Reynolds v Barratt
[2013] NZHC 2185
•27 August 2013
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2012-404-7427 [2013] NZHC 2185
BETWEEN SHARON LOUISE REYNOLDS,
ROBERT NEWCOMB LEARY, LYNETTE MAREE DUNCAN AS EXECUTORS OF THE ESTATE OF PATRICIA ANSTEAD LEARY Plaintiffs
AND
SHARYN DAWN BARRATT, DOUGLAS JAMES BARTLETT, TIMOTHY HARRISON AS TRUSTEES OF THE BARRATT FAMILY TRUST Defendants
Hearing: 24 June 2013 Appearances:
G D Wiles for Plaintiffs
N P Tetzlaff for DefendantsJudgment:
27 August 2013
JUDGMENT OF COOPER J
This judgment was delivered by Justice Cooper on
27 August 2013 at 12.30 p.m., pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:
Solicitors:
Thorne Thorne White & Clarke-Walker, Auckland
Gaze Burt, North Shore City
REYNOLDS v BARRATT [2013] NZHC 2185 [27 August 2013]
Introduction
[1] On 12 December 2012 the plaintiffs filed a statement of claim and an application for summary judgment. Both sought specific performance of a tender agreement dated 4 May 2012 (“the Agreement”). Under the Agreement the defendants agreed to purchase from the plaintiffs a property (“the property”) at 80
Cliff Road, Torbay, on Auckland’s North Shore, for the sum of $2,580,000.
[2] The property comprises more than 3,300 square metres. Mr Bartlett, one of the defendants, gave evidence that the Barratt Family Trust had had an interest in the property for a long time and since September 2011 had put various offers to the owners. In his affidavit of 1 February 2013 he noted that the property has over 200 trees on it, and that this has always been a “significant issue”. The existing building on the property at relevant times was a small bungalow. The Trust’s intention was to remove the bungalow, replacing it with a much larger house, over 30 metres in length. Mr Bartlett noted that would require a larger building site, and trees would need to be removed. He also referred to other issues that would need to be addressed in order to build a home of the preferred type, including cliff stability, water run-off and visual impact.
[3] The plaintiffs allege that, under the Agreement, the defendants were obliged to pay a deposit of $258,000 upon the Agreement becoming unconditional, which they say occurred on 13 September 2012. Settlement would then have followed 60 days later, on 12 November 2012.
[4] However, the defendants purported to cancel the Agreement, relying on a claim that clause 23.0 of the Agreement had not been satisfied. Clause 23.0 was in the following terms:
This agreement is conditional upon the council agreeing to issue a permit to remove the seven trees identified on an annexed site plan on or before 90 days of receiving notice of acceptance of the Tender.
[5] The defendants’ claim that clause 23.0 was not satisfied rests on an assertion that the permission to remove the trees, which was in fact granted by Auckland Council (“the Council”), was based on the wrong plan and that, as a consequence,
one of the existing trees on the site would remain, and severely restrict the type of house able to be built on the site. The plaintiffs contend that the consent was based on the correct plan, and that the defendants’ purported cancellation of the Agreement was unlawful.
[6] To mitigate their loss the plaintiffs marketed the property again and were able to achieve a second sale, but for a purchase price which, being $2,550,000, was
$30,000 less than the price that the defendants had agreed to pay. The plaintiffs also incurred additional costs in relation to the marketing of the property, land agents’ commission and other matters. They now seek summary judgment in the sum which
represents their losses incurred on the second sale, made up as follows:
Loss on resale: $30,000.00 Interest costs: 121,719.45 Agents’ commission/
promotional costs:
67,548.50 Outgoings/maintenance: 7,438.93 Resale marketing: 10,733.71 Professional executors’ costs: 4,614.00 Conveyancing costs on resale: 1,435.00 Estate and property administration: 3,303.85 Total:
$246,793.44
[7] The claim for specific performance of the Agreement has been abandoned.
[8] In addition to their argument that they were entitled to cancel the Agreement and are therefore not liable for the sums sought, the defendants also raised issues concerning the quantum of the plaintiffs’ claim. One of those issues, which was that the claim for interest included an element of double counting, being based on both the deposit and the full unpaid purchase price, was factually incorrect, and abandoned during the hearing.
