Murray v Pepi
[2017] NZHC 2774
•13 November 2017
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI TERENGA PARĀOA ROHE
CIV-2010-488-731 [2017] NZHC 2774
BETWEEN SHANE GRAHAM BRUCE MURRAY
Applicant
AND
CHRISTINE ANNE PEPI Respondent
Hearing: 18 October 2017 Appearances:
N S Tabb for the Applicant
W D Woodd for the RespondentJudgment:
13 November 2017
JUDGMENT OF VAN BOHEMEN J
This judgment was delivered by me on Monday 13 November 2017 at 4.00 pm
Pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date:…………………………
Counsel/Solicitors:
N S Tabb, Barrister, North Harbour, Auckland
W D Woodd, Boyle Mathieson, Henderson
MURRAY v PEPI [2017] NZHC 2774 [13 November 2017]
Introduction
[1] The applicant, Shane Murray, seeks orders to give effect to consent orders made by the Court on 12 April 2011 (2011 Orders) ordering the sale of the property at 200 Nook Road, Parua Bay, in Northland (the Nook Road property) which he co- owns with the respondent, Christine Pepi. Ms Pepi has refused to sign a sale and purchase agreement for the property, despite an agreement entered into between Ms Pepi and Mr Murray in December 2004 (the 2004 Agreement) requiring the sale of the Nook Road property and despite the 2011 Orders.
[2] Ms Pepi has applied for a stay of the 2011 Orders on the grounds that:
(a) Mr Murray is estopped from proceeding with the sale of the Nook Road property until Ms Pepi has had a reasonable opportunity to complete a subdivision of the property, allowing her to take title to and continue to occupy a section of the land on which is built a small cottage where Ms Pepi has been residing; and
(b) The proposed sale price does not represent true market value.
Background
[3] This case concerns a longstanding dispute between Ms Pepi and Mr Murray over the Nook Road property which comprises 3.5 hectares of coastal land in Northland. Ms Pepi has lived on the Nook Road property for well over 20 years, dating from before she met Mr Murray. The main dwelling on the property was the matrimonial home from Ms Pepi’s marriage to her former husband, Cyril Pepi.
[4] When Ms Pepi was under pressure to sell the Nook Road property as part of her matrimonial settlement with Mr Pepi, Mr Murray bought out Mr Pepi’s interests in the property. Mr Murray had been in a relationship with Ms Pepi and they had a daughter who was born a few months before Mr Murray bought into the Nook Road property. The relationship between Ms Pepi and Mr Murray did not last but they continued to remain involved in each other’s lives because of their daughter and because of their shared interests in the property.
[5] The terms on which Mr Murray bought into the Nook Road property were recorded in the 2004 Agreement between Mr Murray and Ms Pepi. The 2004
Agreement provided that either Ms Pepi or Mr Murray could buy out the other’s interest in the Nook Road property for an agreed price within the first two years of the Agreement. If neither exercised the option to purchase within that two-year period, the Nook Road property was to be placed on the open market for sale with a minimum price of $1,000,000.
[6] The initial two-year period expired on 13 December 2006 with neither party exercising the option to purchase. There were discussions about putting the Nook Road property up for sale as envisaged in the 2004 Agreement but no progress was made. In the meantime, Ms Pepi, with Mr Murray’s assistance, converted a shed on the property into a cottage in which Ms Pepi and their daughter could live.
[7] On 12 April 2011, following an application by Mr Murray for summary judgment seeking orders directing the sale of the property, Associate Judge Bell made by consent the 2011 Orders directing the sale of the Nook Road property at a price not less than $1,000,000, with provision for progressive reductions in the price if offers for the property did not reach the minimum price of $1,000,000.
[8] Despite the 2011 Orders, no active steps were taken to market the Nook Road property until November 2013, when the property was listed with Bayleys Realty Group (Bayleys) for sale. Some marketing of the property was undertaken after listing but there was no offer to purchase the property between its initial listing with Bayleys and the offers made in July 2017, which led to the current application.
[9] At some point in 2015, Ms Pepi conceived the idea of subdividing the Nook Road property to create a separate title for the land on which the cottage sits. In March 2016, after some initial investigations dating from October 2015, Ms Pepi instructed a surveying firm, Simpson Shaw, to proceed with a subdivision application.
