Millbrook Estate Limited v Town
[2015] NZHC 1207
•3 June 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2015-404-247 [2015] NZHC 1207
BETWEEN MILLBROOK ESTATE LIMITED
Applicant
AND
GLENN TOWN & ORS Respondent
Hearing: 30 April 2015 Appearances:
M C Black for the Applicant
J E McLennan for the RespondentJudgment:
3 June 2015
JUDGMENT OF ELLIS J
This judgment was delivered by me on 3 June 2015 at 12.30 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date:………………………….
Counsel/Solicitors:
M C Black, Barrister, Auckland
B J Franklin, Barrister, Auckland
MILLBROOK ESTATE LIMITED v TOWN & ORS [2015] NZHC 1207 [3 June 2015]
[1] On 15 November 2012 Millbrook Estate Limited (Millbrook) and the trustees of the Kielstra Family Trust (the Trustees) entered into a sale and purchase agreement in relation to 1341 Pakiri Road, Pakiri (CT NA134 C/308) for a purchase price of $1.55 million. The agreement:
(a) contained an acknowledgment that Millbrook had obtained resource consent to complete a subdivision of CT NA134 C/308;
(b) recorded that:
(i)as a consequence of the proposed subdivision, the Trustees were not purchasing approximately 5.3 hectares of the land, identified as Lots 1, 2, 3 and 4 and marked “A” on a plan that was attached to the agreement (the subdivision land); and
(ii)upon settlement of the transaction, Millbrook would transfer to the Trustees of all the CT NA134 C/308 land, but the Trustees would hold the subdivision land, in trust for Millbrook pending completion of the subdivision;
(iii)the Trustees undertook to “assist the vendor in all respects and to sign all documents and to do all acts as required to enable the purport of the agreement and the subdivision to be completed”;
(iv)upon the issue of separate titles, the Trustees would complete a transfer of the subdivision land back to Millbrook for no further consideration;
[2] Critically, however, the agreement stipulated that if new titles were not issued for the residue land by 10 January 2015, the Trustees would be under no further obligation to transfer the subdivision land back to Millbrook.
[3] The agreement also provided that Millbrook would have the option of retaining a further area of land being no more than 2 hectares in size that was
approximately identified and marked “B” on the attached plan (the option land). The
option expires on 10 July 2015.
[4] The transaction settled on or about 10 January 2013 and title to all of CT NA134 C/308 was transferred to the Trustees.
[5] Millbrook says that by December 2014 at the latest all documents necessary to complete the subdivision had been provided to the Trustees, who were also advised that Millbrook wished to exercise the option to which I have referred at [3] above.1 But for reasons that are disputed, the Trustees did not execute those documents and the subdivision was not completed before 10 January 2015. The Trustees therefore assert that they are now under no further obligation to transfer the
land back or to transfer the land that was the subject of the option.
[6] Millbrook now seek specific performance of the agreement and have applied for summary judgment in that regard.
The Trustees’ defences
[7] The Trustees say they have a number of arguable defences to the claim, and that they give rise to real questions to be tried. More particularly, they say (in summary) that:
(a) Summary judgment is inapt where the remedy sought is one of specific performance;
(b) They had “genuine and/or legitimate grounds” upon which to decline
to execute the relevant authorities and e-dealing documents;
(c) A variation to the sale and purchase agreement was reached between their agent and Millbrook’s agent on 15 November 2012 whereby the boundary between the subdivision land and the Trustees’ land would be adjusted (so that the Trustees gained some of the subdivision land
and Millbrook gained some of the Trustees’ land) and:
1 I will return to a more precise chronology shortly.
(i)Millbrook would be responsible for all fencing costs on the revised boundary;
(ii)Millbrook would re-survey the boundaries in order that they could be reflected in the new certificate of title;
(d)There has been part performance of this varied agreement by Millbrook because it has erected fencing along some of this new boundary. But Millbrook has not completed the fencing or done the resurveying work;
(e) Alternatively there was a collateral contract entered into to the same effect and which has also been partly performed;
(f) Millbrook is estopped from denying the above agreements (of which there has been part performance);
(g) Any trust in relation to the subdivision land came to an end on 10
January 2015.