[9] The second issue raised concerned the claim for agents’ commission and promotional costs on the second sale. Mr Tetzlaff submitted that to allow this element of the claim would confer a windfall on the plaintiffs since they would have been liable to pay a commission on sale of the property in any event. The plaintiffs say in response that as a result of the unlawful cancellation and the need to sell the
property a second time, they became liable for two commissions and they are entitled to recover this sum accordingly.
Approach to summary judgment
[10] Under r 12.2 of the High Court Rules, the Court may give judgment against the defendant if the plaintiff satisfies it that the defendant has no defence to a cause of action in the statement of claim.
[11] The approach on such applications is well understood. For present purposes, it is unnecessary to add to the succinct summary given by the Court of Appeal in Krukziener v Hanover Finance Ltd:1
[26] The principles are well settled. The question on 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; (1986) 1 PRNZ 183 (CA), at p 3; p 185. 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; [1979] 3 WLR 373 (PC), at p 341; p 381. 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).
[12] The question raised in this case is whether the Court can be left in no doubt on the evidence that there is no defence. There is a clear conflict in the evidence. Mr Tetzlaff has emphasised that the Court will not normally resolve material conflicts of evidence or assess the credibility of deponents unless the evidence given on one side is inherently lacking in credibility. He submitted that the plaintiffs
cannot demonstrate that here.
1 Krukzeiner v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26].
The key question
[13] The key question, as identified by both parties, is whether the defendants’ cancellation of the contract was lawful, on the basis of non-compliance with clause 23.0, or whether it was unlawful with the consequence that the purported cancellation amounted to repudiation.
[14] That question turns essentially on an issue as to which there is a factual dispute. The issue is whether the wrong plan was attached to the Agreement, with the result that clause 23.0 was not satisfied.
[15] Before confronting the key question directly, it will be appropriate to set out the background facts and refer to relevant terms of the Agreement.
Background facts
[16] Many of the background facts were set out in an affidavit made by Lynette Maree Duncan, a solicitor, and one of the three executors of the estate of Patricia Anstead Leary. The property was the principal asset of the estate of late Mrs Leary.
[17] In February 2012 the defendants made a written offer to purchase the property for $1,870,000. That offer was conditional on the purchasers obtaining, at their own cost, consent from the Council to remove seven large trees from the property. It was also conditional upon necessary approval or consent to build a home on the property on terms satisfactory to the purchasers. According to Ms Duncan that offer was not accepted for a number of reasons, including the fact that in a recent Government Valuation the property had been valued at $2,450,000.
[18] Barfoot and Thompson Limited were instructed as agents to sell the property and they conducted an advertising campaign calling for tenders by 26 April 2012. On 26 April, Mr Bartlett sent an e-mail to Mr Madsen (of that firm’s Ponsonby office, and the principal agent involved in the transaction) stating that “the Trust” was prepared to put in a tender with “the following elements and conditions”:
— purchase price of $2.51m
— conditional on council agreement to remove 7 trees within 90 days of acceptance of tender. 10% deposit will be paid 14 days after unconditional date.
— settlement on granting of permit to build or 60 days after unconditional date, whichever is sooner.
— we would like access to the land and house as from 20 May, and will pay
$1500 per month, paid monthly in arrears until settlement.
[19] Mr Madsen said in his affidavit of 10 December 2012 that he met with the vendors at Ms Duncan’s office to discuss the offer. They told him to make a counter offer, increasing the price to $2,580,000 and deleting or modifying the conditions that had been stipulated by Mr Bartlett.
[20] Ms Duncan drafted new conditions which were to become clauses 23.0 to
27.0 in the Agreement. Those clauses related to the removal of seven trees on the property, the need to obtain Council consent for the removal, the timing of the payment of the deposit and of settlement, and provision for the purchasers to gain access to the property for the purpose of showing it to builders, architects and other professionals.
[21] On 3 May 2012, Mr Madsen forwarded a copy of a site plan for the property to Mr Bartlett, and to Mr Saull Hinton, who was a colleague of Mr Madsen who worked at the Browns Bay office of Barfoot and Thompson. Mr Hinton had been assisting Mr Madsen in respect of the sale of the property for some time. Mr Hinton and Mr Bartlett then met on site. What happened at the site is the subject of some controversy, and I will refer to the details later. For present purposes, it can simply be noted that following the meeting, Mr Hinton e-mailed to Mr Madsen photographs of the seven trees that had been identified for removal and the site plan, on which the position of seven trees had been marked. In the photographs that Mr Hinton sent to Mr Madsen, the trees had been numbered so as to correspond with the numbers of the trees as marked on the site plan.
