Tammett Properties Limited v Gibbston Valley Station
[2025] NZHC 2238
•8 August 2025
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE
CIV-2023-412-033
[2025] NZHC 2238
BETWEEN TAMMETT PROPERTIES LIMITED
Plaintiff
AND
GIBBSTON VALLEY STATION
Defendant
Hearing: 28 July 2025 Appearances:
S D Munro and S J Deavoll for Plaintiff B B Gresson for Defendant
Judgment:
8 August 2025
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 8 August 2025 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
TAMMETT PROPERTIES LIMITED v GIBBSTON VALLEY STATION [2025] NZHC 2238 [8 August 2025]
[1] The defendant is a property developer undertaking a substantial development known as the Gibbston Valley Resort. The plaintiff entered into an agreement with the defendant to purchase a property in the development which the defendant has purported to cancel in reliance upon a sunset clause. The plaintiff is seeking an order for specific performance of the agreement or damages.
[2] The application presently before me concerns discovery. The parties provided tailored discovery and on their own initiative have exchanged briefs of evidence. As a result of that exchange the plaintiff applies for further discovery of documents. It accepts that in some respects the discovery sought goes beyond the terms of the tailored discovery order but says further discovery is required to address matters put in issue in the defendant’s briefs of evidence. In broad terms, the further discovery goes to the issue of whether the defendant took all reasonable steps to fulfil the conditions of the sunset clause.
[3]The defendant opposes the application on the basis that:
(a)it has complied with the tailored discovery order (and the documents sought are not within the scope of its obligations under r 8.18(2) of the High Court Rules 2016 (the Rules) to provide discovery outside the scope of the tailored discovery order); and
(b)it has not failed to discover any documents that should have been discovered and there is therefore no basis for an order to be made for particular discovery under r 8.19.
[4] For reasons that follow, those matters are not an answer to the application. The real issue is whether the documents sought are sufficiently relevant to the matters in issue in the proceeding such that the Court should order further discovery.
Background
[5] Gibbston Valley Resort is being developed in accordance with a structure plan which identifies stages of development for a variety of purposes. An area known as The Vines was the first area to be marketed. The parties entered into an agreement
dated 11 November 2021 under which the plaintiff agreed to purchase from the defendant a property in The Vines with a dwelling to be constructed on it.
[6]Relevant terms of the agreement for present purposes include:
1.0 Definitions, time for performance, notices and interpretation
1.1 ...
Completion Condition Date means the date that is one year following the Target Completion Date, subject to extension under clause 23.1.1
...
Vendor’s Feasibility Condition Date means 1 December 2021, subject to extension under clause 23.1.
...
9.0 Conditions and mortgage terms
...
9.10 Operation of conditions
If this agreement is expressed to be subject either to the above or to any other condition(s), then in relation to each such condition the following shall apply unless otherwise expressly provided:
(1)The condition shall be a condition subsequent.
(2)The party or parties for whose benefit the condition has been included shall do all things which may reasonably be necessary to enable the condition to be fulfilled by the date for fulfilment.
[(Duty to Fulfil)]
...
21Vendor Conditions – Approval, Feasibility and Completion
21.1This agreement is conditional upon the Vendor confirming to the Purchaser:
a.on or before the Vendor’s Feasibility Condition Date that the Vendor is satisfied (in its sole and absolute discretion) that the Development (or such part of the Development that comprises the Property) is feasible,
1 The Target Completion Date under the Agreement was 30 June 2023 and the Completion Condition Date was therefore 30 June 2024.
