Welch v Dunlop HC Wellington CIV-2004-485-2398

[2005] NZHC 1279

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2004-485-2398 CIV-2004-485-2399

BETWEEN	LORRAINE AGNES WELCH AND JOHN WISHART WELCH CHARLES JONATHAN POPE AND JACQUELINE KAYE POPE
AND	ROSS JAMES CRAUFURD DUNLOP, JAN MARGARET DUNLOP, MURRAY GORDON GIBSON, GABRIELLE ANN GIBSON, MICHAEL MACDOUGALL MOWBRAY AND HELEN MOWBRAY Respondent
Hearing:	28 January 2005

Appearances: J.M. Morrison for Applicants

C.S. Withnall QC and D. McGill for Respondents Judgment: 18 February 2005

JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Introduction

[1]   There are two applications before the Court pursuant to s145 Land Transfer Act 1952. The first is made by Lorraine Agnes Welch and John Wishart Welch (“the Welches”) and is for an order that Caveat 6156420.6 registered against Certificate of Title 90510 not lapse. The second is made by Charles Jonathan Pope and Jacqueline Kaye Pope (“the Popes”) and is for an order that Caveat 6156420.5 registered against Certificate of Title 90512 not lapse. The caveats claim interests under separate

LORRAINE AGNES WELCH AND JOHN WISHART WELCH And Anor V ROSS JAMES CRAUFURD DUNLOP, JAN MARGARET DUNLOP, MURRAY GORDON GIBSON, GABRIELLE ANN GIBSON, MICHAEL MACDOUGALL MOWBRAY AND HELEN MOWBRAY HC WN CIV-2004-485-2398 [18

February 2005]

contracts to purchase different sections in the respondent’s subdivision at Hahei, Coromandel Peninsula.

[2]   Both applications are opposed by the respondents.

Background Facts

[3]   Although the applications before me relate to two separate proceedings to sustain different caveats, nevertheless there are common matters with respect to both sets of proceedings. I now set out these common matters.

[4]   The respondents are owners and developers of the subdivision in question. On  13 March 2001 the Welches signed an Agreement to Purchase Lot 4 on the proposed subdivision for $225,000.00. On 24 January 2002 the Popes signed an Agreement to Purchase Lot 6 on the proposed subdivision for $220,000.00.

[5]   At the time each of these contracts was entered into, the titles to the sections being purchased were not available. The individual contracts contemplated that the respondents would take steps to complete the subdivision, and final settlement of each sale was to take place when the title was available.

[6]   The individual contracts provided in each case for the Welches and the Popes as purchasers respectively first, to approve the titles when they were available, and secondly, to have a specific right to cancel their respective purchase agreements if the delay in obtaining the issue of the titles was excessive.

[7]   In each case, the issue of the title was delayed. Titles were not available until 20 September 2004, some 42 months after the Welches contract, and some 32 months after the Popes contract.

[8]   In the meantime, the respondents as vendors purported to exercise rights of cancellation under both contracts citing, amongst other issues, the delay in the issue of the respective titles.

[9]   Neither the Welches nor the Popes as purchasers accepted that the respondent vendors had that right to cancel, and accordingly they lodged the caveats in question here.

[10]      In addition, they have each advised that they intend to pursue specific performance claims against the respondents to enforce their individual contracts.

[11]      The respondents appear to accept that both the Welches and the Popes as purchasers have at all material times been ready, willing and able to complete their respective purchases. There seems to be no allegation on the part of the respondents that the Welches or the Popes are in default of any obligation to settle, or that they are unwilling or unable to fulfil their obligations under the respective contracts.

[12]      Broadly, those are the factual matters which are in common with respect to the two sets of proceedings. There are a range of matters which are not in common, and I now turn to outline these.

[13]      As noted above, the Welches’ contract was entered into on 13 March 2001, and the Popes’ contract on 24 January 2002.

[14]      Each contract therefore contemplates differing delays in the availability of title.