[22] Mr Madsen said that he then attached those documents to the Agreement, which had already been signed by the defendants. He then arranged to obtain the plaintiffs’ signatures at a meeting to take place on the following day. In the meantime, he sent the documents to Ms Duncan by e-mail.
[23] On 4 May, Ms Duncan signed the Agreement. She applied her initials to the page recording the conditions (clauses 23.0 to 27.0), and the two pages of photographs identifying the seven trees that had been referred to in clause 23 and the site plan, which also identified the trees.
[24] Clauses 23.0 to 27.0 provided as follows:
23.0This agreement is conditional upon the council agreeing to issue a permit to remove the seven trees identified on an annexed site plan on or before 90 days of receiving notice of acceptance of the Tender.
24.0The purchaser agrees to supply the aforementioned site plan identifying the seven trees within 3 working days from date of acceptance.
25.0The deposit of 10% shall be paid upon this agreement becoming unconditional.
26.0Settlement of the balance of the purchase price shall be 60 days from the agreement becoming unconditional.
27.0The vendor agrees to grant the Purchaser access to property from date of acceptance only for the purpose of showing builders, architects and other professionals the property. They do not agree to any alterations or structural work being carried out on the property during the access period. In consideration of the Vendors granting this access, the purchasers agree to keep the property secure at all times and not to do, or allow to be done by any other person entering the property pursuant to this access clause, any act which shall make void or voidable the Vendor’s policy of insurance on the property and will keep the Vendor indemnified for any loss or damage the Vendor may suffer as a result of or arising from the Purchasers breach of this clause or such access being given.
[25] When signing the Agreement, Ms Duncan noted that clause 24.0, under which the purchaser agreed to supply the site plan identifying the seven trees to be removed, had in fact already been complied with. However, the plan that Mr Madsen had attached to the Agreement was not initialled by Mr Bartlett and that has essentially opened the door to the present dispute. As will emerge, Mr Bartlett asserts that he agreed a different plan from the plan that was attached to the Agreement.
[26] Clause 23.0 required the Council to consent to removal of the seven trees identified on the site plan attached to the Agreement. The Council’s consent had to be given “on or before 90 days of receiving notice of acceptance of the Tender”.
There is an issue as to who had the obligation to ensure fulfilment of that condition. On the face of it, the reference to the consent being obtained within 90 days of receipt of notice of acceptance of the tender, suggests that the obligation was that of the defendants, as they would be the party “receiving notice of acceptance”. I consider that is the proper interpretation of the Agreement.
[27] In fact, the tender was accepted by virtue of the execution of the Agreement. Mr Madsen advised Mr Bartlett of execution by the plaintiffs on 4 May. He did that by sending him an e-mail attaching the Agreement. He stated that the originals would be processed at Barfoot and Thompson’s Ponsonby office and forwarded to Mr Bartlett’s solicitor “when nominated”. Having heard nothing, he sent a further e- mail on 8 May inquiring as to whether or not he had chosen a solicitor so that the Agreement could be “processed”.
[28] Having still heard nothing back from Mr Bartlett, Mr Madsen sent a further e-mail dated 23 May 2012. That e-mail was in the following terms:
I was going to report back to the Executors of Cliff Road on progress, I trust all is progressing along?
Do you need them, as owners, to submit anything to Council to help and also has your Trust decided on their solicitor?
[29] That e-mail elicited the following response, on Friday 25 May:
The lawyer is Monica Rodgers at Simpson Western, her mailing address is
Private Bag 93533, Takapuna 0740.
We have the plans underway and have had the levels done, so all underway. I’ve asked about their support and will probably get them to sign a letter when we are ready to put the plans in.
[30] It was Mr Madsen’s evidence that over the following weeks he made regular inquiries of Mr Bartlett as to progress, particularly in relation to the necessary application to the Council for permission to remove the trees. He attached an e-mail dated 6 June 2012 to Mr Bartlett in which he referred to the fact that one of the executors had been asking for an update on how Mr Bartlett was going with the application to remove the trees. Mr Bartlett replied on that day stating that he was not a lot further ahead in terms of milestones. He referred to finalising the floor
plan, which had needed some changes to fit the site. In a subsequent exchange he explained that although application to remove the trees could proceed without a plan of the intended dwelling, the application would have a better chance of success if the reasons for removal could be demonstrated.
