Welsh v Gatchell HC Blenheim CIV 2005-406-279

[2007] NZHC 1898

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IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

CIV 2005-406-279

BETWEEN  DAVID PATRICK WELSH & BRONWYN ISABEL WELSH Plaintiffs

ANDANN JANE RYAN GATCHELL Defendant

Hearing:         30 April 2007

Appearances: J M Kirkland for Plaintiffs

M McKechnie for Defendant

Judgment:      21 June 2007 at 12 pm

RESERVED JUDGMENT OF MILLER J

TABLE OF CONTENTS

Introduction
The oral agreement
The written record
Things done to further the subdivision

The lawyers are introduced The change of heart Completion of the subdivision The value of the land

Is there a contract?

Was there a sufficient note or memorandum in writing? Part performance

Relief Estoppel Decision

WELSH & WELSH V GATCHELL HC BLE CIV 2005-406-279 21 June 2007

[1]      Ann Gatchell owns a section at 273 Queen Charlotte Drive, Havelock.  She and her late husband George Gatchell agreed to sell it to David and Bronwyn Welsh, who now sue in contract for specific performance and, in the alternative, plead an equitable estoppel, the remedy for which is also said to be specific performance.

[2]      There is now no dispute that an oral agreement was reached in October 2003, identifying the parties, the land, the price and the deposit, and the settlement date. Mrs Gatchell denies that there was a concluded contract, saying the parties contemplated a written contract; in the alternative, that there was no signed memorandum in writing and nothing done that was referable to part performance. She adds that equity should not come to the Welshes’ aid because the agreed price,

$65,000, was and is far below market value, which now exceeds $400,000.   She abandoned a plea that Mr Gatchell was unwell and his judgement impaired when he negotiated the agreement, some eight months before his death on 17 June 2004 at the age of 77.

[3]      The Gatchells were both registered proprietors but Mrs Gatchell is the sole defendant.   It is common ground that Mr Gatchell was authorised to negotiate the agreement for the two of them, while the land was held as joint tenants and his interest has passed to her by survivorship.

The oral agreement

[4]      Mr Welsh was the principal witness for the plaintiffs.  He explained that he learned of the land in 2003 when visiting friends who owned a nearby property.  He met George Gatchell in October of that year, and they walked over the land together. It  formed  part  of  the  property  at  273  Queen  Charlotte  Drive,  and  required subdivision.    Mr  Gatchell  explained  his  subdivision  proposal  as  they  walked, pointing out pegs corresponding to a survey plan that he also handed to Mr Welsh. There is no dispute about identity of the land, the subdivision of which has now been

completed by Mrs Gatchell.   Its legal description is now Lot 2 DP 309864, and it comprises 4488m2.

[5]      About two weeks later, the Welshes and their teenage son went to look at the section and meet the Gatchells.   They discussed a suitable building site, and Mr Gatchell and Mr Welsh negotiated an agreement.  Mr Gatchell had subdivided four other sections at the same site, and said that on this occasion he did not want to get involved with engineers, surveyors, valuers, the District Council and roadworks.  He wanted to sell the land on the footing that the buyer would meet all those costs.  He explained that he had sold other sections for $65,000, and Mr Welsh offered to pay that sum on the basis that the Welshes would be responsible for expenses relating to the surveyor, engineer, valuers, legal fees, resource consent fees, and reserve fund contribution.

[6]      Mr Gatchell responded “we have an agreement” and the men shook hands on it.  They agreed that the Welshes would pay a deposit of $10,000 and the balance when the sub-division was completed and title issued.

[7]      As the Welshes left, Mr Gatchell said he would send down  a document recording what they had agreed to.  Mr Welsh said he had a friend in real estate and “if he [Mr Gatchell] wanted, I was happy to have the agreement drafted onto a real estate form”.  Mr Gatchell “was not too concerned about that”.  There was no cross- examination on this evidence.

[8]      Mrs Gatchell and Mrs Welsh were not present during the negotiations, but Mrs Welsh said that when the men rejoined them, Mr Gatchell announced that he had agreed to sell the section and Mrs Gatchell voiced her approval.  Mrs Welsh was not cross-examined, and for her part Mrs Gatchell neither disputed nor confirmed this account.  She explained that she knew George had been in serious talk, but he attended to business matters.  I accept that Mr Gatchell did announce the sale.

[9]      On 9 November 2003, Mr Gatchell faxed to the Welshes a hand-written facsimile setting out the terms of the agreement.  The printed fax header recorded the Gatchells’  surname  and  initials,  with  their  fax  number.    The  full  text  of  the document, including the header, is as follows:

09/11/2003      09.53   03-574-2194     A & G Gatchell

I/we agree to purchase a section from A & G Gatchell 273 Queen Charlotte Drive being part of DP 10537 Lot 2 for a cost of $65,000.00 (sixty five thousand dollars) plus the costs of preparation of section sale eg surveyor, engineer, resource consent, valuer, Council reserve fund and lawyers fees. Plus any other costs pertaining to sale of section – example (road access) and power supply, right of way over our land by power lines known as the “Poo trail” will have permanent access to section – via access road.

There will be a $10,000.00 deposit and $55,000.00 when title to property arrives.

[10]     The fax  was  written  as  if  the purchaser was  speaking,  and  so  invited  a response.   Mr Welsh’s unchallenged evidence was that he did respond: he immediately called Mr Gatchell and said that he was happy with the document, and confirmed their agreement.  Mr Gatchell evidently did not ask Mr Welsh to write his signature upon it.  Nor did Mr Gatchell write his own signature on the document.

[11]     Mr Welsh next discussed the purchase with Murray Giera, a land agent in Christchurch, who suggested that an agreement should be drafted and completed the document by hand.  The Welshes accepted this suggestion.  They signed it and sent it to the Gatchells under cover of a letter that commenced by stating “I hope this draft is ok, if not just let me know”.  The letter went on to advise that Mr Welsh, who wrote the letter, had talked to the engineer, who said that his work was completed and he was handing over to the surveyor.   It added “Not sure what we said about deposit  but  have  enclosed  the  cheque so  you  can  bank  it  when  things  become finalised”.

[12]     The Giera agreement was in the standard REINZ/ADLS form (7th edition).  It recorded the legal description as Lot 2 DP 1053 (the section was then part of Lot 2), and contained the following special conditions (crossings out have been omitted):

This offer is subject to the section sighted being given a clear title with no encumbrances or restrictions on that title.

The cost of survey engineering, resource consent, proportionate reserve contributions, all legal fees for transfer of section, and all service costs be met by the purchaser.

A registered RoW be given to the title being purchased.

This offer is subject to my solicitors approval of title and form with 15 working days of acceptance.

