Meadows v Colcroft Holdings Limited
[2023] NZHC 2464
•4 September 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV2023-404-000942
[2023] NZHC 2464
UNDER section 143 of the Land Transfer Act 2017 IN THE MATTER OF
Caveat number 12663548.1
BETWEEN
JASON ROBERT MEADOWS
Applicant
AND
COLCROFT HOLDINGS LIMITED
Respondent
Hearing: 10 August 2023
Further submissions [14 August 2023]
Appearances:
J Meadows in person
H G Holmes, P K Spring for the respondent
Judgment:
4 September 2023
JUDGMENT OF WHATA J
This judgment was delivered by me on 4 September 2023 at 4.00pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date: ………………………….
Solicitors:
Keegan Alexander, Auckland Copy to: Mr J Meadows
MEADOWS v COLCROFT HOLDINGS LIMITED [2023] NZHC 2464 [4 September 2023]
[1] Mr Meadows entered into a sale and purchase agreement with Colcroft Holdings Limited (“CHL”) to buy a property at 115 Wilma Road Surfdale, Waiheke (“the Property”). When Mr Meadows did not settle on the due date, CHL cancelled the agreement. Mr Meadows then lodged a caveat to protect his interests. His primary claim is that CHL did not allow him to undertake an invasive investigation of water damage that had only come to light about the time of settlement. On his case, this meant CHL was never ready, willing, or able to settle.
[2] CHL responds that cl 10 of the sale and purchase agreement expressly required Mr Meadows to give proper notice of his claims and he did not do this. Having not triggered that cl 10 process, Mr Meadows was obliged to tender the settlement sum and failed to do so. It also says that Mr Meadows, on his own evidence, was never in a financial position to settle.
[3] CHL has applied to have the caveat lapse and Mr Meadows now seeks to sustain it.
Background
[4] The contract, executed on 29 July 2022, was on the 11th edition of the form approved by the Real Estate Institution of New Zealand and Auckland District Law Society. The agreement was conditional on due diligence to be completed by 24 August 2022, which was extended to 7 September 2022. Settlement date was 20 working days after that. Mr Meadows inspected the property in August 2022 and identified some matters that needed fixing. He was given assurances by CHL’s director, Mr Anderson, who was well known to Mr Meadows, that these matters would be fixed. Mr Anderson had already told him on 14 July 2022, that the “house is sound, does not leak and was built and signed off by the council in 1997”. With these assurances in mind, Mr Meadows was happy to proceed with the purchase, subject to an extended settlement period and obtaining a tenancy prior to settlement. CHL agreed to these matters. The settlement date was extended to 23 January 2023. Mr Meadows’ tenant moved into the Property in October.
[5] Two weeks prior to settlement Mr Meadows realised that his bank would not finance the purchase. He set about identifying potential funders and ultimately found
an alternative funder, Loraine Reinsfield. She expressed interest in funding the project, especially given an in-principle agreement he had with an existing tenant of the building yard on the property to buy that yard. Nevertheless, he was not in a position to settle on 23 January 2023.
[6] On 26 January 2023, Mr Meadows became aware of water damage to the house. Mr Meadows visited the site with a licenced building practitioner who advised that to repair structural damage across three floors could cost as much as $1m. Through his then lawyers, Duncan Cotterill, sent photos of the water damage to CHL’s solicitors Martelli McKegg. Martelli McKegg responded on the same day noting the terms of the tenancy required that “no modifications, alterations, or building works to the property prior to settlement” and that there appear to have been unauthorised works breaching this term. Clarification was also sought as to the timing of the works and who did them.
[7] Duncan Cotterill responded on 27 January 2023 with detailed answers provided by Mr Meadows and sought clarification from CHL as to what was proposed “in respect of an investigation into the leaks and the extent of necessary repairs” and the various unconsented works. Martelli McKegg responded on that same day noting that it was consulting with its insurers and would be seeking instructions as to the unconsented work. They also reminded Mr Meadows of his obligation not to undertake further work on the property.
