Sidey v Ngatapa Limited
[2025] NZHC 3056
•15 October 2025
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2025-409-520 [2025] NZHC 3056
UNDERPart 19 High Court Rules 2016 and section 143 Land Transfer Act 2017
IN THE MATTER of an application sustaining a caveat BETWEEN MICHAEL DAVID SIDEY
Applicant
AND NGATAPA LIMITED
Respondent
Hearing: 6 October 2025
Counsel: R D Butler and T P Refoy-Butler for Applicant
R W Raymond KC and B M Russell for Respondent
Judgment: 15 October 2025
JUDGMENT OF ASSOCIATE JUDGE LESTER
SIDEY v NGATAPA LIMITED [2025] NZHC 3056 [15 October 2025]
[1] The applicant, Mr Sidey, asserts that his agreement for sale and purchase dated 8 July 2025 (the Agreement) with Ngatapa Limited (Ngatapa), was not validly avoided by Ngatapa, which would mean Mr Sidey is entitled to maintain his caveat over the property, registered to protect his claim under the Agreement.
[2] Ngatapa says the Agreement is at an end because it was entitled to avoid the Agreement when Mr Sidey did not confirm a due diligence condition in the Agreement.
[3] Mr Sidey’s argument focuses on an exchange of emails between the parties’ solicitors in respect of proposed amendments to special conditions in the Agreement. Those special conditions relate to matters of concern to Mr Sidey before he would confirm the due diligence condition.
[4] Mr Butler, counsel for Mr Sidey, in his written submissions, submits the factual background is not in dispute. I accept that appears to be the case. There were no factual disputes as to the Agreement, what occurred, or the context that could impact on the meaning of the emails in issue in this proceeding. Mr Butler submitted all Mr Sidey needed to show was an arguable case that Ngatapa had affirmed the Agreement. Given there are no factual disputes, nor any suggestion there is further relevant evidence that could be produced in respect of affirmation, the meaning of the emails is a question of law which can be determined in an application to sustain a caveat.
[5] Under the Agreement, Mr Sidey agreed to pay $7.75 million for 198.2447 hectares of rural land. The Agreement contained the following further due diligence condition:
35.DUE DILIGENCE
35.1This Agreement is conditional upon the Purchaser being entirely satisfied that the property is suitable to them at the agreed price and for their intended uses following the Purchaser undertaking a due and diligent investigation of the property which may include (without limitation).
a)Architectural and engineering analysis in respect of the buildings.
b)The property’s compliance with the Resource Management Act 1991 and the Building Act 2004 including future compliance given the Purchaser’s proposed uses of the property.
c)A valuation report by a registered valuer appointed by the Purchaser.
d)A review of the Certificate of title, Easements and EQC Claims.
e)The obtaining of a satisfactory Land Information Memorandum from the local territorial authority.
f)An assessment of the overall financial suitability of the Purchaser’s proposed investment in the property.
g)Securing finance upon terms and conditions satisfactory to themselves.
35.2The parties acknowledge that the satisfaction of clause 35.1 shall be at the sole discretion of the Purchaser and that if the condition is not fulfilled due to the Purchaser not being satisfied with any aspect of the property the Purchaser shall not be obliged to state any reason for the Purchaser’s lack of satisfaction.
35.3The time for satisfaction of the conditions in clause 35.1 shall be confirmed within fifteen (15) working days from the date of this agreement.
35.4The parties acknowledge that clause 35.1 is inserted for the sole benefit of the Purchaser and may at any time prior to the Agreement being voided be waived by the Purchaser giving written notice of waiver to the Vendor.
35.5The parties acknowledge that the Purchaser may elect to employ independent consultants at the Purchaser’s cost to prepare a report on the property and that the Vendor will at all reasonable time and upon reasonable notice provide or cause to be provided access to any necessary part of the property to enable the consultants to undertake the report.
[6] Initially, the time for satisfaction of the condition was 29 July 2025, being 15 working days after the date of the Agreement.
[7] There were two formal extensions of time for satisfaction of the due diligence condition; the first was to extend the deadline to 30 July 2025. On 1 August 2025, the parties agreed to a second extension to 5.00 pm on 4 August 2025.
