[1] This is an appeal against a decision of MacKenzie J (HC WN CIV-2003-485-2279 8 April 2005) in which he dismissed an application by the appellant for an order for specific performance of a contract for the sale of land.

Parties

[2] The appellant is a property development company associated with, and managed by, Mr R J Burrell. It was the intending purchaser of land, under an agreement for sale and purchase, from the respondent, P B & S F Properties Limited, a company associated with Mr and Mrs P B and S F Hawkes. Horsfalls Limited which was the first third party in the High Court, is a real estate agency. Wayne Dyer, who was the second third party in the High Court was the real estate agent at Horsfalls who was actually involved in the intended transaction.

The Agreement

[3] The agreement was on the standard form of Agreement for Sale and Purchase of Real Estate (7th Edition (2) July 1999) approved by the Real Estate Institute of New Zealand and the Auckland District Law Society. It provided for the sale of a vacant property at 170-172 Thorndon Quay, Wellington (the property) by the respondent to the appellant for $1,800,000, plus GST. It provided for a deposit of $100,000 to be paid when the agreement became unconditional. Horsfalls was named as the agent.
[4] In addition to the printed conditions, there was an additional set of “Special Conditions of Sale” attached. Of relevance to the present case is condition 14.0, dealing with due diligence. That condition provided:

14.0 Due Diligence

14.1 This agreement is conditional upon the purchaser being entirely satisfied with the property as a suitable property investment at the agreed purchase price following the Purchaser carrying out a due diligence investigation of the property, including (but not limited to) an investigation of the following:

(a) The proposed physical use of the property;

(b) The state of the title of the land;

(d) The overall financial suitability and commercial viability of the Purchaser’s proposed involvement of the property.

14.2 The parties acknowledge that the condition in clause 14.1 above is inserted for the absolute and sole benefit of the Purchaser and may at any time prior to this agreement being avoided, be waived by the Purchaser giving written notice of waiver to the Vendor.

14.3 The parties agree that satisfaction of the condition contained in clause 14.1 shall be at the sole and absolute discretion of the Purchaser and that if the condition is not fulfilled due to the Purchaser not being satisfied with any aspect of the property, the Purchaser shall not be obliged to state any reasons for the Purchaser’s lack of satisfaction.

14.4 The date for satisfaction of the condition in clause 14.1 shall be the date being 10 working days from the date of this agreement.

[5] Clause 8.7 of the printed terms dealt with conditions, and provided:

Operation of conditions

8.7 If this agreement is expressed to be subject ... to any ... condition(s), then in relation to each such condition the following shall apply unless otherwise expressly provided:

(1) The condition shall be a condition subsequent.

(2) The party or parties for whose benefit the condition has been inserted must do all things which may reasonably be necessary to enable the condition to be fulfilled by the date for fulfilment.

(3) Time for fulfilment of any condition and any extended time for fulfilment to a fixed date shall be of the essence.

(4) The condition shall be deemed to be not fulfilled until notice of fulfilment has been served by one party on the other party.

(5) If the condition is not fulfilled by the date for fulfilment, either party may at any time before the condition is fulfilled or waived avoid this agreement by giving notice to the other. Upon avoidance of this agreement the purchaser shall be entitled to the return of the deposit and any other moneys paid by the purchaser and neither party shall have any right or claim against the other.

(6) At any time before this agreement is avoided the purchaser may waive any financial condition and either party may waive any condition inserted for the sole benefit of that party. Any waiver must be by notice.

[6] Clause 1.2 of the general terms provided for the method of service of notices, and required that notices must be served in writing. It required that they be served as provided in s 152 of the Property Law Act 1952 or served on the relevant party or party’s solicitor by personal delivery, post, facsimile, email, or, in the case of the solicitor, by sending by document exchange.
[7] Clause 11 dealt with the agent. The printed form of that clause provided:

11.0 Agent

11.1 If the name of a licensed real estate agent is stated on the front page of this agreement it is acknowledged that the sale evidenced by this agreement has been made through that agent whom the vendor appoints as the vendor’s agent to effect the sale. The vendor shall pay the agent’s charges including GST for effecting such sale.

