Stake Property Limited as Trustee of Stake Property Trust v Coate HC Auckland CIV-2010-404-8465

[2011] NZHC 1206

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-8465

BETWEEN  STAKE PROPERTY LIMITED AS TRUSTEE OF STAKE PROPERTY TRUST

Plaintiff

ANDJOCELYN SHIRLEY COATE, KATHRYN ANNE BENIONI AND MARGARET ILIA MCCAULEY

Defendants

ANDBARFOOT & THOMPSON First Third Party

ANDALFRED BOK Second Third Party

Hearing:         16 June 2011

Counsel:         C T Patterson for plaintiff

P J P Grace/S Robertson for defendants

Judgment:      7 October 2011 at 10:00 AM

JUDGMENT OF ASSOCIATE JUDGE ABBOTT

This judgment was delivered by me on 7 October 2011 at 10.00 am pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar

Date: ………………….

Solicitors:           Conveyancing Shop Lawyers, PO Box 1205, Pukekohe 2340

Insight Legal, PO Box 333, Warkworth 0941

McElroys, PO Box 835, Auckland 1140

STAKE PROPERTY LTD V COATE & ORS HC AK CIV-2010-404-8465 7 October 2011

[1]      This is a dispute over an agreement for sale and purchase of a residential property.  The dispute is whether the defendants agreed to sell the plaintiff a single property, or two adjoining properties.

[2]      The plaintiff, Stake Properties Limited (“Stake”), says that it entered into an agreement to buy two adjoining properties from the defendants.   The defendants, trustees of a family trust which owns the properties (“the trustees”), say that they only ever intended to sell one of them.  The dispute arises out of the way in which the property being sold has been described in the agreement.

[3]      Stake has applied for specific performance of the agreement.  It contends that on a proper interpretation of the agreement, both properties have been sold.   The trustees say that the proper interpretation is that only one of the properties has been sold but, if that is not the case, the description of the property is too uncertain to give rise to a binding agreement.  They also rely on the doctrine of non est factum and say that there are matters requiring further examination which make this dispute unsuitable for summary judgment.  Lastly, the trustees say that the interpretation of the agreement should be not be determined separately from a third party claim against the agent involved.

Background to the dispute

[4]      The trustees are the owners of two cross-leased properties at 39 Maich Road and 9 Corin Avenue,  Manurewa.   The property at 39 Maich Road  comprises a weatherboard dwelling built in the 1920s.  It was originally the sole dwelling on a

1,010 square metre section of land on a corner of Maich Road and Corin Avenue. The defendant, Margaret McCauley and her husband (now deceased) purchased the property in about 1980, as an investment.  By that time it had been converted into two flats.

[5]      In the mid 1990s Mr and Mrs McCauley subdivided the land to create two cross-leased titles.   The old bungalow became known as 39 Maich Road.   The McCauleys built a brick and tile dwelling on the rear portion of the land.  New cross-

lease titles were issued for the separate dwellings.  The new property was given the street address of 9 Corin Road, as its only street frontage was on to Corin Road.

[6]      Mr McCauley died in 1995.  Mrs McCauley formed the trust and transferred both properties to it.  Mrs McCauley has the main use of the trust assets during her lifetime.   The ultimate beneficiaries are her children (who include the defendant, Kathryn Benioni).

[7]      In 2010 Mrs McCauley had decided to build a house in Thames.  The trustees decided to sell 39 Maich Road and use the sale proceeds to assist her with construction costs.  The trustees listed 39 Maich Road initially with the real estate agent L J Hooker, but in August 2010 cancelled that arrangement and on 20 August

2011 listed it with the first third party, Barfoot & Thompson Limited (“Barfoot”). The  listing  agreement  identified  the  property  as  39  Maich  Road.    The  legal description of the property being sold was not stated, but it was clearly intended to be just the older dwelling as there was a reference to the 1965 conversion into two flats.

[8]      Although the timing is not clear, following signature of the listing agreement Barfoot set up a listing report that identified the property for sale as 39 Maich Road. This report contained detail taken from the listing agreement, together with further information, including a legal description. The listing report contained an entry:

Please note 9 Corin is NOT for sale. The sale is for the two flats at 39 Maich

Road (house conversion).