[15]Specifically, in the Welches’ contract, clause 14.0 states:

14.0 Settlement shall be 60 (sixty) working days after  the  vendor’s  solicitor has given the purchaser’s solicitor notice in writing that the titles are available. If such notice has not been given within 18 months of the date hereon, then the purchaser has the right to cancel the agreement.

[16]      It should be noted that in this clause 14.0, someone has handwritten the words “or vendor” after the word “purchaser” in the last line. This alteration appears to bear the initial of one party only. Although it is somewhat unclear, this initial seems to include the letters “RD” which may relate to the first-named respondent Mr Ross Dunlop.

[17]In the Popes’ contract, clause 14.0 differs and reads as follows:

14.0 Settlement shall be fifteen (15) working days after the  vendor’s solicitor has given the purchaser’s solicitor notice in writing that the titles are available. If such notice has not been given within 12 months of the date hereon, then the purchaser has the right to cancel this agreement.

[18]      Again, it needs to be noted that the words “or vendor” have been added to this clause 14.0 it seems after the word “purchaser” in the last line of the clause. In this case, it appears that the handwritten addition has been initialled by or on behalf of all parties to the contract.

[19]      In the case of the contract with the Popes therefore, it seems that the accepted addition of the words “or vendor” in the last line of clause 14.0 on the face of it gave the respondents as vendors a right of cancellation as titles were not available within 12 months of 24 January 2002, the date of that agreement. As I have noted  earlier the titles were not issued until 20 September 2004.

[20]      The position becomes somewhat less clear, however, when the only substantive affidavit evidence filed in this proceeding, that of Mr C.J. Pope, one of the applicants, is considered.

[21]      In that 11 November 2004 affidavit filed in support of the application, Mr Pope deposed:

4.At the time we were negotiating the purchase I was aware the title to the section had not been issued, and that there might be a delay of some months before it was available. That was not a matter over which we, as purchasers, had any control or influence. It was entirely a matter for the respondents. Therefore a special clause was added in to give us the right to back out of the contract if the delay  in issuing title became excessive. The period nominated was 12 months, though all of the indications I received from the respondents’ agent was that titles should be available well before then.

5.In this respect I refer to clause 14 of the contract:

“Settlement shall be fifteen (15) working days after the vendor’s solicitor has given the purchasers’ solicitor notice in writing that the titles are available. If such notice has not been given within 12 months of the date hereon then the purchaser [or vendor] has the right to cancel this agreement.”

6.The words in square brackets were hand written in at some point, but they were not the result of any discussion with us. All I recall is the contract being returned with various handwritten amendments and a request from the respondents’ agent that I initial everything. It did not occur to me that the respondents were altering the contract in such a way as to give them the right to back out of the contract if they delayed the process for issuing title, though in principle I accepted that if it became impossible for the title to be issued then the contract should be at an end.

7.When the 12 months was almost up our solicitors, Rainey Collins Wright & Co, wrote to the respondents’ solicitors, Welsh McCarthy noting the delay but confirming we wanted to proceed notwithstanding. Attached marked “B” is a copy of that letter dated 21 January 2003.

8.By letter of 11 February 2003 Welsh McCarthy offered to “waive” clause 14 on payment in full. Attached marked “C” is a true copy of that letter.

9.We did not respond directly to that letter. By May 2003 we understood good progress had been made and by letter of 21 May 2003 our solicitors referred to that. Attached marked “D” is a true copy of that letter. I am not aware there was a response to that letter.

10.From time to time I made enquiries to the respondents’ agent, Richardsons Real Estate, about progress. By email of 18 September 2003 I was told by Richardsons “things are happening, your driveway is going to be widened at the front end and the power easements are being sorted by another person. Mike suggested that titles may be through by Christmas”. Attached marked “E” is a true copy of that email.

11.Then on 29 September 2003 Rainey Collins sent an inquiry to Welsh McCarthy. Attached marked “F” is a true copy of that.