Approach
[8] I do not propose to rehearse the principles governing summary judgment here. Suffice it to say that the procedure is inapt where there is a genuine dispute as to the material facts. And in the present case, the nature of the Trustees’ defences suggests that such a dispute may well exist.
[9] To the extent that the Trustees’ pleaded position is clearly at odds with the documentary record, however, I am prepared to engage in at least a limited way with the factual merits. Moreover, I have formed the view that most, if not all, of the defences pleaded are untenable as a matter of law, even on the basis of the Trustees’ own evidence. But before turning to consider those legal issues, it is necessary to set out the aspects of the documentary record in more detail.
Documentary evidence
[10] At the outset it is relevant to note that the directors and shareholders of Millbrook are Alexander Longuet-Higgins and his wife, Fiona. As I understand it, Mr Longuet-Higgins also owns and controls Turvey Company Ltd which, in turn, owns land adjacent to the CT NA134 C/308 land (the Turvey land).
[11] The Trustees are Christine Von Geldern (now known as Mrs Christine Buchanan) and Messrs Town and Winger who are both partners in the law firm Holmden Horrocks. Messrs Town and Winger are independent trustees. The evidence filed by both Mr and Mrs Buchanan suggests that Mrs Buchanan authorised her husband to act as the Trust’s agent in relation to some of the dealings presently at issue. The existence of such an agency relationship has not, however, been
confirmed (or denied) by Mr Town in his evidence.2
[12] As I have said, the sale and purchase agreement for the CT NA134 C/308 land was entered into in January 2013. It seems, however, that relevant written communications about the subdivision did not, however, begin until well into the following year.
[13] More particularly, on 23 May 2014, Mr Town wrote to Mr Dennis (the solicitor for Millbrook) noting that Millbrook had approached the Trustees with a request to extend the 10 January 2015 deadline (referred to in the correspondence as the “Sunset Clause”). In his letter, Mr Town raised a number of questions in relation to Millbrook’s extension request.
[14] It seems there was no reply to this letter until, on 16 June 2014, Millbrook’s solicitor, Mr Dennis, sent an email advising that he was still attempting to obtain instructions, but noting that his client (Millbrook) “would obviously appreciate an extension of time, although it does now appear that such an extension will not be necessary”. Mr Dennis also said that Millbrook was not contemplating offering the Trustees compensation for any extension. He told Mr Town that, if Millbrook
wished to pursue the extension request, he would make further contact in the future.
2 There is no evidence before the Court from Mr Winger.
[15] In early August 2014 there was further email correspondence between the Trustees and Millbrook. This culminated in an email from Mr Longuet-Higgins to Mr Town and Mrs Buchanan dated 12 August 2014 referring to a number of matters relating to the subdivision land and noting that once works on the site were complete, later in the month, “the process of applying for titles can begin”. The email also stated;
With the delays in the native bush fencing on Turvey land, we have approached the Council to bond for the fencing which will mean we can complete the subdivision and gain title prior to the completion of the native bush fencing. This would also require us to remove any livestock from the area until the fencing is complete. Obviously this area is part of the area that Alex and you are currently grazing.
Not sure if this will be necessary at this stage, but as a contingency we should give you notice of the two months as required in the Grazing Agreement dated 14/11/2014 (attached) to surrender the area shown in red.
We would hope that this is not necessary, but if it is needed, the monthly grazing payment would be reduced pro rata and we would offer the area back to you once the fencing was complete for the balance of the Grazing Agreement term.
[16] At this point I interpolate that Mr Buchanan’s evidence was that he had had discussions with Mr Longuet-Higgins in March 2013 about an alteration to the southern and south-eastern boundaries of the CT NA134 C/308 land. It is not disputed that the proposal was that, for reasons of convenience, the Trust would give up some of its land in return for receiving other similar sized areas. As I understand it (and the evidence was rather unclear on the point) the proposed land swap in fact involved Turvey, rather than Millbrook, land, although this distinction may not have been made clear to Mr Buchanan at the time.
[17] In any event, Mr Buchanan says that nothing further was done about this proposal until October 2014, when he discussed the matter further with Mr Longuet- Higgins and “reached agreement” with him. He does not remember the date on which this occurred and nothing was recorded in writing. He said that it was also agreed that a new fence line was to be erected, at Millbrook’s expense, along the new boundary line.
