Stratton Properties Limited v Construction Properties Limited - [2023] NZHC 2666

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2023-419-142

[2023] NZHC 2666

UNDER Part 12 of the High Court Rules 2016

IN THE MATTER OF

an agreement for specific performance of agreements for sale and purchase of land

BETWEEN

STRATTON PROPERTIES LIMITED

Plaintiff

AND

CONSTRUCTION PROPERTIES LIMITED

First Defendant

JEFFREY WILLIAM DE LEEUW

Second Defendant

Hearing: 5 September 2023

Counsel:

M Talbot for the Plaintiff

D O’Neill for the Defendants

Judgment:

25 September 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 25 September 2023 at 1 pm.
Pursuant to Rule 11.5 of the High Court Rules.

…………………..
Registrar/Deputy Registrar

Solicitors/Counsel:
Braun Bond and Lomas, Hamilton Riverbank Chambers, Hamilton

STRATTON PROPERTIES LTD v CONSTRUCTION PROPERTIES LTD [2023] NZHC 2666
[25 September 2023]

Introduction

[1] The plaintiff, Stratton Properties Limited (Stratton) is a land development company. It developed a subdivision at 142–150 Abergeldie Way, Cambridge (the subdivision). The defendant, Construction Properties Limited (CPL), is a company controlled by Jeffery De Leeuw. CPL purchases land for a related company, R G de Leeuw Construction Limited, which trades as GJ Gardner Homes Waikato.

[2] On 3 March 2022, CPL signed agreements for sale and purchase of land to purchase five lots in the subdivision, Lots 8 to 12 (the S&P agreements). Settlement was due to occur on 16 May 2023. However, the day before settlement, CPL purported to cancel the S&P agreements, alleging that it had entered into the agreements as a result of misrepresentations regarding the quality of the subdivision.

[3] In this proceeding, Stratton seeks an order that CPL specifically perform the S&P agreements. Stratton has applied for summary judgment. CPL relies on its cancellation of the S&P agreements.

[4] Mr de Leeuw signed the S&P agreements on behalf of CPL. Each of the agreements included a clause which imposed obligations on Mr de Leeuw as guarantor of CPL’s obligations. Stratton accepts that it has no right to an order requiring Mr de Leeuw to specifically perform the agreements, but nonetheless seeks judgment confirming Mr de Leeuw’s liability as guarantor. Mr de Leeuw advances the same defence as CPL.

Background

[5] Mr de Leeuw has sworn an affidavit on behalf of CPL. In his affidavit, he confirms an involvement in “purchasing land at scale and developing land” for over fifteen years and describes GJ Gardner Homes as the largest residential construction company in the Waikato.

[6] On 21 February 2022, Stratton’s sales manager, Timothy Batters, emailed Mr de Leeuw a copy of the plan for Stage 1 of the subdivision, which comprised thirty

lots including the five that CPL ultimately agreed to purchase. All lots in Stage 1 of the subdivision were 400 m² in size, or very close to that.

[7] Mr Batters has affirmed an affidavit on behalf of Stratton. He says that at the time of the negotiation of the S&P agreements, the plans for Stage 2 of the subdivision had not been finalised. Stage…

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: [2023] NZHC 2666
Decision Date: 25 September 2023

CaseChat Overview and Summary

The case before the High Court of New Zealand involved a dispute between Stratton Properties Limited (Stratton), a land development company, and Construction Properties Limited (CPL), a purchaser of land for GJ Gardner Homes Waikato. Stratton sought an order for specific performance of sale and purchase agreements (S&P agreements) for five lots in a subdivision, while CPL, controlled by Jeffrey De Leeuw, alleged misrepresentation and sought to cancel the agreements. Stratton applied for summary judgment to enforce the contracts, and sought confirmation of De Leeuw's liability as guarantor. The court had to decide whether CPL had an arguable defence to Stratton's claim for specific performance and whether Stratton could enforce the guarantee against De Leeuw. The court found that it was arguable that Stratton had made misrepresentations about the quality of the lots in Stage 2 of the subdivision, but the exclusionary clauses in the S&P agreements precluded CPL from relying on such misrepresentations. The court granted summary judgment in favour of Stratton, ordering CPL to specifically perform the S&P agreements and reserving leave to seek further orders if CPL failed to comply. The court also granted leave to Stratton to seek further orders against De Leeuw if CPL did not comply with the judgment.

Orders