[8] There was a handwritten addition immediately under the printed clause (not initialled by either party) as follows:

2% + GST payable by vendor to Horsfalls Ltd.

[9] Horsfalls was named on the front page of, but was not a party to, nor signatory of, the agreement.

Facts

[10] Mr and Mrs Hawkes had owned the property for about three years, and had intended to develop it. It was not on the market. After discussions with Mr Burrell about his companies’ interest in properties, Mr Dyer approached Mrs Hawkes and said he had a potential buyer for the property. Mrs Hawkes discussed it with her husband: he did not wish to sell, but she was interested. Mr Dyer then presented an offer from a company called Business Solutions Limited (which was associated with the appellant) on 20 May 2003. The price was $1.5 million. There was a due diligence clause requiring fulfilment or waiver within ten working days. The Hawkes received another unsolicited offer for $1.7 million at about the same time.
[11] Mr Hawkes remained unenthusiastic, and this did not change when an increased offer ($1.55 million) was presented. However Mr Hawkes indicated possible interest in selling at $1.8 million.
[12] Mr Dyer then presented an offer for $1.8 million, with a due diligence clause to be satisfied within 60 days. The Hawkes considered this period to be too long and told Mr Dyer so. Eventually they indicated a lack of interest if the clause remained unchanged.
[13] Towards the end of June Mr Dyer visited again, and was told by Mrs Hawkes that there was interest from another potential purchaser. He returned the next day with an offer by the appellant to purchase the property for $1.8 million with a ten day due diligence period. The offer document was referred by the Hawkes to their solicitor, Ms James. She sent a fax to the Hawkes suggesting some alterations. The fax was sent on to Mr Dyer. The appellant agreed to the changes and the offer was amended to accommodate Ms James’ suggestions.
[14] The Hawkes then had two offers before them. They discussed the position with Ms James and decided to accept the appellant’s offer. The agreement described at [3]-[7] was signed on that day. The ten working day period for satisfaction of the due diligence condition ended at 5 pm on 11 July.
[15] On 8 July, Mr Dyer contacted Mrs Hawkes on behalf of Mr Burrell to arrange a meeting between the Hawkes and Mr Burrell. He was told that, if an extension of the time for fulfilment of the due diligence condition was to be requested, it would be refused. The meeting was arranged for 10 July.
[16] On 10 July, Mr Dyer and Mr Burrell met with Mr and Mrs Hawkes. Mr Burrell did, in fact, request an extension of time, and the meeting became somewhat heated. Mr Burrell said the heated discussion was between the Hawkes and Mr Dyer, not him. The extension was refused. It was suggested in the High Court that the effect of the meeting was to amend cl 14 so that it automatically terminated on 11 July. That was not pursued in this Court. Mr Burrell said he made it clear that he would continue trying to fulfil the condition. The Hawkes said he was told he had only one day to do so. Mrs Hawkes reported to Ms James after the meeting.
[17] On 11 July, Mr Dyer sent a fax to Ms James. The fax header records this was sent at 5.15 pm on that day. It said:

Please note that unfortunately I cannot get the purchaser to become unconditional within the 10 day time-frame. Therefore the contract is at an end.

[18] Ms James sent a copy of this to Mr and Mrs Hawkes. As far as they were concerned, that was the end of the matter.
[19] However, on 6 August, Mr Horsfall rang Mrs Hawkes. He asked if the respondent still owned the property, and when told that it did, asked to see the Hawkes. At the meeting which followed, he told the Hawkes that Mr Burrell was acting as if he had purchased the property, and had instructed agents to market it.
[20] Mrs Hawkes then consulted with Ms James. Ms James wrote to the real estate agents who were apparently marketing the property (not Horsfalls). She also sent a letter to Mr Horsfall, which was copied to Mr Burrell. The letter to Mr Horsfall said:

We understand that you have advised our client that Richard Burrell is marketing this property. We enclose a copy of your firm’s fax to us of the 11th July which cancelled the conditional contract between Mr Burrell’s company and our client. Even without this fax, the contract would have lapsed for lack of confirmation or waiver of special conditions.