[13]     It will be seen that the Giera agreement differed from the fax of 9 November. The fax specified the buyers were to pay the costs of preparation of the section for sale, instancing survey, engineering, resource consent, valuation, Council reserve fund and legal fees.  Apart from introducing the standard terms of the REINZ/ADLS form, the Giera agreement specified that the buyers were to meet specified costs; survey, engineering, resource consent, proportionate reserve contribution, all legal fees for transfer of the section, and all ‘service costs’.  It added that a registered right of way was to be given, that the offer was subject to the section sighted being given clear title, and that the offer was further subject to the purchasers solicitor’s approval of title and form within 15 working days of acceptance.

[14]     The deposit cheque was banked on 23 January 2004, but the Gatchells did not sign the Giera agreement or respond to it in any way.  It appears that Mr Welsh and Mr Gatchell never discussed it.  Mrs Gatchell said that she told George to bank the cheque because she knew that they become stale after a time.

Things done to further the subdivision

[15]     Mr Gatchell gave Mr Welsh the names of an engineer, surveyor and road builder, and Mr Welsh recorded them on his copy of the fax.   He instructed the engineer, Mr Evans of Abacus Design, to continue with engineering matters and paid that firm a fee of $1200 on 20 March 2004.  The evidence is that he kept Mr Gatchell informed of what he was doing.

[16]     It appears that Mr Gatchell instructed Newdick Fraser, valuers, to value the section for purposes of fixing the reserve fund contribution, and they did so by letter

of 24 May 2004 addressed to the Marlborough District Council.  They valued it at

$80,000.  They invoiced Mr Gatchell for their modest fee of $90, which suggests the valuation was a desktop exercise.

[17]     Mr  Gatchell  had  been  unwell  for  some  time  but  did  not  seek  medical attention.  When he eventually did so early in 2004 he found he had advanced cancer which was beyond treatment.  By May he was gravely ill.  However, the Newdick Fraser valuation and invoice were faxed from the Gatchells’ home to the Welshes on

12 June, when he was in a hospice.   Mrs Gatchell must have faxed them at Mr Gatchell’s request, although she does not recall it.   Understandably, her priorities were elsewhere.   Mrs Welsh said that Mrs Gatchell first called her, saying that George had taken a turn very much for the worse and was not expected to live much longer; however, he had insisted that Mrs Gatchell should fax the valuation to the Welshes.  I accept this evidence, which was unchallenged and is consistent with a subsequent fax addressed to Mrs Gatchell, in which the Welshes thanked her for the valuation and said it was the last thing to be worried about.   The Welshes paid Newdick Fraser’s fee.

[18]     Mr Welsh also instructed Mr Norton of Survey Solutions to complete the survey in mid-2004, and contacted Mr Lawrence, the road builder, instructing him to carry on with the construction.

The lawyers are introduced

[19]     The Gatchells’ solicitor was Craig Waymouth of Jensen Waymouth, Taupo. His firm had handled the previous subdivisions on the same property, all of which had been the subject of agreements for sale and purchase prepared and signed after Mr Gatchell took legal advice.  Mr Gatchell had told him in 2003 that he planned a further subdivision in which, unlike the previous four, the purchaser would meet most of the costs involved, but he knew nothing of the Welshes or the October 2003 agreement.    Mr  Waymouth  was  instructed  to  handle  Mr  Gatchell’s  estate,  and learned of the Welshes’ from Mrs Gatchell.  He reviewed her documents and saw the fax of 9 November 2003 and the Giera agreement.  He tracked down the Welshes’ solicitor, Philip James of Saunders & Co, Christchurch.

[20]     On 17 August Mr Waymouth asked Mr James to take instructions about whether there was a signed agreement for sale and purchase.  Mr James had not been instructed to act on the sale, although he is a friend of the Welshes and knew they had purchased a section near Havelock.  He took instructions and the two solicitors spoke again on 27 August, when Mr James confirmed that the Welshes intended to purchase and were “running numbers”.

[21]     On  7  October  Mr  James  wrote  to  Mr  Waymouth  advising  that  he  was returning an undated agreement for sale and purchase for signature for execution. He confirmed that Mr Welsh wanted to proceed “subject to some indication of what the legal fees for the transfer of the section and/or the service costs are”.   The agreement that he sent to Mr Waymouth was not, however, a photocopy of the Giera agreement.  Rather, it was a copy that Mr Welsh had copied by hand from the Giera agreement, which was difficult to read and contained crossings-out.   The Welshes had signed this copy too, and Mr James, who obtained it from Mr Welsh’s file, plainly thought it was the agreement that had been sent to the Gatchells in December

2003.  There are no material differences between the Giera and Welsh versions.

[22]     Mr Waymouth responded on 18 October, estimating that legal fees on the sale conveyancing would be $1,000 plus GST and the usual disbursements.   He added that he was unsure what “service costs” meant.   Mr James replied on 22

October, reluctantly accepting the figure of $1,000 for legal fees for transfer of the section but contending that legal subdivision attendances should be the responsibility of the vendor.  He too was unsure what was meant by service costs, and suggested the words were otiose.  He again asked that the agreement be signed and returned.

[23]     Mr Waymouth responded on 4 November, saying that before Mr Gatchell’s death he had told Mr Waymouth that the “intent” behind any agreement with the Welshes was that the section had been considerably discounted in consideration for the Welshes attending to all subdivision work and paying for all subdivision work whatsoever.  I take it that this was a reference to Mr Gatchell’s 2003 advice that he planned a subdivision in which the purchaser would pay most of the costs.  He asked for confirmation that such was the Welshes’ understanding.  Mr James replied on 8

November, saying it was definitely the Welshes’ intention that they should pay all

reasonable costs.  However, they did not think it was an open ended arrangement; the costs would need to be delineated and reasonable.  That was why it was important to define the costs; in that regard, Mr Welsh had obtained details of surveying costs, subdivision, roading and the like.  In evidence, Mr James agreed that he was trying to put boundaries around the costs his clients had agreed to pay.

The change of heart

[24]     At about this time, Jensen Waymouth instructed Mr Fraser of Newdick Fraser to value the Gatchells’ home and the section.   He did so by valuation dated 19

November, concluding that the value of the section following subdivision and completion of formed access would be between $330,000-$350,000.

[25]     By  letter  of  30  November,  Mr  Waymouth  advised  Mr  James  that  Mrs Gatchell did not wish to proceed with the sale, and was not obliged to do so as no signed contract existed.

Completion of the subdivision

[26]     The Marlborough District Council issued a resource consent in September

2004 and Mrs Gatchell has completed the subdivision, although title has yet to issue because the Welshes have lodged a caveat.  She has incurred costs of $32,789.01 to complete the subdivision.  The plaintiffs acknowledge that they must reimburse Mrs Gatchell for those costs should they succeed in this action.