[18] A plan of the new boundary, which was mapped using GPS co-ordinates, was provided to Mr and Mrs Buchanan in late October 2014. Mr Buchanan said that Mr Longuet-Higgins agreed that the entire boundary would need to be re-surveyed at the time the surveyor undertook the work required to effect the subdivision. He says that a fence was subsequently erected along some of the amended southern boundary line but the fence has not been completed and the survey work done did not reflect the new “agreed” boundary. Millbrook disputes that any agreement on the lines just described was ever concluded.
[19] An email exchange between Mrs Longuet-Higgins and Mrs Buchanan during this period (October 2014) appears to confirm that there were indeed negotiations about the boundary adjustment but that, ultimately, no agreement was reached.
[20] In particular, on 16 October Mrs Longuet-Higgins wrote to Mrs Buchanan saying that she had received advice that the boundary adjustment could be “done under the existing consent” and that the surveyors were out plotting the boundaries “as they are by GPS”. Then, Mrs Longuet-Higgins said:
We do need an indication of your interest in amalgamating all the issues into one agreement as we discussed last week. This will determine which issues we need to focus on in order to meet existing deadlines. We are currently focused on getting the covenanted areas surveyed in order to meet the 10
January deadline. If we can extend the deadline we can concentrate on getting the fencing done, then getting it surveyed.
[21] Mrs Buchanan replied the same day, saying “We will reply to you shortly
about the amalgamation of all the issues”.
[22] On 23 October, Mrs Longuet-Higgins emailed Mrs Buchanan saying:
Today the surveyors have completed their field work for the Wizard subdivision.3
We are now in a position to lodge a Survey Plan to obtain titles for these
sites.
We have 2 options now:
1. To go ahead with the above and bond for the fencing of the bush.
3 “Wizard” was the name used to refer to the subdivision land.
2.To not bond for the fencing but to complete it over the next month, and to include in the survey plan, Lot 11 and the boundary adjustment we previously discussed.
Can you please advise whether or not you agree to all the above issues being amalgamated into one agreement with one deadline.
To meet our current deadlines, we would (in the absence of anything to the contrary) have to progress the first option.
[23] Mrs Buchanan replied on 28 October raising issues about the non-completion of some fencing that was necessary for grazing purposes, asking for a copy of the survey plan and referring to Millbrook’s obligation under the sale and purchase agreement to meet all costs of the subdivision. Then, she said:
If we were to grant you an extension from 10 January to 13 April 2015, it would have to be at a certain level of consideration.
[24] On 30 October Mrs Longuet-Higgins responded, attaching a copy of the survey plan which, she said, showed the surveyed area of “the Wizard” and the surveyed area of Lot 11 as per Clause 22 of the Sale and Purchase Agreement. Then she said:
2. … This plan also shows the proposed contras of land between yourselves and Turvey Company Ltd along the southern boundary which allow for the legal boundary to follow the recently completed fence. We agree that Millbrook Estate will meet all costs which are directly related to its subdivisions. The boundary adjustment is between yourselves and Turvey Company Ltd and therefore is not covered by the clauses in the Sale and Purchase Agreement.
3. As previously offered, in your discussion with me, we would meet the costs of the boundary adjustments and fencing as consideration for the extension of the deadline. What did you consider to be “a certain level of consideration”?
We had hoped to hear your thoughts re the amalgamation of all issues into one agreement by now. If we are to get this resolved, I suggest we meet tomorrow to go through any outstanding matters.
Our solicitor will be in contact with yours next week to record all the issues around creating new titles.
[25] On 4 November the Buchanans replied. They said:
We have thought about all the issues and would really like to have everything finalised as soon as possible rather than it dragging on and on. Therefore we see no reason to have a meeting, because as things stand at the
moment, we do not see a good enough reason why we should extend the deadline pas the 10th of January 2015. We feel that two years is long enough, so unless the titles are presented at our lawyers’ offices on or before the 10th of January 2015, the land reverts to us – as per our agreement.
[26] Mrs Longuet-Higgins replied the following day, expressing her disagreement (as to the suggestion that matters were dragging on) and her dismay (at the refusal to work through the issues).
[27] Shortly after that, communications between the lawyers resumed. Thus, on
10 November 2014 Mr Dennis emailed Mr Town, saying that:
I understand that my client has made a number of representations to your client, seeking an extension of time for the creation of new titles. The current cut off date is 10 January 2015. You have previously raised this matter with me and asked whether my client was prepared to negotiate on terms for such an extension.