[9]      Shortly after the property was listed the second third party, Alfred Bok, a sales  person  engaged  by  Barfoot,  sent  information  about  the  listing  to  Stake’s director, Mr Thompson (the way in which it was sent suggests that it was sent to several recipients – perhaps to Mr Bok’s client base).   Mr Bok’s email, sent just before 1.00 pm on 24 August 2010, read:

Subject: New Listing # 439813 24/08

Hi.

Check this new listing out.  2 flats (separate titles) for sale at the 1 price of

$329k! 117 & 134 m2 floor

Below that text Mr Bok had inserted an aerial photograph which showed the two dwellings at 39 Maich Road and 9 Corin Avenue, with the whole of the freehold (cross-leased) land outlined.

[10]     Stake acted quickly in response to Mr Bok’s email.  Mrs McCauley says that she was contacted on 24 August 2011 by Mr Bok, and was told that he had an agreement on 39 Maich Road.  Mrs McCauley had not met Mr Bok (she had listed the property through another Barfoot agent).  He tried, unsuccessfully, to email the agreement to Mrs McCauley. The following morning Mr Bok telephoned again and arranged that he would deliver the agreement to her in Thames.  He arrived at her house that afternoon with an agreement containing an offer from Stake of $320,000.

[11]     The agreement contained the following information about the property:

Address:        UNIT 1 & UNIT 2, 39 MAICH ROAD, MANUREWA Estate:  CROSSLEASE (FEE SIMPLE) [other possible estates had

been  crossed  out,  including  reference  to  CROSSLEASE (LEASEHOLD)]

Legal Description:       FLAT  1   DP  147182   ON  LOT  1   DP  147182

HAVING  ½  SHARE  OF  1,010  M2    &  FLAT  2  AND GARAGE 1 DP 169047 ON LOT 1 DP 147182 HAVING ½

SHARE OF 1,010 M2

Unique Identifier or CT:         103A/410 & 103A/409

[12]     There  were two  terms  of sale in  addition  to  the printed  standard  terms: clause 15.0 which made the agreement conditional on Stake’s solicitor’s approval within three working days; and clause 16.0, under which both parties acknowledged that they had received a copy of the Real Estate Agents’ Authority “New Zealand Residential Property Sale and Purchase Agreements Guide”.

[13]     Mrs McCauley says that she found the agreement a little difficult to read so asked Mr Bok if he had the correct legal references for 39 Maich Road.  She says that  he  assured  her  that  he  did,  after  which  she  signed  the  agreement  with  an amended price of $327,000.  Mrs McCauley says that Mr Bok told her he was in a hurry to get the agreement signed as he was going to Australia at the end of the week.  Mr Bok left with the sole copy of the amended agreement and later the same

afternoon obtained a countersignature on behalf of Stake and signature by fax from Ms Benioni, before travelling to Rotorua to obtain the signature of the third trustee (Mrs Coate) a little after 9.30 pm that evening.

[14]     The following morning, 26 August 2010, Mr Bok emailed Mr Thompson a copy of the agreement (excluding the printed standard terms) with the somewhat cryptic message:

Hi Shaun,

Over to you now ... make it work, please!

[15]     Later that day Stake’s solicitors sent a fax to the trustees’ solicitors stating that they acted for Stake, acknowledging receipt of the agreement, confirming satisfaction of clause 15.0, and declaring the agreement unconditional.  This appears to have been about the middle of the day, as at 1.45 pm Mr Bok sent a further email to Mr Thompson asking him to send the deposit that was payable once the agreement was made unconditional.  This is supported by other evidence that Mrs McCauley received a text from Mr Bok on the morning of 26 August 2010 congratulating her on the sale being unconditional.

[16]     It is not in dispute that at the time the agreement was made unconditional, Stake had not been inside one of the flats at 39 Maich Road (“the second flat”) or 9

Corin Avenue (Mr Bok had arranged for Mr Thompson to visit the second flat on the evening of 26 August 2010).

