Mills v Dickinson

[2019] NZHC 2431

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2019-435-8

[2019] NZHC 2431

BETWEEN

RICHARD WILLIAM MILLS and ASHLEIGH MAREE GOLDEN
Plaintiff

AND

SUSAN MAY DICKINSON

Defendant

AND

WCM LEGAL

Third party

Hearing:

12 September 2019

Appearances:

A Davie for plaintiffs J Porter for defendant

L McKeown for third party

Judgment:

25 September 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Events leading to the dispute

[1]                   The defendant, Susan Dickinson, owns a property on Cologne Street in Martinborough in the Wairarapa. The plaintiffs, Richard Mills and Ashleigh Golden, also live in Martinborough with their young child, where they rent their home.

[2]                   In late 2018, Mr Mills and Ms Golden were approached by Ms Dickinson. They knew each other.   Mr Mills had gone to school with Ms Dickinson’s son.     Ms Dickinson was aware that Mr Mills and Ms Golden were looking to buy their own home in the town.

MILLS v DICKINSON [2019] NZHC 2431 [25 September 2019]

[3]                   The evidence of Mr Mills and Ms Golden on the one hand and Ms Dickinson on the other as to exactly what was said in the discussion that followed, and in subsequent exchanges, about the proposed transaction, differs. It will be necessary to return to this.

[4]                   However, it is clear, first that Ms Dickinson set the asking price for her property at $400,000, second that Mr Mills and Ms Golden regarded that price as acceptable, and third that Ms Dickinson made it plain that it was her intention to buy a another property in the area (with her son) from a Mr Bruce McKenzie and that she did not want to find herself in the position of having sold her home but being unable to buy Mr McKenzie’s property.

[5]                   Both parties engaged their solicitors. Ms Dickinson instructed WCM Legal in Masterton (WCM) and Mr Mills and Ms Golden instructed Davidson Armstrong & Campbell in Waipukurau (DAC).

[6]                   DAC prepared a draft agreement for the sale and purchase of the property. On 28 November 2018, they forwarded this to WCM. It was already signed by Mr Mills and Ms Golden.

[7]                   When WCM replied, the only issue raised on Ms Dickinson’s behalf concerned the date for settlement. In an email, also dated 28 November 2018, WCM proposed to change the settlement date from 30 April to 1 April. This was said to be important from Ms Dickinson’s perspective because that would mean the contract for the sale of her property to Mr Mills and Ms Golden aligned with an agreement she and her son had entered into for the purchase of Mr McKenzie’s property. DAC replied the same day agreeing to the change.

[8]                   On 4 December 2018, the agreement for sale and purchase  was signed by  Ms Dickinson. It included three important terms:

(a)a term for the benefit of Mr Mills and Ms Golden providing that agreement was subject to them obtaining a satisfactory builder’s report;

(b)a further term for the benefit of Mr Mills and Ms Golden providing that agreement was subject to their securing finance; and

(c)the following term, expressed to be for the benefit of Ms Dickinson:

19.0 This agreement in conditional upon the vendor obtaining an unconditional agreement for the purchase of a replacement property within 15 working days from the date of this agreement. This condition is inserted for the sole benefit of the vendor.

[9]                   On 17 December 2018, DAC wrote to WCM saying that the condition relating to the obtaining of a building report was satisfied and that they would advise in relation to the condition relating to finance in due course.

[10]               On 19 December 2018, WCM wrote to DAC saying that the condition in cl 19 was satisfied and enquiring as to where things were regarding finance.

[11]               Later on 19 December 2018, DAC wrote to WCM saying that the condition relating to finance was satisfied and that “accordingly, the contract [is] unconditional”. The letter went on to anticipate settlement on 1 April 2019.

[12]               Conceivably because Mr Mills and Ms Golden were aware that Ms Dickinson and her son had not secured the McKenzie property, Mr Oliver of DAC telephoned Ms George of WCM later still on 19 December 2018 to check that everything was on track for settlement.   Mr Oliver’s file note of the telephone conversation records   Ms George as confirming that that was the case. The words Mr Oliver says Ms George used were “Nope all unconditional”. This (hearsay) evidence is unchallenged.