[8] Mr Butler says that the period between 1-4 August 2025 is important because between those dates the parties and their solicitors continued to work towards finalising the precise wording of three terms said to be of concern to Mr Sidey.
[9] Those terms concerned Mr Sidey wanting to commence grazing on the property before settlement, have the full suite of water allocation rights associated with the farm property to be transferred at settlement, and check the position regarding EQC claims associated with the farmhouse on the property.
[10] The discussion between solicitors in respect of the terms, which I refer to below, concern finalising the precise wording of the terms relating to these three issues. While the scope of the due diligence clause was much wider, there is no suggestion there were other impediments to due diligence. While the emails refer to confirmation of the due diligence condition, in fact what was being negotiated were amendments to the Agreement. The terms of the Agreement had been confirmed when the solicitor’s approval of contract clause was satisfied on 15 July 2025. Finalising the further terms was synonymous with satisfaction of due diligence.
[11] On 7 August 2025, there were direct communications by text between Mr Sidey and Mr Cox (one of the directors of Ngatapa). Those discussions were in relation to the outstanding matters referred to at [9] above. There was also email correspondence between the parties’ solicitors, detailed below.
[12] Mr Butler refers to the correspondence between the solicitors during the period 1 and 7 August 2025 and submits that two of those emails (on 7 August 2025) “are of particular importance as they affirmed the Agreement”.
[13] Mr Butler emphases that in none of the emails did Ngatapa take or raise any issue regarding the fact that Mr Sidey had not formally confirmed the due diligence condition by 5.00 pm on 4 August 2025. Such is not the point. This is not a case where estoppel or waiver is alleged—that is not surprising given silence from Ngatapa in respect of the due diligence condition would not found waiver or estoppel. In any event, as I will set out below, both Mr Sidey’s and Ngatapa’s solicitors saw due diligence as a matter that needed to be confirmed.
Affirmation and extension of time for confirmation of due diligence
[14] As to the principles applying to affirmation, Mr Butler, in his submissions, referred to Associate Judge Gardiner’s decision in Birdwood Rodney Trustee Ltd v Blue Moon Ltd:1
… where a party has a right of avoidance for failure of a condition, they are faced with an election between avoiding or affirming the contract. Once an election is made it is final and precludes the exercise of the alternative right.
This court will not recognise an election unless satisfied that “matters have reached the stage of choice … and that the words or conduct are unequivocal.” This is determined by an objective assessment of the party’s actions. There need not necessarily be communication of an election to affirm, although obviously there must be overt evidence of it.
[15]Burrows, Finn and Todd on the Law of Contract in New Zealand state:2
A party affirms, if, with full knowledge of the facts, he or she makes it clear by words or acts, or even by silence, that he or she refuses to accept the breach as a discharge of the contract. Randerson J has said: “It must be shown that the electing party made a firm and settled choice and does not intend to go back on it. Putting it another way, the electing party must be shown to have committed irrevocably to one of two inconsistent causes of action”.
Conduct which is more equivocal and less decisive than this will not amount to affirmation, and the court may be inclined to hold that the innocent party is still keeping his or her options open.
Affirmation requires an unequivocal choice. This is determined by an objective assessment of the parties’ actions, and may be imputed “irrespective of actual intention or subsequent rationalisation”.
(emphasis added)
[16]D W McMorland in Sale of Land notes:3
… courts are cautious in making a finding of election and require that both matters have reached the stage of choice, so that the party is not merely keeping the question option, and the words and conduct are unequivocal.
(emphasis added)
1 Birdwood Rodney Trustee Ltd v Blue Moon Ltd [2022] NZHC 23, [2022] NZCCLR 5 at [86]–[87] (footnotes omitted).
2 Stephen Todd and Matthew Barber Burrows, Finn and Todd on the Law of Contract in New Zealand, Burrows Finn and Todd on the Law of Contract in New Zealand (7th ed, LexisNexis, Wellington, 2022) at [18.3.2] (footnotes omitted).
