West v Onew Group Limited
[2016] NZHC 3066
•15 December 2016
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2016-404-002493 [2016] NZHC 3066
BETWEEN LEE WEST
Applicant
AND
ONEW GROUP LIMITED Respondent
Hearing: 12 December 2016 Appearances:
S L Robertson for the Applicant
D R Bigio QC and A J Peat for the RespondentJudgment:
15 December 2016
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on
15.12.16 at 4:00pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
L WEST v ONEW GROUP LIMITED [2016] NZHC 3066 [15 December 2016]
Background
[1] The applicant (Mr West) has applied to sustain a caveat registered over a property at Castellina Drive, Karaka, owned by the respondent, Onew Group Limited (Onew), he having agreed to purchase part of that property.
[2] The land Mr West agreed to purchase from Onew was part of a larger lot that was intended for a subdivision development. In March 2015 a plan change was submitted to Auckland Council by a third party that would affect the land. That plan change was referred to as PPV7.
[3] A plan was attached to the agreement which showed Onew’s concept plan for
redevelopment of that other part of the land Mr West purchased.
[4] In September 2015 Onew entered into an agreement for the sale of those remaining lots identified by the concept plan.
[5] On 11 March 2016 Mr West registered a caveat against the certificate of title for the land – which included that part he agreed to purchase.
The agreement
[6] It is dated 28 May 2015. The purchase price was $1.5M. A deposit of
$75,000 was required “on the date that this agreement has become unconditional”. Payment of the balance was required “on the settlement date which is defined in clause 18.0”:
[7] The agreement contained three parts. Those comprised general terms, further terms, and a concept plan.
[8] The general terms included the requirement for payment of the purchase balance on the settlement date as defined in clause 18. Clause 18 was contained in the further terms of sale by which Onew was to have obtained title, code compliance certificates for all building consents, and after certain works had been completed by Onew satisfactorily.
[9] Clause 1.4 provided that if any further terms of sale conflicted with the general terms then those further terms would prevail. Clause 9.7 of the general terms provided:
9.7If this agreement relates to a transaction to which section 225 of the Resource Management Act 1991 applies then this agreement is subject to the appropriate condition(s) imposed by that section. The term consents is defined in the further terms of sale as:
… all consents obtained or to be obtained by the vendor, whether pursuant to the Resource Management Act 1991 or otherwise to enable the vendor to commence, carry out and complete the subdivision.
[10] Regarding Onew’s subdivision proposal clause 20 of the further terms of agreement provided:
The vendor will at the vendor’s cost in all things implement the Consents and carry out and complete the subdivision.
[11] The plan attached to the agreement shows Onew’s subdivision of that land subdivided off to the south of that land sold to Mr West. Access to that subdivision development area was to be along a to-be-formed roadway from Castellina Drive and past the lot purchased by Mr West.
[12] Subdivision was described in the further terms of sale as meaning a subdivision of Onew’s land in accordance with the plan.
Chronology
[13] In early December 2015 Mr West’s solicitor wrote to Onew’s solicitor requesting information about whether resource consents for the subdivision had been granted. Onew’s solicitors responded noting changes were expected to the scheme plan and that the subdivision could not be progressed further until information had been supplied. The solicitors noted that a certificate of title was unlikely to issue prior to December 2016, and said “Our client is happy to release your client from the agreement should they wish to do so”.
[14] Mr West’s solicitors responded that Mr West did not wish to be released from the agreement at that time. Mr West’s evidence was that he purchased the property to be his family home i.e. it was not purchased for any development purpose.
[15] Mr West’s solicitors wrote again on 11 March 2016 requesting information regarding progress with the resource consent application. On that same date Mr West registered a caveat against the title to the property. It noted the interest claimed was as a purchaser pursuant to an agreement for sale and purchase.
[16] On 24 May Mr West’s solicitors wrote to Onew’s solicitors noting their understanding that the final decision allowing changes to the district plan was released on 9 May 2016. Onew’s solicitor’s reply the following day included a copy of Auckland Council’s decisions on the relevant changes to the district plan. Of those Onew’s solicitors noted the Council had decided there would be a new public road along the western boundary of the property between Normanby Road and Castellina Drive and that “this means that the private road shown on the subdivision plans, cannot be built, as the Council will not permit it to be so close to a new public road”.
[17] The solicitors letter concluded:
The rear of the site also needs to have a public road built to take into account future roading alignment.
