Verissimo v Walker CA7/05 [2005] NZCA 491; [2006] 1 NZLR 760; (2005) 6 NZCPR 939 (21 September 2005)

Last Updated: 15 January 2018

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IN THE COURT OF APPEAL OF NEW ZEALAND

_CA7/05

BETWEEN CARLOS VERISSIMO Appellant

AND DESMOND GEORGE WALKER AND OLIVE HILDEGARDE WALKER Respondents

Hearing: 14 September 2005

Court: Hammond, Robertson and Baragwanath JJ Counsel: B P Henry and D A Watson for Appellant

R B Stewart QC and K P McDonald for Respondents

Judgment: 21 September 2005

_{JUDGMENT OF THE COURT}

_{A The appeal is dismissed.}

B The appellant must pay costs of $8000 and usual disbursements to the

_respondents.

REASONS

(Given by Baragwanath J)

[1] This appeal is against a judgment of the High Court at Auckland delivered on

8 December 2004. Frater J found that the parties had reached what the respondent, Mr Walker, noted as a “verbal agreement” for the sale of the respondents’ kiwifruit orchard to the appellant and that all parties thought they “had a deal” at that stage. But she concluded that the respondents had not committed themselves legally.

_{At the conclusion of argument upon that issue we advised counsel that we did not}

VERISSIMO V WALKER CA CA7/05 [21 September 2005]

need to hear them as to enforceability of the alleged contract in terms of s 2(2) of the

Contract Enforcements Act 1956.

Background

[2] Mr Walker, now 75 years of age, is a successful retired businessman who over the years has bought some twenty properties and businesses. In 1983 he and his wife, who is of a similar age, bought an apple orchard at Tuakau of some

16 hectares. Replacing the apple trees, predominantly with kiwifruit vines, they ran the orchard themselves, let the homestead and leased small parts of the land to an onion grower and to a coolstore company.

[3] In late 2003 they decided to sell the property by private tender as a going concern. They gave notice to the tenant of the house and to the lessees.

[4] Mr Verissimo who has had long experience in the kiwifruit industry is a director and shareholder of Verikiwi Pack Limited which operates a number of kiwifruit orchards in south Auckland. In 2003 he had expressed interest to Mr Walker in making an offer if the orchard were to be sold.

[5] In January 2004 Mr Walker told Mr Verissimo that he was going to put the property on the market for sale by tender. He then wrote to Mr Verissimo advising that the property was to be advertised for sale by tender as a going concern and would be on the market from 7 February. Mr Walker made available some four pages of typed “comments for tenderers” with information about the property and the associated business.

[6] Mr Verissimo visited the property with his son Andrew and his orchard manager and on 3 March 2005 made a written tender for the purchase of the property and business for a price of $1,025,000. The written offer, submitted by his accountant, included the statement:

I am instructed to formally submit a tender for Verikiwi Pack Limited on behalf of a syndicate to be formed on the following terms:

...

7. Subject to final contractual matters as required to move to formal legal documentation.

Some or all of these conditions may be negotiated.

(We have added the bold emphasis in this and later quotations from the exhibits.)

[7] The crucial meeting was on 12 March when Mr and Mrs Walker met Mr Verissimo at the orchard. Their discussion lasted until noon. Both parties had prepared themselves for it. The Judge found that Mr Walker had prepared hand-written notes in advance and recorded on them details such as the agreed price and the word “unconditional”. While the notes have been lost they were available to Mr Walker when he made an entry in his diary for 12 March:

“Thought Carlos Verissimo agreed to buy the orchard property. I asked for a prompt deposit whe [sic] he sent agreement back”

and

“... Carlos arrived a little before 10 am. We had a discussion about price. Carlos offered another $25000.00 to $1,050000 & I could see I was getting nowhere so agreed to [sell] write in agreement [sic]

Orchard & Bldgs $1,050,000.00

Tractors (2) 6,000.00

$1,056,000.00

I was just fed up & wanted to quit the property as a Going Concern

As Is Where Is & just walk out.

_{[WE’RE RELIEVED TO HAVE SOLD.]}

...

Thought we had sold orchard and will be pleased when signed offer is received.”

At some later stage the words in italics were added by Mr Walker and the words “sell” and “we’re relieved to have sold” were scored out by Mr Walker; he could not remember when.

[8] Another note with the same date, headed “discussion and agreement”, possibly prepared for his barrister, included the comment:

I decided and Olive agreed we should accept Carlos offer which was a going concern and as inspected and as is where is and to be approved by Sean Kelly.