The value of the land

[27]     Two valuers gave evidence, Mr Fraser for the defendant and Mr Trueman for the plaintiffs.   Mr Trueman valued the section in October 2005 at $375,000 after subdivision, while Mr Fraser valued it at the hearing date at not less than $400,000.

[28]     The valuers agree that there have been dramatic increases in the value of land of this type since 2003.   I have already mentioned the May 2004 Newdick Fraser

valuation of $80,000 for reserve fund contribution purposes.  Mr Newdick prepared that.   The evidence is that a reserve fund valuation ordinarily assumes the development work has been completed and a title issued.  Mr Trueman valued it as at November 2003 at $140,000, on the same basis.  Mr Fraser was not asked to carry out a similar hindsight valuation, but he opined that Mr Trueman’s may be conservative.

[29]     I accept that the market value of the land is now around $400,000.   I also accept Mr Trueman’s valuation of $140,000 at November 2003; Mr Fraser did not value it at that date, and Newdick Fraser’s May 2004 desktop valuation of $80,000 suggests that Mr Trueman’s assessment was not conservative.

[30]     For  purposes  of  comparison  with  the  contract  price  of  $65,000,  the subdivision costs of approximately $30,000 must be deducted from the November

2003 and current valuations.  There remains a significant disparity of about $45,000 between the contract price and the section’s value as at November 2003.  But there is nothing to suggest that the Welshes knew that themselves, still less that they encouraged Mr Gatchell in an assumption that it was worth only $65,000.  It was he who set the price, based on his experience of other sales.  The steep increase in value since 2003 is not peculiar to this site; rather, it is a market phenomenon.

Is there a contract?

[31]     In the end it was common ground that an oral agreement was reached in October, identifying the parties, the price and the deposit, the identity of the land and assignment of responsibility for completing the subdivision, and when settlement was  due.    I  agree.    With  that  conclusion,  variations  introduced  in  the  Giera agreement lose much of their initial significance, for an agreement had already been reached when it was prepared.

[32]     The issues are whether the parties contemplated that the agreement would be reduced to writing and, if so, whether they further contemplated that they would be bound only when it was executed.

[33]     It is first necessary to consider the extent to which subsequent conduct is admissible to interpret the parties’ agreement.   The Supreme Court very recently held in Wholesale Distributors Limited v Gibbons Holdings Limited [2000] NZSC 37 that evidence of subsequent conduct may be used to interpret a contract, but there was a difference of view about whether there must be an element of mutuality before such evidence is admissible. Tipping J held at [52] that the Court should only be able to take into account evidence of mutual or shared conduct in the performance of the contract. Thomas J disagreed, holding at [135] that conduct that is not shared or mutual may nevertheless point to a meaning contrary to that later asserted by one of the parties; in such a case, the value of the evidence stems from the inconsistency between conduct and the construction that that party later seeks to persuade the Court to place upon the contract. He predicted that the approach of Tipping J would lead to confusion and result in credible evidence being excluded. Elias CJ appeared (at [7]) to favour the approach of Thomas J, while Anderson J appeared (at [73]- [74]) to prefer that of Tipping J. Blanchard J did not find it necessary to address the point.

[34]     Returning to the facts, I am satisfied that the parties did intend that their agreement would be reduced to writing.   That agreement was reached at the conclusion of their negotiations, and so is admissible as part of the evidence about formation of the contract.   They subsequently exchanged documents; although the documents were not the same, that conduct can still be considered mutual so far as this point is concerned.

[35]     The next question is whether the parties intended to be bound immediately to their  oral  agreement,  or rather  intended  to  postpone  contractual  liability until  a written agreement was executed.  The ordinary inference where parties contemplate a written agreement is that they do not mean to be bound until it is signed.  It is for the plaintiffs to displace that inference:  Carruthers v Whittaker [1975] 2 NZLR 667,

672; Concorde Enterprises Limited v Anthony Motors (Hutt) Limited [1981] 2 NZLR

385; Verissimo v Walker [2006] 1 NZLR 760.

[36]     I find that the plaintiffs have displaced the inference on the facts.  Although any sale of land is an important transaction, Mr Gatchell had experience in similar

subdivisions and neither party engaged lawyers to vet their agreement before committing to it.   On the contrary, they eschewed legal advice, involving lawyers only after Mr Gatchell’s death.  By contrast, they concluded the oral agreement with a degree of urgency.   Mr Gatchell prepared his own form of agreement to record what they had agreed to, and accepted Mr Welsh’s oral confirmation that it was in order.  The deposit was tendered and banked.  The Gatchells sent the Newdick Fraser valuation and invoice to the Welshes, who paid that firm’s fee as envisaged by the agreement.   The other steps taken by Mr Welsh to complete the subdivision were unilateral in nature, but they do not contradict the evidence of mutual or shared conduct and my conclusion does not depend on them.

[37]     Mr McKechnie emphasised that the Giera agreement spoke of an offer, and was described by Mr Welsh as a draft.  (In the same vein, Mr Welsh’s letter said that the deposit was to be banked when things were finalised.)   That is true, but the unchallenged evidence is that Mr Welsh told Mr Gatchell that the faxed document was in order, and I have found that an agreement was concluded at that time.  The Giera agreement must be interpreted as an invitation, extended after Mr Welsh had taken advice from Mr Giera, to document the faxed agreement as a standard form agreement for sale and purchase.  The invitation was not taken up, but the deposit was banked.

[38]     Mr McKechnie also pointed to the solicitors’ negotiations as evidence that no contract had been concluded.   I agree that the solicitors acted as if there was still room for negotiation, but I think that speaks rather to their ignorance of what had been agreed in circumstances where they first became involved months after the event.

[39]     I find that a contract was concluded on the terms in Mr Gatchell’s fax of 9

November 2003.

Was there a sufficient note or memorandum in writing?

[40]     Mr Kirkland argued that the fax header on Mr Gatchell’s fax of 9 November was a sufficient signature for the purposes of the Contracts Enforcement Act 1956.

In support of that submission, he cited the Electronic Transactions Act 2002, saying that it applies to contracts for the sale of land.  It appears that no New Zealand case has considered these questions.   I record that counsel disclaimed reliance on the authenticated signature fiction, presumably because it is not available where it is contemplated that the party charged will sign the document:  Andrews and Sutton v Orchard (HC Christchurch, M 76/94, 29 March 1994, Tipping J).

[41]     I will first address the requirements of the Contracts Enforcement Act, then examine whether the Electronic Transactions Act has changed them.  Section 2 of the Contracts Enforcement Act provides:

Proof of contracts relating to land and to guarantees

(1)    This section applies to—

(a)    Every contract for the sale of land:

(b)      Every contract to enter into any disposition of land, being a disposition that is required by any enactment to be made by deed or instrument or in writing or to be proved by writing:

(c)    Every contract to enter into any mortgage or charge on land:

(d)     Every contract by any person to answer to another person for the debt, default, or liability of a third person.