[10] In June 2016, Mr Murray reactivated efforts to sell the Nook Road property
and, to that end, entered into a new listing agreement with Bayleys. At Mr Murray’s
request, Ms Pepi also signed the listing agreement. The listing agreement and subsequent marketing material made no mention of a possible subdivision of the property.
[11] In October 2016, Mr Murray visited the offices of Simpson Shaw and was briefed on the progress made with the subdivision. At that meeting, he signed the application for resource consent for the subdivision which had been prepared at Ms Pepi’s instructions for lodgement but needed the signature of an owner of the property.
[12] The subdivision application was formally accepted by the Whangarei District Council in December 2016 but was put on hold in early 2017 when the Council advised that it needed more information. The application remains on hold.
[13] In July 2017, Michelle Dickens and Angus Wood made offers to purchase the Nook Road property, first for $925,000 and then for $950,000. They subsequently made an offer of $1,000,000 (Dickens-Wood offer) for the purchase of the property upon advice from Bayleys that an offer of less than $1,000,000 would not be accepted. Mr Murray accepted the Dickens-Wood offer and signed the sale and purchase agreement based on that offer. However, Ms Pepi refused to sign.
The positions of the parties
Mr Murray’s contentions
[14] Mr Murray said he had bought into the Nook Road property as a favour to Ms Pepi on the clear understanding he would get his money out within a reasonable period. That is why the agreement provided that the property was to be sold for
$1,000,000 if neither party had exercised the option to buy the other out within the initial two-year period.
[15] Mr Murray has wanted to sell the property for the past 11 years but the minimum agreed sale price of $1,000,000 could not readily be achieved in previously-prevailing market conditions. It had not been sensible to market the property when real estate prices had been depressed, especially following the Global
Financial Crisis. The depressed state of the property market had also delayed the marketing of the property after the 2011 Orders had been made.
[16] Mr Murray’s acceptance of Ms Pepi remaining in the property and his assistance in helping her to convert the shed into a cottage were in the context of the depressed state of the property market and did not change the agreement to sell the property when market conditions improved.
[17] The efforts to market the property in 2013–2014 had not resulted in any offers to buy the Nook Road property and even the renewed efforts to market the property in 2016–2017 had resulted in only one offer — the Dickens-Wood offer — that met the minimum agreed price set in December 2004 and reaffirmed in the 2011
Orders.
[18] The Dickens-Wood offer had been made following a renewed marketing effort by Bayleys, based on the listing agreement that Ms Pepi had signed. The listing agreement made no mention of the possibility of subdivision and the idea of subdivision was not discussed with the Bayleys agents at or around the time the listing agreement was signed.
[19] Mr Murray’s evidence was that he had never agreed to the subdivision of the Nook Road property and Ms Pepi had deliberately concealed her intentions regarding the subdivision from him. He said that his knowledge of the subdivision had resulted from his own investigations and did not change the commitment to sell the property if the agreed purchase price of $1,000,000 could be achieved.
[20] Mr Murray said his signature of the resource consent application for the subdivision was unintended; he had not understood the document he had signed to be a resource consent application. He said he had thought it was an application to ensure he would receive information about the subdivision which Ms Pepi had been concealing from him. His work on the driveway was about tidying up the property for sale and not in preparation for a subdivision.
[21] Mr Murray said Ms Pepi’s refusal to sign the sale and purchase agreement to accept the Dickens-Wood offer was the latest example of Ms Pepi looking to back out of her commitment to sell the property. Her claim that the property was worth more than that offered by Ms Dickens and Mr Wood was not born out by actual market evidence.
[22] Mr Murray considered that the assertions made on Ms Pepi’s behalf that the subdivision could be completed by May 2018 were speculative. The time and costs likely to be incurred in completing the subdivision made achievement of that option unlikely given Ms Pepi’s constrained financial resources. That was unacceptable to him when there was a firm offer on the table to purchase the property at the agreed price of $1,000,000.