As well as the issue of now having to deal with neighbours over the timing, location, cost to construction of the new road and all that entails, it also means that the layout for the subdivision has to change considerably – see enclosed plan. The sum of the sections has had to be drastically reduced from 6045sq/m to 5065sq/m. The Council requirements are outside of our client’s control.
The agreement for sale and purchase requires a subdivision in accordance with the plan attached to the contract for lots 1 – 15. It is clear that the subdivision is now impossible, due to Council’s amendments to the District Plan.
As the contract cannot be completed, it is frustrated. Please confirm.
[18] Mr West’s solicitor’s response included:
… My client does not accept that the contract is “frustrated”. The Council requirements have enhanced your client’s ability to subdivide the property.
Your client has had discussions with my client regarding the proposed alteration to the access way to the property and my client has indicated his readiness to discuss such alternations as may be necessary for the subdivision to proceed.
In the circumstances, our client does not accept the “frustration”.
We look forward to receiving the resource consent conditions for the subdivision and the proposed plan, once these have been issued and completed.
[19] Onew’s solicitors responded on 1 June 2016:
The point is not that the land can be subdivided, we acknowledge that it can be.
The contract obliges the vendor to subdivide lots 1 – 15 in accordance with the plan attached to the contract. A subdivision “in accordance with the plan attend [appended] to the contract” is no longer possible due to the Council requirements, and therefore the contract is clearly frustrated.
[20] Mr West’s solicitor’s response noted that the agreement was about the sale of lot 1 to Mr West and that it was not a condition of sale that the balance of the land be subdivided as shown by the plan attached to the agreement. The solicitor stated that the number of lots that Onew ultimately chose to subdivide the land into did not effect its ability to subdivide Mr West’s lot from the land.
[21] Counsel were then instructed and the written opinions of each were exchanged.
Onew’s position
[22] It is that as a result of Auckland Council planning decisions any subdivision that could be undertaken is of a substantially different character from that which the parties contemplated – in particular in relation to road formation, access, and, consequentially the size of lots 2 – 15.
[23] Furthermore it is that the definition of the term Plan in clause 18 of the agreement makes it clear that the subdivision concerns the whole of the site, and not just the carving out of lot 1 for Mr West from the balance of the land.
Mr West’s position
[24] It is that little evidence was available to show that Onew’s obligations to
perform the agreement had become radically different in relation to the transfer of lot
1 to Mr West, or that the contractual obligations to Mr West were not incapable of being performed. It was not enough that future performance had become more expensive or onerous or difficult for those aspects do not cause the principle of frustration to come into play. Also it was apparent that any changes of obligation to perform would not have entitled Mr West to cancel the agreement even if he wanted to.
The evidence
[25] Both parties obtained specialist advice in support of their positions. That evidence has significance for present considerations.
[26] Mr Hook is a planning consultant engaged by Mr West to comment upon how the council’s decision on PPV7 affected the ability of Onew to undertake the subdivision described in the agreement. He was asked in particular to describe whether the private road shown in the subdivision plan could no longer be constructed, and also to what degree Council’s decision changed the subdivision contemplated by the parties’ agreement.
[27] Mr Hook notes the land size of Onew’s property is 1.205 hectares and is occupied by a single dwelling, workshop and ancillary buildings. Original access to it was via a 70 metre long access leg extending northwards from Normanby Road and that more recently residential subdivision of land to the north of that site established a new legal frontage to Castellina Drive. Access Mr Hook says could be established at any time to the north by forming a vehicle crossing to Castellina Drive.
[28] Mr Hook’s evidence includes inter alia:
(a) By order of Auckland Council on 13 December 2013 the Hingaia peninsula was included as a special housing area and that it then became possible for an application to be made for a variation to the Proposed Auckland Unitary Plan to rezone the land within the Hingaia special housing area.
(b)An application was on 10 March 2015 made by others for a Proposed Private Plan Modification (PPV7) to the Proposed Auckland Unitary Plan. That application sought to rezone approximately 145.48 hectares of land into Large Lot, Single House, Mixed Housing Suburban, Mixed Housing Urban, Mixed Use and Neighbourhood Centre zones.
(c) The proposed zoning of the subject site under PPV7 was Mixed
Housing Suburban (MHS).
(d) Council’s decision upon that application was released on 22 April
2016.
[29] Mr Hook has considered how Council’s decision affects Onew’s ability to undertake the subdivision described in the agreement for sale and purchase. He notes that both the proposed (March 2015) and operative versions of PPV7 show a
16 metre wide local road (flexible location) running along a majority of the south western boundary of the subject site. Further, that the subdivision requirements include provision made for the roading layout shown in the plan and that there have been no substantial amendments to subdivision requirements.