[31] Mr Madsen made inquiry again on 19 June, and Mr Bartlett replied on
25 June stating that he had just returned from overseas and would update him on the following day. That did not occur. But on Friday 29 June Mr Bartlett wrote to both Mr Madsen and Mr Hinton as follows:
Quick update. We have had to make some changes to the floor plan now that the base design is done and the house will be about 30m larger. Unfortunately from my viewpoint it will mean that we will need to have removed a further 4 trees, although these are at the back and rear so should not present a council issue. Obviously the contract conditions related to the removal of the trees we have previously identified stays as is and will not be effected by the increase in how many we wish to remove.
We will also need to excavate further to get under the 9m height restriction. Core plans are virtually done, onto the engineering to make sure we will have no cliff issues.
[32] Mr Madsen said this e-mail confirmed his suspicions that Mr Bartlett was not concentrating on achieving satisfaction of the condition in the Agreement requiring Council approval for removal of the trees. On 30 June, he wrote to the plaintiffs in the following terms:
We understand no application for consent to remove the trees have [sic] been submitted by the purchaser as yet.
The following email arrived yesterday afternoon.2 Saull [Mr Hinton] and I have always had difficulties getting hold of him by phone but we will endeavour to get in touch with him this weekend to remind him of his responsibilities under the contract and an explanation of where this is heading. Once either Saull or I have contacted him I will phone you with an update. If we are not comfortable with what is happening I suggest we get on with our own application as either way it will be valuable to an eventual sale of the property.
The [purchasers’] nominated solicitor contacted me yesterday afternoon asking for his email address as she has been unable to get hold of him as well. Of some concern is that they have not acted for him or [for] his Trust before.
2 Mr Madsen forwarded Mr Bartlett’s e-mail of 29 June.
[33] Mr Madsen confirmed in his affidavit what he had said in the final paragraph of this e-mail about contact with Mr Bartlett’s solicitor.
[34] The lack of progress with the consent for the removal of the trees was of concern to the plaintiffs. Mr Leary suggested to his co-executors that they should take the initiative and lodge their own application with the Council. There was agreement that this should be done and on 3 July 2012 Mr Leary reported to Ms Duncan that he had lodged the application himself that morning. In the meantime, Ms Duncan had been in touch with Ms Rodgers to express concern about the failure of Mr Bartlett to make an application for consent to the removal of the trees. On 4 July, Ms Rodgers wrote to Ms Duncan in the following terms:
As discussed, our client informs me that the application for the removal of the trees and the building consent application are to be lodged by the end of next week. Council recommended to our client that this was the best way.
We understand that the consent application for the tree removal should not take that long to process.
We record your advice that your clients have made their own application to
Council which we will obviously need to discuss with our client.
[35] On 11 July Ms Duncan wrote again to Ms Rodgers. She asked for confirmation of when Mr Bartlett had lodged the application. She noted that it might be necessary to extend the time for obtaining Council consent. She received no response to that e-mail. In fact, Mr Bartlett never made the application.
[36] Mr Bartlett wrote to Mr Madsen and Mr Hinton by an e-mail dated 12 July
2012. In his e-mail he said that he would be putting in “the permit” that week. He referred to advice from Ms Rodgers about the fact that the plaintiffs had put in their own application to have the trees removed and said that it would be “potentially confusing” for the Council. He also said that:
The council thinks that the best way forward is to put in separate permit for the remainder of the trees that we need, so I would appreciate it if you could send me a copy of the permit that was lodged to check on the trees that were identified, as there is some confusion on identifying the right trees.
[37] Mr Madsen replied that morning. He advised him of the Council application number for the application for consent to remove the trees that had been made by the
plaintiffs. He confirmed that “the same attached plans as per the Sale and Purchase Agreement were provided to identify the trees”. The plaintiff ’s application had been justified on the basis that removal of the trees was necessary to provide a building platform for any future development on the property and also because branches from the trees had been falling on the existing dwelling. Mr Madsen suggested to Mr Bartlett that the plaintiffs’ application could be amalgamated with that made by Mr Bartlett, to give an “even more compelling argument” for the removal of the trees.
