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High Court of New Zealand Decisions |
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV 2007-404-007998
UNDER Section 145A of the Land Transfer Act
1952
IN THE MATTER OF an application for an early lapse of a caveat
BETWEEN
EASTCORP INVESTMENTS LIMITED
Applicant
AND
MUNROE DEVELOPMENTS LIMITED
Respondent
Hearing: 5 March 2008
Counsel: P Moses for applicant
A Gilchrist for respondent
Judgment: 11 March 2008 at 3pm
JUDGMENT OF ASSOCIATE JUDGE ABBOTT
This judgment was delivered by me on 11 March 2008 at 3pm pursuant to Rule 540(4) of
the High
Court Rules.
Registrar/ Deputy Registrar
Solicitors:
Patel Nand Legal, PO Box 26717, Epsom, Auckland
McLeod & Associates, 59-67 High St, Auckland
EASTCORP INVESTMENTS LIMITED
V MUNROE DEVELOPMENTS LIMITED HC AK CIV 2007-404-
007998 11 March 2008
[1] Eastcorp Investments Limited has applied for an order
sustaining a caveat
lodged against land in a subdivision being undertaken by Munroe Developments
Limited.
[2] Eastcorp claims
a caveatable interest in the land under an agreement for sale
and purchase made on 1 November 2006. Munroe says that Eastcorp
no longer has
a caveatable interest because the agreement was cancelled on 7 June 2007 for non-
payment of the deposit. The general
issue for the Court is whether Eastcorp has
established that an agreement in respect of the land subsists.
[3] Eastcorp accepts
that Munroe gave notice cancelling the agreement, but says
that that notice was invalid because Munroe had waived the strict contractual
time
for payment of the deposit. In the alternative Eastcorp claims that the agreement
was reinstated when the deposit was paid
two days later or that Munroe is estopped
from denying the validity of the agreement, by a representation that it was not
insisting
on payment strictly in accordance with the contract and other conduct
suggesting that the contract was subsisting.
[4] The dispute
has significance for both parties in that both have entered into
agreements for on-sale.
[5] For the reasons I shall now give
I find that an order sustaining a caveat
should not be granted. Eastcorp has filed to establish a caveatable interest in the
land as the agreement for sale and purchase was validly cancelled on 7 June 2007.
In addition Eastcorp has not established that the
agreement for sale and purchase was
reinstated or that Munroe's conduct gave rise to a promissory estoppel.
Background
[6]
Munroe and Eastcorp entered into an agreement for sale and purchase of the
land subject to the caveat on 1 November 2006.
Although the land has now been
given a street address of 24 Burton's Drive, it was identified in the agreement as Lot
13, Kui Lin
Street (being the street which provided access to the subdivision), and is
referred to by the parties as Lot 13 Burton's Drive.
The agreement required
payment of a deposit of $25,000 by the later of 8 January 2007 or completion of the
floor slab
and foundations for the house to be built on it.
[7] Eastcorp entered into an agreement for on-sale of that property on 6
November
2006 for $505,000. That contract provided for both a deposit of $50,500
(presumably payable on signing of the agreement) and a part
payment of balance of
purchase price of $25,000 by the later of 15 December 2006 or completion of
slab/foundation works.
[8]
On 1 June 2007 Munroe's solicitors wrote to Eastcorp's solicitors advising
completion of the floor slab and foundations and requiring
payment of the deposit by
5pm on 7 June 2007 (in accordance with clause 2 of the standard conditions of
contract which made time of the essence).
[9] The deposit sought
was incorrectly stated to be $20,000, but nothing turns on
that. Eastcorp did not pay the deposit by 5pm on 7 June 2007. The following
day
Munroe's solicitors, on the instructions of Munroe's Sales & Acquisition Manager
Mr Kewal, sent notice of cancellation of the
agreement to Eastcorp's solicitors by
fax.