Apparently Fiona Longuet-Higgins and your clients have been discussing the matter. Your client hasn’t engaged for a number of months but has by email of 4 November 2014 rejected the proposal that an extension be granted. Your clients have stated by email that “…unless the titles are presented at our lawyer’s office on or before 10 January 2015, the land reverts to us as per the agreement”.
The above response has caused our client considerable concern. My client has spent a significant amount of money on the proposed subdivision and development of the land. My client is at a point where final surveys will be completed shortly and hopefully the matter can proceed to LINZ for the issue of new titles prior to Christmas.
[28] After referring to various matters contained in the sale and purchase agreement and the issue of whether the trust in respect of the subdivision land would cease on 10 January, Mr Dennis said:
We suggest that the only practical solution would be for your client to grant an extension of the date beyond 10 January 2015. We suggest that that extension be for a period of six months. Your client may have some conditions or requirements for such an extension. We invite your client to enter into negotiations for the extension of that date for a period of six months. Would you please respond indicating any instructions you may have with respect to this matter.
In the meantime my client is proceeding with the subdivision in an endeavour to have titles issued by 10 January. As soon as the plan has been finalised we will forward E-dealing details and authorities for execution by your clients.
[29] On 12 November 2014 Mr Town responded on behalf of the Trust. The letter is, however, stated to be without prejudice and its admissibility is contested.
[30] On 19 November, Mr Dennis responded and confirmed that a draft subdivision plan had now been completed and enclosing a copy of the plan. Mr Dennis advised that he was in the process of establishing an E-dealing and preparing A & I forms recording all instruments which needed to be registered. He said he would forward an A & I form to Mr Town for execution within the next week or so. He also set out the instruments which, in his view, needed to be executed, together with some further documents, which he said the Trustees might wish to have registered as part of the subdivision. Mr Dennis also sought advice from Mr Town on his client’s position in relation to two notations on the title, which appeared to be no longer relevant to the subdivision land.
[31] On 21 November 2014, Mr Town responded, raising an issue about Lot 6 and seeking that the position be clarified (namely that Lot 6 was the property of the Trustees but that Millbrook would have rights of way over that land). Mr Town also said:
Our clients’ co-operation with the subdivision and transfer of the relevant lots is strictly on the basis that your client meets its legal costs on these matters as from the date of receipt of your 10 November email. Please confirm this will be the case.
And Mr Town said that his clients had no desire to have the memorials referred to by
Mr Dennis removed from the title.
[32] On 24 November 2014, Mr Dennis responded by explaining that Lot 6 was always identified as an area of land which was vested as road, a matter which was referred to on Schedule A of the sale and purchase agreement. He also indicated that his clients agreed to meet all of the Trustees’ reasonable legal costs as requested by Mr Town. Mr Dennis then said:
I am setting up the E-dealing and will amend same to suit. I should have E-
dealing A & I’s to you shortly.
[33] On 27 November 2014, Mr Town said that the Trustees accepted the position in relation to Lot 6, namely that it would vest in the Council as a road. He enclosed information as to the way in which the Trustees’ legal costs would be arrived at, and raised a further issue of his clients’ mortgage over the property. He said:
You will need to let us know how you would propose to deal with this as regards to the subdivision.
[34] Mr Dennis responded on the same day by email, saying:
I seek that you order the partial discharge of mortgage that is necessary to release Lots 1 to 4 and 11 of DP 477368 from the ASB mortgage 9605883.3 to the ASB Bank. Alternatively would you please authorise my firm to do this.
[35] Further email correspondence on 28 November 2014 confirmed that a release of the mortgage in respect of Lot 6 would also be required. The Trustees’ solicitor said that she was checking with the Trustees and would let Mr Dennis know the position as regards the proposed approach to the mortgagee, ASB.
[36] On 1 December 2014, Mr Dennis enclosed the various documents relating to the E-dealing and other necessary authorisations. He offered brief explanations for each of the instruments included and asked that if Mr Town required “any other supporting information would you please urgently advise by fax or email and I will provide same to you by email”.
[37] On the same day, Mr Town responded by saying:
It will take some time to check all this. We will get back to you as soon as we can.