Ms Pepi’s contentions
[23] Ms Pepi said that despite the 2004 Agreement and the 2011 Orders, Mr Murray did not demonstrate any serious intention to sell the Nook Road property before 2015. He made no real effort to market the property before 2013 and even the efforts he made from that time were not likely to attract offers at the agreed minimum price. She had been led to believe by Mr Murray’s conduct that he was content for Ms Pepi and their daughter to continue to live at the property.
[24] Ms Pepi had discussed her ideas for subdividing the Nook Road property with Mr Murray from the outset and he had indicated his willingness for her to explore this option. Later, Mr Murray had signed the application for the resource consent and had continued to take an active interest in the progress of the application. He had also undertaken some physical work at the property — to realign the driveway — to prepare it for subdivision.
[25] She had also discussed her intentions regarding the subdivision with the Bayleys agents who were marketing the property when they had restarted their marketing efforts in 2015.
[26] She had taken from Mr Murray’s conduct that he agreed to the subdivision and in reliance on that agreement she had incurred significant cost and expended considerable personal effort to achieve the subdivision. Moreover, she could raise the finance required to complete the subdivision because of the mortgage free property she owned at Lamb Road following the death of her father in 2015.
[27] Ms Pepi argued that the price offered in the Dickens-Wood offer did not reflect the true value of the Nook Road property. She produced a valuation report from Northland Valuers prepared in August 2017 which assessed the market value of the property in its current configuration as being $1,262,000. The report also assessed the value of the property if the subdivision were completed as $1,547,000 to
$1,172,000 for the larger section with the main dwelling, and $395,000 for the section with the cottage.
[28] In addition and regardless of the subdivision issue, it would be unjust to require Ms Pepi to sell the property for the $1,000,000 price in the Dickens-Wood offer.
Discussion
[29] As a preliminary point, I note that both Mr Murray and Ms Pepi gave evidence about how each had behaved in relation to the property and to each other over the period between the agreement of December 2004 and the making of the Dickens-Wood offer in 2017. That included evidence from Mr Murray that Ms Pepi had leased the main dwelling on the property without securing Mr Murray’s written consent as required by the agreement and without accounting to Mr Murray for the rental, and evidence from Ms Pepi that Mr Murray was aware that the dwelling was tenanted and made no objection and that his attitude towards her remaining on the property varied according to whether she was in a relationship with another man. I do not regard that evidence as relevant to the issues I need to decide.
[30] It is common ground between the parties that they have an agreement in place
— the 2004 Agreement — that requires the sale of the property at a minimum price of $1,000,000 and that performance of that Agreement has been ordered by the Court in the 2011 Orders.
[31] In his application of 14 September 2017, Mr Murray sought orders to give effect to the 2011 Orders by completing the agreement for the sale and purchase of the property on the basis of acceptance of the Dickens-Wood offer.
[32] In her notice of opposition dated 18 September 2017, Ms Pepi opposed those orders on three grounds:
(a) Unreasonable delay in giving effect to the 2011 Orders;
(b) Estoppel based on Mr Murray’s agreement, or acquiescence, to the
subdivision of the property which has yet to be completed; and
(c) The alleged inadequacy of the Dickens-Wood offer.
[33] In argument, Mr Woodd, counsel for Ms Pepi, did not pursue the first ground. It could not succeed. The agreement is still in force and the 2011 Orders apply to both parties. If there has been unreasonable delay in giving effect to the 2011
Orders, it has been by both parties. Neither party can invoke the other’s delay as a
reason for her or his own non-performance.
[34] Before considering the legal issues around the estoppel argument, it is necessary to make findings of fact, given important differences in the evidence about the nature and extent of Mr Murray’s involvement with the proposed subdivision.
Was there an agreement to subdivide the Nook Road property?
[35] In her affidavit of 18 September 2017, Ms Pepi asserted that she and Mr Murray had an agreement to secure the subdivision of her property. In his evidence, Mr Murray denied he ever had any agreement with Ms Pepi to subdivide the property.