[17]     The issue over the description of the property being sold arose in the evening of 26 August 2010, when Mr Bok, Mr Thompson, and another turned up at 9 Corin Avenue, wishing to look through the house.   Mr Bok asked the tenant if she was “Karen”, who was the tenant of the second flat at 39 Maich Road.   The tenant at Corin Road checked with Mrs McCauley, whilst Mr Bok and Mr Thompson were starting to look through the property.  Mrs McCauley says that she told Mr Bok “in no uncertain terms to get out of the property immediately, and that it was not for sale”.  Mr Bok and Mr Thompson did not keep the appointment with the tenant of the second flat.

[18]     Barfoot  subsequently acknowledged  that  its  instructions  had  been  to  sell

39 Maich Road only, and endeavoured to meet with Mr Thompson to try to resolve matters.    Those  efforts  to  meet  were  unsuccessful.    The  parties  corresponded between solicitors, with Stake insisting on settlement in respect of both properties, and the trustees denying any obligation to sell both, but offering to complete settlement on 39 Maich Road.

Principles for summary judgment

[19]     Before addressing the specific arguments, I will address the principles that the Court applies when determining applications for summary judgment. I will do so briefly, as the principles are well known and have recently been summarised by the Court of Appeal in Krukziener v Hanover Finance: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 at 3 (CA). 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 at 341 (PC). 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).

[20]     Principles of particular significance for the present application are:

(a)      A plaintiff seeking summary judgment has the onus of showing that there is no defence to the claim, having regard to all of the evidence before the court;

(b)When assessing that evidence the court will not normally seek to resolve conflicts or make findings on the credibility of a witness;

1 Krukziener v Hanover Finance [2008] NZCA 187, (2008) 19 PRNZ 162 (CA) at [26].

(c)      The  court  can,  nevertheless,  decide  whether  evidence  passes  a threshold of credibility: it need not accept evidence that is inconsistent with undisputed contemporary documents or other statements by the same witness, or is equivocal, imprecise or inherently improbable;

(d)The court is entitled to assess the evidence in a robust and common sense way; and

(e)      Ultimately the court must be satisfied that there is no real question to be tried, and that it can come to this conclusion without the need to establish further facts or explore any issues in greater depth at trial.

Interpretation of the agreement

[21]     Stake’s case is that it is clear from the legal description, and particularly the reference in the agreement to the certificates of title for both 39 Maich Road and

9 Corin Avenue, that the agreement was in respect of both properties.  Counsel for Stake conceded that there was some ambiguity in the address (the reference to Unit 1 and Unit 2, 39 Maich Road could be taken as referring to the two flats at 39 Maich Road), but submitted that this was removed by the express reference to the two titles (in other words, Unit 1 and Unit 2 could be construed as reference to the two dwellings, which could collectively be given the general street address of 39 Maich Road).    He argued that this interpretation was supported by surrounding circumstances,  in  the  form  of  Mr  Bok’s  email  of  24  August  2011,  alerting Mr Thompson and others to the sale.  To the extent that the Court considered there was  an  ambiguity  caused  by  the  address,  counsel  submitted  that  it  should  be construed contra-proferentum against the defendants.

[22]     The trustees argue the opposite interpretation, placing primary weight on the address as Unit 1 and Unit 2, 39 Maich Road (in other words the two flats at 39

Maich Road).  Their case is that there is a patent ambiguity created by the difference between the address and the confused legal description but this ambiguity is capable of resolution by reference to the context in which the agreement was made, including the listing agreement for 39 Maich Road only and the nominated listing price (which

was indicative of the value of one rather than both properties).  Counsel submitted that Stake’s argument that ambiguity created by the address was resolved by the legal description applied equally if not more in reverse: there were ambiguities in the legal description that were resolved by the straightforward language of the physical address.  He also argued that Stake could not rely on Mr Bok’s email, as the evidence was clear that Barfoots and Mr Bok had no authority to sell both properties.