[8] On 2 February 2023, Martelli McKegg sent a settlement notice to Duncan Cotterill. It records that the settlement date was 23 January 2023 and identifies a settlement amount of about $2.7m to be paid within 12 working days of the notice. No mention is made of the issues with the house.
[9] Duncan Cotterill responded on 3 February 2023, requesting an opportunity to undertake an invasive investigation of the house to determine the nature and extent of the damage, non-compliance with the building code, and the cost of any repair. A detailed summary of the damage already identified is attached to the letter. The letter noted that the damage may be so extensive as to give rise to the right to cancel. It further records that given the breach of warranties and extent of building
damage, CHL was not in a position to call upon Mr Meadows to settle nor to serve a settlement notice.
[10] Martelli McKegg replied to this correspondence the same day, repeating their demand that Mr Meadows not undertake any work on the property, investigative or otherwise. The letter records their understanding that Mr Meadows had not secured finance. It also states:
Moreover, we refer you to clause 10 of the Agreement, which provides. “if the purchaser has not purported to cancel this agreement, a breach by the vendor of any terms of this agreement does not defer the purchaser’s obligation to settle, but that obligation is subject to the provisions of this clause 10.0”. As I mentioned to you in previous correspondence, a breach of warranty does not allow the purchaser not to settle. The Agreement confirms this, but so too does a long line of case law.
…
If your client has a claim for damages or breach of warranty (which we do not consider he does), this can be dealt with in the usual way and in accordance with the Agreement – not by damaging our client’s property as though it is his own.
[11] On Friday 17 February 2023, Duncan Cotterill provided copies of assessments obtained from a builder and a plumber and noted that those reports record:
·Black mould.
·Extent of damage unknown but likely to be beyond shower and bathroom.
·Leak likely to have been occurring over a long period of time.
·Non-compliant wastewater and septic tank systems.
·Compromised framing.
·Extensive water damage.
·Potential water damage to power board.
·Potential subsidence as a result of long term leak.
[12] Duncan Cotterill also claimed that Mr Anderson misrepresented the state of the house and had breached its warranties at cl 7 and in particular, cl 7.3(5). Given this,
it maintained CHL was not in a position to settle or insist on performance by Mr Meadows. They state that:
In the absence of the full picture of the extent of the damage and the extent of any breach of warranty, Mr Meadows is unable to determine whether it should proceed with compensation or exercise its rights of cancellation. By denying our client an invasive investigation, your client has put our client in the position where it is unable to fully particularise and quantify the compensation needed.
[13] They then state that the settlement notice is invalid and request access to conduct invasive investigations in the presence of Mr Meadows’ experts so that the extent of the damage and remediation costs can be assessed. The letter concludes that:
Our client has indicated it will make its election within 10 working days of the reports of its experts completing their reports.
[14] Duncan Cotterill wrote again on 21 February 2023, noting that Mr Meadows needed to satisfy its lender that there is adequate security, and that without an understanding of the costs of remediation, it is not possible to make an accurate assessment of the value of the security offered by the Property. The email concludes:
This communication is not sent as an affirmation of the contract and is sent without prejudice to our client’s rights of cancellation which our client reserves.
[15] Martelli McKegg’s response of the same date is fulsome. Most relevantly it records their view that Mr Meadows did not have and never had finance and has manufactured the issues now raised. The letter repeats reference to cl 10 of the agreement and the point that a breach of warranty does not deter the purchaser’s obligation to settle, that any claim must be made on or before the last day prior to settlement date together with a genuine pre-estimate of Mr Meadow’s losses, and that the settlement sum must be paid into a stakeholder’s account pending resolution of the claims.