Carlos agreed that the purchase would be unconditional by himself personally and he would pay his deposit immediately after he received the agreement and settlement would be 1^st May 04.

[9] A further diary entry, this time on 13 March, stated:

This morning I pondered about selling the orchard & despite the low price

pleased to have reached agreement.

[10] On Monday, 15 March Mr Walker met his solicitor, Sean Kelly, and instructed him to prepare an agreement. Mr Walker gave Mr Kelly the following detailed notes, dated 14 March 04:

“Appointment Sean Kelly 10.30 am Monday 15-3-04

Verbal agreement reached with Carlos Verissimo and Des and

Olive WALKER

Carlos Verissimo’s lawyer

John Radley ELLIS GOULD Barrister & Solicitors

Level 31 ANZ Centre 23-29 Albert St AUCKLAND Phone [phone] P.O. Box 1509

Springhill Orchards (Trading Name)

70% Desmond George Walker and Olive Hildagarde Walker 30% SOLD AS A GOING CONCERN

As inspected, as is where is.

Agreed agreement will be drawn up by Sean P Kelly, Lawyer

(for DG & OH Walker)

297 Dominion Rd P O Box 56230 Dominion Rd AUCKLAND. Provided that Carlos Verissimo is GST Registered both the

Coolstore and Packhouse will be exempt GST

(1)	The price agreed on was	$1,050,000.00
	Plus Tractors (2)	$ 6,000.00
		$1,056,000.00

(2) 10% Deposit $105,600 to be paid to the Sean Kelly Trust

Account upon signing Purchase Agreement. Unconditional Agreement.

_{(3) Settlement and Final payment to be paid to the Trust}

Account of Sean Kelley $950,400.00 on 1^st May 04.

(4) 2.136 shares in Zespri Group (Cert No 3384) will be transferred at no cost when the Orchard Titles are transferred.

(5) The 2 Tractors sold are 1 only Ferguson Tractor and 1 only

Izuku Tractor are sold for $6000.00.

(6) The Lease Continuance Agreement between the owner DG & OH Walker and the Orchadists Bridge Cool Management Kati Kati terminates 30 June 04 for the Crop from July 03 to 30 June 04 Kiwi Fruit Crop.

(7) All other Plant, Machinery, Refrigeration Plant to be transferred at no charge.

(8) Counties Power have inspected and livened up the installation at Coles Rd and DG and OH Walker Orchards will pay for that account.

(9) Carlos Verissimo will engage his own Electrician to pay him to make the compressors operative.

(10) The Tenant in the House has been given notice to vacate the

House on or before 18 April 2004.

(11) The defective garage door has been drawn to the attention of Carlos as has the defected [sic] piping to the toilets in the Packhouse and Carlos agreed as we did that he is buying as a going concern and as is.

(12) Titles for the both titles are attached

Orchard 14.133 Hectares Legal Description is Lot 2 DP

156929.

Coolstore 1.616 Hectares Lot 4 DP 151893.

_{(13) As is usual Insurance, Rates will be opportioned as at}

1^st May 04. The Tenant will pay for their electricity when they vacate.

(14) DG and OH Walker will arrange for the House to be cleaned by Green Acres or some other Service Company.

(15) Values placed on the Land and Improvements as discussed

SPRINGHILL ORCHARDS, PACKHOUSE & COOLSTORE

ORCHARD LAND 590,000

COOLSTORE LAND 200,000 $790,000.000

Improvements

ORCHARD PACKHOUSE BUILDING $40,000

COOLSTORE BUILDING	$60,000
HOUSE	150,000
COTTAGE	7,000
Implement Shed	3,000
Tractors (2)	6,000	$ 266,000
		$1,056,000.00”

[11] Mr Kelly drafted a formal agreement for sale and purchase of real estate using a Real Estate Institute of New Zealand/Auckland District Law Society printed form. Mr Kelly sent it to Mr Verissimo’s solicitors under cover of letter of 24 March stating:

Please find enclosed an agreement for sale and purchase in duplicate for execution by the purchaser if in order.

Please note that the vendors shall not be bound by the agreement until they actually sign the agreement.

Please forward:

1. Both copies of the agreement signed by the purchaser.

2. Your cheque for $105,600.00 in payment of the deposit. Yours faithfully,...

[12] The Judge found that the agreement and letter were referred to Mr Verissimo’s office but he could not give them his immediate attention first because he was not well and then because of pressures associated with an early kiwifruit picking season. In his absence his son referred them to his accountant “to look at” and “advise of any issues”.