[23]     The starting point for interpretation is the wording used in the agreement.  I am not persuaded that, on its own, there is any ambiguity in the address.   The reference to two units at 39 Maich Road clearly indicates the internal division of that dwelling into two dwelling units.  This is supported by the external evidence as to the  flat  conversion  in  1965.    There  is  clear  ambiguity,  however,  in  the  legal

description.   The references to Flat 1 and Flat 2 and half shares of 1,010 m2  are

consistent with two cross-leased properties, as is the reference to two separate titles. However, there are two “internal” ambiguities: first, the deletion of any reference to a leasehold estate (by deletion of the words “CROSSLEASE (LEASEHOLD)”) and secondly, the reference to “FLAT 2 AND GARAGE 1 DP 169047”.   Garage 1 comprises part of the title to 39 Maich Road; there is no garage in the title to 9 Corin Avenue.

[24]     Context is always a necessary ingredient in ascertaining meaning: Vector Gas Ltd v Bay of Plenty Energy Ltd.2    Unfortunately, in this case some of that context, namely the listing agreement, was known only to the trustee vendors.  Had it been otherwise,  the  listing  agreement  would  have  established  the  objective  purpose without doubt.  Nevertheless, it is a significant aspect.  The marketing email sent out by Mr Bok is also material.  It is confusing in its reference to “2 flats” but “separate

titles”, but the latter, together with reference to floor areas for the two dwellings, tends  to  point  towards  both  properties  being  sold.    It  contains  another  contra- indicator in the asking price of $329,000 which, although significantly higher than rating valuation for 39 Maich Road, was even more substantially lower than the combined rating valuations for both properties.   The speed with which Stake responded to Mr Bok’s marketing email is another aspect.  It may be due simply to

Stake  seeing  this  as  a  “good  deal”  (as  Mr Thompson  states).      However,  that

2 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444 at [19] and [23].

explanation does not necessarily fit with Stake’s decision to make the agreement unconditional the following morning and before inspecting 9 Corin Avenue.

[25]     The uncertainty in the language of the agreement requires the Court to be clear about the context.  The context cannot be established sufficiently on this summary application.

[26]     The circumstances of the despatch of the marketing email, and knowledge of the values of the properties (remembering that Stake is a property investor and Mr Thompson a former real estate agent) warrant further investigation.  There is also a need to investigate further the way in which the agreement was prepared, before the Court can assess the application of the contra proferentum rule.   In his first affidavit, Mr Thompson says that Mr Bok “wrote out the contract”.  In the trustees’ evidence in response, they refer to statements made to them by Barfoot (whose evidence is not yet before the Court) that Mr Thompson drafted the agreement and Mr Bok copied it on to a Barfoot’s form.   In his affidavit in reply, Mr Thompson accepts that sequence but says that he inserted the legal description provided by Mr Bok.  There was no evidence as to where and when that occurred, whether Stake had copies of the titles, or indeed whether the title references were correctly given and copied.  Mr Bok will be able to give relevant evidence on this.

[27]     In this respect I also accept the trustees’ point that there is an argument available to them as to extent that Stake can rely upon Mr Bok’s email given that he has clearly gone so far beyond the instructions that the trustees gave to Barfoot that the email appears to be well outside the scope of his authority: Nathan v Dollars & Sense Ltd.3

[28]     In summary, Stake has not satisfied me that its interpretation of the agreement is so clear as to entitle it to an order for specific performance.  Although that finding is  sufficient  to  dispose  of  the  present  application,  for  completeness  I  will  now

address the other arguments advanced.

3 Nathan v Dollars & Sense Ltd [2008] NZSC 20, [2008] 2 NZLR 557 (SC) at [30]-[31], [40].

Is it arguable that the agreement is void for uncertainty?

[29]     As an alternative to their contention that they have an  arguable case on interpretation, the trustees say that it is strongly arguable that the agreement is void because the subject of the agreement cannot be resolved with any certainty.4

[30]     Stake’s  response to this  argument  is  the same as its interpretation point, namely that the agreement is very specific that two properties, with separate certificates of title, were being sold.