(2)    No contract to which this section applies shall be enforceable by action unless the contract or some memorandum or note thereof is in writing and is signed by the party to be charged therewith or by some other person lawfully authorised by him.

(3)    Nothing in this section shall—

(a)      Apply to any sale of land by order of the [High Court] or through the Registrar of that Court:

(b)      Apply to any alienation of Maori land by a Maori, being an alienation  that is required  by  the  Maori  Affairs  Act  1953  to  be confirmed by the Maori Land Court, or to any sale of Maori land by order of that Court:

(c)    Affect the operation of the law relating to part performance. (4)        For the purposes of this section,—

Disposition includes any conveyance, transfer, grant, partition, exchange, lease, assignment, surrender, disclaimer, appointment, settlement, or other assurance; and any declaration or creation of a trust; and any devise, bequest, or appointment by a will:

Land means any estate or interest, whether freehold or chattel, in real property.

(5)     The foregoing provisions of this section apply only to contracts made after the passing of this Act.

(6)      This section is in substitution for section 4 of the Statute of Frauds

1677 of the Parliament of England, and that section shall cease to be in force in New Zealand, except in respect of contracts made before the passing of

this Act.

[42]    The purpose of s.2 is to protect people from liability on ill-considered, ambiguous, or fraudulent promises.   In Actionstrength Ltd (trading as Vital Resources) v International Glass Engineering IN.GLEN SpA [2003] 2 AC 541, Lord Hoffman said of the Statute of Frauds:

[19] In an application for summary judgment such as this, which is in the nature of a demurrer, one has to assume that Actionstrength’s version is true. And that naturally inclines one to try to find some way in which the putative injustice can be avoided. It is, however, important to bear in mind that the purpose of the Statute of Frauds was precisely to avoid the need to decide which side was telling the truth about whether or not an oral promise had been made and exactly what had been promised. Parliament decided that there had been too many cases in which the wrong side had been believed. Hence the title, ‘An Act for prevention of frauds and perjuries’. It is quite true, as Mr McGhee said, that the system of civil procedure in 1677 was not very well adapted to discovering the truth. For one thing, the parties to the action were not competent witnesses. But the question of whether the Statute of Frauds should be preserved in its application to guarantees was considered in 1953 by the Law Reform Committee (First Report, Statute of Frauds and Section 4 of the Sale of Goods Act 1893 (Cmd 8809)) and the recommendation of a very strong committee was to keep it.

[20] The terms of the Statute of Frauds therefore show that Parliament, although obviously conscious that it would allow some people to break their promises, thought that this injustice was outweighed by the need to protect people from being held liable on the basis of oral utterances which were ill- considered, ambiguous or completely fictitious. This means that while normally one would approach the construction of a statute on the basis that Parliament was unlikely to have intended to cause injustice by allowing people to break promises which had been relied upon, no such assumption can be made about the Statute of Frauds. Although the scope of the Statute of Frauds must be tested on the assumption that the facts alleged by Actionstrength are true, it must not be construed in a way which would undermine its purpose.

[43]     The Interpretation Act 1999 applies to the Contracts Enforcement Act unless the context of the latter requires a different interpretation.  I do not think that it does; the Act requires no formality beyond a written note or memorandum signed by the

party to be charged, and its purposes can be met where the note or memorandum is in electronic form. (This conclusion is reinforced by my conclusions below relating to the Electronic Transactions Act.) Under s.29 of the Interpretation Act, ‘writing’ means

“representing or reproducing words, figures, or symbols in a visible and tangible form and medium (for example, in print)

[44]     This is apt to include a fax, which is written or typed on paper then sent electronically to the receiving machine, which prints a copy of it on another sheet of paper.  Where the paper contains words, both copies are ‘writing’ for purposes of this definition.  The definition is broad; writing includes words or numbers used to identify the sender, date, and time, where they are added to the document by the sending machine and printed by the receiving machine.

[45]     The word ‘signed’ is not defined in s.2(2) or the similarly worded s.49A(1) of the Property Law Act 1952, which provides that no legal interest in land may be created or disposed of except by writing signed by the person creating or conveying the same.   It appears from counsels’ research that no New Zealand decision has considered the meaning of ‘signed’ in this context.  In ordinary usage, a person signs a memorandum or note by writing his or her name or mark on it.   That is what Tipping J described in TÄ Dellaca Limited v PDL Industries Limited [1992] 3 NZLR

88, 98 as the “ordinary connotation” of ‘signed’.   The Oxford English Dictionary gives as appropriate meanings for ‘sign’:   “to attest or confirm by adding one’s signature; to affix one’s name to (a document, etc)” and “to write or inscribe (one’s name)  as  a  signature”.    ‘Signature’  is  succinctly  defined  in  Butterworths  New Zealand Law Dictionary (6th ed 2005) as:

A person’s mark on a document which indicates his or her intention to be bound by its contents.

[46]     In the context of contracts affected by the Contracts Enforcement Act, a signature satisfies two essential requirements.  It identifies the person signing, and its presence on the document evidences his or her intent to be bound to its contents. Both requirements must be satisfied.  In Selby v Selby (1817) 3 Mer 2 at 6, Grant MR held:

It is not enough that the party may be identified.   He is required to sign. And,  after  you  have  completely  identified,  still  the  question  remains, whether he has signed or not.   There  may be  in  the  instrument  a  very sufficient description to answer the purpose of identification without a signing; that is, without the party having either put his name to it, or done some other act intended by him to be equivalent to the actual signature of the name – such as a person unable to write marking his mark.  But it was never said, because you may identify the writer, therefore, there is a signature within the meaning of the statute, if so, the word “I” or “me” would be enough, provided you can prove the handwriting.

[47]     A person may sign by using his or her full name, or last name prefixed by initials, or initials only, and possibly by using a pseudonym or a combination of letters and numbers: J Pereira Fernandes SA v Mehta [2006] EWHC 813 at [26]. It need not be hand-written; a stamped name has been held sufficient: Goodman v J Eban [1954] 1 QB 550. In that case Evershed MR, with whom Romer LJ agreed, held at 563 that:

… the essential requirement of signing is the affixing in some way, whether by writing with a pen or pencil or by otherwise impressing upon the document, one's name or "signature" so as personally to authenticate the document. … in all the cases, the essential requirement is, but is not more than, the personal authentication of the individual “signing”.