[16] The letter further notes that it remains possible for Mr Meadows to comply with cl 10 and that he is in an “unusually well-informed position, having had access to the property for some 5 months prior [to] settlement.” The letter further records:
[Mr Meadows] is required to settle and, in circumstances where he clearly does not have the financing sufficient to settle (or to comply with clause 10), time being of the essence, he is in fundamental breach. If he considers compensation is claimable for the breaches he claims (which we repeat, are denied), then he ought to have followed clause 10 of the Agreement). He has elected not to do so, and we infer that this is because he does not have the funding to do so.
[17] On 22 February 2023, Duncan Cotterill write again, most relevantly recording that one of the backers is very concerned about the uncertainty as to the cost of the remediation of the dwelling and this has created real headwinds for Mr Meadows in obtaining finance. It also notes that it was unable to secure a lease with Brian Building Limited (“BBL”), noting that Martelli McKegg also acted for them. The letter concludes:
While our client does not have the funds to settle this is largely because of these issues. If the contract is not cancelled by your client then my client will continue to work to get the funding needed.
[18] Coinciding with this, Ms Reinsfield wrote to Mr Meadows stating that she would like to provide funding to the purchasing entity of the Property subject to the following conditions:
1. A Quantity Surveyors report on the scope of work and the cost of repairs from the leak in the upstairs bathroom of the main dwelling.
2.A visual inspection completed by my Builder and structural engineer.
3. An executed agreement to Lease the Builders Yard by Brian Building Limited.
4. An executed conditional Sale & Purchase Agreement for the Builders Yard to Brian Building Limited.
5.A Personal Guarantee from Jason Meadows.
6.A right to register a caveat against 64b Ocean Road, Waiheke Island.
7. A copy of the Deed of Nomination for the Sale and Purchase Agreement dated 29th July 2022 with Colcroft Holdings Limited for 115 Wilma Rd, Waiheke.
[19]Martelli McKegg issued a notice of cancellation the same day.
Evidence
[20] Mr Meadows filed two affidavits in support of his application. Mr James Anderson filed an affidavit in opposition. Mr Meadows’ affidavits provide a detailed account of his version of events, including references to alleged misrepresentations made by Mr Allen Anderson, the discovery of the damage and his dealings with the vendor. He refers to his dealings with Ms Reinsfield and claims he was unable to satisfy her terms for finance because the vendor had prohibited him from taking steps to identify the true scope of the damage to the house.
[21] Mr Anderson similarly provides evidence supporting the vendor’s position, refuting claims of misrepresentation as well as maintaining that the damage to the property was minor, noting for example that the insurer had paid out on damage to the leak in the bathroom.
[22] During the hearing it became evident that some of Mr Meadows claims were unsupported by sworn evidence, particularly in relation to claims that he had financial support at key times from Ms Reinsfield. Given the significance of this to his claims, I resolved to provide him with the opportunity to provide that evidence. An affidavit of Ms Reinsfield was then filed after the hearing.
[23] In short summary, Ms Reinsfield relevantly says that Mr Meadows contacted her on 19 January 2023, seeking finance for the purchase and she confirmed her interest and began due diligence. On 25 January 2023, she confirmed that she wished to progress the deal and that she could meet the deadlines to enable the purchase to proceed. She says they came to terms for a loan facility they both deemed acceptable. However, on 27 January 2023, Mr Meadows advised her about water damage to the house. He then provided her with reports from a builder and a plumber, noting that the cost of repair to the damage was estimated to be $1m.
[24] Ms Reinsfield refers to dealings with the vendor’s lawyers, problems with access for inspection of the damage, as well as the fact that they had issued a settlement notice. She notes that Mr Meadows was “pushing very hard to receive a formal loan offer,” but she was worried about the extent of the damage as well as the failure of the vendor to carry out promised works. Ms Reinsfield also considered that the proposed
lease to BBL was important, but was concerned about the fact that Martelli McKegg had previously acted for BBL. This made her feel “anxious about advancing the funds to complete the purchase”.