[31]     It is trite law that for an agreement to be binding the parties have to have reached consensus on all essential terms, or alternatively upon an objective means of establishing those terms.5   In some cases, ambiguity of expression in the contract can demonstrate an absence of consent to its apparent terms, demonstrating that the parties were at cross-purposes and that there was no genuine agreement between them as to the subject matter of the contract.6     This proposition may not apply, however, if the parties are “deemed to have assented” (by conduct).7

[32]     It is clear from the evidence currently before the Court that these parties were at cross-purposes as to the subject matter of this agreement: the trustees listed 39

Maich Road only with Barfoot, and intended to sell only that property, whereas Stake intended its offer to be for both properties.   In terms of the authorities, the issue becomes whether the trustees conducted themselves in such a way that the law will deem their assent to be to the sale of both properties.  The conduct that could possibly  fall  into  that  category  is  Mr Bok’s  marketing  email  and  the  trustees’ signature of the agreement with the incorrect legal description. As to the first aspect, the evidence seems clear that Mr Bok exceeded his authority by inserting legal descriptions applying to 9 Corin Avenue.  As to the second, in the context that the trustees had given Barfoot authority to sell only 39 Maich Road, as reflected by the

address given in the agreement, it is at least arguable that a reasonable person would

4 Wellington City Council v Body Corporate 51702 (Wellington) [2002] 3 NZLR 486 (CA);

Montgomery v Continental Bags (NZ) Ltd [1972] NZLR 884.

5 Burrows, Finn & Todd Law of Contract in New Zealand (3rd ed) LexisNexis, Wellington, 2007 at

[3.7], Wellington City Council v Body Corporate 51702 (Wellington) supra, at 495.

6 Montgomery v Continental Bags (NZ) Ltd supra, at 888-889.

7 Montgomery v Continental Bags (NZ) Ltd supra, at 888-889, citing Smith v Hughes (1871) LR 6QB

597.

not deem their signature of the agreement to be an assent to the sale of both properties. Accordingly, I consider that this ground of defence is at least arguable.

The plea of non est factum

[33]     The trustees claim that they have an arguable defence based on the plea of non est factum.  A summary of the matters that a person relying on this plea must establish can be found in the following extract from Bradley West Solicitors Nominee Co Ltd v Keeman:8

1The person raising the plea (the proponent) must have signed the document believing it to have a particular character or effect.

2The document must in reality have a radically different character or effect thus creating a wholly different result from that which was understood by the proponent.

3The  proponent's  mistaken  belief  must  have  resulted  from  an erroneous explanation or description of the document given to him by someone else.

4The proponent must be able to show that, notwithstanding his error, he acted with all reasonable care in the circumstances.

5If the proponent's mistaken belief arises because, acting in reliance upon a trusted adviser such as a solicitor, he did not take steps to read and understand the document prior to signing it, the plea is not available (see p 120 line 45).

[34]     Counsel for Stake accepted, at least for the purposes of this application, that the trustees would be able to satisfy the first two of these points, but argued that they had not shown that their mistaken belief resulted from an erroneous explanation or description given by Mr Bok, that they had acted with all reasonable care, or that they could avoid the fifth point.

[35]     I accept that there are issues for the trustees with each of the matters raised by counsel for Stake, but do not consider that they are necessarily unarguable:

(a)      Mrs McCauley has given evidence that Mr Bok assured her that the legal description was correct and that she signed the agreement on that basis.  Counsel for Stake argued that it was possible that the parties

were   speaking   at   cross-purposes,   and   that   Mr   Bok   thought Mrs McCauley was asking whether he had correctly entered the legal description  for  both  properties.   This  is  not  a  matter  that  can  be resolved on this application.  In addition, further evidence is needed as to the circumstances of preparation of the agreement before it can be said that Stake did not create the erroneous description.

(b)Counsel for Stake argued that it was not reasonable for Mrs McCauley to have given in to the time pressure created by Mr Bok – he was the trustees’ agent and the trustees could very easily have taken time to run the agreement past their solicitors. Against that, however, it is not unusual for parties to sign agreements and purchase before taking legal advice, particularly where the sale is being arranged through reputable agents.   I do not accept that the trustees do not have an arguable position on this point.