[10] There is a dispute as to events between the notice requiring payment of the
deposit,
and the cancellation of the agreement on 8 June 2007. This dispute lies at
the heart of Eastcorp's claim for a continuing
caveatable interest. Eastcorp's
director, Mr Rabinovitch contends that Mr Kewal told him in a telephone
conversation prior
to the deadline for payment that Munroe did not insist on strict
compliance.
[11] After Munroe gave notice of cancellation Mr
Rabinovitch rang Mr Kewal.
Again, there is a dispute as to the detail of that conversation, but they agreed to meet
on the following
Monday (the next working day). That meeting took place in Mr
Kewal's office. It is common ground that they discussed several
contracts and that
Mr Rabinovitch wrote out and left with Mr Kewal a cheque for $20,000. The
parties disagree as to
whether that sum was for the deposit on Lot 13 Burton's Drive,
or for one or other of two other properties which Eastcorp had agreed
to purchase
from Munroe (13 Peng Place in a separate subdivision, and Lot 14 Burton's Drive).
[12] Later that day Mr Kewal wrote
to Mr Rabinovitch by email regarding
payment of deposits on agreements between Eastcorp and the Ramwell group of
companies to which
Munroe belonged. The contracts for 13 Peng Place and Lot 14
Burton's Drive were referred to specifically, and mention was
made of "using the
$20,000 deposit" for Lot 14 Burton's Drive. The following day there was email
correspondence between Mr
Rabinovitch and Mr Kewal in which Mr Rabinovitch
initially indicated that Lot 13 was his priority, but Mr Kewal said that 13 Peng
Place
or Lot 14 Burton's Drive had to have priority. The emails also contained the
following specific exchanges in relation
to Lot 13 Burton's Drive:
Email from Mr Rabinovitch at 10.13am
I can only do Lot 13 as I have already sold it. Or
have you already sold it
on? I hope not as it will cause me huge problems.
Email from Mr Kewal at 10.30am
No, we have not sold Lot 13 as yet. Having said that, I cannot just apply
deposit to Lot 13 because #13 Peng Place is first
in the queue that we need to
get over with. Till then I cannot commit any further at this stage.
I know you understand
and I understand your situation as well. I will try
and hold Lot 13 Burtons for you but without any obligation.
Email from Mr Rabinovitch at 12.12pm
Thank you for taking the time to spend with me this morning.
....
Point 2 Also it was agreed that as soon as 13 Peng goes ahead that you will
apply the $20,000 to Lot 13 Burton and in the
interim period you will
personally hang onto the cheque.
....
Email from Mr Kewal to Mr Rabinovitch at 1.22pm
(returned at 1.38pm by Mr Rabinovitch with his comments inserted into the
text)
....
Point 2
I will hang onto the property (Lot 13 Burtons) as long as possible
but not for very long.[Roy Rabinovitch] How long? I made
it clear that
Lot 14 burtons should be the first on your radar [Roy Rabinovitch] I will
concentrate all my efforts
to Lot 14 Burtons and also to 13 Peng to apply
the deposit to if 13 Peng goes through. The deposit for Lot 14 Burtons will
become due in a weeks time. How can I apply deposit to a cancelled
agreement when a existing one is yet to be honoured?
[Roy Rabinovitch]
Need a new contract for Lot 13.
....
[13] The state of other contracts was also mentioned in the email exchange on 12
June 2007.
Mr Kewal informed Mr Rabinovitch that Munroe required deposits to
be paid promptly and settlements to take place within five working
days of issue of
code compliance certificates. Mr Rabinovitch responded that weekly progress
updates on timing were necessary
from his end. On 2 July 2007 Mr Rabinovitch
emailed Mr Kewal's assistant (Mr Laguda) requesting an updated completion
schedule.
Mr Laguda sent a property progress report in respect of dealings between
Ramwall Group and Eastcorp the following day.
Lot 13 Burton's Drive was
included in that report.
[14] On 6 July 2007 Munroe entered into an agreement for sale and purchase
of
Lot 13 Burton's Drive with another investor. The combined price for the land and
building package was $503,240. The
sale was conditional on the investor obtaining
an unconditional on-sale of the property within six weeks, that is, by 17 August
2007.