[38] Mr Madsen said in his affidavit that he thought the reference in Mr Bartlett’s e-mail of 12 July to putting in a “separate permit for the remainder of the trees that we need” was a reference to the additional four trees that Mr Bartlett had referred to in his earlier e-mail of 29 June. Rather than providing a copy of the application for consent to remove the trees, he had simply provided Mr Bartlett with the reference number given to the application by the Council, and advised him that the same plan had been used in the application as had been used in the Agreement. It is significant in view of arguments raised by the defendants that Mr Bartlett at that point did not reply requesting a copy of the application (which he had called “a permit”) in the e- mail of 12 July.
[39] The next communication from Mr Bartlett was an e-mail of 31 July in which he advised Mr Madsen and Mr Hinton that some engineering issues had been encountered in relation to the proposed house that were not fully resolved. He expressed the opinion that those issues would not affect “the permit”, and he thought the best thing to “expedite the deal” would be to complete the application for removal of the trees in advance of making the necessary application for consent to build the new house. He stated that he would probably ask for a “week extension of the tree removal clause to allow this to happen”.
[40] In the meantime, Ms Duncan had written again to Ms Rodgers. Her letter was in the following terms:
It now appears unlikely that we will obtain a response from Council within the 90 day time limit imposed by Clause 23 of the agreement (3rd of August
2012). We therefore suggest that the date for obtaining the consent be
extended until the 12th of October 2012. Please confirm your client’s
approval to this extension.
[41] Ms Rodgers replied on 2 August 2012. In her letter, she recorded her instructions that:
Our client will agree to the extension of time for satisfaction of clause 23.0 to 12 October 2012 but provided that the agreement is varied to include a new condition that the agreement is conditional upon our client being satisfied by 31 August 2012 that it can build a dwelling on the property of the type, style and design as our client requires.
[42] Ms Rodgers was concerned by that reply, given that the expiry of the 90 day period referred to in clause 23.0 was the following day, 3 August 2012, and in her view if the proposed new condition were accepted, it would be easy for the defendants to avoid complying with their obligations under the Agreement. She decided not to respond to the letter.
[43] The Council granted its consent to the plaintiffs’ application to remove the
trees. Another solicitor employed by Ms Duncan’s firm wrote to Ms Rodgers on
13 September 2012 advising her of the granting of the application. The letter also stated that the Agreement was therefore unconditional, and the deposit of “$251,000” [sic] was payable within 14 days. No response was received to that letter, and the deposit was not paid.
[44] On 27 September Ms Rodgers wrote to Ms Duncan requesting a copy of the “consented application”. This was taken to be a request for the Council consent and a copy of that was attached to the reply sent the same day. Ms Duncan’s firm also noted that the deposit was due to be paid on that day and asked that it be paid forthwith. In the meantime, Mr Madsen had been endeavouring to make contact with Mr Bartlett to find out what was happening.
[45] There was a meeting between Mr Bartlett, Mr Madsen and Mr Hinton on site on 3 October. According to Mr Madsen, Mr Bartlett appeared keen to proceed with the purchase and wished to negotiate a payment arrangement for the deposit, and to defer settlement until February 2013. Mr Hinton gave similar evidence, stating that he could distinctly recall at that meeting that Mr Bartlett had said he wished to “go
unconditional” but wanted to defer payment of the deposit. Mr Hinton said that Mr Bartlett was prepared to pay interest on the balance of the purchase price if a later settlement date could be agreed. In his affidavit of 1 February 2013, Mr Bartlett did not respond to the evidence of Mr Madsen and Mr Hinton about the 3 October meeting.
[46] Later that day Mr Madsen sent an e-mail to Mr Bartlett which was in the following terms:
Thanks for meeting today at 80 Cliff Rd.
Attached is the Resource Consent (already with your solicitor) and the arborist report for the consent that identifies the seven trees as per the Sale and Purchase agreement.
Sorry about the delay forwarding this to you but I just needed make contact with two of the main trustees. Both accept in principle your proposal for
Deposit: $70,000-$100,000 payable immediately
The balance of the 10% payable on the 16th November 2012
Settlement 28th February 2013 subject to penalty for late settlement as per existing Sale and Purchase agreement.