(c)      Counsel  for  Stake  argued  that  the  trustees  were  in  a  “Catch  22” position with respect to the fifth point – if they were relying on Mr Bok as a trusted adviser, the plea was not available; but if they did not regard him in that light, they needed to take legal advice.  He referred to the rationale underlying this point, namely that where the erroneous explanation or description is given by a trusted advisor such as the

signatory’s  own  solicitor,  the  remedy  is  against  the  advisor,9   and

submitted  that  the  trustees  were  not  without  a  remedy.     This submission begs the question whether Mr Bok was a trusted advisor. doubt whether a real estate agent is to be regarded in the same light as a solicitor (in terms of the Bradley West Solicitors Nominee Co Ltd v Keeman analysis), but in any event I do not consider that this point should be determined summarily.  As the Court made clear in Bradley West this is essentially an aspect of whether the signatory took reasonable care.  It is to be determined in all the circumstances of the case, including the circumstances surrounding Mr Bok’s efforts to secure an agreement.

[36]     There a number of matters that require further examination for this plea, as well as the other aspects of the defence.  In particular, as I have already indicated, it may well be relevant to know exactly how the critical aspects of the agreement (the address and the legal description) came into being.   In that respect it is highly relevant that Mr Thompson acknowledges that he prepared the first draft (because he says that Mr Bok was too slow) and that Mr Bok provided the legal description.  It may also be relevant to establish why neither Mr Thompson nor Mr Bok included 9

Corin Avenue in the address reference.  The trustees have questioned whether there was a pre-existing relationship between Mr Thompson and Mr Bok which had an influence on Mr Bok’s actions (it may or may not be relevant that Mr Thompson was formerly one of Barfoot’s agents). Although I accept that there is no direct evidence before the Court to suggest collusion, there is conflicting evidence as to whether Mr Thompson  had  had  any  previous  dealings  with  Mr  Bok,  and  there  are unanswered questions over the speed of the transaction (as a further illustration, Ms Benioni’s evidence is that Stake signed the counter-offer before she did).  These are all factors which could be relevant to the policy consideration underlying the plea of non est factum, namely whether the trustees have some other recourse, but they could also give rise to a defence that Stake had reason to suspect that the trustees executed the agreement under a misapprehension as to its character in which case

any carelessness on the part of the trustees may not be relevant:10

It is now settled beyond any shadow of doubt that when we speak of negligence or carelessness in connexion with non est factum we are not referring to the tort of negligence but to a mere failure to take reasonable precautions in ascertaining the character of a document before signing it. The insistence that such precautions should be taken as a condition of making out the  defence  is  of  fundamental  importance  when  the  defence  is  asserted against an innocent person, whether a third party to the transaction or not, who relies on the document and the signature which it bears and who is unaware  of  the  circumstances  in  which  it  came  to  be  executed.  It  is otherwise when the defence is asserted against the other party to the transaction  who  is  aware  of  the  circumstances  in  which  it  came  to  be executed and who knows (because the document was signed on his representation) or has reason to suspect that it was executed under some misapprehension as to its character. In such a case the law must give effect to the policy which requires that a person should not be held to a bargain to which he has not brought a consenting mind for there is no conflicting or countervailing consideration to be accommodated - no innocent person has placed reliance on the signature without reason to doubt its validity.

On this analysis the element of carelessness has no relevance for the present case.

[37]     Weighing all of these matters, I accept that the defendants have an arguable defence based on the plea of non est factum.

Discretion – availability of specific performance

[38]     Counsel for the defendants submitted that the Court must not only satisfy itself that there is no arguable defence, but also that it should grant the order the for specific performance that Stake seeks.  This will include consideration as to whether it would be unfair to grant that remedy without further examination of matters which

could render it unfair, as against an award of damages.11

[39]     Counsel for the trustees referred to evidence that it was Mrs McCauley’s long-term plan to move back into 9 Corin Avenue, and submitted that that possibility would be lost if an order for specific performance was granted.  He argued that if the Court was to find that there was a binding agreement to sell both properties, then the trustees had a strong claim against Barfoot and Mr Bok and damages would be the appropriate remedy for Stake as they were likely to be recoverable from the third parties, leaving her able to return to live in 9 Corin Avenue.