[36] More specifically, Ms Pepi stated that she told Mr Murray about engaging Simpson Shaw, the surveyors, to seek consent for the subdivision and had had a discussion with Mr Murray about the location of the separate driveway to be constructed for the main dwelling. She stated:
Shane has expressed his consent and agreement to me from the outset and I have discussed every step taken under the Subdivision Agreement with Shane and have followed his advice about what should be done. I believe Shane has communicated, from the outset, with Trevor Shaw and Trevor Shaw’s offsider, Pat Smith of Simpson Shaw Surveyors
[37] Mr Murray was emphatic that he did not learn of the subdivision proposal until early 2016. Under cross examination, Ms Pepi acknowledged that she had carried out and paid for all of the engagements with Simpson Shaw from the time of her first approach to them in October 2015 until Mr Murray called on Simpson Shaw himself in October 2016. Moreover, in her evidence, Patricia Smith of Simpson Shaw, who met Mr Murray when he called at Simpson Shaw’s offices in October
2016, acknowledged that she told Mr Murray that Ms Pepi had asked Simpson Shaw not to give information to Mr Murray about the subdivision.
[38] This evidence is consistent with Mr Murray’s position that he had no
agreement with Ms Pepi to subdivide the Nook Road property.
[39] I am satisfied it was Ms Pepi who took the initiative to secure the subdivision and she did so without the agreement of Mr Murray, from whom she sought to conceal at least the detail of what she was pursuing with Simpson Shaw. Accordingly, there was no express agreement between Ms Pepi and Mr Murray to subdivide the property. However, that is not the end of the matter.
The extent and significance of Mr Murray’s involvement with the subdivision
[40] In his second affidavit and under cross examination, Mr Murray acknowledged that Ms Pepi discussed the subdivision with him at some time around early 2016. He knew a lot more after his meeting with Ms Smith at Simpson Shaw in October 2016. Ms Smith’s evidence establishes that Mr Murray was briefed on the subdivision at that meeting, that Ms Smith had sent him the scheme plan of the proposed subdivision after the meeting concluded and that Mr Murray kept in touch with Ms Smith over the subsequent months regarding progress with the subdivision. This included at least one conversation about whether Mr Murray could assist in obtaining some of the further information required by the Whangarei District Council when it put the resource consent application on hold in January 2017.
[41] Most significantly, Mr Murray signed the application for the resource consent for the subdivision at that initial meeting with Ms Smith. Ms Smith’s evidence is that before Mr Murray signed the application, she explained that the application was ready to go to the Council, that the form was the application form to Council and that an owner’s signature was needed, and that under those circumstances Mr Murray signed it. Mr Murray’s evidence was that he did not know the document was a resource consent application and that he thought signing the document was a means of ensuring he could obtain on-going information about the subdivision.
[42] Despite Mr Murray’s denial under cross examination by Mr Woodd that he knew full well what he was signing, I do not find Mr Murray’s evidence on this point convincing. I doubt Ms Smith, either deliberately or inadvertently, misled Mr Murray when she suggested he might sign the resource consent application. Even if I were to accept Mr Murray’s unlikely contention that he was shown only the first page of the form — which is headed “Resource consent application” — I consider it unlikely that he was in any real doubt about the nature of the document he was signing. I draw an inference from that signature, from Mr Murray’s ongoing engagement with Simpson Shaw about progress with the application, and from his discussions with Simpson Shaw about how to meet some of the District Council’s requests for further information, that Mr Murray was content to let the subdivision application go forward and see what might result, at least from October 2016 until September 2017 when he instructed Simpson Shaw that he did not agree to the subdivision.
[43] The question that arises, therefore, is whether Mr Murray’s acceptance of the subdivision is sufficient to establish the estoppel asserted by Mr Woodd on behalf of Ms Pepi.
Does an estoppel arise?
[44] Mr Woodd based his argument on estoppel on propositions drawn from Equity and Trusts in New Zealand1 and framed his submissions around the opening sentence in ch 19:2
The basic principle behind the modern doctrine of equitable estoppel can be simply stated: a party will not be permitted to deny an assumption, belief or expectation that it has allowed another to rely on where such a denial would be unconscionable.
[45] In his submissions, Mr Woodd said, in effect, that in allowing Ms Pepi to explore the subdivision option, Mr Murray was allowing Ms Pepi to believe that the sale of the Nook Road property would not happen until the subdivision had been completed or otherwise resolved; that Ms Pepi had relied on this conduct by Mr Murray and had acted to her detriment so that it would be unconscionable for the property to be sold before the subdivision had been completed.