[30] Mr Hook agrees some changes may be needed to the subdivision layout in order for it to better relate to the local road connections shown in both the proposed and operative versions of the PPV7 but that this has occurred because of the manner in which Onew’s consultants detailed roading design and lot layout –an exercise undertaken after, he believes, the PPV7 was applied for. Regardless it is Mr Hook’s view that any changes that may be required by the subdivision described in the
agreement would not make the development materially more difficult or expensive or more onerous to carry out.
[31] Mr Newman a director of Onew deposes that due to plan changes made by independent Commissioner’s of Auckland Council on 22 April 2016 the subdivision of the land was no longer able to be carried out in accordance with the concept plan and therefore that Onew could not complete the subdivision in accordance with that concept plan.
[32] Mr Newman confirms that Onew never made any submission to Auckland Council for or in support of either a public link road through the land or a public road that was, he says, so near to the land as to have the effect of prohibiting the creation of the private road shown in the concept plan.
[33] Mr Churchill a registered surveyor has sworn an affidavit on behalf of Onew. He has read Mr Hook’s affidavit. It is his view that the operative provisions of the Hingaia North’s Structure Plan were introduced from 22 April 2016 and that the MHS zoning (as it applied to the entire site) was also introduced from that date. He does not agree therefore that those changes were introduced earlier (indeed prior to the sale and purchase agreement), as Mr Hook stated. Mr Churchill says the earlier submitted version of PPV7 made no provision for any specified roads within or near the land and that as at 28 May 2015 (the date of the agreement) there was no requirement for any public roads to be constructed as part of any development of the land or in close proximity to it. It follows that changes, he believes, required to the agreement plan have not been created by Onew’s land development consultant, but arose as a result of Auckland Council’s recommendation and a decision on PPV7 on
22 April 2016 which introduced the MHS zoning across the whole of the site and also introduced the ‘Critical Local Road’ i.e. that proposed along the western boundary of Onew’s property.
[34] It is Mr Churchill’s view that the PPV7 decision requires any subdivision to be in accordance with a structure plan which specifically identifies a new north – south public road on the western boundary of the land; that it is a discretionary activity to subdivide a site not in accordance with the structure plan, as specific
policies in the decision version state that subdivision should provide an interconnected road network, and coordinate infrastructure.
[35] Mr Churchill states that the concept plan does not achieve this because, inter alia:
(a) There is no allowance for a public road which would any way inhibit the ability of such to be provided;
(b)The existing entrance strip off Normanby Road would inhibit the ability for a north – south road to be constructed; and
(c) Subdivision in the manner shown in the agreement plan would effectively prevent any linkage between the land to the west and the land the east of the subdivision area.
[36] Mr Churchill states the Auckland Unitary Plan (AUP) permits no more than
10 sites to gain access off any single jointly owned access lot or right-of-way easement. In the present case the agreement plan showed 11 lots gaining access, which exceeded the AUP requirement.
[37] Mr Churchill expresses the view that it would be highly unlikely that a resource consent could be obtained for the subdivision in the manner shown in the concept plan.
[38] Mr Hook has filed an affidavit in reply to Mr Churchill’s affidavit. By it he responds to criticisms from Mr Churchill for statements made by Mr Hook suggesting that PPV7 development considerations were on record before the sale and purchase agreement was signed. Mr Hook now acknowledges this was not the case he having relied on a summary prepared by a planner and he not having access to the original documents at the time. Mr Hook agrees that the local road element was not shown on any area structure plan at the time the agreement for sale and purchase was signed.
[39] Mr Hook agrees that as part of Auckland Council’s decision on 22 April 2016 the Hingaia North Structure Plan identified a local road adjacent to the property’s western boundary and incorporating the access leg of the site that extends to Normanby Road. He does not agree however that the structure plan created a requirement for public roads to be constructed as part of any development of the land or in close proximity to the land. Mr Hook does not believe a local road in the exact location on the agreement plan is necessarily a requirement of any development of the land. He disagrees therefore with Mr Churchill’s statement that the PPV7 required any subdivision to be in accordance with a structured plan. Mr Hook says there is no such requirement but that it is simply a matter that assists to establish the activity status of the subdivision and then it is a matter for assessment upon a specific application within the structured plan area.