He also advised that he was asking for the Trustees’ mortgagee for the partial release
that day.
[38] On 3 December 2014, Mr Town wrote to Mr Tilley seeking further clarification on certain points, none of which were particularly significant. Mr Tilley responded the following day answering all the queries raised. He said:
We would seek an early return of the signed A & I forms as it is essential that this E-dealing be lodged shortly, to enable the titles to issue before 10th of January 2015.
[39] It appears there was no immediate response to that E-mail and Mr Dennis followed it up on 10 December 2014 asking for the documents to be returned as a matter of urgency.
[40] That day Mr Town wrote to Mr Dennis, saying:
1.Our client has a number of issues related to the subdivision including the boundaries therefor. We will let you know once further investigations are completed.
2. Christine Buchanan will be overseas as from Friday 12 December
2014 until Christmas Day.
[41] On 11 December 2014, Mr Dennis replied by letter at some length. He noted, inter alia, that with the exception of the Trustees’ properly signed A & I forms, “we are ready to lodge the E-dealing”. He said any further delay in the production of the signed A & I forms will be “the sole cause of titles not issuing by 10th of January
2015, if that should occur”. Mr Dennis went on to express views on the Trustees’
contractual obligations and suggesting that the Trustees were in breach of their obligation to co-operate. He also foreshadowed the possibility of legal proceedings in the event that the issue of new titles was prevented or hindered by the delays of the Trustees.
[42] The following day Mr Town responded, raising new queries and requiring responses to them before the Trust would consider executing the various documents required for the subdivision.
[43] In a further letter written the same day, Mr Town said that his client had raised legitimate concerns and questions regarding the subdivision, that they were not preventing the issue of title but rather making sure all matters were in order before signing any documents. He said that they had approached ASB Bank for the required partial discharge and, notwithstanding following up the request twice, it was not yet available, so registration was not possible, even in the event that everything
was in order and agreed to. After commenting that the threat of litigation was inappropriate and would be resisted, he said:
Our client is prepared to co-operate and as needed negotiate a solution acceptable to all parties and we would have thought that would be a more productive line to take.
[44] Mr Dennis replied by email on 15 December 2014, responding to the five specific matters raised in Mr Town’s letter in some detail. In relation to the boundary issue, Mr Dennis said:
The boundary between Turvey company land and your clients’ land remain [sic] unchanged from the boundaries contained in your clients’ existing title. There is absolutely no change along the southern and south-eastern boundary. Attached is plan reference SP04 reference number 7203. This identifies proposed changes along the southern and south-eastern boundary, changes which have not been put into effect at this point of time. You will note from diagram AA that there are no changes along these boundaries. You will also note that there is no exchange of land area in your E-dealing. My client had offered to complete this exchange of land. An agreement was not reached and the matter was not pursued. My clients would still be willing to complete the exchange of land in the future.
The urgency of the whole matter was, understandably, stressed again.
[45] On 18 December 2014, Mr Dennis emailed Mr Town, confirming that his clients had deposited a sum into Mr Town’s trust account in payment of his legal fees. He went on to say:
We note that we have not received any further queries from you since our explanatory emails of 16 December. Please now urgently return your required documents to my office, by email in the first instance.
[46] Mr Town responded on 19 December 2014 by saying that he was awaiting instructions and would be in touch.
[47] On 23 December 2014, Mr Town wrote again to Mr Dennis raising several minor matters, the most significant of which was that:
Our client advises that it was assured that the proposed boundary changes were to be incorporated in the resurveying of the land. Why was that not completed? If it is not completed now when will it be?
[48] ASB’s consent to the partial discharge of the mortgage (which was dated 16
December 2014, a week earlier) was attached to the letter.
[49] Mr Dennis responded by email the same day. In relation to the boundary issue, he said:
Your client is fully aware why the proposed boundary changes did not proceed. My client offered to complete the boundary changes if, and only if, your client would agree to an extension of the 10th January 2015 date for the issue of new titles. Your client refused to grant the extension. Accordingly the proposed boundary changes did not proceed. Your client is fully aware of this. Your client and Fiona Longuet-Higgins exchanged email correspondence to this effect. We hold the chain of emails, which of course, will be presented as evidence in any court action.