[46] However, apart from Ms Pepi’s assertions, there is no evidence that Mr Murray ever allowed Ms Pepi to believe that the sale of the property would be made subject to or contingent upon achieving the subdivision. To the contrary, in June 2016, while Ms Pepi was involved in preliminary discussions with Simpson Shaw about the idea of a subdivision, at Mr Murray’s request Ms Pepi signed a new listing agreement for the sale of the Nook Road Property in which no reference was made to the idea of a subdivision. Furthermore, despite Ms Pepi’s efforts to suggest that relevant parties accepted at the time the new listing agreement was signed that the sale would be subject to completion of the subdivision, she gained no support for that contention in the evidence of the others involved:
(a) Mr Murray and Penny Kempton, one of the Bayleys agents engaged to sell the Nook Road property, contradicted Ms Pepi’s initial claim in her affidavit of 18 September 2017 that the subdivision proposal was discussed at a meeting at the Nook Road property on 6 June 2016
involving Ms Kempton, Irene Bremner (another Bayleys
1 James Every-Palmer “Equitable Estoppel” in Andrew Butler (ed) Equity and Trusts in New
Zealand (2nd ed, Thomson Reuters, Wellington, 2009) 601.
2 At 602.
representative), Mr Murray and herself, when the listing agreement was signed. Ms Pepi later corrected herself on this point and acknowledged that her meeting with Ms Kempton and Ms Bremner took place without Mr Murray in attendance and after she had signed the listing agreement.
(b)Ms Pepi’s continued assertions that the subdivision had been discussed at her meeting with Ms Kempton and Ms Bremner shortly after the listing agreement had been signed, that she had shown the Bayleys agents a scheme plan of the subdivision, and that the agents had expressed enthusiasm with the subdivision, were rebutted by Ms Kempton — who said she became aware of the subdivision some time later and that she had only seen a scheme plan of the proposed subdivision “many months” after the signing of the listing agreement.
[47] I prefer the evidence of Ms Kempton and Mr Murray on this point. Ms Kempton, in particular, was clear in her evidence that her brief was to market the whole of the Nook Road property. She also said, and I agree, that she would have been breaching her professional duties if she had marketed the whole property if she had been aware that a part was to be subdivided off.
[48] The agreement for the sale and purchase of the Nook Road property itself contradicts Ms Pepi’s claim that it was understood at the time of signature of the listing agreement that the property was to be subdivided before sale. In addition to the standard clauses contained in the ADLSI form, the agreement had a special clause which provided:
21.0 The purchaser acknowledges that the separate out building on the property has been converted to a 2 bedroom self-contained studio with wood burner, without a building permit, and is purchasing “as inspected and as is”. The purchaser will not require the vendor to obtain a building permit or any compliance certificates that may be required at any future time in relation to the building, fireplace and any intended use… .
[49] This clause would have served no purpose if the land on which the studio (cottage) was situated was to be subdivided off before sale. While Ms Pepi said under cross-examination that she had never seen the sale and purchase agreement,
the fact it contained this clause reinforces the evidence of Ms Kempton and Mr
Murray that sale of the property was not subject to achieving the subdivision.
[50] I do not consider Mr Murray’s later knowledge of the subdivision and his discussions of it with Simpson Shaw or his work on the driveway materially changed that situation. The discussions are consistent with a desire to know whether a subdivision might be feasible but cannot be elevated into an agreement or course of conduct with Ms Pepi. The evidence about the driveway work is disputed and inconclusive.
[51] In my view, the sale and the subdivision were pursued on separate tracks and there was nothing said or done by Mr Murray that provided a basis for an assumption, belief or expectation on the part of Ms Pepi — or any reliance by Ms Pepi — that the sale of the Nook Road property was subject to completion of the subdivision. Accordingly, no question of estoppel arises.