[13] By letter of 2 April 2004 Mr Verissimo’s solicitors Ellis Gould responded:

Walker to Verissimo

Sale of Springhill Orchards, Coles Road, Tuakau

We refer to your letter of 24 March 2004 which we forwarded to our client for perusal and instructions.

We thought as a matter of courtesy we should do a preliminary reply to you to acknowledge receipt of the documents and advise that we are awaiting instructions from our client.

A preliminary comment we had from our client is that he will need:

1. The pack house production reports for the last few years.

2. All relevant information about on orchard activities that would impact on production and Eurepgap accreditation such as fertiliser usage.

3. Transfer of Zespri shares to our client.

4. A covenant of continuation of good plant husbandry until the property is taken over.

Can you please raise these preliminary issues with your client. We will come back to you with a formal response shortly.

Yours faithfully

ELLIS GOULD

[14] On 7 April Ellis Gould asked Mr Kelly for copy of the lease to the coolstore company. The same day Mr Kelly responded to Ellis Gould’s letter of 2 April stating:

My clients advise me that:

1. The pack house production reports for the last few years have been read by your client.

2. The vendors have given the lease to Bridge Cool until 30 June 2004 and they have no control over the orchard activities.

3. The transfer of the Zespri shares is covered by Clause 16 of the proposed agreement.

4. The vendors do not agree to such covenant. The pack house and cool store have been closed down for seven years. The property and business are sold as is where is and that is why the purchase price is so low. The vendor has had his electrician turn on the electricity. Carlos Verissimo has stated that he would get his electrician to check out the compression of the refrigeration.

Please urgently submit the agreement for sale and purchase in duplicate and pay the deposit.

Mr and Mrs Walker have today been out to the orchard to check that the dwellinghouse is vacant and clean and the lawns are mowed. They would like the agreement concluded promptly.

[15] An email sent on 13 April 2004 from an adviser to Mr Verissimo to Andrew Verissimo and Ellis Gould referred to Mr Walker’s frustration at the time it had taken to get a signed contract from the purchaser as to finance. It said that:

[Mr Verissimo] has advised that he is prepared to take the risk... hence the agreement will not be conditional on finance.

The document may be said to afford some evidence that Mr Verissimo’s advisers understood his position to be that a binding agreement was yet to be financed. But Mr Henry submitted that no significance should be attached to it given Mr Verissimo’s other commitments. The Judge did not refer to it and we are prepared to accept Mr Henry’s submission.

[16] Mr Verissimo eventually signed the agreement on 15 April. Despite the apparent negotiation over point 4 in the letters of 2 and 7 April he made only one alteration, on which Mr Stewart QC did not rely, adding the words “or nominee” after his name as purchaser. He signed the agreement and the deposit cheque was then sent to Mr Kelly’s office.

[17] In the meantime however Mr Walker had received a higher offer of $1.2 m by Mr Titchmarsh to whom Mr and Mrs Walker contracted in writing on 19 April to sell the property. In accordance with instructions received from Mr Walker on

16 April to await the offer expected from Mr Titchmarsh, Mr Kelly advised Mr Verissimo that because of the delay his offer was not accepted and returned the deposit cheque.

[18] Mr Verissimo did not accept that there was no contract. He promptly lodged a caveat against the title to the property, arranged for his solicitors to tender payment in settlement of the transaction and upon its rejection issued the present proceedings on 6 May 2004.

The decision of the High Court

[19] Frater J correctly directed herself as to the prerequisites to formation of the contract identified by Blanchard J in Fletcher Challenge Energy Limited v ECNZ Limited [2001] NZCA 289; [2002] 2 NZLR 433, 444 at [53]:

(a) An intention to be immediately bound (at the point when the bargain is said to have been agreed); and

(b) An agreement, express or found by implication, or the means of achieving an agreement (eg an arbitration clause), on every term which:

(i) was legally essential to the formation of such a bargain; or

(ii) was regarded by the parties themselves as essential to their particular bargain.

...