3 D W McMorland Sale of Land (4th ed, Cathcart Trust, Auckland, 2022) at 12.28.
The key emails
[17] Given the weight Mr Sidey places on the email exchanges, it is necessary to set them out in some detail. There was only one communication in evidence on 5 August 2025 being an email from Ms Macgregor, solicitor for Mr Sidey, to Ms Robinson, solicitor for Ngatapa. This email, sent at 10.35 am, was a follow-up to an email sent by Ms Macgregor at 4.18 pm on 4 August 2025. In the 4 August 2025 email, Ms Macgregor referred to amendments to the further terms and advised that if those terms were accepted by both clients, and the settlement date being changed to 15 October 2025, Mr Sidey would confirm due diligence on the basis of those amendments. In the 5 August 2025 email, Ms Macgregor referred to a clause relating to early access seeking to clarify her client’s meaning of the clause. There being no response to the 5 August 2025 email by the solicitors for Ngatapa on 5 August 2025, affirmation, if it occurred, would have to be found on events that occurred on 6 or 7 August 2025.
[18] On 6 August 2025 at 5.29 pm, Ms Robinson wrote to Ms Macgregor. Mr Cox was copied into the email.
[19] In the 6 August 2025 email, Ms Robinson attached updated terms and advised that Ngatapa was uncomfortable with a mixed possession and settlement date. Ms Robinson suggested that if there was a concern with obtaining stock, the settlement date could be brought forward, and suggested 15 September 2025.
[20] The 6 August 2025 email recorded that Mr Cox had been unable to get a formal report from EQC about what claims had been made on the property, but had received verbal confirmation there had only been a minor claim of around $5,000. Ms Robinson recorded that a formal request for information had been made, but difficulties had been experienced with solicitors requesting such information.
[21]The final paragraph of the 6 August 2025 email recorded:
These terms are still subject to the vendor’s final approval. The intention is that once further terms are agreed, due diligence is then confirmed and the agreement is unconditional, with your client’s option to cancel if the water consent is not transferred with the full allocation.
[22] Accordingly, as at 5.29 pm on 6 August 2025, there had been no agreement in respect of amending the special conditions in the Agreement, which Mr Sidey wanted amended before confirming due diligence. Ngatapa’s solicitor recorded that due diligence was outstanding and the Agreement remained conditional.
[23] In my view, the 6 August 2025 email did not affirm the Agreement even though due diligence had not been confirmed. Rather, the issue of confirmation of due diligence expressly remained a live issue. This email and the emails that followed, show each party was keeping their options open in respect of due diligence. This is reinforced by Mr Sidey not requesting a formal extension of time to satisfy due diligence.
[24] The next email was sent by Ms Macgregor to Ms Robinson at 12.07 pm on 7 August 2025. I set the email out in its entirety:
Hi Mark and Lucy,
Thanks for the call just now.
Attached is a revised version of the further terms, based on our instructions from [Mr Sidey] (which we understand Shane [vendor’s real estate agent] has confirmed with [Mr Cox].
[Mr Sidey] is getting onto the nominee entity ASAP – I’ll come back to you on that as soon as I have the details.
Once the attached terms are in agreed form, we can confirm DD. Look forward to hearing from you.
[25] It will be seen that the email is a record of a telephone discussion. The proposed further terms are produced by consent. The email records: “Once the attached terms are in agreed form, we can confirm [due diligence]”. Accordingly, this is Mr Sidey recording his view that the due diligence condition remains unsatisfied. The two emails detailed above record that common position.
Email from vendor’s agent: 7 August 2025
[26] The vendor’s agent, Mr Shane O’Brien, was communicating with Mr Cox of Ngatapa and with Mr Sidey. Mr Sidey says that on 7 August 2025 “the parties were working hard to iron out the further terms”. He refers to Mr O’Brien helping them
iron out terms. Mr Sidey produces an email that he received from Mr O’Brien on 7 August 2025 at 10.15 am which he forwarded to his solicitor a couple of minutes later. He says the email shows that Mr O’Brien had been talking to both him and Mr Cox about the further terms.