[50] The email chain to which Mr Dennis refers has been set out above. In my view it entirely supports the contention made by him in this email.
[51] Mr Town responded just before close of play that day, rejecting the suggestion that any blame could be attributed to the Trustees. It seems that Mr Dennis did not receive the email before he left for the Christmas vacation.
[52] On 8 January 2015 Mr Town sent a short email to Mr Dennis, inquiring:
One further question at this stage
Is a Consent Notice to be registered v Lot 5?
[53] The following day, Mr Dennis wrote to Mr Town noting that he had not received any further correspondence since the substantive email of 23 December
2014. Mr Dennis said that he required the Trustees to email by return all properly executed documentation, including the A & I forms, “before 5.00 pm today”. The possibility of legal proceedings was again raised.
[54] Mr Town responded by disputing the contention that there had been no subsequent correspondence and referring to an email he had sent the day before. He said:
Our client has justifiable concerns regarding the subdivision which have been outlined and remain answered (or at least some of them do).
[55] Mr Town has confirmed in his evidence that the word “answered” should have been “unanswered”. The letter does not, however, say what his “unanswered” concerns were and nor does he subsequently identify them in his evidence. Indeed, his email of 8 January suggests that there was only one outstanding query which, as Mr Dennis subsequently advised, had previously been answered by Millbrook on 19
December.
[56] And so the 10 January 2015 deadline came and went. Although there was further correspondence between Mr Town and Mr Dennis the only item of note is Mr Town’s letter of 30 January in which he referred to four outstanding issues which, he said, needed to be addressed before any final resolution could be achieved. Those “issues” were as follows:
(a) A demand that the boundary adjustment be made and resurveyed
“before it will release the authority and instruction documents to you.”
(b)A new demand that Lot 11 remain as part of its title “compensation for all the difficulties it has suffered”;
(c) A demand for a copy of the consent notice (which had been provided on 19 December);
(d)A demand that the “fencing” be completed “before the documents will be released.”
[57] No resolution was achieved. These proceedings were filed on 12 February
2015.
Discussion
[58] It is against the above evidentiary background that I now turn to consider Millbrook’s claim and the Trustees’ defences. The starting point is, of course, that it is not disputed that the relevant subdivision documents were not signed by the Trustees and the subdivision has not proceeded. Nor is it disputed that the documents said by Millbrook to be necessary to effect the subdivision were in the
possession of the Trustees some time before the 10 January 2015 deadline. Rather, the central issue is whether the Trustees were at least arguably justified in refusing to sign the documents.
[59] The first question is whether it is arguable that the Trustees did not breach their undertaking to assist Millbrook “in all respects and to sign all documents and to do all acts as required to enable the purport of the agreement and the subdivision to be completed”. This requires an analysis of the reasons given by them for not executing those documents.
The boundary issue
[60] I deal first with the boundary issue. I have little hesitation in finding, even at this summary judgment stage, that no agreement on the proposed boundary change was reached, for the reasons that follow.
[61] First, Mr Buchanan’s rather vague evidence as to the existence of such an agreement is contradicted by the contemporaneous documentary record, the salient parts of which I have set out above. At the very time he says an agreement was reached between himself and Mr Longuet-Higgins, his wife and Mrs Longuet- Higgins were engaged in negotiations on the same issue. It seems to me quite clear that those negotiations were ultimately unfruitful.
[62] Secondly there is no evidence before the Court that Mr Buchanan had the authority of all the trustees to enter such an agreement on the Trust’s behalf.
[63] Thirdly, Mr Town’s own evidence suggests that he did not consider such an agreement existed. In particular, he gives as a reason for the delay in obtaining the partial of discharge of mortgage from ASB his desire to be sure that the subdivision plan accurately recorded the boundaries and that “everything was in order”. Given the fact that Mr Town did, in fact, obtain the partial discharge on 16 December 2014, it can only be assumed that he did indeed consider that the boundaries were accurately recorded and that everything was in order. Mr Town is of course not just the Trust’s legal adviser but also a Trustee.
[64] Fourthly, there is the point that the land affected by the boundary proposal was not owned by Millbrook but by Turvey. Even if (contrary to the above) an agreement about the boundary was reached, the parties to that would be the Trust and Turvey. It is difficult to see how the Trust’s obligation to perform the Sale and Purchase agreement could be affected by an agreement reached between the Trust and a third party. I accept, however, that this difficulty might be able to be overcome by repleading.