[20] She cited the principle stated by Richmond J in this Court in Carruthers v

Whitaker [1975] 2 NZLR 667, 671:

It is established by the evidence to which I have earlier referred that at the time when the parties instructed their respective solicitors they all had in mind only one form of contract which would govern the sale and purchase of the farm, namely, a formal agreement in writing to be prepared and approved by the solicitors. When parties in negotiation for the sale and purchase of property act in this way then the ordinary inference from their conduct is that they have in mind and intend to contract by a document which each will be required to sign. It is unreasonable to suppose that either party would contemplate that anything short of the signing of the document by both parties would bring finality to their negotiations. Furthermore both parties would expect their solicitors to handle the transaction in a way which would give them proper protection from the legal point of view. There is no evidence whatever in the present case to rebut this prima facie inference. On the contrary, and as found by Wilson J, the parties in fact expected that the contract would eventually be signed by both vendor and purchasers. The Judge then observed that this expectation was “merely a reflection of common practice”. With respect, I would prefer to put it that the parties intended to contract in accordance with common practice, which in New Zealand is to obtain the signatures of both vendor and purchaser to both copies of the agreement, one copy being of course for the vendor and the other for the purchaser.

[21] The salient passages from Frater J’s decision are as follows:

[51] The critical issue in this case is whether the usual inference has been displaced. The onus is on the plaintiff to do so. On the available evidence, I am not satisfied that he has.

[52] There is no doubt that at the meeting of 12 March the parties reached agreement on all essential terms of their contract. One could hardly find otherwise, given the detailed notes which Mr Walker made to give to his solicitor. I am sure that they all thought they “had a deal” at that stage.

[53] But, in my view, an essential part of the “deal” or “agreement” was that it was subject to completion of the legal formalities: that was a condition of Mr Verissimo’s tender offer, and there is nothing to suggest that the parties agreed otherwise when they met subsequently. Indeed, one of the terms recorded by Mr Walker was that they agreed that Mr Kelly would

draw up the agreement; he did not record that they agreed that they would be contractually bound immediately.

[54] Both men were experienced businessmen. They sought and acted on the advice, not only of their lawyers, but also their accountants. They expected their professional advisors to vet the form of any document they were to sign, to ensure that it protected their interests. I am satisfied that if they had found that it did not, each of the parties would have taken steps to ensure that the terms were varied to accommodate those concerns.

[55] And that is what actually happened. Mr Kelly protected the defendants' position by spelling out, in his letter of 24 March to Ellis Gould, the previously unspoken condition that the agreement was subject to payment of the deposit and signature by both parties. Mr Verissimo professed not to have seen that letter, although it was clearly sent to his email address. But whether he did or not, his solicitor, his son and his accountant, all of which acted on his behalf, saw that letter and, significantly, did not take objection to it.

[56] As I see it, that is the fatal flaw in the plaintiff's case and the point which distinguished it from the situation in Newton King v Wilkinson, where the purchaser paid the deposit immediately and thereafter the parties and their solicitors conducted themselves for over 14 months on the basis that they were bound by the terms they had orally agreed.

[57] Nor do I think it matters that, ultimately, Mr Verissimo signed the agreement prepared by Mr Kelly with only one, legally inconsequential, amendment. The fact that his advisors sought to introduce new terms, was a further indication that they did not see the terms of the document sent to them as being set in stone.

[58] In Dryden v Hemmingway CA70/95 15 November 1995 McKay J, delivering the judgment of the Court of Appeal, said, at p 10:

The Judge accepted that the parties had agreed that they “had a deal”, but we agree that those words on their own are equivocal. They show agreement on the terms of the intended contract, but do not necessarily show an intention to enter into contractually binding obligations prior to execution of the contemplated final documents. There was no evidence that anything more was said which might show that both parties had so intended, or had so acted that such an intention should be imputed.

[59] That conclusion applies equally to the facts of this case.

[60] Accordingly, I find that the parties did not enter into a binding oral contract on 12 March, and dismiss the plaintiff's application on that ground alone.

Submissions on appeal

[22] Mr Henry emphasised the Judge’s conclusion at [52] of her judgment. He submitted that the passages we have emboldened in our [8] demonstrate a categorical acceptance by the parties that they had contracted.

[23] As to the underlying factual matrix within which the parties dealt he emphasised the commercial experience of both parties and the evident desire of Mr Walker to see completion of the transaction as is evidenced by the subsequent email of 13 April 2004 (at [15] above).

[24] He particularly emphasised the diary entries on 12 and 13 March, the note headed “discussion and agreement”, and the important note beginning “verbal agreement reached with Carlos Verissimo and Des and Olive Walker” (at [20] of the High Court judgment). Prepared on 14 March for presentation to Mr Walker’s solicitor the following day this was, he said, a virtually contemporaneous account of what had happened at the meeting on 12 March. Its statement of what occurred is correctly recorded by the Judge at [52] of her judgment. What she describes in [53] is “a condition of Mr Verissimo’s tender offer” and in [55] as “the previously unspoken condition” that the agreement was the subject of completion of the legal formalities derives not from the parties but from the Judge and it is for the parties and not the Court to articulate what it is they have agreed.