having regard to development costs, availability of sufficient finance on acceptable terms, the level of sales, ability to procure sufficient Consents within the Vendor’s programme, and any other matter or matters the Vendor considers appropriate to consider [(Feasibility Condition)]; and
b.on or before the Completion Condition Date that:
(i)a search copy of a new record of title for the Property is available; and
(ii)the Vendor has completed all works necessary to obtain a Code Compliance Certificate for the Dwelling. [(Sunset Clause)]
21.2The conditions at clauses 21.1.a, 21.1.a [sic] and 21.1.b are inserted for the sole benefit of the Vendor. If at any time it becomes apparent to the Vendor (in its sole discretion) that any or all of the conditions at clauses 21.1.a and 21.1.b will not be fulfilled, the Vendor may notify the Purchaser accordingly and immediately without further notice cancel this agreement and any Net Deposit shall be returned to the Purchaser’s solicitor’s trust account. If the condition in clause
21.1.a is not fulfilled, the Vendor shall not be required to disclose any reason for such determination. [(Advanced Cancellation Clause)]
[7]On 30 November 2021, the defendant confirmed the Feasibility Condition.
[8] On 27 July 2022, the defendant purported to cancel the agreement on the basis that it was unable to satisfy the Sunset Clause (cl 21.1(b)). Notably, this was 23 months prior to the Completion Condition Date. In purporting to cancel the defendant relied upon the Advanced Cancellation Clause. The defendant said it could not satisfy the Sunset Clause conditions because:
Delivering the vision we originally envisaged for The Vines has unfortunately become unachievable. Global shortages caused by Covid, manufacturing issues and the Ukrainian/Russian war have impacted our ability to procure building materials, and key components to construct our utility services. Timelines have continued to be stretched by delays with contractors, consultants and local authorities. The stretched timelines together with hugely increased costs across the entire Vines project have impacted the viability of The Vines stage from a funding perspective. We are extremely disappointed to inform you that The Vines project in its current design cannot proceed. We are therefore left with no choice but to cancel all Sale and Purchase Agreements for properties in The Vines.
We are still planning to build an accommodation/residential offering on The Vines site at a later stage and are focussed on delivering the lifestyle values of the Resort as a whole. However, we must now revaluate the construction and design concepts of the Vines offering to ensure its viability.
[9] The plaintiff challenges the cancellation of the agreement. Its contentions include that having confirmed the Feasibility Condition the defendant was not able to cancel on its stated grounds and, most relevantly for present purposes, that the defendant failed to perform its duty under cl 9.10 of the agreement to do all things reasonably necessary to enable fulfilment of the conditions in the Sunset Clause. In the statement of claim the plaintiff pleads:
The Defendant’s Purported Cancellation was based on reasons of feasibility and that it intends to build an accommodation/residential offering on the Development at a later stage, but has chosen to give priority to other properties as part of the Development.
[10]In response to that pleading, the defendant pleads:
…it cancelled the agreement on the basis of its determination that the sunset clause condition would not be able to be fulfilled for a number of reasons including an inability to procure funding for The Vines development.
[11] The parties were ordered to provide tailored discovery including in relation to the following categories:
(a)documents identifying or relating to any endeavours made by the defendant between 11 November 2021 and 27 July 2022 to complete the subdivision of the property, construct a dwelling on the property, and fulfil the conditions under cl 21 of the agreement, including any documents predating the agreement; and
(b)documents identifying reasons why, as of 27 July 2022, the defendant alleges that a new record of title for the property would not be able to issue and a dwelling on the property would not be able to be constructed by 30 June 2024.
[12] The defendant provided its list of documents on 26 February 2024. Since then there have been further requests for discovery, which the defendant has provided to some extent.
[13] I understand the parties agreed to exchange briefs of evidence at an early stage. The plaintiff’s briefs of evidence include expert evidence from Mr Paul Croft, a director of a property development and investment group, who considers the defendant did not do all things reasonably necessary to ensure fulfilment of the conditions in the Sunset Clause before it purported to cancel. Mr Croft says:
It appears that [the defendant] has chosen to prioritise other areas of the Development and has failed to explore any of the available options to ensure it could progress and complete the construction of the Property.
[14]The other options identified by Mr Croft include:
(a)confirming cost increases and concerns through tender processes or re-engineering of the budget;
(b)if there is time, delaying any decision to cancel to assess funding requirements having regard to further sales during that period and/or use the time to explore funding options;
(c)utilising the property developer’s own equity for funding;
(d)potential shareholder funding;
(e)use of additional security to obtain further funding;
(f)utilising mezzanine funding or alternative lending using a non-bank lender; and
(g)seeking funding from alternative sources.