[15] On 9 July 2007 Mr Laguda sent Mr Rabinovitch an email listing progress
with properties in the Burton's Drive subdivision.
Lot 13 was in the list.
[16] In an affidavit in reply Mr Rabinovitch's wife (also a director of Eastcorp)
states that she
and Mr Rabinovitch met Mr Kewal on 30 July 2007 and discussed the
cheque for $20,000 (which had not been banked).
She said that Mr Kewal
indicated that he was wanting other properties sold first but "reinforced that Lot 13
was ours". Mrs
Rabinovitch attached to her affidavit a valuation in respect of Lot
13 which she said Mr Kewal gave them at that meeting.
[17]
Mr Rabinovitch had a further meeting with Mr Kewal at his office on 15
August 2007. He has attached to his affidavit progress
reports on four properties in
the Burton's Drive subdivision which he says that Mr Kewal gave him at the
meeting. It included a progress
report for Lot 13.
[18] On 22 August 2007 Mr Kewal sent an email to Mr Rabinovitch advising him
that Ramwall/Munroe had decided
that it would not be selling any more houses in
the Burton's Drive subdivision to Eastcorp. He set out matters that were taken into
consideration in coming to the decision, including:
a) Eastcorp had had agreements on five properties (including Lot
13);
b) Deposits had not been paid when due resulting in cancellation of
agreements;
c)
More time had been given for deposits to be paid (and the properties
had been "held back" for Eastcorp, but none
had eventuated;
d) Renegotiations had taken place but resulted in an agreement only in
respect of Lot
8 (although that was later transferred by agreement to
Lot 14 as there was a second contract on Lot 8);
e)
Eastcorp had wanted to put an agreement in place for Lot 13 without
commitment on other lots, but that was unacceptable
to Munroe;
f) Munroe had given Eastcorp opportunity to secure the other properties
by paying a $20,000
deposit with agreements, but Eastcorp had been
unable to do that.
The net effect was that Munroe would be proceeding
with only the sale of Lot 14.
[19] On 28 August 2007 Eastcorp's solicitors lodged the caveat that is now in
issue against
Lot 13.
[20] Munroe's on-sale agreement was due to settle on 30 November 2007. On
29 and 30 November 2007
Munroe's solicitors wrote to Eastcorp's solicitors
requesting immediate withdrawal of the caveat. It appears that
Munroe or its
solicitors had overlooked notice given by Land Information New Zealand of the
lodgment. Munroe then applied to the
Registrar under r 145A of the Land Transfer
Act 1952. The present application was filed following receipt of notice from the
Registrar in accordance with that section.
Legal principles
[21] The principles on which the Court acts in deciding an application for an order
that caveat not lapse
have been developed by the Courts and are now reasonably well
settled. It is for a caveator to show a reasonably arguable case
for the caveatable
interest claimed. As the matter is decided in a summary way, a Court will not seek
to determine a disputed question
of fact:
From this it follows ... an order for the removal of such a caveat will not be
made under s 143 unless
it is patently clear that the caveat cannot be
maintained either because there was no valid ground for lodging it or that
such valid ground as then existed no longer does so.
Sims v Lowe [1988] 1 NZLR 656,659-660
[22] Although Sims v Lowe was an application for removal of caveat under s 143
of the Act, the same principles also
apply to applications under both s 145 and s
145A of the Act: Hinde McMorland and Sim, Land Law in New Zealand, para
10.020.
[23] Where there is a conflict in the evidence, the caveator's evidence should be
accepted as correct for the purposes of
the application to sustain the caveat "except
where patently lacking in credibility on its face": Macrae v Rapana (HC Auckland
M633/94, 17 June 1994, Fisher J). This dictum reflects the well known comments
of the Privy Council in Eng Mee Yong v Letchumanan
[1980] AC 331,341E that the
Judge determining the matter is not bound:
... to accept uncritically, as raising a dispute of fact which
calls for further
investigation, every statement on an affidavit however equivocal, lacking in
prescision, inconsistent
with undisputed contemporary documents or other
statements by the same deponent, or inherently improbable in itself it
may
be.