[25] He distinguished Carruthers v Whitaker as dealing with a case of greater complexity and Dryden v Hemingway as one containing some six references to matters requiring future attention so that despite the parties having agreed that they “had a deal” and drunk a bottle of wine in celebration they clearly did not intend to accept a legal commitment until the formal documentation had been completed.

The respondents

[26] Mr Stewart QC placed at the front of his argument the statement of Mahoney JA in Air Great Lakes Pty Limited v K S Easter (Holdings) Pty Limited (1985) 2 NSWLR 309, 326:

The only question considered by the [trial Judge] was whether there was a binding contract between the parties. In considering this question... it is of assistance to distinguish between three questions: did the parties arrive at a consensus?; (if they did) was it such a consensus as was capable of forming a binding contract?; and (if it was) did the parties intend that the consensus at which they arrived should constitute a binding contract?

[27] He submitted that neither on the language used by the parties nor having regard to the factual matrix and subsequent conduct had Mr Verissimo established a commitment that the consensus at which they had arrived should constitute a binding contract.

[28] Mr Stewart acknowledged that the term “condition” does not precisely capture what the learned Judge must have intended. The authorities from Carruthers v Whitaker rather refer to a “usual inference” that the commitment will not occur until formal documentation has been executed.

Discussion

Approach

[29] Undoubtedly, as Mr Walker repeatedly recorded and as he accepted in oral evidence, the parties had reached agreement. But with respect to Mr Henry’s careful argument, we do not agree that on the objective test of what that would have meant to an ordinary informed New Zealand observer is that the parties would have assumed an immediate legal commitment. It is true that in lawyers’ language “agreement” can mean “contract duly executed and legally binding”: Shorter Oxford

English Dictionary (3^rd definition). The word is used in that sense as the name of the

Law Society form. But it is of some interest and in accordance with the experience of the members of the Court that the New Zealand Oxford Dictionary published this year defines “agreement” as follows:

1. the act of agreeing; the holding the same opinion (reached agreement).

2 mutual understanding.

3 an arrangement between parties as to cause of action etc.

[30] It is very clear that, in ordinary New Zealand parlance, there was “agreement” in terms of the first of Mahoney JA’s questions. Nor do we doubt that in the present case there was such degree of specificity as to detailed terms that the second question must also be answered yes. We do not however accept the appellant’s argument that the third was therefore satisfied as well.

[31] It is convenient when discussing formation of a contract to speak of “intention”. But it is trite that the subjective state of mind of the respective parties is immaterial. What matters is the message that was objectively conveyed by each to the other, discerned within what Lord Wilberforce famously called the factual matrix: Prenn v Simmons [1971] 1 WLR 1381 (HL). Both the words used and the factual matrix are important to the determination of what intention the Court will infer from the parties’ conduct or impute to them – here whether they reached agreement to be immediately bound.

[32] In addition to Carruthers v Whittaker and Dryden v Hemingway the Judge cited Holmes v Australasian Holdings Limited [1998] 2 NZLR 303 and Shell Oil New Zealand Limited v Wordcom Investments Limited [1992] 1 NZLR 129. Mr Henry also cited Storer v Manchester City Council [1974] 3 All ER 824; Newton-King v Wilkinson [1976] 2 NZLR 321, France v Hight [1989] NZCA 247; [1990] 1 NZLR 345 and Fraser v Strathmore Group Ltd CA329/90 4 October 1999 at 37-8. The jurisprudence was in our view distilled by Cooke J in Concorde Enterprises v Anthony Motors (Hutt) Limited [1981] 2 NZLR 385, 389 where having cited the passage from Carruthers v Whitaker which we have reproduced at [20] he said:

This case is in the different field of commercial contracts, where there is not by law the same need for signed writing as evidence, but in our opinion the natural inference is the same in absence of factors to the contrary.

Unless that inference is displaced the result is that, even though all the terms to be included in the document have been agreed, there is no contract and each party has a locus poenitentiae until at least execution on both sides.

[33] The enquiry in that case was whether there was anything sufficient to displace the natural inference as at the time of the negotiations. We adopt that test and Mahoney JA’s three questions as a lucid expression of it.