[15] The defendant’s briefs of evidence include one from its Chief Executive Officer, Mr Gregory Hunt. The plaintiff considers Mr Hunt’s evidence has identified
documents (both within and outside the tailored discovery categories) that should be disclosed as relevant to the issue of whether the defendant took reasonable steps to fulfil the conditions in the Sunset Clause. As a result of further correspondence between the parties’ lawyers, further documents were discovered by the plaintiff but disagreements remained and this application was filed.
[16] The plaintiff’s application presents as an application under r 8.19. The application seeks further discovery of documents:
... in relation to the [d]efendant’s endeavours towards and/or ability to fund the construction of the area of the development relevant to the [p]roperty, construct a dwelling on the relevant property, and otherwise fulfil the conditions under cl 21 of the agreement ...
[17] The plaintiff has identified 11 categories of documents that it says fall within this description.
The law
[18] For the purposes of this judgment, the relevant rules are rr 8.17, 8.18 and 8.19 of the Rules:
8.17Variation of discovery order
(1)Subject to rule 7.7, a party may apply for an order varying the terms of a discovery order.
(2)The variation may be granted by a Judge on the ground that—
(a)compliance or attempted compliance with the terms of the order has revealed a need for a variation; or
(b)there has been a change of circumstances that justifies reconsideration.
8.18Continuing obligations
(1)Each party against whom a discovery order is made has a continuing obligation to give discovery and offer inspection at all stages of the proceeding, even if that party has filed and served an affidavit of documents that complies with this subpart.
(2)A party must discover a document if, in the course of complying with an order for tailored discovery, that party becomes aware of a document that is not required to be discovered under the order, but that—
(a)adversely affects that party's own case; or
(b)adversely affects another party's case; or
(c)supports another party's case.
8.19Order for particular discovery against party after proceeding commenced
If at any stage of the proceeding it appears to a Judge, from evidence or from the nature or circumstances of the case or from any document filed in the proceeding, that there are grounds for believing that a party has not discovered
1 or more documents or a group of documents that should have been discovered, the Judge may order that party—
(a)to file an affidavit stating—
(i)whether the documents are or have been in the party's control; and
(ii)if they have been but are no longer in the party's control, the party's best knowledge and belief as to when the documents ceased to be in the party's control and who now has control of them; and
(b)to serve the affidavit on the other party or parties; and
(c)if the documents are in the person's control, to make those documents available for inspection, in accordance with rule 8.27, to the other party or parties.
[19] The generally accepted four-stage approach to applications under r 8.19 is set out in Assa Abloy New Zealand Ltd v Allegion (New Zealand) Ltd as follows:2
(a)Are the documents sought relevant, and if so how important will they be?
(a)Are there grounds for belief that the documents sought exist? This will often be a matter of inference. How strong is that evidence?
(c)Is discovery proportionate, assessing proportionality in accordance with Part 1 of the Discovery Checklist in the Rules?
(b)Weighing and balancing these matters, in the Court’s discretion applying r 8.19, is an order appropriate?
2 Assa Abloy NZ Ltd v Allegion (New Zealand) Ltd [2015] NZHC 2760, [2018] NZAR 600 at [14].
[20] I was also referred to Beverley v DC One H1 Ltd, where Radich J noted that under r 8.19 the Court must consider whether it is in the interests of justice to order the particular discovery sought in light of the issues in the proceeding and having regard to the proportionality and cost of the particular discovery.3
The defendant’s primary argument
[21] As noted, the defendant contends the Court should not order further discovery because it has complied with the tailored discovery order, there is no reason to believe it has not discovered documents that “should have been discovered” and accordingly there is no basis for making an order under r 8.19.
[22] The defendant says the terms of the tailored discovery order were of importance to it, as the allegation that it failed to do all things reasonably necessary to fulfil the conditions in the Sunset Clause lent itself to a very wide and potentially burdensome discovery exercise. It says it was content to accept the tailored discovery order to ensure the parameters of discovery were clear and well-defined.