Is there an arguable case for waiver of the time for payment of the
deposit?
[24] Eastcorp's case is that
Mr Kewal represented to Mr Rabinovitch prior to the
deadline for payment of the deposit that it would not matter if Eastcorp went
beyond
the deadline (having been told that Eastcorp could be a day or so late). The Court
must decide whether Eastcorp has established
this representation on the evidence,
and, if so, whether it amounts to a waiver of the otherwise clear contractual
obligation so
that Munroe was not entitled to cancel immediately after the deadline
passed.
[25] A clear representation that a term of the
contract will not be enforced or
insisted upon, which is relied on, amounts to a waiver of that contractual term:
Watson v Healy
Lands Limited [1965] NZLR 511; Neylon v Dickens [1978] 2
NZLR 35 (PC).
[26] In Watson v Healy Lands Limited Woodhouse J was asked to find that the
defendant vendor of the property had waived
payment of the deposit of £8,000 by
agreeing to accept a lesser sum of £3,000 in lieu, or alternatively that payment of the
balance
was to be postponed for a period beyond the time when the vendor gave
notice of rescission (so that the notice of rescission was
premature). The waiver was
said to arise either out of an arrangement made in discussions between the parties, or
to be a consequence
of correspondence in which the second of two payments
comprising the £3,000 was referred to as "balance of deposit" and accepted
as such.
Woodhouse J considered that the first of these propositions amounted to an
allegation of variation which could not be supported
in the absence of writing. He
dismissed the contention that acceptance of the payment described as "balance of
deposit" amounted
to a waiver, and then addressed the alternative submission that
the discussions between the parties had led to an arrangement for
the balance of
£5,000 to be deferred for three months (preventing any default occurring until a
period after the notice of rescission
was given).
[27] The case has similarities with the present one in that the plaintiff purchaser
alleged that he had been given
"a clear impression that if the balance was paid within
the extended period this would be a sufficient compliance with the contract
(at p 514
ll14-16). Woodhouse J held that Mr Watson (the representee) had to show that there
was an unambiguous representation arising
as the result of a positive and intentional
act done by the representor with knowledge of all the material circumstances, and
that
he relied on that representation in carrying out the new arrangement. He found
that Mr Watson failed to establish either
requirement on the facts.
[28] In Neylon v Dickens the Privy Council had to consider whether an agreement
by the vendors'
solicitors to assist the purchaser by filing an application for consent
under the Land Settlement Promotion and Land Acquisition
Act 1952, so as to meet
a statutory deadline, amounted to a waiver of a contractual deadline for obtaining the
consent (due to expire
the working day after the application was filed). If it did not
the contract was void.
[29] The Privy Council applied the
dicta of the House of Lords (Lord
Wilberforce) in Mardorf Peach v Attica Sea Carriers [1977] AC850,871:
All that is needed
to establish waiver, in this sense, of the committed breach
of contract, is evidence, clear and unequivocal, that such
acceptance has
taken place ....
The Privy Council held that what was required to establish waiver in that case was
... evidence that the vendors' solicitor, by lodging the application on 23
January was representing unambiguously
that the vendors were treating the
deadline of 26 January as not being of the essence of the contract. (at p38).
The Privy
Council decided that the only reasonable inference was that the vendors
intended that the arrangement to lodge the application would
both satisfy the
statutory deadline and keep the contract alive notwithstanding the inevitability that
the contractual deadline for
obtaining a consent on the application could not be met.
It found that the lodging of the application was a representation to that
effect. It also
found that this inference was amply confirmed by other evidence including
statements in the covering letter accompanying
the application, and in subsequent
events. It stated (at p39):
Evidence of these subsequent events could not be relied
on to remove
ambiguity in the events of 23 January, if such ambiguity had existed, but it is
admissible to confirm
the proper inference to be drawn from the events of 23
January.