[25] Ultimately, on 22 February 2023, Ms Reinsfield sent an email with her proposed terms for finance, noted above at [18]. On 25 February 2023, she was advised by Mr Meadows that the vendor had sent a notice cancelling the agreement, but she was prepared to leave the offer on the table for four weeks. She withdrew this offer on 23 March 2023. The main reason she says was because of the dishonest conduct of the vendor.
Clause 10
[26] Clause 10, dealing with claims to compensation by purchasers, is key to the resolution of the present dispute. Most relevantly, cls 10.1 to 10.4 states:
10.1 If the purchaser has not purported to cancel this agreement, the breach by the vendor of any term of this agreement does not defer the purchaser’s obligation to settle, but that obligation is subject to the provisions of this clause 10.0
10.2The provisions of this clause apply if:
(1) the purchaser (acting reasonably) claims a right to compensation for:
(a)a breach of any term of this agreement;
(b)a misrepresentation;
(c) a breach of section 9 or section 14 of the Fair Trading Act 1986;
(d)an equitable set-off, or
(2) there is a dispute between the parties regarding any amounts payable:
(a)under clause 3.12 or clause 3.13; or
(b)under clause 5.2.
10.3To make a claim under this clause 10.0:
(1) the claimant must serve notice of the claim on the other party on or before the last working day prior to the settlement date, time being of the essence (except for claims made after the settlement date
for amounts payable under clause 3.12 or clause 3.13, in respect of which the claimant may serve notice of the claim on the other party at any time after a dispute arises over those amounts); and
(2)the notice must:
(a) state the particular breach of the terms of this agreement, or the claim under clause 3.12, clause 3.13 or clause 5.2, or for misrepresentation, or for breach of section 9 or section 14 of the Fair Trading Act 1986, or for an equitable set-off; and
(b) state a genuine pre-estimate of the loss suffered by the claimant; and
(c) be particularised and quantified to the extent reasonably
(3)the claimant must not have made a prior claim under this clause 10.0 (to the intent that a claimant may make a claim under this clause 10.0 on only one occasion, though such claim may address one or more of the elements in clause 10.2).
[27]Clause 10.6 provides a process for dispute resolution. It says:
10.6 If the purchaser makes a claim for compensation under clause 10.2(1) but the vendor disputes that the purchaser has a valid or reasonably arguable claim, then:
(1) the vendor must give notice to the purchaser within three working days after service of the purchaser’s notice under clause 10.3, time being of the essence; and
(2) the purchaser’s right to make the claim (on the basis that such claim is valid and reasonably arguable) shall be determined by an experienced property lawyer or an experienced litigator appointed by the parties. If the parties cannot agree on the appointee, the appointment shall be made on the application of either party by the president for the time being of the Auckland District Law Society. The appointee’s costs shall be met by the party against whom the determination is made or otherwise as determined by the appointee.
[28] If a claim is accepted or determined in accordance with cl 10.6, but the quantum is challenged, then cl 10.8 lays down a process for resolution of such challenges. That process includes the payment of an interim amount to a stakeholder until the amount of the claim is determined. Clause 10.8(4) states:
(4) if the parties cannot agree on the interim amount, the interim amount shall be determined by an experienced property lawyer, an experienced litigator, or, where the claim for compensation is made under clause 5.2, an
experienced registered valuer or quantity surveyor appointed by the parties. The appointee’s costs shall be met equally by the parties, or otherwise as determined by the appointee. If the parties cannot agree on the appointee, the appointment shall be made on the application of either party by the president for the time being of the Auckland District Law Society;
[29] Clause 10.9 defers settlement date to the second working day after the determinations at either cls 10.6 or 10.8(4). Clause 10.10 then provides that the procedures prescribed in cls 10.1 to 10.9 do not affect the right to bring proceedings for specific performance, and a determination under cl 10.6 that the purchaser does not have a reasonable claim does not prevent the purchaser from pursuing their claim after settlement. Clause 10.10 then preserves the right to seek specific performance as follows:
10.10 The procedures prescribed in clauses 10.1 to 10.9 shall not prevent either party from taking proceedings for specific performance of this agreement.