12.The next development was Welsh McCarthy’s letter of 17 October 2003 purporting to withdraw the earlier offer to “waive” clause 14. Attached marked “G” is a copy of that letter. Then by letter  dated 21 October 2003 Welsh McCarthy sent a further letter purporting to advise the contract was at an end. A true copy of that letter is attached marked “H”.

…

22.We do not accept the respondents can rely on their delay and cancel  the contract. We are aware that property values in the subdivision have increased and we are under no doubt that the respondents are endeavouring to take advantage of their delay in obtaining title to the section so that they can re-sell for more money. As acknowledged  by Welsh McCarthy on behalf of the respondents, we continue to be ready willing and able to settle the purchase of the section, and we wish to do so.

[22]      So far as the Welch proceeding and the contract with the Welches is concerned, the position was set out in the affidavit of the applicant Mr J.W. Welch dated 10 November 2004. In that affidavit he deposed:

4.The contract is conditional on the issue of title. That was because  the respondents did not have titles for the individual sections and needed to take the steps necessary to obtain them. We understood there would be some delay but we were to be protected by a special provision giving us the right to cancel if the delay was excessive.

5.That is the basis of clause 14 in a contract. It is barely legible in the copy of the contract we have but reads:

“Settlement shall be sixty (60) working days after the vendor’s solicitor has given the purchasers’ solicitor notice in writing that the titles are available. If such notice has not been given within 18 months of the date hereon then the purchaser has the right to cancel this agreement.”

Although it appears someone has handwritten “or vendor” after “purchasers” that was not an alteration made or accepted by us.

6.There were delays in the issue of separate title for the section we had agreed to purchase. Following inquiry by our then solicitors, Anderson Lloyd, solicitors on behalf of the respondents, Welsh McCarthy, reported by letter dated 3 February 2003 on those delays. Attached marked “B” is a true copy of that letter.

7.Then by subsequent letter dated 21 October 2003 Welsh McCarthy wrote to our new solicitor advising the respondents were unable to provide separate title and purported to rely on clause 14 of the agreement and say the contract was at an end. Attached marked “C” is a true copy of that letter.

8.We did not accept that the contract was at an end. On our instructions Rainey Collins, solicitors disputed the purported cancellation by letter dated 18 November 2003. Attached marked “D” is a true copy of that letter.

[23]      Interestingly, the only evidence put before the Court in this matter is that provided in the affidavits filed on behalf of the Welches and the Popes in support of their applications. The respondents themselves have not adduced any affidavit evidence in support of their contention that the circumstances here entitled them to cancel the contracts. Those circumstances were alleged in a letter dated 10  December 2003 from Welsh McCarthy, the solicitors to the respondents, to Rainey Collins, the solicitors acting for the Welches and the Popes, which letter is exhibited to affidavits filed in support of this application. Otherwise, however, the

respondents have chosen not to file affidavits to establish any factual matters in support of their opposition to the applications.

Counsel’s Arguments and My Decision

[24]      The general approach to applications under s145 Land Transfer Act 1952 was settled in Sims v Lowe [1988] 1 NZLR 656 where Somers J at page 660 said:

The caveator seeks to clog or fetter the proprietary interest of another. As a matter of principle, it seems right that he must justify the continued existence of his caveat. He will do that if he can show that he has a reasonably arguable case for the interest he claims.

[25]      The applicants have the burden of establishing a “reasonably arguable case” that they have a caveatable interest in the properties in question, and that the caveats should be sustained – Hinde McMorland & Sim “Land Law in New Zealand” Vol. 1. Para 10.020. An order for removal of a caveat is not to be made unless it is patently clear that the caveat cannot be maintained either because there was no valid ground for lodging it, or that no such ground may exist now – Re Graham (1912) 14 GLR 806; New Zealand Limousin Cattle Breeders Society Inc v Robertson [1984] 1NZLR 41 (CA).