[40]     Counsel for Stake argued that Stake was entitled to its choice of remedy given that the trustees had not established that there was any unfairness in an order for specific performance.  He submitted that there was no evidence that Stake knew of the error, and any inference to be taken from the speed with which the transaction was effected had been answered by Mr Thompson’s evidence that Mr Bok had, at all times, been clear that both properties were being sold, by Stake’s perception that this was “a good deal”, and that he had used a legal description provided by Mr Bok when he prepared the first draft of the agreement.   Counsel argued that Mr Bok’s statement to Mrs McCauley was equivocal, but in any event there was no reason (other than unsupported  inference) to  attribute any injustice to Stake.    In those circumstances, he submitted that there was no basis to decline Stake’s entitlement to

specific performance.12    He also submitted that there was insufficient evidence of unfairness to the trustees: there was no evidence from Mrs McCauley that she was intending  to  return  to  live  in  the  property  (only  hearsay  evidence  from  her neighbour).

[41]     I accept that there was no direct evidence of disentitling conduct by Stake, but for the reasons I have already given (as to the need for further investigation into the circumstances surrounding the preparation of the agreement) I am unwilling to make a finding on the point at this stage (and do not need to do so).  However, there is force to Stake’s arguments that the trustees have not produced sufficient evidence of Mrs McCauley’s intention to return to live in 9 Corin Avenue.  If that was a firm decision, I would have expected Mrs McCauley to have given evidence to that effect. The fact that she has just built her present house in Thames tends to suggest otherwise.

Discretion – the third party claim

[42]     The trustees have issued a third party claim against Barfoot and Mr Bok. They say that summary judgment is inappropriate, in any event, as the outcome of both claims could be determined by a finding on the correct interpretation of the contract.13

[43]     Counsel for Stake argue, as with the point on specific performance, that there was no injustice or unfairness in having Stake’s claim proceed separately from the trustees’ claims against the third parties, relying on Slade v Allan14 where the Court granted summary judgment for liability for breach of warranty in an agreement for sale and purchase, notwithstanding an argument that that claim could only be fairly determined at the same time as a possible claim against third parties for deceit and

misrepresentation.

12 Relying on Pegasus Town Ltd v Bishop HC Christchurch CIV-2008-409-002821, 22 April 2009, where the Court awarded specific performance as there was no evidence of unfair or disentitling conduct by the plaintiff; and Waitarere Rise Ltd v Rangi (2010) 11 NZCPR 224 at [31] and [33].

13 Sudfeldt v UDC Finance Ltd (1987) 1 PRNZ 205 (CA); and Druids Friendly Society v Westpac

Merchant Finance Ltd (1966) 9 PRNZ 644.

14 Slade v Allen (2007) 8 NZCPR 490.

[44]     I do not accept that Slade v Allen assists Stake.   In that case, there was no common issue between the respective parties.  The decision of this Court in Druids Friendly Society  v Westpac Merchant Finance Ltd  is more relevant.   That case involved an application for joinder of third parties in a summary judgment context, where the Court gave weight to the need to avoid the same issues being argued in different proceedings before different judges and possibly with different results.  In this case, the third parties have already been joined, and it is clear from the pleadings that there is a common issue (interpretation of the agreement and whether it is void for uncertainty) between the two sets of claims.  On that basis, I would also exercise the Court’s discretion to decline summary judgment.

Decision

[45]     For the reasons I have traversed above I am not satisfied that the defendants do not have an arguable defence, or that this is an appropriate case to exercise the Court’s discretion to grant summary judgment.  The application is dismissed.  The Registrar is to allocate a further case management conference at the first available date.

[46]     The  Court’s  usual  practice  on  dismissal  of  an  application  for  summary judgment is to reserve costs for decision in light the eventual determination at trial. Counsel for the defendants has sought the opportunity to make submissions in this respect, advising that there is correspondence between the parties irrelevant to this. Counsel for Stake has asked for costs to be reserved in the usual way.  Although I will need persuading that there is good reason to depart from the usual approach, I will allow the trustees opportunity to present their case for doing so.  I direct that the trustees file any memorandum in support of their request to fix costs at this stage within 10 working days.   Stake is to file any memorandum in response within a

further five working days.

Associate Judge Abbott