[48]     In Schneider v Norris (1814) 2 M & S 286, 288, which concerned a name printed by hand, Lord Ellenborough CJ held:

I cannot but think that a construction, which went the length of holding that in no case a printing or any form of signature could be substituted in lieu of writing, would be going a great way, considering how many instances may occur in which the parties contracting are unable to sign. If indeed this case had rested merely on the printed name, unrecognised by, and not brought home to the party as having been printed by him, or by his authority, so that the printed name had been unappropriated to the particular contract, it might have afforded some doubt, whether it would not have been entrenching upon the statute to have admitted it. But here there is a signing by the party to be charged by words recognising the printed name as much as if he had subscribed his mark to it, which is strictly the meaning of signing, and by that the party has incorporated and avowed the thing printed to be his; and it is the same in substance, as if he had written Norris & Co. with his own hand. He has by his handwriting in effect said, I acknowledge what I have written to be for the purpose of exhibiting my recognition of the within contract.

[49]     To similar effect, in Bennett v Brumfitt [Registration Case] (1867) LR 3 CP

26, Bovill CJ held (at 31) that there is no distinction between using a pencil or pen and a stamp; in each case the act is the personal act of the party signing.   For the

same reason, I consider that a typed or machine-printed name may suffice, where the party signing has typed or inserted it so as to adopt the contents of the document.

[50]     Adoption of the contents is signified by the presence of the signature and its location on the document.  The signature can appear anywhere on the writing: Evans v Hoare [1892] 1 QB 593, Caton v Caton [1867] LR 2 HL 127, 142, 146. In the latter case, Lord Chelmsford LC and Lord Westbury emphasised that the signature must be inserted so as to govern the document as a whole. Unless it does so, the mere inclusion of a person’s name in the body of a document will not of itself constitute a signature, even if he has written it himself. If it is found in an instrument incidentally only, or refers only to part of it, it lacks legal effect as a signature. Lord Westbury said at 142-3:

Now, what constitutes a sufficient signature has been described by different Judges in different words.  In the original case upon this subject, though not quite the original case, but the case most frequently referred to as of the earliest date, that of Stokes v Moore [1 Cox 219], the language of the learned Judge is, that the signature must authenticate every part of the instrument. Or again, that it must give authenticity to every part of the instrument. Probably the phrases "authentic" and "authenticity" are not quite felicitous, but their meaning is plainly this, that the signature must be so placed as to shew that it was intended to relate and refer to, and that in fact it does relate and refer to, every part of the instrument. The language of Sir William Grant in Ogilvie v Foljambe [3 Mer. 53], is (as his method was) much more felicitous. He says it must govern every part of the instrument. It must shew that every part of the instrument emanates from the individual so signing, and that the signature was intended to have that effect. It follows, therefore, that if a signature be found in an instrument incidentally only, or having relation and reference only to a portion of the instrument, the signature cannot have that legal effect and force which it must have in order to comply with the statute, and to give authenticity to the whole of the memorandum.

[51]     I draw from these cases the following propositions.  Although the content of the document and the signature upon it may be written at the same time and by the same person, they serve different legal purposes.   A signature is a distinct and personal act that identifies the party to be charged and evidences his or her intention to be bound by the contents of the document.  For that reason, a name need not be interpreted as a signature where it serves some other purpose, as in the case where it appears as part of the substantive content.  A signature may appear in any position, but it must govern the whole.  A name, initials, or other mark that identifies the party

to be charged may suffice as a signature.  It need not be hand-written; in particular, it may be stamped or typed.

[52]     It is the signature that signifies the intention to be bound in law, and not the sending of the document to the other party.  That distinction must be borne in mind when considering electronic communications, in which the question may be whether a mechanism designed to identify the sender also serves as a signature.  The point is illustrated by two cases concerning email headers.  The first is J Pereira Fernandes SA v Mehta (above), in which Judge Pelling QC held that an electronic signature is capable of serving as a signature for purposes of the Statute of Frauds, although it did not do so on the facts.   The alleged signature was an e-mail address in the document header at the top of an e-mail.   The address included the defendant’s surname and part  of  his  first  name.    It  had  been  inserted  automatically by the computer when an employee of the defendant sent the e-mail to the plaintiff.

[53]     Judge Pelling QC took judicial notice of the fact that the sender of an e-mail does not insert an e-mail header “in any active sense”.  For that reason, the header did not evidence the necessary intention to be bound and so the e-mail had not been signed for the purposes of s.4 of the Statute of Frauds.  He held at [29]:

In my judgment the inclusion of an e-mail address in such circumstances is a clear example of the inclusion of a name which is incidental in the sense identified by Lord Westbury [in Caton v Caton] in the absence of evidence of a contrary intention. Its appearance divorced from the main body of the text  of  the  message  emphasises  this  to  be  so.  Absent  evidence  to  the contrary, in my view it is not possible to hold that the automatic insertion of an e-mail address is, to use Cave J’s language [in Evans v Hoare], ’intended for a signature’. To conclude that the automatic insertion of an e-mail address in the circumstances I have described constituted a signature for the purposes of s 4 would I think undermine or potentially undermine what I understand to be the Statute’s purpose, would be contrary to the underlying principle to be  derived  from  the  cases  to  which  I  have  referred  and  would  have widespread and wholly unintended legal and commercial effects. In those circumstances, I conclude that the e-mail …. did not bear a signature sufficient to satisfy the requirements of s 4.

[54]     Judith  Prakash  J  reached  a  contrary conclusion  in  the  Singaporean  High Court in SM Integrated Transware Pte Limited v Schenker Singapore (Pte) Limited [2005] SGHC 58. The facts were similar to Mehta.  The party charged, a Mr Tan, did not append his name at the bottom of any of his e-mail messages, but they

included an address line naming him and giving his e-mail address. The Judge held that the emails were writing for purposes of the Interpretation Act (Cap 1, 2002 Rev Ed), which is in similar terms to the definition in the Interpretation Act 1999. The question was whether Mr Tan had signed the emails for the purposes of s.6(b) of the Civil Law Act (Cap 43 1994 Rev Ed), which is the Singaporean equivalent of the Statute of Frauds. It stipulates that for a lease of land to be enforceable there must exist some written memorandum or note evidencing its terms and signed by the person against who it is to be enforced.

[55]     Prakash J  held that the emails had been signed.    She  acknowledged  the “minor difficulty” that Mr Tan had not appended his name at the bottom of any of his messages, but inferred at [92] that he omitted to do so because he knew it appeared at the head of every message next to his e-mail address, and then concluded that there could be no doubt that he was identified as the sender.  The difficulty with this reasoning, in my respectful view, is that it addresses the identification of the person signing, and not his intention to be bound by marking the document.  It also focuses on his state of mind rather than the objective indicia of intent.