[52] Even if I am wrong in that conclusion, I consider Ms Pepi’s claim for estoppel could not succeed. First, the detriment pointed to by Mr Woodd — expenses of $26,505 incurred to date in pursuing the subdivision — is relatively small when weighed in the wider context of the 11-year wait that Mr Murray has had to recover money he thought he was advancing for a relatively short period. Moreover, Ms Pepi took on those costs voluntarily, without consultation with her co- owner.
[53] Secondly, and more importantly, is the issue of unconscionability. As Tipping J noted for the Court of Appeal in National Westminster Finance NZ Ltd v National Bank of NZ Ltd, unconscionability is the thread that runs through all manifestations of estoppel:3
The decisions of this Court in Wham-O MFA Co Ltd v Lincoln Industries [1984] 1 NZLR 641 and Gillies v Keogh [1982] 2 NZLR 327 have emphasised the element of unconscionability which runs through all manifestations of estoppel. The broad rationale of estoppel, and this is not a test in itself, is to prevent a party from going back on his word (whether express or implied) when it would be unconscionable to do so.
3 National Westminster Finance NZ Ltd v National Bank of NZ Ltd [1996] 1 NZLR 548 (CA) at
549.
[54] Later in his judgment, Tipping J set out the elements that someone claiming the benefit of an estoppel in relation to an underlying assumption of fact, law or both must establish. The final element was:4
(6) In all the circumstances it would be unconscionable to allow the other party to resile or depart from the underlying assumption.
[55] In this case, “all the circumstances” must embrace the conduct of and implications for Ms Pepi if the sale were to go through and also the conduct of and the implications for Mr Murray. Therefore, while it is appropriate to take into account the work that Ms Pepi has done to achieve the subdivision and the fact that this is the home in which she and, later, her daughter have lived, it is also appropriate to take into account the fact that until just before the hearing of this matter, Ms Pepi made no effort herself to buy out Mr Murray’s interests in the Nook Road property or to sell the property despite the 2004 Agreement and the 2011 Orders. It is also appropriate to take into account the 11-year wait that Mr Murray has had to get his money out of the property and that the Dickens-Wood offer is the only offer that has been made to purchase the property in that time and that is made at the earlier-agreed sale price of $1,000,000.
[56] In all of those circumstances, I do not consider it is unconscionable to require Ms Pepi to go through with the sale of the Nook Road property. To the contrary, I consider it would be unreasonable to require Mr Murray to delay further the sale of the Nook Road property to await the outcome of a subdivision when there can be no certainty whether and when the proposed subdivision could be achieved.
[57] Mark Shaw of Simpson Shaw gave evidence for Ms Pepi that, in his estimate, assuming “normal” timeframes and “standard” conditions, the subdivision could be completed and titles issued within eight months and at a cost of approximately
$43,700 in addition to the costs already incurred to date. Mr Shaw acknowledged, however, the difficulty of assessing the timeframe and costs to complete the
subdivision prior to the resource consent being granted.
4 At 550.
[58] In fact, the resource consent application was put on hold in January 2017 by the Whangarei District Council shortly after it was formally received (bearing in mind the Christmas break) and it has remained on hold since then, first, because of the nature of the information sought by the Council and then, presumably, because of the reactivation of this proceeding.
[59] It is apparent from the Council’s letter of 25 January 2017, which put the application on hold and requested further information, that there are a number of hurdles to be overcome in order to secure the resource consent. These include:
(a) Satisfying the Council that the cottage (on the land to be subdivided off from the main title) has existing use rights and will otherwise meet the requirements of the District Plan. This could be a challenge given that it was considered necessary in the sale and purchase agreement to require any purchaser of the property to acknowledge that the building had been converted to a 2-bedroom self-contained studio without a building permit, and to undertake not to require the vendor to obtain a building permit or any compliance certificates that may be required at any future time in relation to the building.
(b)Securing consent for a non-complying activity in the context of the objectives and policies of the Proposed District Plan when the Council officer, in the Council’s letter of 25 January 2017, noted that:
… the proposal seeks to create allotments less than what already exists thereby reducing the potential for the land to be used for rural land use activities or in a manner that is in keeping with the objectives and policies of [the proposed Rural Production Environment Plan Changes — PC85A].