[26]      In Hinde McMorland & Sim “Land Law in New Zealand” Vol. 1. Para 10.020(a), the authors state:

It is clear that on an application under sections 143, 145 or 145A the Court ought not finally to determine the rights of the parties unless both parties consent or unless the facts are not in dispute and the law has been fully argued.

[27]      Somers J. in the Court of Appeal in New Zealand Limousin Cattle Breeders Society Inc v Robertson at page 43 stated:

The proceedings upon such an application (under s145) are quite unsuitable to determine the rights of the parties.

[28]      The test to be applied under s145 provides the Court with a residual discretion whether to allow the caveat to lapse or not. The onus rests on  the caveator, but a balance of convenience test has been held to be appropriate – see

Pacific Homes Limited (in receivership) v Consolidated Joinery Limited [1996] 2 NZLR 652 (CA). In Pacific Homes Limited Blanchard J in delivering the judgment of the Court of Appeal said at page 656:

…The Court retains a discretion to make an order removing the caveat, though it will be exercised cautiously. An order will be made for removal only where the Court is completely satisfied that the legitimate interests of the caveator will not thereby be prejudiced.

[29]      Thus, it is clear from Pacific Homes Limited that even if a caveator satisfies the Court that she/he has an arguable case, the Court retains a discretion to make an order removing the caveat.

[30]      The first issue for consideration here is whether the applicants have caveatable interests in the respective sections in terms of s137 Land Transfer Act 1952.

[31]Section 137 states:

137.     Caveat against dealing with land under Act – Any person –

(a)    Claiming to be entitled to or to be beneficially interested in any land, estate, or interest under this Act by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise howsoever; or

(b)    Transferring any estate or interest under this Act to any other person to be held in trust –

may at any time lodge with the Registrar a caveat in Form N in the Second Schedule to this Act.”

[32]      It is settled law that an agreement for sale and purchase of land passes a beneficial or equitable estate to the purchaser – Foreman v Hazard [1984] 1NZLR 586, and see Familton v Nebraska Investments Limited (HC Christchurch, CIV- 2003-409-2488, 3 March 2004, Associate Judge Thomson).

[33]      The caveats in question here claim estates or interest in the land under the respective agreements for sale and purchase. The respondents’ Notice of Opposition to the current applications in each case claims that the applicants have failed to

demonstrate a caveatable interest in the land in question, and that it is just in all the circumstances that each of the caveats lapse.

[34]      As I have noted earlier, the only affidavit evidence before the Court on these applications is that provided in the affidavits of the applicants in support of their applications. On the face of it, I am satisfied this evidence establishes both the existence of the respective contracts, and their acceptance by the respondents and also the acknowledgement on behalf of the respondents that at all times the applicants had been ready, willing and able to settle and fulfil their obligations under the respective agreements.

[35]      Notwithstanding this, before me Mr Withnall QC for the respondents endeavoured to argue otherwise. He contended that, particularly in the case of the contract with the Welches, the claim by Mr Welch in his affidavit that the addition of the handwritten words “or vendor” appearing in clause 14 “was not an alteration made or accepted by us” must mean that there had been no consensus, no acceptance of the vendor’s counter-offer to sell, and hence no contract.

[36]      In the context of the present application before the Court, where the applicants must simply establish a reasonably arguable entitlement to their claimed caveatable interests, and the Court is not required to finally determine the rights of the parties, Mr Withnall QC’s claim for the respondents that no contract with the Welches is in existence must be rejected. I am satisfied that repeated affirmations of the Welches contract occurred. As late as 10 December 2003 Welsh McCarthy, the solicitors to the respondents, in a letter to Rainey Collins, solicitors to the applicant (exhibited as Exhibit “E” to the affidavit of Mr Welch) stated:

We reject your suggestion that our clients are unable to cancel the agreement which existed between our respective clients. (emphasis added)

[37]      The only evidence before the Court being the affidavit of Mr Welch, the applicant, deposes clearly that a contract between the parties was concluded.