[13]               On the basis that there was an unconditional agreement, on 21 December 2018 Mr Mills and Ms Golden paid a $30,000 deposit to WCM.

[14]The Christmas and New Year period went by.

[15]               Mr Mills and Ms Golden’s evidence is that, on 17 January 2019, Ms Dickinson told them that she believed that her property was worth more than $400,000, and in effect that she was looking for a higher price. Mr Mills and Ms Golden say that they

were shocked by this, believing as they did that they had  a concluded contract.     Ms Dickinson denies this evidence.

[16]               Mr  Mills  and  Ms  Golden  came  to  understand  around  this  time  that   Ms Dickinson had obtained market appraisals for the property that suggested its value was greater than $400,000 and that the agreement Ms Dickinson and her son had apparently entered into to buy the McKenzie property was not to proceed. Rightly or wrongly, Mr Mills and Ms Golden came to believe that Ms Dickinson and her son were looking to purchase a more expensive property and wanted more money to complete that purchase. Ms Dickinson denies she wanted more money for her property.

[17]               Mr Mills and Ms Golden also had some exchanges with Ms Dickinson’s son, but I do not regard those as adding materially to the picture.

[18]               It was at this point that the parties’ solicitors became involved and the affidavit evidence contains exchanges between them.

[19]               No useful purpose would be served by describing these exchanges in detail. It is enough to say:

(a)On behalf of Mr Mills and Ms Golden, DAC maintained the position that there was an unconditional contract in place that was binding on both parties, and took all steps available to them to settle including repeatedly confirming Mr Mills and Ms Golden’s wish and capacity to settle and proffering all necessary documentation.

(b)On various bases, first WCM and, after Ms Dickinson changed solicitors, Sievwrights Law in Wellington, disputed the enforceability of the contract on her behalf.

[20]               In the end, the position adopted by Ms Dickinson is best captured in Sievwrights Law’s letter of 15 February 2019, which was in these terms:

We now act for Sue Dickinson in this matter.

We have taken careful instructions. It is clear there is no unconditional contract, as at all times the contract was conditional upon our client obtaining an unconditional offer to purchase another property — which has not happened.

Your client was at all times fully aware of our clients position in this regard, and that she would not sell her property unless another property was secured. The deposit has been returned. This matter is now at an end.

[21]               Ms Dickinson’s affidavit sworn in opposition to Mr Mills and Ms Golden’s application for summary judgment is presumably directed at the contention encapsulated in Sievwrights Law’s letter.

[22]Three features of Ms Dickinson’s affidavit should be mentioned at the outset:

(a)First, it contains a considerable amount of peripheral material that is not germane to the contractual dispute.

(b)Second, it deals in considerable detail with the arrangements between Ms Dickinson and her solicitors, to which Mr Mills and Ms Golden were, of course, not privy.

(c)Third, the overall flavour of Ms Dickinson’s evidence is that WCM were at fault throughout by interpreting her instructions incorrectly; not including a term in the contract that was capable of protecting her interests; and conveying to DAC that cl 19 was satisfied when that was not the reality of the situation or her instructions to them.

[23]               To the extent that Ms Dickinson’s affidavit might be said genuinely to be relevant to the dispute between the parties, she says that she conveyed to Mr Mills (and by implication also to Ms Golden) that she was only prepared to sell her house on the terms proposed to them provided she and her son had unconditional arrangements to purchase the McKenzie property, and that as a result of health issues she experienced around this time she withdrew from that purchase.

[24]               So, the essential defence Ms Dickinson would wish to run at trial is that it was part of the arrangement that the sale and purchase of her property would only occur if

she (and her son) entered into an unconditional agreement to purchase an alternative property.

Summary judgment principles

[25]This being an application for summary judgment, the burden is on the plaintiffs

— Mr Mills and Ms Golden — to make out their case. The established principles in relation to summary judgment were summarised by the Court of Appeal in Krukziener v Hanover Finance Ltd:1

[26]                The principles are well settled. The question of a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). the Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). the Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).