[30] Notice to complete and remedies on default are stated at cl 11. In this regard, cl 11.1(2) states:
11.1(2) The settlement notice shall be effective only if the party serving it is at the time of service in all material respects ready, able, and willing to proceed to settle in accordance with this agreement, or is not so ready, willing, and able to settle only by reason of the default or omission of the other party.
Overview
[31] Clause 10 is a mechanism enabling the speedy resolution of bona fide and reasonable purchaser claims listed at cl 10.1. The starting point under cl 10 is that claims to compensation by a purchaser or disputes about amounts owning do not permit the purchaser to refuse to proceed to settlement until these matters are remedied.1 In short, a purchaser must give notice of claim under cls 10.1 or 10.3 and where the claim is disputed, follow the process laid out at cl 10.4 and following.2
1 Property Ventures Investments Ltd v Regalwood Holdings Ltd [2010] NZSC 47, [2010] 3 NZLR 231 at [72]; and see also Mao v Singh [2022] NZCA 390, (2022) 23 NZCPR 477 at [66].
2 The same point was made by the Court of Appeal in Yu v Bradley [2022] NZCA 378, (2022) 23 NZCPR 902 in respect of ninth edition of the agreement approved by the Real Estate Institute of New Zealand and the Auckland District law Society at [99].
[32] However, there are two important qualifications to the strict operation of cl 10. First, cl 11.1(2) provides that a settlement notice shall be effective only if the party serving it is at the time of the service either; in all material respects ready, able and willing to proceed to settle in accordance with the agreement or is not so ready, able and willing to settle only by reason of default or omission of the other party. So, relevantly here, a vendor that does not allow the purchaser to inspect the property in order to be able to particularise its cl 10 claim runs the risk of an adverse finding that it was not, in fact, ready, able or willing to settle.3
[33] Second, as the Court of Appeal in Mao v Singh observed, the purchaser’s right to seek specific performance is expressly preserved by cl 10.10, irrespective of whether the purchaser provides notice of claim, in circumstances where the proper tender of the settlement sum would have been futile because the vendor was never ready, willing, and able in all material respects to perform its settlement obligations.4 The facts in Mao are illustrative. The vendor refused to deliver vacant possession, so the purchaser was not precluded from pursuing his claim to specific performance even though he did not trigger the cl 10 process.5
Mr Meadows’ case
[34] Mr Meadows contends that CHL made it impossible for him to particularise the extent of compensation or assess the tenantability of the house. He was therefore never at a point where he could invoke cl 10 or advance any claim to compensation. He also maintains that no prudent purchaser could be expected to provide settlement in full and then sue for damages when CHL had lied, hidden damage, refused access, and disregarded contractual obligations under the agreement. Overall, as a consequence of CHL’s refusal to allow him to properly quantify the damage and remedial costs, CHL was never ready and willing to settle. On that basis he maintains he ought now be able to seek specific performance and the caveat should remain in place pending resolution of that claim.
3 Regalwood, above n 1 at [78]— [83]; and see Yu v Bradley, above n 2 at [106]— [107].
4 Mao, above n 1 at [59] and [68].
5 At [66]— [68].
CHL’s case
[35] Mr Holmes for CHL submits that if Mr Meadows had a genuine claim for compensation, he was obliged to trigger the cl 10 process as expressly required by cl 10.1. He did not do this, even though he was specifically invited to do so. To now allow Mr Meadows to rely on his own default in this regard would render cl 10 completely otiose. The claim that CHL caused Mr Meadows to default and was never ready, willing or able to settle is rejected on the following grounds:
(a)A purchaser is not required by cl 10 to provide a definitive estimate of a claim, but rather simply a “genuine pre-estimate” of his loss to the extent “reasonably possible”.