[40] Mr Hook explains:
14. There are numerous subdivision options for the Hingaia North Structure plan area, which will require the establishment of a local roading network. However the range of options ie. alternative roading layouts, is not limited or restricted to that shown on the Structure Plan. I do not favour the use of the term “critical local road” to describe the local roading on the structure plan and consider that to be misleading about its status and significance.
…
16. In support of the subdivision concept plan, I note that the Council’s decision on PPV7 has applied a Mixed Urban zoning to the entire site. This improves the prospects of securing consent to a subdivision in accordance with the concept plan as the proposed lots better conform with the subdivision standards of Mixed Urban zoning, compared to the subdivision standards of the Large Lot zone that applied to approximately 40% of the site at the time the concept plan was prepared.
17. Overall, it is my opinion that the Council decisions on PPV7 have made it more likely that subdivision consent would be granted to the concept plan (or to a subdivision plan which is in general accordance with the concept plan and with no reduction in yield). In particular, at the time that the concept plan was prepared subdivision of the site would have been classified as a Non-Complying activity. The Council’s decisions on PPV7 have resulted in any subdivision having a Discretionary Activity status, which is less onerous and has a higher prospect of a successful consenting outcome.
18. As no application has been made for subdivision of [the property], it is speculative of Mr Churchill to express an opinion (in his paragraph 25) that subdivision in accordance with the Concept Plan is “highly unlikely” to
be obtained. Such a determination can only be made by the respective Consent Authority (in the first instance) and can then be appealed to the Environment Court.
[41] Mr West deposes that he understands from the affidavits filed on behalf of Onew that Onew has not made any application to Auckland Council for consent to enable it to carry out the subdivision referred to in the agreement.
Overview of considerations
[42] The contract was about the parties’ knowledge and expectations of an outcome. Usually that includes the parties’ assumptions and considerations and their reasonable objective assessment as to issues that may arise to affect performance of the contemplated settlement outcome.
[43] It is apparent from the assessment of counsel that little information was immediately available concerning exactly how the Council’s decision affected Onew’s ability to complete the subdivision. Regarding lot 1 (that which Mr West agreed to purchase) it seemed to have affected the exact means of access and therefore Council’s local road decision only concerned the other lots in the subdivision. Regarding those it was not then certain what the extent of changes were to lot sizes and numbers. It must have been within the contemplation of both parties that changes would be required and perhaps even that those might have affected access to the other lots. The extent of those changes might provide justification to invoke the doctrine of frustration or on the other hand they might be only about the proposed subdivision becoming more expensive or onerous or difficult, but of insufficient dimension to justify Onew cancelling the agreement.
Considerations
Generally
[44] To sustain his caveat Mr West must show he has a reasonably arguable case for his claim of a beneficial interest in the land.
[45] The caveat challenge process involves a summary procedure which is not usually suitable to the determination of disputed questions of fact. An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained – either because there is no valid ground for lodging it in the first place, or because such ground no longer exists.1 Even if a claimant of an interest sufficiently proves that claim the Court still retains the discretion to remove the caveat but must first be satisfied that a caveator’s legitimate interest would not be prejudiced in that outcome.
[46] In this case it is not in dispute that Mr West obtained a caveatable interest by the sale and purchase agreement. Rather the issue concerns Onew’s position that any beneficial interest ceased because the parties’ contract was avoided because of unforeseen conditions which attached to subdivision development conditions imposed post contract.
Conditional contracts
[47] Usually but not always a caveatable interest is not acquired until an agreement becomes unconditional because not until then would a purchaser be able to bring a proceeding for specific performance.
[48] The Court of Appeal’s recent decision in Morte Holdings Limited v ANCL Investments Limited2 held:
In the case of conditional contracts where the parties intend to be bound and to remain bound subject to the fulfilment of the condition, an equitable interest in the land may also arise. In such circumstances there is a reasonable expectation by virtue of the agreement for sale and purchase that the registered proprietor will not act inconsistently with the purchaser’s contingent interest in the land until the outcome of the condition is ascertained. Equity will provide remedies if the vendor’s actions materially endanger the expectation. The beneficial interest will cease if the contract is avoided for failure of the condition in the same way as it may for cancellation for breach or upon non-payment of the purchase price.
[49] Mr Bigio for Onew relies in this regard upon the decision of the Supreme
Court in Steele v Serepisos3. In that case the parties entered into a sale and purchase
1 Sims v Lowe [1988] 1 NZLR 656 at 660 (CA).
2 [2016] NZCA 494 at [10].
agreement that required a subdivision to be carried out prior to settlement. It was expected that the owner of a neighbouring property would consent to an easement for drainage over the neighbour’s property, but the neighbour refused consent. The purchaser sued for specific performance on the basis that drainage could be provided in an alternative location. The Court of Appeal disagreed and held that a subdivision involving drainage through an alternative location was of a substantially different character from that the contractor had contemplated. The Supreme Court by a majority 3:2 upheld that decision.
