Sutton v Van der AA
[2017] NZHC 3006
•7 December 2017
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA TE ROTORUA-NUI-A-KAHU
CIV-2017-463-000032 [2017] NZHC 3006
BETWEEN GUY SUTTON
Plaintiff
AND
MARIA JOSEPHINE VAN DER AA Defendant
Hearing: 2 August 2017 Appearances:
K I Bond for the Plaintiff
S McKenna for the DefendantJudgment:
7 December 2017
JUDGMENT OF ASSOCIATE JUDGE SARGISSON
This judgment was delivered by me on 7 December 2017 at 10.30 a.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date.......................................
Solicitors:
Whitfield Braun Limited, Hamilton
SUTTON v VAN DER AA [2017] NZHC 3006 [7 December 2017]
Grantham Law, Hamilton
Introduction
[1] At the heart of this dispute is the property at 44 Kutai Street, Turangi. The property is owned by the defendant, Maria Van Der Aa.
[2] The plaintiff, Guy Sutton, says he reached an oral agreement with Maria on 16
January 2016 for the sale and purchase of the property. Maria accepts this, but she says it is not enforceable under s 24(1) of the Property Law Act 2007 (PLA). Whatever the status of the agreement, her more basic contention is that Guy subsequently accepted her repudiation of, or offer to terminate, the sale and purchase agreement.
[3] Both parties seek summary judgment: Guy, for specific performance of the sale and purchase agreement; Maria, for dismissal of the cause of action.
[4] This case raises two key issues. First, was there an enforceable sale and purchase agreement that Maria subsequently repudiated or offered to terminate? Secondly, did Guy accept that repudiation or offer through his conduct? I answer both questions in the affirmative. My reasons follow.
Facts
The sale and purchase agreement
[5] Guy and Maria meet around 2008 or 2009 through Maria’s husband, Jack. Within time, they all became friends. The history of their relationship, described in some detail in the respective affidavits, is not material here.
[6] The relevant events commenced in mid-January 2016 when the parties reached an oral agreement for sale and purchase. This is common ground, though the exact date is disputed: Guy says 15 January, Maria 16 January.
[7] The terms of that agreement are clear. Guy would purchase the property at the valuation price for $235,000, with a deposit of $5,000. He would take possession on
1 April 2016. Guy gave Maria a cheque for the deposit, and she gave back a receipt.
[8] The parties were well on track to formalise their agreement. Maria had her solicitors draw up a written sale and purchase agreement for them to sign. But then Maria dramatically changed course. On 20 March 2016 either Jack or Maria clearly communicated to Guy that they would no longer be selling the property to him.
Subsequent conduct
[9] Guy’s evidence is that he was shocked by Maria’s abrupt change of mind. Still, he joined Jack and Maria for a coffee at their place, and Jack and Guy made small talk until Maria handed Guy an envelope. Guy concedes he knew the envelope contained a cheque for the return of the deposit. He took it without protestation.
[10] The following morning, Guy discovered a mistake in the cheque: it had been made out to him personally rather than to his family trust, which had paid the deposit. He called Maria to request a new cheque, and then drove to her house to collect it. Shortly after accepting the second cheque for the refund, Guy visited a bank in Hamilton. He went for the purpose of banking the cheque, though his evidence is that he was still in two minds about whether he actually would.
[11] As fate would have it, he discovered a minor spelling mistake on the second cheque in the family trust’s name; and confirmed with the teller that this meant he could not bank it. He took this to be a sign that he should not let go of his dream to own the property.
[12] He called Maria to inform her of the mistake. It is not clear he specifically requested a third cheque. What is clear, however, is that Maria said she would write out another one, and there is no indication Guy registered any objection to her doing so.
[13] After leaving the bank, Guy went to see his lawyer and it is at this point he resolved to pursue his claim. On 29 March 2015, Sutton lodged a caveat on the title to the property; Maria says she could not afford to apply for the caveat to be removed. Lawyers continued to exchange emails until the present application was filed on 4
April 2017. On 15 April 2015, Maria put $5,000 (the value of the deposit) into her solicitor’s trust account pending resolution of the threatened claim.
Law
[14] The legal principles are well settled.
[15] The question in plaintiff summary judgment is whether the defendant has no defence to the claim.1 The Court must be left without any real doubt or uncertainty.2
The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the onus shifts to the defendant to demonstrate why the application should not succeed.3
[16] For defendant summary judgment, the defendant must produce evidence to show that the plaintiff’s claim against it cannot succeed in its entirety.4
[17] For both kinds of application, the court will be reluctant to resolve material conflicts of evidence or assess the credibility of deponents. But it will not uncritically accept evidence that is inherently lacking in credibility. Overall, the Court will take a robust and realistic approach to the evidence.