[27] Mr Raymond KC, counsel for Ngatapa, placed considerable significance on the 10.15 am email of 7 August 2025. In the email Mick is Mr Sidey. It provided as follows:
1.Mick to go unconditional on all matters except transfer of water (i.e. today)
2.Mick will pay $500k deposit immediately on going unconditional as per Point 1. (today)
3.Settlement is still 13 OCTOBER 2025 or earlier by mutual agreement
4.Clause 33.5 to change to “immediately upon going unconditional” vendor to apply for transfer of water i.e. today
5.New Clauses 33.6 and 33.7 look okay and acceptable to Mick
6.Okay to remove clause 41 provided that claim is “around $5k”
7.Early access only given once points 1 and 2 above done and Mick happy with transfer of water amount on 15 September 2025
8.Purchaser Early access – Mick happy to work with vendor but on full confirmation as per Point 7
a.Mick has access to 45 hectares to spray out, cultivate and sow down Fodder Beet & Kale from 15/9. Will work with vendor on ideal paddocks.
b.Mick will pay Brian (Manager) wages plus any power costs for irrigation used from 15/9 to settlement.
c.Vendor to continue grazing Lovett cows and take income to Settlement
d.Vendor to leave his 23 steers on farm to Settlement.
e.Mick and vendor to work on allowing Mick access to graze up to 500 head of cattle to settlement (maximum and market dependent)
f.Happy to work with vendor on a farm management plan/grazing plan once point 7 done (full confirmation as date may vary because of Ecan).
[28] Mr Sidey’s email to his solicitor on 7 August 2025 said: “Please refer to the changes below and feel free to give me a call when you’re free”.
[29]Then ensued, between Mr Cox and Mr Sidey, a series of text messages between
3.40 pm and 4.00 pm on 7 August 2025 which related to the arrangements around grazing. Mr Sidey, when he forwarded Mr O’Brien’s email to his solicitor at
10.17 am, did not say that the matters set out at [27] were not agreed, nor does he say in his evidence that he had not agreed to the terms set out in Mr O’Brien’s email. The text messages on the afternoon of 7 August 2025 were aimed at addressing points 8(c) and 8(e) from [27] above.
[30] I return to Ms Macgregor’s 12.07 pm email on 7 August 2025. The attached terms to that email included terms reflecting, or largely duplicating, the matters addressed at paragraph eight of Mr O’Brien’s email above. Ms Macgregor’s email at
12.07 pm on 7 August 2025 updated the terms attached to Ms Robinson’s email of 6 August 2025 and, as noted, adopted some of the matters from Mr O’Brien’s email of 10.15 am on 7 August 2025.
[31] On 7 August 2025 at 12.22 pm, Ms Robinson emailed Ms Macgregor to ask what her instructions were around the settlement date and asking if it was to be on 13 October 2025. Neither party sees this email as significant.
[32] This is the context in which the two key emails fall to be considered. These emails are central to Mr Sidey’s position.
Email from Ms Robinson (Ngatapa’s solicitor) to Ms Macgregor (Mr Sidey’s solicitor) on 7 August 2025 4.32 pm
[33]Mr Cox was included in the parties copied into this email.4
Thanks Oliva, we are very close, just a few amendments to the final clause below which are to reflect that the agreement is around grazing by the purchaser prior to settlement, rather than early possession, with some comments below.