[50] In that case the terms of sale required agreed steps to be undertaken. The Supreme Court considered the obligations placed on vendors of land to be subdivided, by s 225(1) of the RMA. That section provides:
225. Agreement to sell land or building before deposit of plan
(1) Any agreement to sell any land or any building or part of any building that constitutes a subdivision and is made before the appropriate survey plan is approved under section 223, shall be deemed to be made subject to a condition that the survey plan will be deposited under the Land Transfer Act 1952 or in the Deeds Register Office, as the case may be; and no such agreement is illegal or void by reason that it was entered into before the survey plan was deposited.
[51] That obligation placed on a vendor by the subsection was described by the
Supreme Court as requiring:
… the vendors to take all reasonable steps to deposit the plan, and thus to take all reasonable steps to fulfil conditions that might be imposed on the plans approval, provided those conditions were themselves reasonable.
[52] Ms Robertson for Mr West submits that the obligation in s 225(1) does not mean that the vendor is held to the identical plan annexed to the agreement for sale and purchase without any amendment whatever.
[53] As Allan J noted in Featherstone Park Developments Limited v Robertson
Homes Limited4:
3 [2007] 1 NZLR 1.
4 HC Hamilton, CIV 2008-419-1175, 18 May 2009.
[97] …Neither is the vendor to be held to identical plan, because the local body requirements may give rise to necessary modifications.
...
[98] The approach [suggesting a vendor must obtain consent for the identical plan annexed to the agreement for sale and purchase] would render the subsection unworkable in practice. It would require vendors to procure the deposit of an initial scheme plan without any amendment whatever. The imposition for such an implied contract duty would fly in the face of the practical realities of the subdivision of land, and is also contrary to the observations of the Supreme Court in Steele v Serepisos.
Subdivision expectations
[54] Onew’s case is that the term ‘subdivision’ is defined in the parties’ agreement as “a subdivision of the vendor’s land in accordance with the plan” and that the parties agreement referred to that plan in the agreement as the “concept plan”. While the agreement required Onew, at its own cost, to implement the consents (whether pursuant to the RMA or otherwise) and to carry out and complete the subdivision, Onew asserts that its ability to proceed was dependent upon consents being issued by Auckland Council to allow for all of the land to be developed as shown on the concept plan, and that there was no provision for any variations to that concept plan, nor was there to be a further approval mechanism on the form of the subdivision following consultation with Auckland Council.
[55] Mr Bigio submits therefore that on an objective analysis the parties agreed to the form of the subdivision as set out in the concept plan and did not contemplate any alternative proposal; that the ability of Mr West to take title to ‘lot 1’ depended on Onew’s ability to obtain consent for the whole of the concept plan.
[56] Onew relies upon the evidence of Mr Churchill who referred to how the specific policies and objectives behind the decision on PPV7 (insofar as they relate to the land) are not met by the subdivision because of the requirement for an interconnected road network which the subdivision does not provide for, and because the subdivision exceeds the maximum number of sites accessible by the planned right of way; but also because it is claimed there are now strong planning, traffic and design reasons for a public road through the land that were not there previously and which the subdivision did not take account of.
[57] Mr Bigio submits that in any event and based on Steele v Serepisos [including the taking of reasonable steps to fulfil conditions] and taking into account the Council’s decision on PPV7 and the subdivision’s incompatibility with the same that it would be unreasonable to now require a different subdivision of the land to be agreed between the parties.
[58] Mr Bigio submits it is appropriate for Onew to rely on its expert advice as to the likelihood of obtaining resource consent and that there is no requirement under the agreement for Onew to make speculative and/or futile applications for consent as, he claims, Mr West asserts they should.
Whether the claim of a caveatable interest is available
[59] Also it is Onew’s position that current issues are not confined to an analysis of the views of planning consultants and surveyors but are also about whether or not the land in question could be subject of a claim for specific performance by Mr West. If he is without that capability then his claims of a registerable interest must fail.
[60] Mr Bigio refers to the approach taken by the High Court in Serepisos v Steel5. In that case Miller J held it would be inequitable to grant specific performance because it would not be possible to require the drains in question to be connected to a property owned by another person that would not permit it. Also the Court held that the plaintiff was the principal cause of the loss of the opportunity to procure that consent.
