Sidey v Ngatapa Limited - [2025] NZHC 3056

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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] NZHC 3056
Decision Date: 15 October 2025

CaseChat Overview and Summary

Sidey v Ngatapa Limited is a case where the applicant, Mr Sidey, sought to sustain a caveat over a property he had an agreement to purchase from Ngatapa Limited. Mr Sidey argued that Ngatapa had affirmed the agreement for sale and purchase dated 8 July 2025, despite Mr Sidey not confirming the due diligence condition by the deadline of 5.00 pm on 4 August 2025. Ngatapa argued that it was entitled to avoid the agreement due to Mr Sidey's failure to confirm the due diligence condition. The legal issue at the heart of this case was whether Ngatapa had affirmed the agreement, thereby waiving its right to avoid the contract.

The court examined the exchange of emails between the parties' solicitors in the days following the due diligence deadline. The court found that Ngatapa's solicitors had not unequivocally affirmed the agreement. Instead, their emails indicated that the parties were still negotiating the terms of the agreement and that due diligence had not been satisfied. The court concluded that Ngatapa had not affirmed the agreement, and therefore, it was entitled to avoid the agreement on 8 August 2025. As a result, Mr Sidey's application to sustain the caveat was dismissed.

In its judgment, the court emphasised the importance of an objective assessment when determining whether a contract has been affirmed. An objective observer would have understood that the parties were still negotiating the terms of the agreement and that due diligence had not been satisfied. The court also noted that Ngatapa's solicitors had called for confirmation of due diligence by the end of the day on 7 August 2025, which was inconsistent with affirmation, as it would have meant that time was no longer of the essence.

Ngatapa was awarded costs in respect of the application on a 2B basis, plus disbursements as fixed by the Registrar. The order of the Court would be sealed unless costs memoranda were filed by Ngatapa within five working days of the date of this judgment. The court also directed that if the application was dismissed, the order should lie in Court and not be sealed for three working days to allow for potential instructions on whether an appeal should be lodged.

Orders