41
PURCHASER EARLY ACCESSGRAZING BY PURCHASER PRIOR TO SETTLEMENT
4 Note: the additions are shown in red small caps.
41.1Subject to the Water Consent transfer being completed in accordance with clause 33 above, the Agreement being
unconditional in all respects and the deposit having been paid by the Purchaser, the Vendor will grant the Purchaser early access to the Property from Monday 15 September 2025 on the following terms:
41.1.1the Purchaser will have access to approximately 45 hectares (being specific paddocks that are agreed between the Vendor and Purchaser) to spray out, cultivate and sow-down fodder beet and kale crops;
41.1.2the Purchaser will be responsible for paying the manager’s wages
plus any electricity costs associated with irrigation from
15 September 2025 until settlement;[AH – would rather this is not included, as makes it unclear that the purchaser does not have possession of the whole of the property)
41.1.3 the Vendor CURRENTLY
will be entitled to continue tograzeS the Lovett cows on the Property. THE PURCHASER SHALL CONFIRM TO THE VENDOR PRIOR TO 20 AUGUST 2025 IF THE PURCHASERWISHES TO TAKE OVER THIS GRAZING AGREEMENT FROM
SETTLEMENT
until settlement (and receive all associated income);
41.1.4the Vendor will be entitled to continue to graze its 23 steers on the
Property until settlement;(AH – vendor is entitled to graze, possession is not being given early)
41.1.5the Vendor and the Purchaser will work together to agree
appropriate access FOR GRAZING to the Property to allow the Purchaser to graze up to 500 cattle on the Property from
15 September 2025 until settlement;
41.1.6the Vendor and the Purchaser will work together to agree and implement an appropriate farm management / grazing plan for the Property to facilitate the above.
Can you give me a call if any queries. If these are now agreed I can circulate a final copy of the further terms that have been amended and ask for your
confirmation by return that the further terms are varied as per the attached, due diligence is confirmed and the agreement is unconditional.
Just to also record as per previous correspondence, the EQC claim clause 32 should not refer to the Vendor having lodged any claims, and not to reference number 022062.
[34] Counsel were agreed that where the penultimate paragraph refers to the terms as attached, it means the terms set out in the body of the email itself. There was no attachment to the email. The terms that Ms Robinson amended are those that Ms Macgregor had taken from Mr O’Brien’s email of 10.15 am that day, which Ms Macgregor included in her 12.07 pm email.
[35] It is noteworthy that neither Mr Sidey nor Ms Macgregor in their affidavits, address points 1 and 2 from Mr O’Brien’s email set out at [27], that is, the requirement for confirmation (save as to water) and the payment of the deposit to be completed that day. Again, Mr Sidey does not deny that Mr O’Brien’s email sets out the terms that had been, to use his term, “ironed out” by Mr O’Brien acting as intermediary between Mr Cox and Mr Sidey.
[36] Mr Raymond submitted that point 1 of the email of 10.15 am on 7 August 2025 was significant in construing what the penultimate paragraph of the 7 August 2025 email at 4.32 pm reproduced at [33] meant, where Ms Robinson asked for Ms Macgregor’s “confirmation by return” that due diligence was confirmed. Mr Butler submitted it was unrealistic to treat this as requiring confirmation of due diligence by 5.00 pm on 7 August 2025, as it left only 28 minutes for confirmation. I do not accept that submission. The need for confirmation that day on everything except water consent issues had already been agreed as recorded at paragraph 1 of the
10.15 am email. Due diligence had already been extended twice and the remaining matters were relatively minor and, in any event, were essentially covered by what were agreements to agree. See proposed terms 41.1.5 and 41.1.6, with 41.1.3 extending Mr Sidey’s option to take over an existing grazing agreement to 20 August 2025.
[37] The need for confirmation by the end of the day is consistent with both parties treating the confirmation of due diligence as outstanding and needing to be addressed urgently. So much is consistent with there having been no formal extension of time for confirmation.
[38] Ms Macgregor replied to the email, four minutes later at 4.36 pm on 7 August 2025. This email is set out below.
Email from Ms Macgregor to Ms Robinson—7 August 2025 4.36 pm
[39]The email stated:
Thanks Lucy. This is consistent with [Mr Sidey’s] instructions to me earlier this afternoon, so if you could provide the final further terms that would be great.
[40] Mr Butler submits the following paragraph is the key one from Ms Robinson’s email of 4.32 pm reproduced at [34]:
Can you give me a call if any queries. If these are now agreed I can circulate a final copy of the further terms that have been amended and ask for your confirmation by return that the further terms are varied as per the attached, due diligence is confirmed and the agreement is unconditional.
[41] Ms Macgregor’s reply noted, at [290], four minutes later, calls for the further terms to be provided but it does not address the request for Ms Macgregor’s “confirmation by return”.
[42]The exchange of emails just canvassed shows that:
(a)6 August 2025 at 5.29 pm: the vendor tendered terms subject to the vendor’s final approval and notes that due diligence to be confirmed once further terms are agreed.