[56]     Prakash J relied on two American decisions, Shattuck v Klotzbach 14 Mass L Rep 360 (2001) and Cloud Corporation v Hasbro Inc 314 F 3d 289 (2002). In the former case, the defendant had actually typed his name in the body of an email. He pleaded non-compliance with the Statute of Frauds. The Court declined his application to dismiss, reasoning:

A memorandum is signed in accordance with the statute of frauds if it is signed by the person to be charged in his own name, or by his initials, or by his Christian name alone, or by a printed, stamped or typewritten signature, if signing in any of these methods he intended to authenticate the paper in his act.  Irving v Goodimate Co 320 Mass, 454, 458-59 (1946). Here, all e- mail correspondences between the parties contained a typewritten signature at the end. Taken as a whole, a reasonable trier of fact could conclude that the e-mails sent by the defendant were “signed” with the intent to authenticate the information contained therein as his act.

Moreover,  courts  have  held  that  a  telegram  may  be  a  signed  writing sufficient to satisfy the statute of frauds.  See Providence Granite Co Inc v Josesh Rugo, Inc 362 Mass, 888, 889 (1972) (“a telegram which was a

‘writing sufficient to indicate that a contract for sale [under GLc 106, 2-

201(1)] (had) been made … and signed by the party whom enforcement … (was) sought’ ”); Hansen v Hill 340 NW2d 8, 13 (Neb 1983) (intent to authenticate by signature demonstrated by name typed on telegram).   This

court believes that the typed name at the end of an e-mail is more indicative of a party’s intent to authenticate than that of a telegram as the sender of an e-mail types and sends the message on his own accord and types his own name as he so chooses.   In the case at bar, the  defendant sent  e-mails regarding the sale of the property and intentionally and deliberately typed his name  at  the  end  of  all  such  e-mails.    A  reasonable  trier  of  fact  could conclude that the e-mails sent by the defendant regarding the terms of the sale of the property were intended to be authenticated by the defendant’s deliberate choice to type his name at the conclusion of all e-mails.

[57]   Cloud Corporation v Hasbro also concerned an exchange of emails. Unfortunately the emails themselves are not described in the judgment of the US Court of Appeals for the 7th Circuit.  I infer that the sender’s name was typed in the body of the emails because Judge Posner, for the Court, agreed with the Court in Shattuck that the sender’s name on an email satisfied the signature requirement of the Statute of Frauds.

[58]     The Court rejected an argument that a written signature was required, holding that neither the common law nor the Uniform Commercial Code (UCC) requires a hand-written signature, or limits an electronic signature to a facsimile of a hand- written signature.   It held that the purpose of the Statute of Frauds is to prevent a contracting party from creating a triable issue concerning the terms of that contract, or whether it exists, on the basis of his say-so alone.  That purpose does not require a hand-written signature, especially in a case where there is other evidence of the existence of the contract beside the writings that the parties relied upon.   (On the facts, the appellant had produced the additional quantity of product that was ordered in the correspondence.)  The Judge also relied upon UCC s.2-104(3), which provides that as between merchants, where a written communication confirming a contract is received and the party receiving it has reason to know its contents, the writing satisfies the requirements of the Statute of Frauds unless written notice of objection to its contents is given within ten days after receipt.  The Court accordingly treated the statutory requirement of writing as an evidential matter only, with the absence of writing capable of being overcome by other evidence of agreement or other presumptions.

[59]     The same result was reached in International Casings Group, Inc v Premium

Standard Farms, Inc 56 UCC Rep Serv 2d 736, 358 F Supp 2d 863 (W.D Mö 2005),

which did rest on email addresses (although one of the writers was in the habit of appending his first name at the end of the body of his emails).  Under Missouri law, the Statute of Frauds had been extended to contracts for the sale of goods exceeding

$500.   The question whether an interim injunction should be granted turned on whether  the  plaintiff  could  point  to  an  enforceable  contract.    Under  the  UCC,

‘signed’ included any symbol executed or adopted by a party with present intention to authenticate a writing, and an electronic signature was defined as an electronic sound, symbol, or process attached to or logically associated with a record and executed by a person with intent to sign the record.  The evidence established that the emails were authentic, that the writers intended to authenticate and adopt their emails by hitting the send button, and that the parties had agreed to transact by email. The Court held that the purpose of the Statute of Frauds is to prevent fraud, and it would be contrary to the purpose of the UCC to permit a party to escape liability on an agreement clearly reached.  After reviewing the developing case law, the Court concluded that a valid signature may include a name as part of an email, if the requisite intention to authenticate the writing is present.

[60]     The New Zealand context differs in ways that limit the assistance to be gained from the US decisions.  The Contracts Enforcement Act applies to a small class of contracts, and its purposes are as stated by Lord Hoffman in Actionstrength v International Glass Engineering (above).  Specifically, its purpose is not simply the prevention of fraud in the instant case.   It is more accurate to say that it opts for certainty because  proof  of  fraud  may be difficult,  and  (perhaps  incidentally)  to protect people from ill-considered or ambiguous agreements.   The consequence is that, in the interests of certainty for all, some people will escape liability on their promises.   Section 2 is not of evidential significance only: absent compliance the agreement is unenforceable in law, subject only to the doctrine of part performance, which addresses the risk that the statute will itself become an instrument of fraud in particular cases.

[61] However, I accept that a signature, including a typed signature, may be attached electronically to a writing under the Contracts Enforcement Act. Under the Interpretation Act, the writing itself may take electronic form, and it is settled that a signature need not be hand-written for the purposes of the Act. Accordingly, a typed

or  printed  signature in  an  electronic writing may satisfy s.2  if,  on  the  facts,  it identifies the person charged, is made by that person, and evidences his or her intention to be bound to its contents.

[62]     In this case, I am concerned with a fax header.   The fax itself is a note or memorandum recording the agreement, and the question is whether the name printed in the header is a signature.  In Mehta, Judge Pelling QC drew an analogy with fax headers. He said at [23]:

What is relied upon is an e-mail address. It is the e-mail equivalent of a fax or telex number. It is well known that the recipient of a fax will usually receive a copy that has the name and/or number of the sender automatically printed at the top together with a transmission time. Can it sensibly be suggested that the automatically generated name and fax number  of the sender of a fax on a faxed document that is otherwise a s 4 note or memorandum would constitute a signature for these purposes?

[63]     It follows from what I have said that a name written on a fax may amount to a signature.  But a fax header printed using the machine’s capacity to add writing to the document as it is copied and sent cannot serve as a signature unless, perhaps, there is evidence that it was specifically inserted for the transaction concerned.  A fax header identifies the owner of the sending machine, the sending number, and the time of despatch.  There is no reason to suppose that it serves the added purpose of a signature, because every fax does not require a signature.  And where the header is added automatically, it cannot qualify as a signature because it was not affixed to the particular writing with the intention that by adding his or her name the sender would adopt its contents.