[27]                Under r 141A the defendant need not file a statement of defence. The onus remains on the plaintiff, and summary judgment will be denied if on the hearing of the application it appears that there is an issue worthy of trial.

[26]            The burden then is on Mr Mills and Ms Golden to satisfy the Court — so that it is left with no real doubt or uncertainty — that Ms Dickinson has no defence to their claim.

Discussion

[27]            In advancing the argument that there is a case to go to trial, Mr Porter’s focus was on avoiding a perceived difficulty with the terms of cl 19 of the sale and purchase agreement. As a starting point, he acknowledged the parol evidence rule, which is that in the case of complete written agreements, extraneous evidence tending to contradict

1      Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162.

the terms of the same will not generally be admitted. He sought to bring this case within the scope of several contractual remedies to avoid the application of cl 19.

[28]So, he suggested:

(a)that the written agreement did not accurately reflect the agreement between the parties and that Ms Dickinson may be entitled to contend for rectification of the agreement;

(b)that there was a collateral oral contract between Ms Dickinson and  Mr Mills (but not Ms Golden), which included an unlimited condition that Ms Dickinson obtain an unconditional sale and purchase agreement for a replacement property; or

(c)that Ms Dickinson mistakenly believed the sale and purchase agreement contained such an unlimited condition and she could therefore seek relief for contractual mistake under s 24 of the  Contract and Commercial Law Act 2017.

[29]            There are several issues with those suggestions, not least of which is s 24 of the Property Law Act 2007, which requires contracts for the sale of land to be in writing. However, it is unnecessary to address any of those arguments in order to resolve this case as they do not go to the essential point.

[30]            Mr Mills and Ms Golden’s case is that the parties have an unconditional and enforceable contract. Ms Dickinson contends that they do not, essentially because she and her son never entered into an unconditional contract to acquire the McKenzie property. It is common ground that they did not do so. On the face of the agreement for sale and purchase, Ms Dickinson would have been perfectly entitled to treat herself as released from any obligation thereunder had she simply relied on cl 19 and communicated the fact that she and her son had not managed to secure a contract for the acquisition of the McKenzie property.

[31]            Clause 19 is expressed to be for her benefit. The 15 working days merely specified the period after which Ms Dickinson could cancel the contract for failure of the condition. The period certainly did not mean the contract would become unconditional after 15 working days irrespective of whether the condition was fulfilled. The clause imposed no obligation on Ms Dickinson.

[32]            Instead of taking advantage of cl 19 to release herself from the sale and purchase agreement, through her solicitors, she communicated the opposite — before the expiry of the 15-working-day period. In other words, it is not the terms of the contract that are in issue here, but Ms Dickinson’s confirmation, through her solicitors, that the material cause — clause 19 — was satisfied.

[33]In order to deal with that point, Mr Porter advanced two arguments.

[34]            First, he sought to demonstrate that Ms Dickinson did not instruct or authorise WCM to confirm that cl 19 had been satisfied. It is plain that in relation to this issue there will be a clash of evidence between Ms Dickinson and her former solicitors, WCM. It is equally plain that that clash cannot be resolved in the context of this summary judgment application.

[35]            In my view, even if that clash were to be resolved in her favour, that would not afford Ms Dickinson a defence to Mr Mills and Ms Golden’s claim. As an elementary matter of the law of agency, a principal is bound by the acts of his or her agent within the agent’s actual or ostensible authority. It could scarcely be clearer law that, if a party engages a solicitor to act in relation to a transaction involving the sale and purchase of land, it is within the solicitor’s ostensible authority to confirm fulfilment of a condition such as cl 19.

[36]            So, in other words, either Ms Dickinson authorised WCM to confirm that cl 19 was satisfied, in which case WCM had actually authority to do so, or, by engaging WCM in relation to the transaction, Ms Dickinson conferred on them ostensible authority. In either case, Ms Dickinson is bound by their action in confirming the contract.