[23] I do not accept the defendant’s position that r 8.19 cannot be engaged. The plaintiff relies upon Southland Building Society v Barlow Justice Ltd, where Associate Judge Osborne rejected the submission that the words “should have been discovered” in r 8.19 should be narrowly construed so as to mean there cannot be an order for particular discovery unless the respondent is in breach of a discovery order.4 Associate Judge Osborne said:
[26] There is no validity in any proposition to the effect that a party has no obligations other than to simply comply with the terms of a discovery order which is in place. In themselves the continuing obligations under r 8.18(2) must call for the Court to require a party to produce a document if the Court is satisfied that a document adversely affects or supports one or the other party’s case. In the terminology of r 8.19, such a document “should have been discovered”.
3 Beverley v DC One H1 Ltd [2024] NZHC 3363 at [6]–[7].
4 Southland Building Society Ltd v Barlow Justice Ltd [2013] NZHC 1125. See also Hoyle v Hoyle [2015] NZHC 3001 at [24]; Commissioner of Police v Gong [2019] NZHC 2735, [2020] NZAR 519 at [10]; and Commerce Commission v Lodge Real Estate Ltd [2020] NZHC 1909, [2020] NZAR 863 at [7].
[24] Associate Judge Osborne also went on find that, in the alternative to ordering particular discovery under r 8.19, the Court could make an order under r 8.17 varying the terms of an existing discovery order.5 He was of the view that a change of circumstances within the terms of r 8.17(2)(b) was intended to deal with the widest range of changed circumstances, and:6
... the evolution of this defendant’s pleadings and case, bringing into relevance an arguably wider or different range of documents, amounts in my judgement to a “change of circumstances that justifies reconsideration” (in terms of r 8.17(2)(b)) of the existing discovery order.
[25] Here, the plaintiff’s position is that the exchange of briefs has highlighted that the defendant is relying on matters for which discovery has not been provided under the tailored discovery order.
[26] Mr Gresson referred me to Body Corporate 366611 v Downer New Zealand Ltd.7 That decision appears consistent with the Southland Building Society Ltd case, to the extent that Associate Judge Bell found that if he was wrong in making an order under r 8.19 he could vary the existing discovery order under r 8.17. Associate Judge Bell said:
[32] In case I am wrong on my interpretation of the order, I deal with this matter also under r 8.17. Admittedly Downer did not refer to r 8.17 in its application. Nevertheless, some expansiveness is required to get to grips with the substance of the discovery issue and to ensure that the case does go to trial with adequate disclosure on both sides. Accordingly, if I am held to be in error in my interpretation of the tailored discovery order, I amend the terms of this tailored discovery order to hold that the obligation to disclose documents relating to maintenance/repairs and defects also relates to damage resulting from the alleged defects and extends to disclosure by the plaintiffs of documents which may go to show that they were also responsible for that damage.
[27] The lesson to be taken from the decisions in Southland Building Society and Body Corporate 366611 is that, notwithstanding the terms of a discovery order, the Court has the tools to require further discovery be provided where the interests of justice require that. As Brewer J said in Burgess v Monk:8
5 At [27].
6 At [29].
7 Body Corporate 366611 v Downer New Zealand Ltd [2019] NZHC 2656.
8 Burgess v Monk [2016] NZHC 527, [2016] NZAR 438.
[7] Discovery in civil proceedings is aimed at ensuring that the parties have before trial all information relevant to the issues between them. There should be no surprises. Each party, at an early stage, should be able to assess the strengths and weaknesses of the respective cases. A party is not entitled to keep secret documents which might be adverse to its case. If litigation is a game, then it is played with all the cards spread face up on the table.