[64]     I acknowledge that the fax in this case was written as a contract for the sale of land, and invited the purchaser to sign and return it.  I have also found that the parties had already formed an oral contract.  By writing the document in that form and sending it to the Welshes, Mr Gatchell sought their confirmation that the fax recorded their oral agreement.  The inference is plain that he too was adopting the contents, and not merely soliciting an offer.  But the law requires that he evidence his adoption of its contents by the act of signing it, and not merely by the act of sending it.  There is no evidence that Mr Gatchell inserted the header manually when sending the fax.  I am prepared to draw an inference to the contrary; namely, that the

header was programmed into the machine’s memory some time previously, probably when it was first set up, and then attached automatically to all faxes.  The printed name  and  fax  number  sufficiently  identifies  the  person  sending  the  fax,  in conjunction with other evidence of the circumstances, but it cannot establish the necessary intention to be bound to the transaction recorded in the document faxed on this occasion.  The contract was not signed.

[65]     Does  the  Electronic  Transactions  Act  2002  affect  this  conclusion?    The purpose of that Act is to facilitate the use of electronic technology by (a) reducing uncertainty about the legal effect of information that is in electronic form or is communicated by electronic means and the time and place and dispatch and receipt of electronic communications, and (b) providing that certain paper based legal requirements may be met by using electronic technology that is functionally equivalent to those legal requirements.   The Act facilitates the use of electronic writing and signatures but does not presume that they meet the legal requirements for which they may be employed.  Whether they do so or not depends on accessibility of the record and reliability of the signature, both of which are factual questions.

[66] The Act takes a media-neutral approach to electronic communication technologies. It defines electronic to include “electrical, digital, magnetic, optical, electromagnetic, biometric, and photonic”. This appears to include fax machines. Section 6 provides that in interpreting the Act, reference may be made to the UNCITRAL Model Law on Electronic Commerce and any document that relates to the Model Law and emanates from the United Nations Commission on International Trade Law or its working group for the preparation of the law. The Model Law on Electronic Commerce was adopted in 1996. In my view it is also appropriate to consider the Model Law on Electronic Signatures, which the General Assembly adopted in 2001, because it is intended to complement the Model Law on Electronic Commerce.

[67]     The Act applies to every enactment that is part of the law of New Zealand and that is passed either before or after its commencement.   There are express exclusions listed in s.14 and the schedules to the Act.   They do not include the Contracts Enforcement Act, although they do extend to provisions of enactments that

relate to instruments or documents presented  to,  deposited  with,  entered  on  the register or filed by, the Registrar-General of Land or the Registrar of Deeds. Accordingly, an electronic note or memorandum, signed electronically, may comply with  s.2  of  the  Contracts  Enforcement  Act  provided  the  requirements  of  the Electronic Transactions Act are met.

[68]    Dealing first with the requirement of writing, s.18 provides that a legal requirement that information be in writing is met by information that is in electronic form if the information is readily accessible so as to be useable for subsequent reference.  “Information” is defined to include information (whether in its original form or otherwise) that is in the form of a document, signature, seal, data, text, images, sound, or speech.  It is plainly apt to include a note or memorandum of an agreement.

[69]     An electronic signature is defined, in relation to information in electronic form, as “a method used to identify a person and to indicate that person’s approval of that information”.  An electronic signature meets a legal requirement for a signature if certain evidential requirements are met.  They are found in s.22:

Legal requirement for signature

(1)    Subject to subsection (2), a legal requirement for a signature other than a  witness’ signature  is  met  by  means  of  an  electronic  signature  if  the electronic signature—

(a)    adequately identifies the signatory and adequately indicates the signatory's  approval  of  the  information  to  which  the  signature relates; and

(b)    is as reliable as is appropriate given the purpose for which, and the circumstances in which, the signature is required.

(2)     A legal requirement for a signature that relates to information legally required to be given to a person is met by means of an electronic signature only if that person consents to receiving the electronic signature.

[70]     It will be seen that the electronic signature need not appear on the note or memorandum, so long as it adequately indicates acceptance of the contents.   That will require that it forms part of the writing or is otherwise associated with it so as to not only identify the party to be charged but also evidence his or her approval of the contents.   The section does not prescribe that a signature is ineffective unless it

governs an entire writing.   Rather, the Court must ask to what information the signature relates, whether the signatory has been adequately identified, and whether the electronic signature adequately indicates approval of that information.  In a case governed by the Contracts Enforcement Act, it will be necessary to consider whether the information adopted suffices in law as a note or memorandum of the contract.

[71]     There is a rebuttable presumption in s.24 that an electronic signature is as reliable as is appropriate if it meets certain requirements relating to the means used to create it.   The requirements affect proof of identity and the ability to detect alterations to the signature or information after signing:

Presumption about reliability of electronic signatures

(1)        For the purposes of sections 22 and 23, it is presumed that an electronic signature is as reliable as is appropriate if—

(a)      the means of creating the electronic signature is linked to the signatory and to no other person; and

(b)      the means of creating the electronic signature was under the control of the signatory and of no other person; and

(c)     any alteration to the electronic signature made after the time of signing is detectable; and

(d)     where the purpose of the legal requirement for a signature is to provide assurance as to the integrity of the information to which it relates, any alteration made to that information after the time of signing is detectable.

(2)      Subsection (1) does not prevent any person from proving on other grounds or by other means that an electronic signature—

(a)    is as reliable as is appropriate; or

(b)     is not as reliable as is appropriate.

[72]     On first impression it may appear that under sections 22 and 24, identity and intention to be bound are examined independently of the reliability of the method of creating the signature.  I do not think that is the correct construction.  Identity and intention to adopt the contents of the electronic writing are at the heart of the inquiry, and they cannot be adequately established if the method is not reliable.   When considering adequacy of an electronic signature under s.22(1)(a), the Court must be able to take account of the legal context and the purpose for which the signature is

required.   It is able to do so, as a matter of construction, because “electronic signature” is defined as a method used to identify a person and indicate that person’s approval of information. Consistent with that, ss.24(1)(a) and (b) concern the reliability of the means (which term is synonymous with method) of creating the signature, but both are expressly concerned with identity; that is, whether the method of creating the signature is linked exclusively to the signatory and exclusively under the signatory’s control. It follows that the requirement that the method be as reliable as is appropriate extends to proof of identity and intent using that method. The connection is made clearly in Article 7 of the Model Law on Electronic Commerce, which provides that a legal requirement for a signature is met if a method is used to identify a person and indicate that person’s approval of the contents, and that method is as reliable as was appropriate for the purpose for which the data message was created or sent.

