P.S. Construction Limited v Premier Building Services Limited
[2025] NZHC 81
•5 February 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-2083
[2025] NZHC 81
BETWEEN P.S. CONSTRUCTION LIMITED Plaintiff AND
PREMIER BUILDING SERVICES LIMITED
Defendant
Hearing: 4 February 2025 (by AVL) Appearances:
S O McAnally for Plaintiff A M Swan for Defendant
Judgment:
5 February 2025
JUDGMENT OF ASSOCIATE JUDGE LESTER
This judgment was delivered by me on 5 February 2025 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
……………………………..
P.S. CONSTRUCTION LIMITED v PREMIER BUILDING SERVICES LIMITED [2025] NZHC 81 [5 February 2025]
[1] P.S. Construction Limited (PSC) agreed on 27 August 2021 to purchase a lot in a subdivision being undertaken by Premier Building Services Limited (Premier). The contract was subject to a condition that Premier obtain title for the lot by 30 March 2023 (the agreement).
[2] At 5.11 pm on 30 March 2023 (“the 5.11 pm email”), PSC’s solicitor advised Premier’s solicitor that PSC was cancelling the agreement on the basis the title condition had not been satisfied by Premier. PSC in this proceeding seeks judgment for the deposit it had paid of $182,000 together with interest.
[3] While Premier accepts it had not obtained title by 30 March 2023, its position is that PSC’s purported cancellation of the agreement by the 5.11 pm email was invalid. Premier says it invoked its entitlement under the agreement to extend the period it had to obtain title by six months.
[4] In the alternative Premier, in its notice of opposition, said if it is held that PSC’s cancellation was valid then PSC “… subsequently withdrew the cancellation and/or affirmed the agreement”.1
[5] Accordingly, it is necessary to consider whether PSC validly cancelled the agreement by the 5.11 pm email.
Key terms of the agreement
[6] The agreement between the parties was on the 10th edition of the ADLS/REINZ agreement for sale and purchase of land. It is dated 27 August 2021.
[7] In response to the 5.11 pm email, Premier at 7.19 pm on 30 March 2023 gave notice purporting to extend the date for satisfaction of the title condition.
1 This submission was not pursued at the hearing on 4 February 2025.
[8]Clause 1.3(2) and (3) of the agreement provide:
(2)Any act done pursuant to this agreement by a party, including service of notices, after 5.00 pm on a working day, or on a day that is not a working day, shall be deemed to have been done at 9.00 am on the next succeeding working day.
(3)Where two or more acts done pursuant to this agreement, including service of notices, are deemed to have been done at the same time, they shall take effect in the order in which they would have taken effect but for subclause 1.3(2).
[9] Clause 9.10 of the agreement provides the operation of conditions. Clause 9.10(5) provides:
(5)If the condition is not fulfilled by the date for fulfilment, either party may at any time before the condition is fulfilled or waived avoid this agreement by giving notice to the other. Upon avoidance of this agreement, the purchaser shall be entitled to the immediate return of the deposit and any other moneys paid by the purchaser under this agreement and neither party shall have any right or claim against the other arising from this agreement or its termination.
[10] Clause 1.4(1) of the agreement provides that all notices must be served in writing. An email is a permitted means of service of a notice unless the notice is one required by the Property Law Act 2007. The notices in issue in this proceeding are not governed by that Act.
[11] The vendor’s solicitor’s details given on the back sheet of the agreement give an email address for the solicitor concerned and accordingly, under 1.4(4) of the agreement, PSC’s solicitor was entitled to give notice cancelling the agreement by email.
[12]Clause 22 of the agreement provides:
22.1This Agreement is conditional upon the Vendor obtaining the issue of a separate computer Fee Simple register for the Properties as shown on the Resource consent and Scheme Plan and on terms acceptable to the Vendor and in accordance with the requirements of this agreement by 30 March 2023.
22.2If the conditions in Clause 22.1 have not been satisfied by the due date stipulated above, but the vendor is able to demonstrate progress has been made towards satisfying the conditions, the Vendor may in its sole discretion advise the Purchaser the due dates for these conditions
are extended up to 6 months from the stipulated dates without any further compensation payable to the Purchaser.
[13] Clause 9.10(4) of the agreement provides that conditions “shall be deemed to be not fulfilled until notice of fulfilment has been served by one party on the other party”.
[14] It is not in dispute that Premier did not give notice of fulfilment of the condition in cl 22.1 prior to 5.00 pm on 30 March 2023. Again, the need for notice to have been given prior to 5.00 pm is found in cl 1.3(2) set out at [8] above.
Was the 5.11 pm email a valid cancellation notice?
[15]The 5.11 pm email, after referring to the agreement then says:
According to clause 22.1 of the further terms, the agreement is conditional upon the vendor obtaining the issue of title for the Lot 15 by 30 March 2023. To date, we have not received a copy of new title for Lot 15 and the clause
21.1 has not been satisfied. We are instructed to serve our client’s notice of cancel[l]ation of this agreement on the basis that clause 22.1 is not satisfied and that the vendor has failed to request an extension of the condition by providing evidence to show that good progress has been made towards satisfying clause 22.1 condition. We hereby advise that the agreement is cancelled.