[28] Applied to this case, the tailored discovery ordered appears to have been predicated upon an assumption that only documents in existence at the date the defendant purported to cancel were relevant to the issue of whether it had taken reasonable steps to enable fulfilment of the Sunset Clause conditions. It will be observed that the tailored discovery categories in [11] concern the position as at 27 July 2022. For the reasons that follow, I am satisfied that documents that came into existence after that date are relevant and have been put in issue and should be discovered. I take the same position as Associate Judge Bell in Body Corporate 366611 and am prepared to vary the tailored discovery order where the interests of justice require that so both parties go to trial with adequate disclosure.9
Relevance
[29] It is my understanding the defendant does not contend that documents sought by the plaintiff do not exist or that ordering discovery would be disproportionate, at least in terms of the time and cost associated with providing them. The defendant’s contention is that the documents sought are insufficiently relevant.
[30] The touchstone issue in respect to which discovery is sought has been clearly identified as whether the defendant did all things reasonably necessary to enable fulfilment of the conditions in the Sunset Clause.
[31] I take the approach that a document or class of documents will be relevant if they tend to prove or disprove anything that is of consequence to the determination of the proceeding. It is a concept that is broader than admissibility but will not generally include documents that are merely contextual.10 As Williams J said in Attorney-
9 Body Corporate 366611 v Downer New Zealand Ltd, above n 7.
10 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR 8.7.01].
General v Institutions of Professional Engineers New Zealand Inc, it includes something “that is directly connected, related or pertinent to ‘the matter at hand’”.11
[32] The plaintiff’s position is that discovery is required of documents relating to the defendant’s financial and operational position generally up to 30 June 2024, including its security and assets, and ability to obtain funding to progress the construction of the development and not just that part of the development known as The Vines. This is because of the defendant’s reliance upon an alleged inability to finance The Vines (including because of matters affecting the development generally such as world events, stretched timelines with contractors and significant increases in forecasted costs) and that the defendant has proceeded with other stages of the development, including duplex type properties not dissimilar to what were planned for The Vines.
[33] Mr Croft also says in a development of this kind, involving multiple areas and stages of development, it is usual for early stages of the development to be unprofitable. He says the fact that costs are incurred in the early phase to fund infrastructure makes the backend of the project more profitable, and therefore focusing upon just one area of the development gives a misleading view of the defendant’s financial and operational position.
[34] The defendant, through its director Mr Hunt, says the plaintiff’s position is wrong as the development is being undertaken in stages (that he refers to as separate projects) which are insufficiently linked, such that the feasibility, funding and risk profile associated with one has little relevance to another. He also says funding obtained for a particular project typically cannot be used to fund another. Despite that, Mr Hunt acknowledges that the overall profitability of one project may assist with assessing the risk of one being carried out. He says in his affidavit:
The exception to the above is the overall profitability of a completed development may help assess the risk associated with one that is yet to be carried out. For example, in this case, the successful issuing of titles and sale of properties within The Reserve development was one of the factors that was relevant to whether The Vines development was viable and could be funded.
11 Attorney-General v Institution of Professional Engineers New Zealand Inc [2018] NZHC 74, [2018] NZAR 275 at [28].
However, the detail as to The Reserve itself, and its funding/budget requirements, were not relevant.
[35] In view of this evidence and having regard to the fact the development is being undertaken by one company and is planned to be managed as a cohesive whole, the defendant’s approach which silos off stages of the development as separate projects is clearly going to be scrutinised closely at trial.
[36] I also do not accept the defendant’s broad contention that documents that came into existence after cancellation cannot be relevant to the defendant’s decision to do so. Here, whether the defendant took reasonable steps to enable fulfilment of the Sunset Clause conditions must be considered in the unusual context where notice of cancellation was given just under two years before those conditions were to be satisfied. Whether the defendant had taken all reasonable steps must necessarily involve consideration not only of the circumstances as they existed at the time but the options available to the defendant to satisfy the conditions on or before the Completion Condition Date. The options that were reasonably available to the defendant may well be informed by the defendant’s financial and operational position and decisions it made to progress the development generally up to the Contract Completion Date.