[73]     With respect to reliability, the Guide to Enactment of the UNICTRAL Model Law on Electronic Signatures suggests at [75] that factors to be taken into account include the nature of the parties’ trade activity, the frequency of commercial transactions between them, the kind and size of the transaction, the function of signature requirements under the statute, compliance with trade customs and practices, the availability of insurance against unauthorised messages, availability of alternative methods of identification, and the degree of industry acceptance of the method of identification chosen.

[74]     The assessment of reliability obviously must recognise that the signature is required under the Contracts Enforcement Act, the purposes of which I have already mentioned.  They are partly precautionary, in that a signature draws attention to the fact that by appending it the signatory adopts the content of the document.  Because they  include  the  sale  and  purchase  of  family  homes,  agreements  for  sale  and purchase of land are extremely common, yet they are typically both important and rare for the individual participants.  That invites caution when considering electronic agreements and electronic signatures affecting the sale and purchase of land.  There is probably now a customary understanding that an agreement is not binding until reduced to writing and signed; I note that Evershed MR cautioned in Goodman v Eban (above, at 558-9) against departing from the settled meaning of ‘signed’.  To

that end, the Court will normally infer that the parties do not mean to be bound until the document is executed.  That approach also facilitates taking legal advice before the parties assume contractual obligations.   I observe that the Law Commission considered in its Report on Electronic Commerce that a simple e-mail message is most unlikely to be regarded as sufficient to constitute an agreement for sale and purchase of land:  New Zealand Law Commission Electronic Commerce Part 2:  A basic legal framework (NZLC R 58 1999) at [149].

[75]     The Electronic Transactions Act clearly admits use of electronic writing and signatures in this context, but whether any given writing is a memorandum or note for the purpose of the Contracts Enforcement Act, and whether it has been signed, are questions of fact.   An electronic signature will not prove adequate unless the Court is satisfied that its insertion was intended to signify adoption of the electronic note or memorandum of which it forms part or with which it is otherwise associated. That suggests that it would be prudent for those who wish to rely on an electronic writing and signature to warn the party to be charged that the writing is a contract that will bind that party when he or she attaches an electronic signature to it, and to specify what form of electronic signature is required.  The REINZ/ADLS standard form already contains a warning about the effect of a signature on the paper.

[76]     Turning  to  this  case,  I conclude  that  the  Act  is  of  no  assistance  to  the Welshes.  A fax header may be capable of being an electronic signature as defined, but it does not comply with s.22(1)(a) in this case.  Mr Gatchell did not attach the header for the purpose of this transaction, so its presence did not adequately indicate Mr Gatchell’s approval of the contents.  All that it proved was that the Gatchells had sent the fax.  I find that the requirements of s.2(2) of the Contracts Enforcement Act were not satisfied.  The contract is not enforceable by action unless the Welshes can invoke the doctrine of part performance.

Part performance

[77]     The   Contracts   Enforcement   Act   preserves   the   law   relating   to   part- performance, the purpose of which is to ensure that the legislation itself does not become an instrument of fraud.  The leading New Zealand authority is TÄ Dellaca

Limited  v  PDL  Industries  Limited  (above).    Tipping  J  identified  a  conflict  of authority on the question whether acts of part performance must have been done in performance of the contract or merely in reliance on it.   After reviewing the authorities, he concluded that the narrower view is correct, and framed the test (at

109) as follows:

1.    Was  there  a  sufficient  oral  agreement  such  as  would  have  been enforceable but for the Act?

2.  Has there been part performance of that oral agreement by the doing of something which:

(a)   clearly amounts to a step in the performance of a contractual obligation or the exercise of a contractual right under the oral contract; and

(b)   when viewed independently of the oral contract was, on the probabilities, done on the footing that a contract relating to the land and such as that alleged was in existence.

3.  Do the circumstances in which that part performance took place make it unconscionable (fraudulent in equity) for the defendant to rely on the Act?

[78]     I have found that there was a sufficient oral agreement, and further that it was reduced to writing albeit not signed.  Mr Kirkland relied on the following acts of part performance; payment of the deposit, engaging the engineer, surveyor, and roading contractor, paying the engineers fee of $1,200, and paying Newdick Fraser’s valuation fee.

[79]    In my view, payment of the deposit specified in the agreement was an unequivocal act of part performance in circumstances where I have found that payment followed formation of the contract.  So far as the other steps are concerned, the contract provided that the purchasers would pay the costs of subdivision, including  engineer  and  Council  reserve  fund  fees.    It  did  not  provide  that  the Welshes would instruct the firms concerned, although the evidence is that Mr Welsh did  instruct  some  of  them  and  kept  Mr  Gatchell  informed  of  developments. However, the Welshes did pay the engineer’s fee and there was no dispute that his work was needed to complete the subdivision.  They also paid the valuer’s fee on request by the Gatchells.  These were also steps in the performance of the contract, and they indicate on the balance of probabilities that a contract was in existence.  I am satisfied that there has been part performance, and because it was done with the

Gatchells’ knowledge it would be unconscionable for Mrs Gatchell to now rely on the Act.

Relief

[80]     The Court has a discretion whether to award damages in lieu of specific performance under s.16A of the Judicature Act.  Canadian courts may have moved away from a presumption that specific performance should issue when the contract involves  land:  Semelhago  v  Paramadevan  [1996] 2 SCR 415 at [20]-[21] per Sopinka J. In a case resting on part performance, it may be that a more nuanced remedy is appropriate, reflecting the extent to which the contract has been performed and the detriment suffered. But the cases do not appear to draw that distinction, and the established position in New Zealand remains that specific performance is the normal remedy: Loan Investment Corporation of Australia v Bonner [1970] NZLR

724, 735 (PC), Foreman v Hazard [1984] 1 NZLR 586, 594 (CA). Mr McKechnie did not argue otherwise.

Estoppel

[81]     It is not necessary to address the proprietary estoppel claim.  It rested on the same facts that Mr Kirkland relied on to prove the contract and part performance.  If I am wrong about either of those matters, it seems unlikely that the plaintiffs would retain a sufficient foundation for an estoppel.

Decision

[82]     The plaintiffs have succeeded and will have a decree of specific performance. They must pay the purchase price and reimburse Mrs Gatchell for all costs of the subdivision, including its legal costs.  Counsel should confer about the terms of the order and submit a draft for the Court’s approval.  There will be leave to apply.

[83]     The plaintiffs are entitled to costs, which I am inclined to fix on a 2B basis for the statement of claim and the hearing (that is items 8 and 9 in Schedule 3) and,

having regard to the very narrow factual compass and limited discovery, a 2A basis for all other steps.  Counsel may file memoranda if costs cannot be agreed.

"In accordance with r 540(4) I direct the Registrar to endorse this judgment with a delivery time of

12.00 pm on the 21st day of June 2007."

F Miller J

Solicitors:

Saunders & Co, Christchurch for Plaintiffs

Jensen Waymouth, Taupö for Defendant