[34] We do not accept the appellant’s submission that the “natural inference” arises only in complex cases and has no application to cases such as the present where the parties have agreed on Mahoney JA’s first and second questions. Rather it follows from the analysis of Sir Clifford Richmond and Lord Cooke that, to give an affirmative answer to Mahoney JA’s third question, it must appear that the parties have turned their mind to the question and that the objective test of a common intention to give an affirmative answer is satisfied.

[35] By such approach the Courts have promoted the public interest in simplicity and clarity in construction of contracts that is seen in the analysis of successive signatures discussed in Wilmott v Johnson [2002] NZCA 309; [2003] 1 NZLR 649 (CA).

This case

[36] Here the factual matrix begins with the fact that Mr Verissimo’s original tender had been in writing and subject to formal legal documentation. In cross-examination Mr Verissimo accepted that if his tender offer had been accepted it would be subject to the execution of the formal documentation before he was formally committed to buy. When Mr Walker spoke to Mr Verissimo on

5 March 2004 he was told not only that his offer was too low but that Mr Walker required both that any offer was unconditional as to finance and that a purchase offer must be in writing.

[37] Further, before the meeting of 12 March Mr Walker had been advised by his accountant that for the transaction to be zero rated for tax purposes both parties had to reach such agreement in writing: Goods and Services Tax 1985 s 11(m)(i): see Fatac Limited (in liquidation) v Commissioner of Inland Revenue (2002) 20 NZTC

17,902 (CA). While Mr Henry submitted that the agreement was for immediate binding commitment and for the provision of the written document to be a simple consequence of that we consider the point to be helpful to the respondents’ argument.

[38] Mr Walker was not cross-examined on his evidence that he wanted provisions in the agreement protecting him against any claims which might

otherwise arise having regard to the age and condition of the plant and buildings and that he wanted these matters agreed and recorded in the sale and purchase agreement to avoid any misunderstandings.

[39] Asked in cross-examination about his state of mind Mr Verissimo said:

I came to this meeting prepared to pay the deposit and I thought it may have come to the point at the end where we agreed on the terms of the contract and we would sign and pay a deposit followed by documentation...

He accepted that it was customary for parties buying and selling land to enter into a written agreement which both parties would sign. Cross-examined Mr Verissimo conceded that the matters raised in his solicitor’s letter of 2 April 2004 (at [11] above) were the sorts of things that it was for the solicitors to sort out.

[40] There is in addition subsequent conduct. In Fletcher Challenge Energy

Limited v ECNZ (at [19] above) at [56] the Court of Appeal said:

It is... permissible when considering contract formation... to look at subsequent conduct of the parties towards one another, including what they have said to each other after the date of the alleged contract.

[41] Because it was for the purpose of instructing his solicitor Mr Walker’s note reproduced at [20] of the judgment is potentially important, especially the statement that verbal agreement had been reached. But there is also importance in Mr Kelly’s letter of 24 March with its statement “the vendors shall not be bound by the agreement until they actually sign the agreement”: that is the best evidence of Mr Walker’s instructions at that point. While it is logically possible that he underwent a change of mind, there was no contemporary challenge on Mr Verissimo’s side. That is a significant pointer in favour of the respondents: see TA Dellaca Limited v PDL Industries Limited [1992] 3 NZLR 88, 95 line 12. While Mr Verissimo had his distractions, if he believed the oral agreement was legally binding it is difficult to credit that he failed to communicate to his representatives the simple message that such was the case. The letters of 2 and 7 April 2004 show that both solicitors considered that the parties were still in negotiation; again it is difficult to believe that Mr Verissimo’s really did not know his client’s mind.

[42] The Judge made no finding on a conflict of evidence between Mr French, a member of Mr Verissimo’s syndicate and Mr and Mrs Titchmarsh. They asserted and he denied that on 7 April 2004 when Mr Titchmarsh congratulated Mr French on buying the orchard Mr French responded that congratulations were a bit premature as the deal had not been finalised; Mr Verissimo had not yet signed it. Mr and Mrs Titchmarsh have their own interest to protect and we do not ourselves make any finding on this point.

[43] But we are satisfied both on the text of Mr Walker’s notes as to “agreement”, reinforced by the surrounding evidence, measured against the test imposed by the law, that the alleged oral commitment was not established.

Result

[44] The appeal is dismissed.

[45] The appellant is to pay to the respondents costs of $8000 and usual disbursements.

Solicitors:

Ellis Gould, Auckland for Appellant

K P McDonald, Auckland for Respondents