(b)7 August 2025 at 10.15 am: agent’s email notes that the contract was to go unconditional today (excluding transfer of water).
(c)7 August 2025 at 12.07 pm: purchaser’s solicitor provides revised versions of those terms and notes that once agreed, due diligence can be confirmed.
(d)7 August 2025 at 4.32 pm: further amendments from the vendor’s solicitor are made. The solicitor calls for confirmation by return that due diligence is confirmed.
(e)7 August 2025 at 4.36 pm: purchaser’s solicitor asks for final further terms, but advises that what had been provided was consistent with Mr Cox’s instructions to her earlier in the afternoon.
What is the effect of Ngatapa’s solicitor’s paragraph set out at [40] above?
[43] Mr Butler submits the emails are “irreconcilable with any concern regarding the absence of formal confirmation of Due Diligence”. I do not accept that
submission. Both Mr Sidey and Ngatapa were aware of the need for the condition to be satisfied. As to whether there was an expression of concern, that is besides the point where both parties expressly recognise the need for the condition to be addressed—in any event, Mr O’Brien’s 10.15 am email of 7 August 2025 shows confirmation (save as to water) was required, indeed, agreed to be provided that day. Mr Sidey is a commercial real estate agent. The solicitors involved for the parties are experienced conveyancing solicitors. The reference to due diligence remaining outstanding and to Mr O’Brien recording one of the “ironed out terms” was that the agreement was to go unconditional save as to water that day, would not have been lost on those involved.
[44] Mr Butler submits it is reasonably arguable that by the above emails Ngatapa affirmed the Agreement which would mean its purported avoidance of the agreement on 8 August 2025 was invalid, in turn meaning it was arguable the agreement remained on foot and that Mr Sidey’s caveat should be maintained.
[45] Mr Butler’s submissions rely on the emails of 7 August 2025 as affirming the Agreement.
[46] It is not all conduct (or inaction) by an innocent party after the right to avoid has arisen that will affirm a contract. Whether such conduct amounts to an affirmation involves an objective assessment. That means, the context and content of the conduct is relevant. Context includes the basis upon which the right to avoid has arisen—does the innocent party’s conduct indicate that despite the right to avoid, the party has decided not to avoid? Or does their conduct show they have not yet made that decision? It may be relevant whether the conduct in issue refers to the event creating the right to avoid. If it does so, it is important to ask whether it conveys an election that the innocent party is proceeding on the basis that the agreement is continuing.
[47] I am satisfied that Ngatapa’s solicitor’s email of 4.32 pm on 7 August 2025, reproduced at [33], did not convey that the contract was going ahead, despite due diligence not being confirmed. Due diligence was the focus of communication in the three working days following the ability to avoid arising, albeit there being limited
communication on the first working day, 5 August 2025. Again, both parties were keeping their options open—both were biding their time.
[48] As noted above, the confirmation of due diligence was tied to the agreement to vary the further terms of the Agreement. With the further terms subject to on-going negotiations, Ngatapa recorded that the due diligence clause was not satisfied. All concerned would have known failure to confirm due diligence gave rise to a right to avoid. That right was not immediately exercised but the tenor of the communication was not that Ngatapa was treating the time for satisfaction of due diligence as open-ended, which would be the case had they affirmed.5 With Mr O’Brien recording in the Agreement that there was to be confirmation that day, and with confirmation sought “by return”, Ngatapa conveyed that satisfaction of due diligence was not on some open-ended timeframe. The call for confirmation by return and the terms recorded in Mr O’Brien’s email communicated that Ngatapa had not affirmed because if it had done so, time would not be of the essence, that is, no urgency in respect of the satisfaction of due diligence.