[61] In the Supreme Court the majority held that the subdivision had become one of a substantially different character and that it was not reasonable to expect the vendor to comply with the consent imposed. The Supreme Court referred to s 225(1) of the RMA and said that provision required vendors to take all reasonable steps to deposit the subdivision plan and therefore to take all reasonable steps to fulfil conditions that might be imposed for the plans approval provided those conditions
were themselves reasonable.
5 HC Wellington, CIV 2003-485-1335 13 August 2004.
[62] Section 225(1) states that any agreement to sell land subject to a subdivision shall be deemed to have been made subject to a condition that the survey plan be deposited under the Land Transfer Act 1952.
[63] There has been some suggestion on behalf of Onew that by the further terms of sale Mr West and Onew contracted out of the implied term in s 225(1) that the vendor need only take reasonable steps to deposit a plan and to comply with reasonable conditions. It is suggested the relevant further terms clause requiring Onew to obtain consents to enable it to carryout and complete the subdivision may have been unlawful because that obligation was wider than contemplated by s 225(1) of the RMA.
Conclusions
[64] The Court does not agree to claims of unlawfulness by the provisions contained by the parties’ further terms of sale. In that respect those further terms provide reason why in this case, and unlike Steele v Serepisos, it is not merely about taking reasonable steps to deposit the plans and reasonable steps to fulfil any conditions imposed. In this Court’s view the obligations upon Onew went further because it agreed to obtain the consents and to implement and carryout the subdivision. Ms Robertson submits those further terms prevail over the implied notions of reasonableness in the agreement following Steele v Serepisos.
[65] Paragraphs 18 and 20 of the further terms of the agreement infer obligations to obtain and implement the consent and those prevail over clause 9.7 of the general terms and the Steele v Serepisos prescription of obligations, but even if they did not there is evidence of the need for action by Onew beyond simply adopting the advice of its surveyor Mr Churchill.
[66] However and even if that argument is not accepted it is clear there remains on Onew the obligation to take all reasonable steps to obtain approval of the concept plan, even if strict compliance with that plan is not possible. Onew has not undertaken those steps, preferring to rely upon advice that its expectations will not be achieved.
[67] In that regard the evidence of Mr Hook and Mr Churchill provide focus. They cannot agree. The caveat summary process is not suitable in this instance to determine whether the evidence of one ought to be preferred over the other. Also, Onew has not taken any steps to obtain consent for its subdivision approval. Further it is Onew’s position that it is not going to make any application because it says it cannot comply with a 16 metre road requirement. Mr Hook challenges that assessment. He says it is not a requirement but rather one of the factors to be looked at upon any application.
[68] Onew’s position is that any claim by Mr West can be satisfied by an award of
damages.
[69] The Court does not agree it is that straightforward. The evidence is Mr West did not purchase the property for potential development advantage but rather for a family home in an area he has been associated with. He should not be denied the opportunity to apply to the Court for a decree of specific performance in the circumstances of this case. Any decision by the Court in this regard is discretionary. Considerations are complex and ought to be exercised with caution in the summary caveat removal process.
Summary
[70] Mr West’s claim of a caveatable interest is not defeated by claims that subdivision development conditions subsequently imposed prevent the sale to Mr West being effected. No application for subdivision had been lodged. Onew’s position is that a subdivision could not be achieved in terms identified by contract conditions and the concept plan. Onew’s position relies upon its surveyor’s assessment of the local road consent requirement and perceptions about how that may influence development expectations. However the value of those perceptions remain untested, and also they are disputed by Mr West’s town planner who said the local road conditions were not a subdivision requirement, but just one of the many factors for consideration upon a subdivision application.
[71] Evidence from both sides does not agree about whether an appropriate development consent could be obtained. In this case the Court’s focus was not only about the reasonableness of steps that ought to be taken but also upon the steps it was agreed Onew had to undertake. Whether pursuant to contract terms or by reference to the Steele v Serepisos prescription, this Court does not accept Onew has sufficiently undertaken its contract further term performance obligations.
[72] The Court does not agree Mr West’s sole recourse to relief is only by way of a claim for damages, rather that recourse to a claim for specific performance may still be available.
Result
[73] The application to sustain the caveat is granted.
[74] The respondent is ordered to pay the applicant’s costs on a 2B basis together
with disbursements approved by the Registrar. If those cannot be agreed the Court will fix them after memoranda from counsel has been received.
Associate Judge Christiansen
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