(b)Mr Meadows had ample information upon which to base a genuine pre- estimate — he had an estimate for the structural repairs for example.
(c)Clause 10 does not impose a duty on vendors to allow invasive investigations to establish the pre-estimate.
[36] The reality Mr Holmes contends, is that Mr Meadows, on his own evidence, did not have the funds to settle.
Threshold
[37] The threshold principles for sustaining a caveat are well settled. As stated by the Court of Appeal in Philpott v Noble Investments Ltd:6
(a)The onus is on the applicants to demonstrate that they hold an interest in the land that is sufficient to support the caveat, but they need not establish that definitively;
(b)It is enough if the applicants put forward a reasonably arguable case to support the interest they claim;
(c)The summary procedures involved in applications of this nature are not suited to the determination of disputed questions of fact. An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained – either because there is no valid
6 Philpott v Noble Investment Ltd [2015] NZCA 342 at [26].
ground for lodging it in the first place, or because such a ground no longer exists; and
(d)When an applicant has discharged the burden upon it, the Court retains discretion to remove the caveat which it exercises on a cautious basis. Before it does so the Court must be satisfied that the caveator’s legitimate interest would not be prejudiced by removal.
(footnotes omitted)
The reasonably arguable claims
[38]The following matters are reasonably arguable:
(a)Promised works were not completed, including works to bifold doors, replacement of the gas hob, and installation of a double wall oven.
(b)CHL (through Mr Anderson) misrepresented the house on the Property as weathertight.
(c)The weathertightness damage was hidden by Mr Anderson.
(d)CHL knew the house, and works on the house, were not code compliant including in relation to weathertightness works and the installation of the wastewater and septic system.
(e)The house was not tenantable at the time of settlement.
(f)CHL was on notice from 26 January 2023 of Mr Meadows claims of damage to the Property and that he wanted to undertake an invasive inspection of the house.
(g)The cost to remedy the water damage could be in excess of $1m.
(h)CHL refused to allow Mr Meadows to undertake any invasive testing or other works on the house for any purpose.
(i)CHL’s refusal to allow Mr Meadows to undertake an invasive inspection or quantity survey of the house precluded Mr Meadows from making a definitive assessment of the costs of any remedial works.
(j)Obtaining appropriate consents, including for a compliant wastewater and septic system could take several months.
(k)Mr Meadows had a conditional offer of finance from Ms Reinsfield that depended on an invasive inspection or quantity survey of the house.
[39]However, it is also clear that:
(a)Mr Meadows was invited by the CHL to trigger the cl 10 process and refused to do so.
(b)Mr Meadows reserved his position as to whether to cancel or affirm the agreement.
(c)Mr Meadows did not have the finance to hand in order to settle either at the settlement date of 23 January 2023, or at the expiry of the settlement notice period.
Assessment
[40] At its core, Mr Meadows’ claim turns on whether, in the circumstances of this case, it is reasonably arguable CHL was obliged to allow Mr Meadows to undertake invasive testing of the house so that he could make an election to settle in accordance with cl 10 or to cancel. If the answer is yes, then the matter must go to trial for determination.
[41] There is no express requirement in the contract for a vendor to allow invasive testing. At most cl 3.2 envisages a pre-settlement inspection “for the purposes of examining the property”. That has been interpreted to extend to allowing a valuer to
attend the inspection alongside a purchaser.7 It seems highly unlikely that an intention to allow invasive testing could be grafted onto this right of inspection, given that it ordinarily involves destructive testing. But on the available evidence, this case has some very unusual features, including most relevantly evidence of major weathertightness defects only coming to light at about the time settlement was due. A purchaser confronted with such information, at the eleventh hour, is arguably entitled to require such level of inspection as is reasonably necessary to enable it to provide, as required by cl 10.3, “a genuine pre-estimate” of the loss suffered and to particularise and quantify any claim “to the extent reasonably possible”. Put another way, it is arguable that cl 10.3 should not be construed in such a way as to unreasonably preclude a purchaser in the present situation from being able to meet these informational requirements and otherwise from proceeding to settlement on a properly informed basis.