[65] And lastly, there is the Statute of Frauds problem. There is no dispute that ss 24 and 25 of the Property Law Act 2007 (the Act) prima facie apply and that any agreement affecting the boundaries was required to be in writing. Similarly, there is no dispute that there is no such agreement here. Accordingly, and even if the four points made above are somehow mistaken, the Trust is forced to rely (as it does) on the doctrine of part performance, which is preserved by s 26 of the Act. For completeness, therefore, I briefly address that aspect of the defence below.
Part performance
[66] As noted above, the Trust says that the boundary variation agreement included the terms that:
(a) Millbrook would be responsible for all fencing costs on the revised boundary;
(b)Millbrook would re-survey the boundaries in order that they could be reflected in the new certificate of title.
[67] Then, the Trust says that Millbrook has partly performed this variation agreement, by erecting fencing along some of the new boundary. But because Millbrook has not completed the fencing or done the resurveying work necessary to give complete effect to the variation it is in breach. That breach is said to justify the Trust refusing to perform its part of the original (but varied) agreement by facilitating the subdivision. More specifically, the Trust says that they were unable to facilitate the subdivision while the new boundary remained un-surveyed.
[68] There are, however, several difficulties with this position.
[69] The leading New Zealand authority on part performance is TA Dellaca Limited v PDL Industries Limited.4 There, Tipping J identified a conflict in the authorities about whether acts of part performance must have been done in performance of the contract or merely in reliance on it. After reviewing those authorities, he concluded that the narrower view is correct, and framed the test (at
109) as follows:
1. Was there a sufficient oral agreement such as would have been enforceable but for the Act?
2. Has there been part performance of that oral agreement by the doing of something which:
(a) clearly amounts to a step in the performance of a contractual obligation or the exercise of a contractual right under the oral contract; and
(b) when viewed independently of the oral contract was, on the probabilities, done on the footing that a contract relating to the land and such as that alleged was in existence.
3. Do the circumstances in which that part performance took place make it unconscionable (fraudulent in equity) for the defendant to rely on the Act?
[70] Even assuming (contrary to my findings above) that the first part of this test is met and there was a sufficient oral agreement, the first problem is that the erection of the fence is not an act that is unequivocally referable to the alleged agreement. In particular, Mrs Longuet-Higgins’s email of 30 October 2014 clearly suggests that the new fencing preceded the discussions about the alteration of the boundary.
[71] Secondly, it is not the Trust that has partly performed the agreement. The point of the doctrine is that it prevents (usually) a defendant from unconscionably relying on the Statute of Frauds in circumstances where (usually) a plaintiff has, in reliance on the agreement, partly performed it, to his detriment. The present circumstances seem to me to involve the converse of that. Here, it is the defendant Trust that seeks to prevent the plaintiff company, Millbrook, from relying on the
Statute of Frauds because the plaintiff has (allegedly) partly performed the
4 TA Dellaca Limited v PDL Industries Limited [1992] 3 NZLR 88.
agreement by putting up fences along a portion of the boundary. That position appears to me to be illogical. The Trust has expended neither labour nor time nor money further to the alleged agreement. The reality is that the Trust did nothing at all. On the evidence before me therefore, there is no relevant reliance by, and no relevant detriment to, the Trust. There is no basis for the operation part performance doctrine here.
Other reasons for non-performance
[72] On the basis that the boundary issue does not, as a matter of fact or law, afford the Trust a defence, the question becomes whether there were any other reasons that might justify its refusal to facilitate the subdivision.
[73] In my view, Mr McLennan appropriately accepted before me that, aside from the boundary issue, none of the other issues raised by the Trust (or on its behalf) would have justified refusing to sign and return the sub-division documents. The correspondence shows that Mr Dennis responded quickly and appropriately to every query raised.
[74] As previously noted, Mr Town reiterated in his affidavit that he accepts that “some” of the Trustees’ “issues” raised had been satisfactorily answered by Millbrook before 10 January 2015, but said that a number were not. But there is nothing in the evidence before me that suggests that there were any real matters outstanding at that date. This is made clear when one considers Mr Town’s letter of
30 January 2015. In terms of the four issues said there to be outstanding:
(a) there was no agreement about the boundary adjustment for the reasons
I have already given;
(b)the demand made by the Trust in relation to Lot 11 was entirely new and had nothing to do with whether the subdivision could proceed;
(c) the consent notice had been provided to the Trust well over a month before;
(d) the “fencing” demand falls at the boundary agreement hurdle.