We are instructed that the property is not on the market.

[21] Mr Burrell’s reaction to this was to discard the fax received from Ms James. He said he did this out of frustration. The next day he instructed the appellant’s lawyer, Mr Caughley, to confirm the agreement. Mr Caughley wrote to Ms James the next day (8 August) doing so. The heading of the facsimile message referred to the sale of the property by the respondent to the appellant. The text was:

We act for the purchaser and have recently received the agreement dated 27 June 2003. We are instructed to confirm clause 14 of the agreement and have been asked to enquire where the deposit should be paid.

[22] Mr Burrell contacted Mr Dyer who had by then left Horsfalls and was in Wanaka. Mr Dyer tried to contact Ms James, and when he could not do so left a message, which was recorded by the receptionist at Ms James’ firm in these terms:

Re: Thorndon Quay

Sent fax saying contract at an end due to no contact from his client and he had to go to Wanaka on a family matter. So clearing his desk before he left. He will call next week.

[23] Mr Caughley made attempts to arrange settlement of the contract, but the respondent refused to settle. A caveat was lodged on behalf of the appellant, and these proceedings were issued.

High Court decision

[24] The Judge outlined a list of issues, but was required to deal with only two. Those two issues, and his decision in relation to each, are summarised below.

(a) Was the agreement void or merely voidable after the ten working day period?

[25] The Judge referred to the terms of cl 8.7 (reproduced at [5] above) and concluded that the contract was voidable, not void, after the expiry of the ten working day period.
[26] There was no issue taken with this conclusion, and we agree it was correct.

(b) Did the 11 July fax bring the agreement to an end?

[27] The Judge considered extensively the circumstances leading to the formation of the contract, and the terms of the agreement itself. He concluded that it was possible for Horsfalls/Mr Dyer to be agent for both parties to the transaction, and that Mr Dyer was acting as the appellant’s agent in the presentation of offers, the arrangement of the 10 July meeting and the sending of the 11 July fax. He found that Mr Dyer had acted within his authority in relation to the first sentence of the fax, and that this was sufficient to amount to a notification that the condition in cl 14.3 would not be fulfilled, and to bring the contract to an end. He found that Mr Dyer did not have express authority to say that the contract was at an end, but that he had either implied actual authority or apparent authority to do so. So the fax was sufficient notice of the avoidance of the contract and brought it to an end.
[28] He then considered the situation which would arise if he were wrong, and Mr Dyer had no authority to say that the contract was at an end. As we have noted, he decided that the first part of the fax was sufficient to constitute the necessary notice having been given by Mr Dyer as Mr Burrell’s agent. He said it was immaterial if he were wrong on the agency conclusion because the telephone conversation between Mr Burrell and Mr Dyer, which was the basis for Mr Dyer’s fax, could be construed as a communication by Mr Burrell as representative of the appellant as purchaser to Mr Dyer as agent for the respondent. Thus in either case there was communication from the purchaser to the vendor that the condition was not satisfied. MacKenzie J interpreted cl 8.7(5) as not applying to a situation where the time for fulfilment of the condition (5.00 pm on 11 July 2003) had passed, because cl 8.7(5) applies only where “the condition is not fulfilled by the date for fulfilment”. He said cl 8.7(5) applied only where the purchaser advises that the condition is not and cannot be fulfilled prior to the date for fulfilment.
[29] The effect of the 11 July 2003 fax is at the heart of the appeal, and we will consider this issue in greater depth later.
[30] Before doing so, we mention briefly the other issues identified by the Judge. It was not necessary for him to deal with them in the light of his finding that the agreement was avoided on 11 July 2003. However the respondent supported the judgment on the basis of its arguments as to how those issues should be decided, and it is appropriate that we comment briefly on them.

(c) If the agreement was not avoided on 11 July 2003, was it avoided on 6 August 2003?