Can you please get your solicitor to formalise this to the vendors solicitor.
[47] On the following day, 4 October, Mr Bartlett and Mr Madsen spoke on the telephone and Mr Bartlett acknowledged receipt of the e-mail, and stated that he had everything that he needed and would be seeing his solicitor to formalise “the payment variation”.
[48] However, on 8 October Mr Bartlett telephoned Mr Madsen and told him that one of the trees identified for removal on the resource consent documents was not a tree that he had originally identified for removal. Mr Bartlett e-mailed Mr Madsen following their telephone discussion. His e-mail was in the following terms:
Just giving you a quick heads up on an issue with the permit. The 7 trees that they have specified to be removed are not the 7 trees that I identified and that the architects and I have been working to. Ive had a look at the contract, and although 7 trees on the permit are marked its not the 7 trees that I supplied to yourself and Saul, there is one different, but its an important one being the pine on the drive that restricts the length on the house. Im not quite sure how it happened as I signed the site plan with the trees identifies
[sic] but the one that is in the contract is not the one I signed although the vendor has signed it.
Over the weekend I and the architect have been working to see and see [sic] if we can change the shape of the house to fit, but it now looks like if we change the orientation we have more trees that we would need to remove. Im just working through the options, as you know we have planned to have more removed anyway, although they were not crucial to the site so im [sic] working with the council to see if we should just put in a new application or if an addendum can be filed. Ill ring you this afternoon after speaking to the council on the issue.
[49] Also on 8 October, at Mr Bartlett’s request, Mr Madsen provided to Mr Bartlett another copy of the plan that had been attached to the Agreement. Mr Madsen asked him to mark on that site plan the missing tree as he was not sure which tree was causing the problem.
[50] On 9 October Mr Bartlett forwarded what he described as “the correct site plan that I signed” and which he said was the one he had been working to. That plan was effectively the plan attached to the Agreement, but modified so as to reflect Mr Bartlett’s version of the plan that he had agreed with Mr Hinton on site and that had been subsequently attached to the Agreement. Mr Bartlett noted that the “incorrect tree” on the plan that had been attached to the Agreement was tree number
5, which should have been the different tree numbered 2 on the plan attached to his e-mail. The key issue with this tree was that, as positioned on the “correct” site plan, it restricted the length of the house. Mr Bartlett observed that he was working to see if the difficulty could be resolved.
[51] Mr Madsen’s evidence was that he had never seen that plan before. Mr Hinton also said that he had never seen that plan and that he was quite sure it was not the plan that Mr Bartlett had marked in his presence on 4 May 2012.
[52] On 17 October Mr Bartlett again wrote to Mr Madsen. He advised that he had asked Ms Rodgers to cancel the contract. He stated that “the issues based around the tree to be removed is [sic] just too significant”, and delaying the “unconditional aspect” of the contract would put the vendors at a significant disadvantage with summer approaching and no opportunity for them to obtain a “back up” deal. He did state, however, that he remained interested in the property.
[53] On the same day, Ms Rodgers wrote to Ms Duncan in the following terms:
We refer to your facsimile of 13 September 2012 informing us that your
client’s application for tree removal had been approved.
The agreement was conditional upon Council agreeing to issue a permit to remove seven trees indentified on a site plan annexed to the agreement. Our client informs us that the plan annexed to the agreement is not the one he signed and presented to the agent as required by clause 24.0. A copy of our client’s plan is attached. The significant difference is the permit approved by Council did not include the tree marked “2” on the attached plan. This tree severely restricts the type of house that can be built on the site.
Accordingly, the condition in clause 23.0 is not satisfied and we hereby give notice on our client’s behalf that the agreement is cancelled....
[54] In her affidavit, Ms Duncan noted that the plan on which Mr Bartlett relied had not previously been seen by her and she expressed the view that it was a “pure fabrication”. On 2 November, she wrote disputing the assertion made in respect of the trees and stating that the notice of cancellation was not accepted. She recorded the vendors’ expectation that the purchasers would settle in accordance with the Agreement. Her letter encapsulates the position on which the plaintiffs now rely:
Your client Doug Barton3 met with the agent Saull Hinton at the site. Your client drew the trees on the map and the agent placed numbers beside them. The agent also photographed the trees at the same time so there is no doubt of the identification.