[38]      The absence of any evidence from the respondents to support their contention that no contract came into existence with the Welches is telling.

[39]      For all these reasons, I reject the respondents’ suggestion that no concluded contract was reached with the Welches.

[40]      Effectively, therefore, the respondents’ argument in opposition to each of the applications before me is that the respective agreements were validly cancelled by the respondents, so in each case no arguable caveatable interests existed in favour of the applicants.

[41]      This argument is basically to the effect that as titles were not available within the timeframes provided in clause 14 of each contract, the vendors had a right to cancel the respective agreements in terms of that clause, and did so.

[42]I turn now to consider this argument with respect to each of the contracts.

[43]      Regarding the Welches contract, Mr Morrison for the applicants contends  that on the face of it, and given Mr Welch’s unchallenged evidence that the words “or vendor” were a variation to the original agreement, not introduced or accepted by him, clause 14 does not afford the respondent vendors any right of cancellation. His contention is that clause 14 merely gives the Welches as purchasers a right of cancellation in the event that the titles were not available within the stated period, and the Welches throughout clearly indicated their intention not to cancel the agreement in terms of this clause. It follows, according to Mr Morrison’s submissions, that the contract with the Welches stands, and they are entitled to maintain their caveat.

[44]      Although the position concerning the Welches contract is not entirely clear, I am satisfied that the position as contended by Mr Morrison in paragraph [43] above is a reasonably arguable one, and on balance the Welches’ application to uphold their caveat should succeed here, pending a proper exploration of the parties’ rights at substantive trial. It is clearly the case that if, in any s145 application, a conflict  arises on the evidence, the applicant’s evidence should be preferred for the purpose of this s145 hearing – McCrae v Rapana (HC Auckland, M633/94, 17 June 1994, Fisher J) and Familton v Nebraska Investments Limited. The evidence from Mr Welch as applicant is reasonably clear, and it is significant here that in this case there

is no contradictory evidence provided by the respondents. In my view, the applicants, the Welches, have shown a reasonably arguable case to sustain their caveat, and they are entitled to the preservation order they seek. An order to this effect will follow.

[45]      Turning now to consider the Popes’ contract, the position in my view is somewhat less clear.

[46]      On the face of it, the addition of the words “or vendor” in clause 14 of the Popes’ contract was initialled by all parties.

[47]      Mr Pope in his affidavit deposes that when the contract was returned, it had various handwritten amendments, and the Popes were requested to initial these. He states at paragraph 6 of his affidavit:

It did not occur to me that the respondents were altering the contract in such a way as to give them the right to back out of the contract if they delayed the process for issuing title, though in principle I accept that if it became impossible for the title to be issued, then the contract should be at an end.

[48]      These comments, however, are quite inconsistent with a statement in a letter from Mr Pope’s solicitors, Rainey Collins, dated 21 January 2003 (exhibited as Exhibit “B” to his affidavit of 11 November 2004) which stated:

We understand that there may still be some slight delay with availability of title but despite this our clients wish to proceed. Accordingly they have asked us to notify your clients that they have no intention of exercising their right to withdraw under clause 14.0, but in return seek your client’s confirmation that they likewise will not be withdrawing.

For certainty we suggest that clause 14.0 be accepted by both parties as waived.

(emphasis added)

[49]      It seems a reasonable assumption that on 21 January 2003 the Popes as purchasers could have been in little doubt that in terms of clause 14.0 of the contract, the respondents as vendors had the right to cancel if titles were not available within the twelve month period. In my view, this, coupled with the clear provisions of the document itself which appeared to be signed and initialled by all parties, supports the

respondents’ contention that if titles were unavailable for twelve months, either the respondents or the Popes could cancel.

[50]That is not the end of the matter, however.