[75] The only further “unresolved” issue to which Mr Town specifically refers in his affidavit relates to Millbrook’s obligation to pay the Trust’s legal costs and the fact that Millbrook has refused to pay the last invoice which was dated 2 February
2015. In that respect Mr Town says:
If the Trust had been prepared to sign the documentation – which it was not
– they could not have been released in any event until all its costs were paid by the plaintiff.
[76] There seem to me to be are a number of difficulties with that position, the principal of which being that the 2 February invoice was dated well after the time for compliance by the Trustees with their obligations and well after the 10 January deadline. I simply do not accept that this ex post facto refusal to pay justifies the Trust’s position.
Other matters of defence
[77] In my view there is no substance in the collateral contract and estoppel “defences”. My finding that there was no oral agreement reached between Mr Longuet-Higgins and Mr Buchanan suffices to deal with the collateral contract defence which, in any event, would face other obstacles. An estoppel defence encounters the same difficulty as the part performance defence; even on the defendants’ version of the facts there is no legally relevant reasonable reliance by, or detriment to, them. And the issue of whether the trust over the subdivision land continued past 10 January 2015 seems to me to be irrelevant given my conclusion that the Trust was in breach of its obligations at that date.
[78] Lastly, there is the issue of whether or not a remedy of specific performance is appropriate in the summary judgment context. Mr McLennan referred in particular to the decision in Lyons v Stewart5 and the commentary to rule 12.2 of the District Court Rules (which relates to summary judgment and specific performance). But in my view, all that case and the commentary do is point out that, at the
summary judgment stage, a court may not have all the material before it that is
5 Lyons v Stewart (1998) ANZ ConvR 94.
necessary to exercise its remedial discretion as between specific performance and damages.
[79] I acknowledge that cases where specific performance has been ordered by way of summary judgment are not common. But none of the usual reasons were advanced by Mr McLennan in support of a submission that it would be an inapt remedy here. And in the circumstances of this case I consider that it would be just and equitable to order specific performance. More particularly, I note that such a remedy is more common where the subject matter of the contract is (as here) land. Millbrook has gone to considerable expense and effort to effect the subdivision. Mr Longuet-Higgins says that the company has spent between $100,000 and $200,000 in that endeavour. Retaining the benefit of the subdivision land is, plainly, of some importance to it.
Conclusion
[80] For all the foregoing reasons Millbrook has satisfied me that the Trust does
not have an arguable defence to Millbrook’s claim. By way of summary:
(a) the Trust’s contention that the Sale and Purchase agreement and their obligation under it to facilitate the subdivision was the subject of an oral variation (or an oral collateral contract) is at odds with the documentary record and (it seems) Mr Town’s own assessment of the matter;
(b)there is no evidence that Mr Buchanan had the authority of all the trustees to enter such a variation agreement;
(c) any such variation agreement was required to be in writing and it was not;
(d) the doctrine of part performance has no application;
(e) the evidence does not disclose any other outstanding issues as at 10
January 2015 (or, indeed, immediately before the 2014 Christmas
break) that would justify the Trust refusing to facilitate the subdivision by executing and returning the relevant documents to Millbrook (indeed, on my analysis there were no outstanding issues at all);
(f) there are no other tenable defences;
(g)no reasons have been advanced that would warrant the court refusing to exercise its discretion in favour of an order for specific performance.
[81] Millbrook is entitled to summary judgment and an order for specific performance accordingly. The defendant trustees are to execute and deliver up all documents that are said by Millbrook or its advisers to be required in order to effect the subdivision of CT NA134 C/308 referred to in clause 21, and the exercise of the option referred to in clause 22, of the Sale and Purchase agreement dated 5
November 2012.
[82] If amendment to, or further specificity in, the terms of this order is required or if ancillary directions are necessary, Mr Black may submit a memorandum.
[83] The Trust is to pay Millbrook’s costs on a 2B basis in the usual way.
Rebecca Ellis J
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