Our client has revisited the site with the agents and the photographs match the trees which were referred to in the arborist’s report and consented to by the Council.
We understand that your client has not paid the deposit. We are instructed to give notice that your client must pay the deposit on or before the third working day after service of this notice on you by fax failing which the vendor will look to their remedies.
The meeting on site on 3 May 2012
[55] The key factual issue is what happened at the site meeting on 3 May 2012. As to that, Mr Hinton and Mr Bartlett gave conflicting evidence. According to Mr Hinton, he went with a site plan and handed it to Mr Bartlett. He then said:
In my presence Mr Bartlett walked around the property and marked on the plan each of the 7 trees that he wished to have removed by placing an “x” within a circle at the appropriate point on the plan. He did this in my presence. I asked him to double check the position of his markings on the plan and then I numbered the trees in his presence 1 to 7 (inclusive).
The plan referred to by Mr Hinton, which was attached to his affidavit, was the plan that was also attached to the Agreement. He continued:
After completing this marking on the plan I took photographs of each of the
7 trees that had been identified. Again, Mr Bartlett followed me to confirm that the trees that I was photographing were the same trees that he had
marked on the plan. Annexed hereto and marked “C” are the three pages of
5 photographs of the trees that I refer to. Upon returning to the office I downloaded the photographs from my camera, scanned the site plan as marked by Mr Bartlett and then forwarded them by email to Carl Madsen.
[56] However, according to Mr Bartlett, he took several copies of the site plan with him to the site and he noticed that Mr Hinton also had a copy of the same plans. He says that the two walked around the site and that he indicated the relevant trees “from my map”. He noticed that Mr Hinton4 had his own plan and was making his own notes, which he thought was to facilitate taking photographs. He then said:
I then gave a signed plan to Mr Hinton. Contrary to what Mr Hinton has said in his affidavit we did not share one plan; I indicated the trees and numbered them on my site plan, and he did the same on his site plan.
Mr Hinton then took a number of photographs, but did not show the photographs to
Mr Bartlett.
[57] In an affidavit sworn in reply, Mr Hinton observed that he had a clear recollection of the site meeting of 3 May, that Mr Bartlett did not have with him any separate copy of the site plan, that Mr Hinton gave Mr Bartlett his own copy of the site plan and that Mr Bartlett marked the trees on that plan by placing an “x” within a circle for each tree. The plan was then given back to Mr Hinton with the trees fully marked on it, which Mr Hinton then proceeded to number 1 to 7 in Mr Bartlett’s presence. Mr Bartlett did not sign the plan, which Mr Hinton then took back to the office to be scanned and forwarded by e-mail to Mr Madsen. He had taken the view
that Mr Bartlett should himself mark the trees on one plan, so as to avoid any later confusion or misunderstanding.
Evaluation
[58] For a number of reasons I have not found Mr Bartlett’s version of events
credible.
[59] First, I note that Mr Bartlett did not raise an issue about the wrong plan having been used until 8 October 2012. According to Mr Bartlett, he did not receive a copy of the Agreement from his solicitor until 26 July 2012. Even then, he did not notice that the plan attached to the Agreement was not the one he signed. He explains that he believed he would be putting in his own application for removal of the trees, and would be using his own “map”. While the site plan attached to the Agreement was wrong, it looked on the face of it to be correct, and he observed that the “mistake could not be easily seen without a thorough examination”. The photographs of the trees did not mean much to him, as they did not illustrate the location of each tree on the property.
[60] The subsequent application for consent to remove the trees, which had been made by the plaintiffs, was based on the wrong plan and as a result, the Council’s consent was granted for the wrong trees. Mr Bartlett said that it was not until he went to the Council to look at the consent for removal of the trees on 26 September that he noticed the error.
[61] Mr Bartlett’s evidence that he did not receive a copy of the Agreement until
26 July is inconsistent with evidence that Mr Madsen gave that he forwarded the Agreement to Mr Bartlett on 4 May. The e-mail that Mr Madsen sent attached the Agreement, including the plan and photographs. Further, once Mr Bartlett had advised Mr Madsen that Ms Rodgers would be his solicitor for the purposes of the transaction the manager of Barfoot and Thompson’s Ponsonby Office wrote to Ms Rodgers by letter dated 5 June enclosing a copy of the Agreement as signed.