[51]      Notwithstanding the position under clause 14.0, Mr Morrison for the Popes contended that the general proposition that a party in default of an obligation under a contract cannot use that as a basis for avoiding a contractual obligation, must apply here. As to this, he referred to the judgment of Baragwanath J in Fu Hao Construction Limited v Landco Albany Limited (unreported HC Auckland, 13  August 2004, CIV2004-404-1272). That case related to the sale and purchase of a parcel of land which contemplated the need for a subdivision requiring a resource consent under the Resource Management Act 1991. There, the Agreement for Sale and Purchase contained a provision which stated:

If it is necessary for the vendor to obtain any consent or consents to the sale, and the vendor is unable or unwilling to obtain the consent or consents to this sale, the vendor may, regardless of any attempt by the vendor to obtain the consent or consents, by written notice to the purchaser, or the purchaser’s solicitor, cancel the contract.

[52]      With regard to this provision, Baragwanath J in his judgment at paragraph 28 stated:

A construction that the defendant could escape from the contract simply because it was unwilling to perform would mean that it could capriciously relieve itself of liability at any stage. A clause having that effect would be repugnant to the rest of the agreement and simply disregarded: Watling v Lewis [1911] 1 Ch. 414.

[53]      As I have noted earlier, the only evidence adduced before the Court in relation to the Popes’ contract is that provided in the affidavits of Mr Pope. There is no sworn evidence on behalf of the respondents indicating the steps they took to have the subdivision completed and titles issued, and to explain the delays which have occurred here.

[54]      A brief chronology as to matters which occurred with respect to the Popes’ contract is useful.

a)On 24 January 2002, the Agreement for Sale and Purchase was signed.

b)In terms of clause 14.0, title was to be available within twelve months of that date, being 24 January 2003.

c)On 21 January 2003, Rainey Collins for the Popes wrote to the respondents’ solicitors, Welsh McCarthy, indicating their understanding that there might still be some slight delay with availability of title. Despite this, the letter confirmed the Popes as purchasers wished to proceed and sought confirmation that the respondents did not intend withdrawing under clause 14.0 of the contract.

d)On 11 February 2003 Welsh McCarthy, wrote to Rainey Collins stating:

“…our clients…have advised that they would be quite happy to waive clause 14.0 on payment in full by your clients. Such payment to be held on deposit but undispersed in our Trust Account until issue of Title.”

e)Some delay ensued and then on 21 May 2003 Rainey Collins wrote to Welsh McCarthy stating:

“We referred your 11 February letter to our clients who understand that since then good progress has been made. We wonder therefore if you can let us have an estimate as to when title is likely to be available. If the end is not yet in sight, our clients will consider the proposal in your previous letter.”

f)On 18 September 2003 Mr Pope received an e-mail from Richardsons Real Estate, Hahei, the vendor’s agent in this matter, in response to

his request for any update with respect to the section. This e-mail stated:

“Things are happening, your driveway is going to be widened at the front, and the power easements are being sorted by another person. Mike suggested that titles may be through by Christmas…”

g)On 29 September 2003 Rainey Collins again wrote to Welsh McCarthy stating that:

“Our clients understand that the delays with title have now been resolved so have asked us to enquire as to when you are likely to be ready to settle.”

h)This drew a response on Friday 17 October 2003 when Welsh McCarthy wrote to Rainey Collins referring to the letter of 11 February 2003 and stating:

“This letter serves to confirm our client’s withdrawal of that offer to waive clause 14 on payment in full by your clients and otherwise in terms of that letter.”

i)Quickly thereafter on Tuesday 21 October 2003 Welsh McCarthy wrote to Rainey Collins stating that as the respondents were unable to satisfy the conditions in clause 14 of the contract, it was at an end.

j)By letter dated 22 October 2003 Rainey Collins replied and indicated their surprise at the vendor’s purported cancellation of the contract “as we had understood that the delays surrounding the issue of title had been resolved”.

k)Finally, in his affidavit dated 11 November 2004, as I have noted above, Mr Pope stated at paragraph 22:

We do not accept the respondents can rely on their delay and cancel the contract. We are aware that property values in the subdivision have  increased and we are under no doubt that the respondents are endeavouring to take advantage of their delay in obtaining title to the section so that they can resell it for more money. As acknowledged by Welsh McCarthy on behalf of the respondents, we continue to be ready, willing and able to settle the purchase of the section, and we wish to do so.