[42] Mr Holmes’ contention that Mr Meadows had ample information is question begging — how do we know without testing the facts?
[43]In summary, whether on the facts of this case:
(a)there was a proper basis for the claim of major weathertightness damage (and misrepresentation, among other claims);8
(b)invasive inspection was reasonably necessary to enable Mr Meadows to meet the informational requirements of cl 10.3; and if so,
(c)CHL was obliged to allow invasive testing,
is not a question readily resolved without regard to established facts.
[44] I am mindful that of the directive at cl 10 “time is of the essence” and so a decision had to be made and steps taken with alacrity. But that cuts both ways.
7 Yu, above n 2 at [71].
8 I leave the resolution of the threshold requirements for making a bona fide claim pursuant to cl 10.1 to the trial court. Mr Holmes quite properly conceded that the claim for misrepresentation was arguable.
A purchaser is arguably entitled to expect that a vendor will be forthcoming in enabling the claims process to be undertaken quickly and not baulk at allowing obvious informational gathering steps to be carried out. In this regard Mr Meadows had two reports of the potentially significant damage. There was at least some proper basis for the claimed defects.
[45] I also acknowledge that Mr Meadows’ failure to make any sort of election or specifically trigger cl 10 is highly problematic for him. This is not a case of a vendor refusing to engage with a compensation claim. On the contrary, this is a case of a purchaser apparently refusing to make an election or trigger a compensation claim pursuant to cl 10. But this ultimately comes back to the resolution of whether CHL was wrong to refuse any consideration of invasive testing altogether and whether that fact precluded Mr Meadows from being able to trigger the claims process. If so, CHL could be said to have never been a ready, willing, or able vendor or causative of Mr Meadows default. This basic point was made by the majority in Regalwood when responding to a similar issue in that case:9
[Regalwood’s] lack of cooperation had made it impossible for Property Ventures to assess the consequences of the non-compliance with the Building Act and hence to make a sensible estimate of the amount it should properly tender.
[46] Similarly, I find that the same point is not inarguable from Mr Meadows’ perspective.
[47] Finally, Mr Meadows’ acknowledgement in submissions that he did not have the funds to settle on settlement date or at the conclusion of the settlement notice period weighs heavily against him. Ms Reinsfield’s conditional offer does not assist him. If anything, her evidence was unhelpful to his case. Rather it highlights that Mr Meadows was most unlikely to have been in a position to settle in any event. This is likely to be fatal to his claim. He was unable to obtain finance from his usual bank when settlement came due and went searching for alternative finance. The alternative finance was conditional, not only as to a quantity survey, but as to third party arrangements, including an executed third-party lease of the premises.
9 Regalwood, above n 1 at [83].
[48] Against this background it is very difficult to argue that CHL’s alleged default, in fact, precluded Mr Meadows from settling on the required date for settlement. But all of this has a chicken and egg quality. Both parties must discharge their obligations to facilitate settlement and if relevant, the cl 10 compensation process. Agreement to an invasive test may have enabled Mr Meadows to commit to the settlement and complete that process. Whether that is an available conclusion can only be sensibly resolved on the evidence properly tested.
[49] Overall, I find that Mr Meadows claim is weak but not inarguable. The caveat is therefore sustained. The proper course now is for Mr Meadows to file his claim for specific performance with 15 working days. Costs are reserved pending the resolution of the substantive claim.
[50] I wish to record for that purpose that Mr Holmes responsibly presented the case for CHL, helpfully providing a full bundle of documents and alerting the Court to all relevant authorities. That assistance should be considered in the resolution of any final cost award.
Whata J
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