[60] At a minimum, these hurdles suggest the application may struggle to be considered within “normal” timeframes and “standard” conditions which could mean that Mr Murray could be waiting considerably longer than estimated by Mr Shaw if he were required to await completion of the subdivision before selling the Nook Road property.
[61] For all these reasons, I do not accept Ms Pepi’s argument based on estoppel.
Would it be unjust to compel sale at the price in the Dickens-Wood offer?
[62] Mr Woodd submitted that the only valuation of the property before the Court is that obtained by Ms Pepi from Northland Valuers dated 4 August 2017, which assessed the market value of the property, unsubdivided, at $1,262,000, and that it would be unjust to compel Ms Pepi to sell the property at a price less than 80% of its market value. I do not accept that submission.
[63] The Northland Valuers report was not the only valuation evidence before the Court. There was, in addition, the Marketing Report of 5 September 2017 prepared by Bayleys. It records the interest shown in the Nook Road property by potential buyers since it was first marketed in 2013. That report shows that no potential buyer before Ms Dickens and Mr Wood considered the property worth more than
$900,000. But, in my judgment, the best evidence of the market value of the Nook Road property is not the opinion evidence, albeit of a registered valuer, in the Northland Valuers report but the Dickens-Wood offer itself. This is the only offer that has been formally made for the purchase of the property since the property was first marketed in November 2013. It is not unjust to require Ms Pepi to sell the property at the price which was the minimum price she agreed to under the December 2004 Agreement and which was confirmed in the 2011 Orders, especially since the property has not been able to achieve any better offer.
Relevance of open letter of 9 October 2011
[64] Mr Woodd drew the Court’s attention to an open letter he wrote on behalf of Ms Pepi to Ms Tabb, counsel for Mr Murray, offering to settle the proceeding on one of two alternative bases which involved Ms Pepi buying out Mr Murray’s interest in the property — either by Mr Murray taking Ms Pepi’s property at Lamb Road in part satisfaction of the agreement, or Mr Murray awaiting the resolution of Ms Pepi’s father’s estate. In that letter and in his submissions, Mr Woodd said that refusal to accept settlement on one of those bases would show that Mr Murray was not genuine when he said he required the Court’s assistance to get his capital out of the Nook Road property.
[65] Mr Murray answered those submissions in cross examination. Both bases of settlement advanced by Mr Woodd were contingent on other things happening and neither would secure Mr Murray $500,000 cash in the hand as would be delivered by acceptance of the Dickens-Wood offer (less agent’s fees). Given the history of Mr Murray’s involvement with the Nook Road property, his stance is understandable. I do not consider it a bar to recovery.
Result
[66] The Dickens-Wood offer meets the minimum agreed price for the Nook Road property set in the 2004 Agreement and confirmed in the 2011 Orders. Accordingly, Ms Pepi is under an obligation to accept that offer and has not established any valid legal basis for the Court staying the implementation of the 2011 Orders.
Orders
[67] I would hope that in the light of this decision, Ms Pepi will sign the sale and purchase agreement accepting the Dickens-Wood offer, adjusted as appropriate to deal with the passage of time. Against the possibility that she will not, I make the following order:
(a) Unless Ms Pepi has signed the sale and purchase agreement (as yet undated) between Christine Anne Pepi and Shane Graham Murray as vendors and Michelle Margaret Dickens and Angus Patrick Wood as purchasers in respect of the property at 200 Nook Road, Parua Bay by
5pm on Monday 20 November 2017, counsel for Mr Murray is to file the appropriate draft orders for signature of the agreement by the (Deputy) Registrar of the High Court in Whangarei in place of Ms Pepi.
Costs
[68] Ms Tabb for Mr Murray submitted that costs should be awarded on a solicitor-client basis because Mr Murray has been compelled to come to the Court twice to remedy breaches of the 2004 Agreement by Ms Pepi. That submission does
not take into account the reality that Mr Murray himself took no steps to implement the 2004 Agreement or the 2011 Orders for some time.
[69] Given the history of this dispute, I see no reason to depart from standard costs in accordance with rr 14.2–14.5 of the High Court Rules.
[70] Costs are awarded to Mr Murray on a 2B basis. Memoranda are to be submitted if the parties cannot agree.
van Bohemen J
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