[55]      In considering this chronology, it is significant as I see it, that whereas originally it was envisaged that the subdivisional plan would be deposited and titles available by January 2003, ultimately the titles were not issued until some 20 months later on 20 September 2004.

[56]      The respondents have chosen to put no sworn evidence before the Court to explain the delays on their part in having the titles issued. Two things are clear. The first is that the steps required to have titles issued and the time required to do so were all matters within the control of the respondents, and yet titles were not issued finally until 20 September 2004. The second is that therefore we have here a failure on the part of the respondents and not an inability to get the titles issued within the agreed timeframes.

[57]In addition, as I see it, several points noted in the chronology in paragraph

[54] above may well lend weight to the suggestion from Mr Pope that “the respondents are endeavouring to take advantage of their delay in obtaining title to the section…”.

[58]   Certainly the e-mail of 18 September 2003 from the respondents’ selling agents to Mr Pope which confirmed that “things are happening” and “your drive way is going to be widened at the front” and “Mike suggested that titles may be through by Christmas” casts an interesting light upon the notice approximately one month later on 21 October 2003 purporting to cancel the contract.

[59]   Before me, Mr Withnall QC suggested first, that there was an absence here of any evidence of disentitling conduct on the part of the respondents and secondly, that the respondents’ right to cancel the Pope contract was based upon the circumstances which they allege are generally set out in the letter from Welsh McCarthy dated 10 December 2003, a copy of which was exhibited to the affidavit of Mr Pope.

[60]   That Welsh McCarthy letter, as I see it, is not evidence of those matters. The respondents have chosen to place nothing before the Court themselves as evidence in this matter, and accordingly none of the allegations in this Welsh McCarthy letter have been established.

[61]   Mr Morrison for the Popes submitted to me that it is anathema to reasonableness that vendor delay, the reasons for which have not been established by any evidence, should be relied on by the vendor respondents here to relieve them of their contractual obligation to obtain and make titles available by the simple expedient of delaying until the time for doing so had passed – which is all that the evidence establishes – and cancelling. I agree.

[62]   Although it is clear that the Popes as purchasers must establish a reasonably arguable entitlement to the caveatable interest they claim, I am satisfied by a small margin here that they have done sufficient to meet this test. In my view, the Popes have shown an arguable case against the respondents’ right to cancel the agreement, given particularly the absence of any evidence before the Court from the respondents as to the steps they may have taken to have the subdivisional plan deposited, and the reasons for the delay which occurred.   I say this with the comments of  Baragwanath

J. in Fu Hao Construction Limited v Land Co Albany Limited noted at paragraph

[51] above clearly in mind.

Conclusion

[63]              It will be apparent, therefore, that both the applications by the Welches and the application by the Popes to sustain the caveats in question are successful. The interim orders made earlier are now made permanent.

[64]There will be orders as follows:

(1)That caveat no. 6156420.6 lodged by the Welches in respect of all that land contained in Certificate of Title 90510 shall not lapse.

(2)That caveat no. 6156420.5 lodged by the Popes in respect of all that land contained in Certificate of Title 90512 shall not lapse.

[65]              In each case the applicants, the Welches and the Popes are, however, to issue proceedings within 28 days of the date of this judgment to enforce their respect agreements, and thereafter they are to take all reasonable steps to prosecute those proceedings, failing which the respondents can apply further to this Court.

[66]              The applicants, the Welches and the Popes, having been successful, they are each entitled to costs against the respondents which I award on a category 2B basis, together with disbursements as fixed by the Registrar.

Associate Judge D.I. Gendall

Delivered at 9.00am on 18 February 2005.

Solicitors:

Rainey Collins, Wellington for Applicants Duncan Cotterill, Auckland for Respondents