[62] Mr Bartlett said that he did not receive the e-mail of 4 May, and that he had
“subsequently asked” Mr Madsen to send his lawyer a copy of the Agreement. He
referred to Mr Madsen having mentioned in conversation problems that he was having sending an e-mail from his computer, which he identified as “one possible reason” for not receiving it. However, Mr Madsen also sent the e-mail to Mr Hinton, on the same day, and he received it. Even if this issue is resolved in Mr Bartlett’s favour, his solicitor had the plan in early June5 and the allegation about the wrong plan having been attached to the Agreement was not made until Mr Bartlett’s e-mail of 8 October 2012. It does not seem plausible to me that an issue of such importance would simply not have been noticed until that point especially in the context of the
development proposals that Mr Bartlett was working up with his architect over the intervening period. There had clearly been a focus on the location of the trees, as the e-mail Mr Bartlett sent on 29 June shows. Further, as noted above, by his e-mail of
12 July 2012, Mr Bartlett had himself sought confirmation from Mr Madsen as to the trees that were covered by the application for tree removal made to the Council. Mr Madsen told him that the trees were those identified in the Agreement.
[63] Mr Bartlett’s version of events would require it to be accepted that he did not check to see whether the plan attached to the Agreement was the correct plan. Further, since he claims to have kept a copy of the plan that he signed it would need to be accepted that he never gave that plan to his solicitor or asked her to check it against the plan in the Agreement. This in itself is not plausible given the evident importance of the removal of the trees for the viability of the intended development.
[64] Nor is it credible in my view that confusion could have arisen at the site given the detail Mr Hinton was able to give as to the methodology that was followed to identify the trees. It seems to be inherently unlikely that the result of the site meeting would have been the production of two inconsistent versions of the plan. I note in this respect that the tree claimed to be wrongly omitted was further away from the existing house property than trees that were marked on the plan.
[65] In the circumstances, I am of the view that the version of events proffered by
Mr Bartlett is inherently lacking in credibility. That conclusion is consonant with the impression created by the narrative I have set out in which it seems that Mr Bartlett
5 It will be remembered that Mr Madsen had to ask Mr Bartlett several times for the name of his solicitor so that he could send the Agreement to her.
wished to satisfy himself that the house he wished to build could be built, focusing on the development of the house plans and delaying the making of, then leaving to the plaintiffs, the application for resource consent to remove the trees which was the purchasers’ responsibility under the Agreement. That stance was consistent with the offer he had originally made for the property, but it was not legitimate under the Agreement.
[66] Mr Bartlett’s real intentions were manifest when he instructed Ms Rodgers to write on 2 August agreeing to extend the time for satisfaction of the clause 23.0 but on condition that the Agreement was varied to include a new clause making the Agreement conditional upon the purchasers’ satisfaction that a dwelling of the type, style and design required could be built on the property. It can be observed that on Mr Bartlett’s version of events he had not noted at this time the incorrect plan and so there would be no reason to suppose that he would not be able to build the house he wished to build.
[67] I conclude that the defendants have no defence to the claim.
Quantum
[68] As noted earlier the plaintiffs seek summary judgment in an amount of
$246,793.44. That includes claims for agent’s commission and promotional costs on
the second sale of the property.
[69] I accept the plaintiffs’ contention that the claims for agent’s commission and promotional costs on the second sale are proper. The Agreement was wrongly cancelled at a time when the costs now sought had been incurred. It was Ms Duncan’s evidence that the relevant costs had in fact been deducted from the deposit sum held by Barfoot and Thompson as recorded in their invoice dated 15
March 2013.
[70] That invoice was intended to be attached to Ms Duncan’s affidavit of 6 June
2013, but was inadvertently omitted. I gave leave for her to file a further affidavit attaching the Barfoot and Thompson invoice, and reserving leave for Mr Tetzlaff to
make any further submission that he wished to having seen the invoice. No such submissions were received.
[71] Consequently, there is no outstanding issue concerning the quantum sought in
the plaintiffs’ claim.
Result
[72] These conclusions mean that the plaintiffs are entitled to succeed on their application for summary judgment and there will be judgment accordingly for the sums set out in [6] above.
[73] If there is any issue as to costs that cannot be agreed between the parties, I
will receive memoranda within 15 working days of delivery of this judgment.
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