[30] Both Watson v Healy Lands Limited and Neylon v Dickens
were decided on
findings of evidence given at trial. The present application must be decided on the
principles for dealing with evidence on a summary application, namely
that
Eastcorp's evidence is to be accepted unless patently lacking in credibility.
[31] The starting point for Eastcorp's case
must therefore be whether the alleged
statement by Mr Kewal represented unambiguously that Munroe was not treating the
deadline of
5pm on 7 June 2007 as being of the essence of the contract.
[32] It is significant that in his initial affidavit in support of
the application, Mr
Rabinovitch said (at paragraph 8) that he telephoned Mr Kewal on 7 June 2007 "to
advise that the applicant would
be a day late with the payment, and explain the
reason". He did not say that there was any agreement, arrangement or
understanding
as to the contractual time limit not being insisted upon. In his later
affidavit in reply (and in response to Mr Kewal's
evidence in opposition that he did
not believe that Mr Rabinovitch telephoned him on 7 June 2007) Mr Rabinovitch
said instead that
the conversation with Mr Kewal had been on 6 June 2007. He set
out briefly the reason for delay, and stated:
[Mr Kewal] said
that was fine, and that I should keep him posted.
[33] Whilst I can accept a possible confusion over the date, I find it surprising
that
Mr Kewal's alleged response was not given in Mr Rabinovitch's first affidavit.
Further, whilst the words might be sufficient
if Munroe accepted that they were said,
I must examine them more critically in light of the contest about them. Although I
can accept
that Mr Kewal's alleged response was possible, it is vague. Mr
Rabinovitch does not say that either he or Mr Kewal
referred to the notice
specifically (which would help tie the comment to Munroe's legal position). Indeed
Mr Rabinovitch's evidence
in his first affidavit suggests that the conversation may
have gone no further than merely informing Mr Kewal of his position. I
am not
persuaded that they are unambiguous (particularly in light of later events which
suggest that Munroe was willing to continue
negotiations with Eastcorp after
cancellation about a new contract).
[34] I turn now to consider subsequent events.
The first (again taking Mr
Rabinovitch's version of the facts) is that two mornings afterwards Munroe's
solicitors, on instructions
from Mr Kewal, sent notice of cancellation of the
agreement for failing to pay the deposit by the contractual deadline.
There is
nothing in the evidence to suggest that this was a consequence of a change of heart
by Mr Kewal. To the contrary,
the evidence indicates that wherever possible Mr
Kewal did what he could to help Mr Rabinovitch to effect the purchases.
[35]
It is common ground that there was a telephone conversation after the notice
of cancellation. Mr Rabinovitch's evidence of it
is also equivocal: he was told
"not to worry". This is capable of being construed as an indication that the contract
was
capable of being revived (it is curious, to say the least, that Mr Rabinovitch did
not refer to the letter of cancellation in his
first affidavit). There is support for the
view that this was, and was seen to be, an indication that the contract could be
revived
in Mr Rabinovitch's evidence in his first affidavit of discussion at the
meeting on 11 June 2007:
I discussed with Mr Kewal
the reason for the late payment of the deposit,
and explained the applicant's position, namely that it was intent on reviving
the Agreement.
[36] Next, and even more compelling, are the admissions by Mr Rabinovitch in
the email correspondence starting
late on the following Monday and carrying on
through the Tuesday. Mr Rabinovitch's opening enquiry on the Tuesday morning
was
to ask whether Munroe had already sold Lot 13. That is not the opening
gambit of someone who believes he has a binding
contract (whether on the basis of
an earlier accepted invalid cancellation, or on the basis of reinstatement on the
Monday). The critical evidence, however, is the documented
exchange at the end of
the Tuesday correspondence in which Mr Kewal asks Mr Rabinovitch how he can
apply a deposit to a cancelled
contract, and Mr Rabinovitch responds that he needs a
new contract. This follows Mr Kewal's advice that he would try to hold Lot
13 for
Mr Rabinovitch and Eastcorp but without any obligation to do so. He made it clear
that he needed to have a deposit paid
on Lot 13 (clearly the cheque left with Mr
Kewal on the Monday was not regarded as being available for that purpose).