[37]            That is subject to one final contention advanced by Ms Dickinson through  Mr Porter. It is a point he emphasised. He submitted that the evidence demonstrated that Mr Mills and Ms Golden knew or suspected that the term had not been satisfied. In relation to this he said that that would explain why Mr Oliver telephoned Ms George to confirm things on 19 December  2018.  The relevance of this contention is that  Mr Mills and Ms Golden may only rely on Ms George’s ostensible authority so long as they acted in good faith and without reasonable grounds to suspect that she lacked authority.2

[38]            In my view, that contention does not advance matters greatly. Mr Mills and Ms Golden may or may not have known or suspected that Ms Dickinson and her son had not purchased the McKenzie property. For present purposes, I am prepared to proceed on the basis that they did know or suspect that. That may mean that they were surprised by her confirmation that cl 19 was satisfied. But of course, she may have instructed her solicitors to confirm satisfaction of cl 19 irrespective of whether she and her son had managed to acquire the McKenzie property. She may have done so, even though they had not purchased the McKenzie property, for any number of reasons. For example, because she had decided in the meantime that she wished to sell her property but had lost interest in the McKenzie property. Confirmation of cl 19 in such circumstances would effectively involve a waiver.

[39]            The short point is, Ms George confirmed — twice — that cl 19 had been fulfilled, and Mr Mills and Ms Golden were entitled to rely on that confirmation. In those circumstances, any knowledge they might have had about the status of the intended purchase by Ms Dickinson and her son of the McKenzie property was not grounds for suspecting that Ms George lacked authority. For these reasons, I am satisfied to the necessary standard that Ms Dickinson has no tenable defence.

[40]            The only remaining question is whether Mr Mills and Ms Golden are entitled to specific performance. Specific performance is an equitable remedy, which is at the discretion of the Court.  However, it is well established that the Court will usually

2      Ceres Orchard Partnership v Fiatagri Australia Pty Ltd [1995] 1 NZLR 112 (HC) at 117; and

R and E Tingey and Co Ltd v John Chambers and Co Ltd [1967] NZLR 785 (SC) at 787.

exercise its discretion to enforce a contract for the sale and purchase of land.3 The law treats land as unique, and regards damages as an inadequate remedy for a purchaser.

[41]            Mr Porter argued against specific performance on the basis that while the Cologne Street property is unique from Ms Dickinson’s perspective, she having lived in the property for some 15 years, the property is not unique from the perspective of Mr Mills and Ms Golden, who could purchase any number of similar properties in the area. Mr Porter also drew comparisons between the situations of Ms Dickinson and Mr Mills and Ms Golden. He characterised Ms Dickinson as an elderly widow with limited earning potential who would be losing her home, and Mr Mills and Ms Golden as young professionals who are already in rental accommodation and could easily purchase another property.

[42]            I am satisfied there is nothing in Mr Porter’s submissions on this point. The point of ascertaining the uniqueness of the subject matter of the contract is to determine whether damages would be an inadequate remedy. The exercise is conducted from the perspective of the plaintiff, who is the aggrieved party. It is not a balancing exercise between the interests of both parties. The position of the plaintiffs is only relevant to the extent there is a suggestion they come to court without clean hands. There is no basis for such a contention here.

[43]            Although Ms Dickinson might not see it this way, I am satisfied that Mr Mills and Ms Golden have an equally strong attachment to the property. It will be the first home that they own. Their evidence is that they had been in the market for some time and this property suited them and was within their price range. They had even purchased accoutrements for the property in anticipation of moving in. I have no doubt that it is just and equitable to compel Ms Dickinson to fulfil her contractual obligation to settle the sale and purchase agreement.

Result

[44]            In my judgment, Mr Mills and Ms Golden are entitled to the summary judgment in terms of the order for specific performance sought by them.

3      Loan Investment Corporation of Australasia v Bonner [1970] NZLR 724 (PC) at 735.

[45]            I reserve costs, not having heard from counsel as to these. If counsel are unable to resolve costs, as I would expect them to do, they may come back to the Court by memoranda.

Associate Judge Johnston

Solicitors:

Treadwells, Wellington for plaintiffs Sievwrights Law, Wellington for defendant Duncan Cotterill, Wellington for third party