Was there an enforceable agreement for sale and purchase?
[18] The parties never signed a formal sale and purchase agreement. But Guy contends there is nonetheless a written contract enforceable under s 24(1) of the PLA; Maria disagrees. It is not necessary to resolve the dispute because Guy’s alternative
submission in reliance on part performance is considerably stronger.
1 Pemberton v Chappell [1987] 1 NZLR 1, (1986) 1 PRNZ 183 (CA) at 185.
2 Krukziener v Hanover Finance [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].
3 MacLean v Stewart (1997) 11 PRNZ 66 (CA).4 Westpac Banking Corporation v MN Kembla NZ Ltd [2011] 2 NZLR 298; A-G Jones [2003] 16
PRNZ 715 (PC).
[19] The doctrine of part performance is preserved under s 26 of the PLA.5 The doctrine exists to ameliorate the harsh consequences that would sometimes flow from a rigid requirement that all contracts for the sale of land be recorded in writing. The elements are laid out by Tipping J in the leading authority, TA Dellaca Ltd.6
[20] It suffices for present purposes simply to say that Guy’s conduct in giving Maria the deposit arguably amounts to part performance, that is, a step in the performance of a contractual obligation. I also consider that the wider circumstances of the case would make it unconscionable for Maria to rely on the strict requirements of the Act. I proceed on the basis that there was sufficient part performance.
[21] So at the time Maria (or Jack) straightforwardly communicated to Guy that they would no longer be selling him the property, there was an enforceable oral agreement on foot. Maria casts this as an offer to cancel, but I agree with Guy that it is more readily construed as a repudiation, that is, a clear statement that she would no longer be performing her contractual obligations.
[22] But the distinction is largely academic in this context. Either way, the issue is whether Guy’s conduct evinces a meeting of minds, a clear intention to accept Maria’s repudiation or offer to terminate the contract.
Did Guy accept the repudiation or offer to cancel through his conduct?
[23] Maria concedes that Guy at no point verbally and explicitly communicated his acceptance that the contract was now at an end. But I agree with Maria that there is ample evidence of such an acceptance in (at least a combination of) the following actions:
(a) Guy took the envelope given to him by Maria without question, which he presumed to contain a cheque for repayment of the deposit;
5 It provides that “Sections 24 and 25 do not affect the operation of the law relating to part performance”.
6 TA Dellaca Ltd v PDL Industries Ltd [1992] 3 NZLR 88 (HC) at 109, as amended slightly by
Fleming v Beevers [1994] 1 NZLR 385 (CA) at 391-392.
(b)After discovering the mistake in the first cheque, he called Maria to request a second cheque, which he later collected from her;
(c) He then went to the bank with the second cheque, only to be deterred at the eleventh hour by discovering the minor spelling mistake in the trust’s name on the cheque;
(d)He then called Maria to inform her of the spelling mistake; and while there is no indication he requested a third cheque, Maria said she would write one up, and Guy does not seem to have raised any objections at this point.
[24] This conduct occurred over a number of days. At no point did Guy communicate any reservations or objections to Maria’s clear message that they would no longer be selling the property to him; rather his conduct is consistent throughout without an intention to accept this new state of affairs.
[25] Guy’s rebuttal is that he was shell-shocked by the sudden turn of events. He insinuates that right up to the point he saw his lawyer he was acting “like a zombie”: equivocating back and further, acquiescing to Maria’s forthright actions, but unable to make a clear and final decision. The suggestion, it seems, is that he did not ‘wake up’ until he discovered the spelling mistake in the bank and went to see his lawyer.
[26] The court must look to his actions,7 and these tell a different story. His conduct was sufficiently clear and unequivocal for the court to be satisfied that there was a meeting of the minds, that Guy had “committed irrevocably to one of two inconsistent courses of action”.8
[27] I find that Guy accepted the agreement was at an end. He therefore has no basis for claiming specific performance. It follows that Guy’s claim cannot succeed in its
entirety.
7 Kipling v Van Kan [2012] NZCA 163 at [33].
8 Jansen v Whangamata Homes Ltd HC Hamilton CIV-2003-419-1511, 29 November 2004.
Result
[28] The plaintiff’s application for summary judgment is declined. Judgment is entered on the defendant’s application for summary judgment.
[29] As costs follow the event under the statutory costs regime, the defendant is awarded 2B costs on her application plus disbursements as fixed by the Registrar. There will be no costs on the plaintiff’s application. To award costs on that application
would be to duplicate costs.
Associate Judge Sargisson
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