[37] Mr
Rabinovitch relied on two aspects of Munroe's conduct post the alleged
representation, in particular, as supporting his arguments.
The first was the
delivery of the cheque with the notation on the back Lot 13 Burton's Drive.
However, as I have said, the
subsequent exchange of email correspondence makes it
patently clear that Munroe did not accept that that cheque was being held for
Lot 13.
[38] The second aspect was the delivery of progress reports on the subdivision
which included reports on Lot 13. I regard
these as equivocal. Eastcorp was still
expressing interest in all five Burton's Drive properties, and it is understandable
that
Munroe would seek to retain that interest until such time as it had an unconditional
on-sale. I do not regard the provision
of those reports as determinative of the issue
whether or not Mr Kewal made a representation to Mr Rabinovitch on 6 or 7 June
2007
that Munro would not treat the deadline as being of the essence of the
agreement on Lot 13.
[39] In my view Munroe's prompt
cancellation and the exchange of email
correspondence on 12 June 2007 are compelling. They call into question Mr
Rabinovitch's
recall of the telephone conversation of 6 or 7 June 2007 and the
purpose of it. I find that Munroe has failed to make out an arguable
case for waiver
having regard both to the ambiguous nature of the alleged representation and to the
contemporary documentation.
Was the contract reinstated?
[40] Eastcorp submits that if there was no waiver, and the contract was cancelled
on 8 June 2007,
the parties orally agreed to reinstate it at the meeting of 11 June
2007. Eastcorp's counsel submitted that this agreement came
into effect with Mr
Kewal's acceptance of the cheque for $20,000 endorsed on its back with the words
"Lot 13 Burton's Drive".
[41]
Munroe contends that Eastcorp's argument cannot stand in the face of the
email correspondence that followed the meeting and, in
any event, any such
agreement would be unenforceable for lack of compliance with s 2 Contracts
Enforcements Act 1956.
[42] I
accept that it is at least arguable that the cheque was written and handed to
Mr Kewal for Munroe with the intention it was to be
applied to Lot 13 Burton's
Drive. However, Eastcorp's case that it was accepted by Munroe as reinstatement
of the contract is again
patently lacking in credibility having regard to the
contemporary email correspondence and the fact that it was never banked.
The
email correspondence makes it plain that the cheque was not being allocated to any
contract at that point. It is not
in dispute that it was never banked. Eastcorp's
counsel argued that the correspondence was ambiguous and that Eastcorp had only
to
show a reasonably arguable case for an oral agreement to reinstate. I read Mr
Rabinovitch's acknowledgement, in the context
of the email correspondence as a
whole, as a clear acceptance that Eastcorp does not at that point have a binding
contract. Were
this not the case I would have expected Eastcorp to have called for
Munroe to produce a further agreement, or to have tendered its
own in accordance
with the alleged agreement to reinstate. Neither of these two possibilities occurred.
[43] Eastcorp has not
satisfied me that it has an arguable case for its claim to
reinstatement. I do not need to address Munroe's argument that the agreement
would have been unenforceable.
Does Munroe's conduct give
rise to a promissory estoppel?
[44] Eastcorp contends that Munroe knew that the cheque presented at the meeting
of 11 June 2007
was for the express purpose of securing Lot 13, and Munroe
accepted the cheque knowing this. Eastcorp says that that acceptance
led it to
believe that Munroe had agreed to reinstate the contract, and that it would be
inequitable to allow Munroe to resile from
the implicit representation. In that
respect it says that Munroe knew of Eastcorp's on-sale of the property, and also that
Munroe wanted it to continue to believe that it would be able to purchase Lot 13
until Munroe's on-sale agreement became unconditional.