[37] Further, events that occurred after the purported cancellation of the agreement have been put in issue in the proposed evidence for the defendant of Mr Hunt and Mr Christopher Brown, a civil engineer and project manager for the development, which contain hindsight analysis to justify the cancellation. For instance, Mr Brown says:
[22] I note even as of today, sales in The Reserve are very slow and well below what was anticipated at that earlier stage. This includes a duplex style property, similar in a number of ways to product being sold in The Vines, which has yet to result in a single contracted buyer.
…
[37] The decision to recommend cancellation of the contracts was carefully considered and based on many months of information gathering. Looking back and knowing what occurred over the following months within the construction market, with further cost increases and delays I consider it was the right decision at that time.
[38] Mr Hunt also makes assertions relevant to the defendant’s financial circumstances and the state of the development after the date of cancellation to justify its position that it validly cancelled. For example, in his brief of evidence Mr Hunt says:
[19]... If [the defendant] had pushed ahead with The Vines, it would either be insolvent or in a hugely precarious financial position, with the very real possibility that the properties in Stage 1 of The Vines would be incomplete and a number of presale agreements cancelled by purchasers. Since July 2022, sales in The Reserve, which were earmarked to partially fund The Vines, have stalled. A product in
The Reserve that we are currently marketing for sale is a duplex style property, similar in a number of ways to the product being sold in The Vines, which has yet to result in a single contracted buyer.
...
[24] [The defendant’s] sales have now stalled entirely, including in respect of the duplex style property currently marketed for sale in The Reserve. This demonstrates the risk in developers relying on subsequent stages to compensate for significant funding shortfalls, which based on the slowdown of [the defendant’s] sales in The Reserve, would have almost certainly been an unsuccessful risk for [the defendant] to take had it relied on Stage 2 and 3 sales in The Vines.
...
[30]Mr Croft references an email that indicated [the defendant’s] intention to self-fund part of The Vines project As at the date of this brief
we still have 15 sections in The Reserve available for sale. [The defendant’s] only avenue to self-fund part of the development cost for The Vines was through selling enough sections in The Reserve to enable that, which did not come to pass. ...
[31]Ultimately, the shareholders were not prepared to take the risk of advancing further funds to [the defendant]. ...
...
[34] This would not in my view have allowed the development to be completed. Sales within AA5 remain very slow and as mentioned above, over the past 12 months have stalled. ...
[42] With the benefit of hindsight, the market confirmed our assessment. Pricing did increase further, sales slowed dramatically, and delays became more prevalent. ...
[39] I am satisfied that in the interests of justice the defendant should be ordered to provide further discovery. In my view, the further discovery to be provided by the defendant should be in respect to the following:
(a)Any loan agreement between the defendant and any lender in relation to any funded area of the defendant’s development up to 30 June 2024.
(b)Any Barnes Beagley Doherr or other quantity surveyor reports, budgets, statements of financial position, valuations or programme documents prepared to support applications for, or required to be provided by the terms of, any loan facility in relation to any funded area of the defendant’s development up to 30 June 2024.
(c)All correspondence and related documents with the defendant’s lender, First Mortgage Trust, that detail how the lending for the AA5/Reserve section of the defendant’s development was repaid.
(d)Any information that details any assets or security that was available to the defendant to secure funding for the development up to 30 June 2024, including information that details the value of any security or assets.12
(e)Any correspondence with Mr Philip Dean Griffith or High Definition Development LLC regarding how any loan provided by them to the defendant was allocated.
Result
[40] I vary the term of the tailored discovery order so that the defendant is to file and serve a further affidavit of documents within 20 working days of the date of this judgment specifying the documents as described in [39] above that are or have been in its power or control. The defendant shall provide open documents listed in that further affidavit for inspection within a further 15 working days.
12 I understand that such information would be readily available in the financial accounts of the defendant.
[41] The plaintiff is entitled to costs on this application on a 2B basis along with reasonable disbursements as fixed by the Registrar.
O G Paulsen Associate Judge
Solicitors:
Anderson Lloyd, Christchurch Todd & Walker, Queenstown
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