, James Developments Ltd (James). The area was still undergoing subdivision at the time of the agreement. The terms of contract recognised that a boundary adjustment would be necessary before settlement could occur. This would affect the size of the area contracted for, stated in the contract to be “4.7161 Ha more or less”. In anticipation of this adjustment the parties had also agreed, in cl 18.3, that “the final area of the property as shown on the approved survey plan must not be less than 4.7150 Ha”. Yet by the date on which the transaction should have been settled in accordance with the agreement, the area of land for which Mana had deposited a plan and obtained issue of a certificate of title was only 4.6990 ha. A few days later, without having given a settlement notice, James advised Mana that the contract was cancelled because of Mana’s failure to comply with cl 18.3. The High Court[1] and the Court of Appeal[2] have disagreed about the validity of that purported cancellation.
[1]Mana Property Trustee Ltd v James Developments Ltd (2009) 10 NZCPR 295 (HC) per Associate Judge Osborne.
(a)Whether cl 18.3 of the contract was an essential term (s 7(4)(a) of the Contractual Remedies Act 1979); and
(b)If so, whether James was entitled to cancel the contract by the notice it gave to Mana on 3 November 2008 without prior issuance and expiry of a settlement notice under cl 9.0 of the General Terms of Sale of the agreement form.
The facts
[3] Mana was in the course of purchasing Lots 5 and 11 at McNulty Road, Cromwell from the Central Otago District Council (CODC). Those lots were part of a subdivision of the CODC’s land. In a contract made on 15 October 2007 Mana agreed to on-sell Lot 11 to James but with a reduced area. A re-subdivision…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
Continue reading Mana Property Trustee Ltd v James Developments Ltd
Sign in free to access the full text
Details
AGLC
Mana Property Trustee Ltd v James Developments Ltd [2010] NZSC 90
Case
[2010] NZSC 90
Decision Date
CaseChat Overview and Summary
Mana Property Trustee Ltd and James Developments Ltd entered into a contract for the sale of land, with a condition that the area of the land must not be less than 4.7150 hectares. The area of the land was less than the stipulated minimum at the time of settlement, and James Developments Ltd purported to cancel the contract. Mana Property Trustee Ltd sought specific performance of the contract and the Court of Appeal ruled in their favour, leading to an appeal by James Developments Ltd to the Supreme Court of New Zealand. The appeal was allowed and the purported cancellation was declared to be of no effect. The Supreme Court held that the minimum area clause was an essential term and that James Developments Ltd was not entitled to cancel the contract without issuing a settlement notice and waiting until its expiry. The proceeding was remitted to the High Court for outstanding issues to be determined in light of this judgment and the costs order made in the Court of Appeal was set aside.