[45] Counsel for Eastcorp relied on the principle of promissory or equitable
estoppel which can be traced back to the judgment
of Lord Cairns in Hughes v
Metropolitan Railway Co (1877) 2 App. Cas 439, developed in the classic statements
of Denning J (as he then was) in Central London Property Trust Limited v High
Trees House Limited
[1947] 1 KB 130 and again in Combe v Combe [1952] EWCA Civ 7; [1951] 1 All ER
767, and by Lord Cohen in Tool Metal Manufacturing Co Ltd v Tungsten Electric Co
Ltd [1955] UKHL 5; [1955] 2 All ER 657. Counsel referred to the decision of this Court in P v P
[1957] NZLR 854 where McGregor J reviewed these authorities. The principle to
be taken from them is that where a party to a contract acts so as to
induce another
party to believe that it will not insist on its strict legal rights, and the other party acts
on that belief to its
detriment, the Court will not allow the first party to enforce its
strict rights where it would be inequitable to do so.
[46]
In his written submissions, counsel for Eastcorp focused on the acceptance of
the cheque on 11 June 2007 and subsequent delivery
of property reports and
statements that Lot 13 "was Eastcorp's" as the inequitable conduct. I also
understood counsel
to extend this, in his oral submissions, to the statement made in
the telephone conversation on 6 or 7 June 2007.
[47] Dealing
with the latter point first, there seems to me to be little difference
between the argument for waiver and the argument for promissory
estoppel in
respect of the pre-cancellation telephone conversations. Eastcorp has not persuaded
me that there is a credible
basis for an estoppel, any more than for a waiver, for the
reasons I have already given.
[48] Similarly, I do not accept that
there is an arguable case in respect of the
cheque for $20,000. I am unable to reconcile Eastcorp's argument that it did not
caveat Lot 13 (believing that Lot 13 was being held for it) with the statements of Mr
Rabinovitch in the email correspondence of
12 June 2007. He had been told by Mr
Kewal that he would try to hold Lot 13, but without any obligation. Mr Kewal had
also made it
clear that Lot 13 would only be available after Eastcorp had completed
the Peng Place and Lot 14 contracts, and that Munroe could
not use the deposit
without further instruction from Eastcorp. There was also the express
acknowledgement that a
new contract was needed for Lot 13 (which seems to me to
be the opposite of saying that Munroe was not intending to insist on its
legal rights).
[49] I am not persuaded that either there was clear conduct which could have
induced a belief that the contract
had not been cancelled, or had been reinstated.
Neither the subsequent provision of reports nor the alleged later assurance that
Lot
13 "was Eastcorp's" are conduct inducing Eastcorp to change its position on the
cancellation or reinstatement of the contract.
It knew what the position was on 12
June 2007. It did not follow up with a new agreement as Mr Rabinovitch
acknowledged it
had to do.
Exercise of discretion and imposition of terms
[50] I find that Eastcorp does not have an arguable case for a caveatable
interest,
primarily on the grounds that Eastcorp's evidence on the key issues of a pre-
cancellation representation or reinstatement
of the contract patently lacks credibility
in light of contemporary documents.
[51] If I had not determined the application on
this basis due to the uncertainties
and inconsistencies to which I have referred I would only have granted the
application on terms.
One of the terms would have been to commence prosecution
of a proceeding to resolve the substantive dispute. Of greater consequence
(in terms
of Eastcorp's ability to meet the conditions), however, is that I would also have made
an order sustaining the caveat on
condition that Eastcorp provide an undertaking as
to damages and evidence to show that it was capable to meeting such an undertaking:
BP Oil New Zealand Limited v Van Beers Motors Limited [1992] 1 NZLR 211;
Investment Syndicates Incorporated (NZ) Limited v Emundi Enterprises Ltd, HC
Auckland, CP518/96, 18 December 1996, Master Kennedy-Grant.
Decision
[52] Eastcorp's application for an order sustaining caveat X7523047.1 against the
land in Certificate of Title 312259
(North Auckland Registry) is dismissed.
[53] Eastcorp is to pay Munroe costs of and incidental to this application on a 2B
basis
together with disbursements as fixed by the Registrar.
_________________________
Associate Judge Abbott
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