[49] I do not find an arguable election to affirm in Ngatapa’s email of 7 August 2025 at 4.32 pm. In this email, Ngatapa was not making an unequivocal election to affirm the Agreement following a failure by Mr Sidey to confirm the due diligence condition. The high point was that as at 4.32 pm on 7 August 2025, the agreement was still alive and the due diligence condition remained unsatisfied. Ngatapa recorded that due diligence needed to be confirmed and called for confirmation by return, as had been agreed would happen (save as to water) in the email of 7 August 2025 at 10.15 am. Ngatapa, through to 7 August 2025, was “merely keeping the question open” of whether to avoid or affirm. In calling for confirmation of due diligence, Ngatapa was not abandoning its right to avoid for the due diligence condition not being confirmed. As I have said, Ngatapa was keeping that option alive. Calling for confirmation of the due diligence condition of itself signals that Ngatapa was not affirming the Agreement
5 D W McMorland, above n 3, at [12.22]. When time for performance is of the essence, whether originally or by later notice, and the innocent party agrees to extend that time, but does not do so to a future date certain, or by conduct gives the other party to understand that the essentiality of time is not being enforced, the result is either a waiver of the essentiality or an election not to cancel. The distinction lies in the time at which the extension is allowed, whether before or after the time which was of the essence; if before, it is a waiver, and if after, it is an election to affirm. (footnote omitted)
following due diligence being not confirmed by 5.00 pm on 4 August 2025. Essentiality of time in respect of due diligence had not been lost because there had not been affirmation.
[50]The context of the 7 August 2025 email at 4.32 pm is Mr O’Brien’s email of
10.15 am on 7 August 2025 requiring confirmation by the end of that day. Ms Robinson asks if the terms as amended in the email are agreed and if so, she will circulate a copy of the final terms. The email then sets out additional requirements. The steps called for by Ms Robinson after the words “and ask for your confirmation by return” were to be completed, as the email says, “by return”.
[51] Since 5.00 pm on 4 August 2025, when Ngatapa had the right to avoid, Ngatapa had been biding its time. Both parties wished to preserve their rights under the due diligence clause because their emails record the need for confirmation. Both parties were aware that no formal extension to satisfy the due diligence clause had been agreed. As Mr Sidey puts it; “It was all go between the parties on 7 August 2025 because all the parties were working hard to iron out the further terms”. The parties recognising the need for urgency is consistent with an understanding that no further extension had been granted.
[52] Mr Butler, in his submissions, refers to Ngatapa’s solicitors using the language of “intention” in their email of 6 August 2025 when they wrote: “The intention is that once further terms are agreed, due diligence is then confirmed and the Agreement is unconditional …”.
[53] The 6 August 2025 email is equivocal. The further terms Ngatapa’s solicitor provided remained subject to Ngatapa’s approval which the vendor was not bound to give.
[54] I find that Ngatapa did not affirm the contract of 8 July 2025 following it having the option to avoid which arose at 5.00 pm on 4 August 2025, being the extended date for the satisfaction of the due diligence clause. Ngatapa’s statements on 6 and 7 August 2025 represented it biding time in respect of its election. Both
parties expressly recorded the need for due diligence to occur and via Mr O’Brien, agreed confirmation was to occur, save as to water, on 7 August 2025.
[55] What would the objective observer conclude from the above correspondence? The objective observer would know that if a contract is affirmed then time was no longer of the essence. Here, however, both parties were still acting with urgency on 7 August 2025, conveying to the objective observer that there had not been affirmation. That a sense of urgency existed would be understood by an objective observer because the absence of a formal extension to confirm due diligence, the parties recording the need for due diligence to be addressed, the 10.15 am email on 7 August 2025 recording that the Agreement was to be confirmed that day, and the call for confirmation “by return”, noted above.
[56] It follows, from my conclusion, that I am satisfied Ngatapa was entitled to avoid the Agreement on 8 August 2025 and that Mr Sidey’s application to sustain the caveat is dismissed.
Costs
[57] Ngatapa is entitled to costs in respect of the application on a 2B basis, plus disbursements as fixed by the Registrar. That will be the order of the Court unless costs memoranda are filed by Ngatapa within five working days of the date of this judgment.
[58] Mr Butler sought that if the application was dismissed, that the order lie in Court and not be sealed for three working days so that he could take instructions on whether an appeal should be lodged. There is a direction accordingly.
Associate Judge Lester
Solicitors:
Holland Beckett Law, Christchurch Lane Neave, Christchurch
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