[16] At the hearing Mr Swan, counsel for Premier, developed a submission that the above notice was invalid because it was arguable that Premier had in fact provided some evidence to show good progress had been made towards obtaining title, satisfying cl 22.1 of the agreement. Mr Swan submitted the cancellation notice was invalid as it included what Mr Swan characterised as reference to a failure to provide evidence of good progress to obtain title. Mr Swan’s submission was that if the cancellation notice was invalid, then the 9.19 pm email from Premier extending time to obtain title was effective and the agreement remained on foot. Premier says it ultimately cancelled the agreement when title became available and PSC refused to settle as it says the contract remained on foot and it therefore forfeited the deposit.
[17] I do not accept Mr Swan’s submission. The cancellation notice is expressly issued on the basis that cl 22.1 was not satisfied. The words:
…and that the vendor has failed to request an extension of the condition by providing evidence to show that good progress has been made towards…
obtaining title, only recite the precondition that applies had Premier sought an extension of time to obtain title. As Mr McAnally, counsel for PSC submitted, all PSC’s solicitor was saying was that Premier had failed to request an extension. Whether in fact there had been direct discussions in the past between the parties about progress towards obtaining title is beside the point, as no extension of the title condition was sought by Premier pursuant to cl 22.1 before PSC cancelled the agreement.
[18] The 5.11 pm email does not rely on there having been no communications about progress towards obtaining title. Rather, it stated no extension had been sought which would have required such evidence.
[19] Accordingly, I find that as no notice of satisfaction of cl 22.1 was given by Premier prior to 5.00 pm on 30 March 2023, PSC was entitled to and did give notice of cancellation pursuant to cl 9.10(5) of the agreement. While cl 9.10(5) refers to giving notice avoiding the agreement and the email sent by PSC’s solicitor refers to the cancellation of the agreement, nothing turns on that difference albeit, avoidance is a different concept from cancellation.2
The purported extension of cl 22.1 of the agreement
[20] Premier’s solicitor at 7.19 pm on 30 March 2023, sent an email to PSC’s solicitor which advised as follows:
Our client advised that our client has communicated the progress of the project with your client already, and there is no doubt that there has been good progress for the project. Civil works are expected to be completed in April.
Pursuant to clause 22.2 our client extends the condition in clause 22.1 for a further 6 months to 30 September 2023.
2 See discussion in D W McMorland Sale of Land (4th ed, Cathcart Trust, Auckland, 2022) at [5.15.]..
[21] I find that this notice was of no effect. The effect of cl 1.3(3) of the agreement, set out at [8] above, is that the cancellation advised in the 5.11 pm email is deemed to have taken effect prior to the 7.19 pm email.
[22] Unusually under this agreement, it was expressed that the deposit could be immediately released to Premier upon receipt without any further confirmation or authorisation required. However, the agreement provided that if the agreement was cancelled as a result of PSC’s default, then the deposit paid must be refunded in full within 40 working days.
“What is dead is dead”
[23] I comment only briefly on the alternative ground of opposition given it was not pursued at the hearing. There is no concept of resurrection in contract law.3
[24] Once a contract is validly terminated, the contract is over. PSC’s election to cancel was final and irrevocable. The reference to “what is dead is dead” comes from Lord Wilberforce in Johnson v Agnew.4
[25] Accordingly, the reference in the notice of opposition to PSC subsequently withdrawing its cancellation or affirming the agreement could not assist Premier. Once an election is made it is irreversible.5 Nor is it possible to affirm that which does not exist. Accordingly, it was appropriate that Mr Swan did not pursue this ground of opposition.
Decision
[26] There is judgment for the plaintiff against the defendant in the sum of $182,000 together with interest on that sum from 1 June 2023 to the date the judgment sum is
North Holdings Development Ltd v Kim (2011) 14 BCB 170 at 170. A case note in respect of
North Holdings Development Ltd v Kim HC Auckland CIV-2010-404-4261, 16 August 2021.
4 Johnson v Agnew [1980] AC 367 at 298.
5 North Holdings Development Ltd v Kim, above n 3, at [52].
paid pursuant to s 9 of the Interest on Money Claims Act 2016.6 The plaintiff is entitled to costs on a 2B basis together with disbursements as fixed by the Registrar and I so order.
Associate Judge Lester
Solicitors:
Law NZ Lawyers, Auckland (for Plaintiff) DAU Lawyers, Auckland (for Defendant)
Copy to counsel:
S McAnally, Barrister, Auckland (for Plaintiff) A M Swan, Barrister, Auckland (for Defendant)
6 As noted at [22] above, the deposit was repayable no later than 40 working days after cancellation, therefore interest runs from the date 40 working days after the 5.11 pm email.
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