[31] The respondent’s position was that, even if the agreement remained on foot after 11 July 2003, the fax sent by Ms James to Horsfalls on 6 August 2003 (see [20] above), which was copied to Mr Burrell as representative of the appellant, itself constituted notice avoiding the agreement. We do not think there is anything in that contention. The letter to Mr Horsfall did not purport to be a notice to the appellant, and did not purport to avoid a contract remaining on foot. Rather, it stated that the 11 July fax had cancelled the contract, and expressed the view that if that had not been the case, the contract would have lapsed for lack of confirmation or waiver of the special conditions. Assuming for present purposes that the 11 July fax did not avoid the agreement, both of those statements would have been legally incorrect. They were expressions of view as to the situation which then pertained. They were not statements that the letter itself was bringing about any legal consequences. Accordingly we reject the contention that the 6 August fax may have been sufficient, of itself, to avoid the agreement.

(d) Was the agreement made unconditional by the appellant on 8 August 2003?

[32] The respondent indicated its intention to support the judgment on the grounds that the agreement was not made unconditional by the appellant on 8 August 2003, but this was not pursued in oral argument. The argument was that, if the agreement remained capable of being declared unconditional on 8 August 2003, Mr Caughley’s letter to Ms James (see [21] above) did not achieve the objective of making it unconditional. The letter does not expressly refer to the condition in cl 14 being waived under cl 14.2, or to the purchaser being entirely satisfied of the matters in cl 14.1, thus satisfying the condition in cl 14. But the use of the word “confirm” and the inquiry about payment of the deposit (which was payable on the date the agreement became unconditional) is clear enough, and we are satisfied the letter had the effect of making the contract unconditional (assuming it remained on foot at that date).

The effect of the Agreement

[33] Before turning to the critical issue on the appeal, we make some comments about the agreement.
[34] Clause 14 is worded in a way which makes the satisfaction or non-satisfaction of that condition entirely a matter of the subjective judgment of the purchaser. In that sense, it is not really a condition at all, and the requirement of cl 8.7(2) that the purchaser “must do all things which may reasonably be necessary to enable a condition to be fulfilled” seems hollow. Read literally, it requires the purchaser to convince itself to be satisfied. Read realistically, it provides little room for the vendor to criticise the purchaser for failing to comply with cl 8.7(2).
[35] A contract in very similar terms to the agreement in this case (including cl 14) was considered by the High Court in Prime Property Group Limited v Amtrust Pacific Properties Limited HC WN CIV-2003-485-208 25 March 2004. In that case both parties accepted, and the Judge concluded, that the effect of the insertion into the contract of a condition in terms of cl 14 was to convert what, on its face, appears to be an agreement for sale and purchase, into an option to purchase. However, for reasons which we will come to, the difference between a real option and the effective option created by agreements of the kind used in this case is that an option typically has an exercise date, and if it is not exercised by that date it lapses. In the present case the effective option keeps running until one of the parties avoids the contract. As both this case and Prime Property demonstrate, this can lead to uncertainty which could be avoided if the arrangement were documented as an option, which would better reflect the commercial realities of the situation.
[36] Although he had earlier found a notice complying with cl 8.7(5) had been given, MacKenzie J found at [44], when considering an alternative scenario, that there was no need to comply with cl 8.7(5). He said the contract could be brought to an end after the due diligence period by an informal notification from the purchaser (or a person acting on the purchaser’s behalf) to the effect that the purchaser was not entirely satisfied that the property was a suitable property investment at the agreed purchase price in terms of cl 14.1. He said that cl 8.7(5) applied only where the fulfilment of the condition had not occurred and the condition was still capable of fulfilment. He found, on the facts, that that was not the situation pertaining at the time of the telephone conversation between Mr Burrell and Mr Dyer, and the subsequent fax sent by Mr Dyer on 11 July. For that reason he was able to find that, even if Mr Dyer was not acting as the agent of the appellant in sending the fax, the communication by Mr Burrell to Mr Dyer (in his capacity as agent for the respondent) was a sufficient communication that cl 14 was not and would not be able to be satisfied, so bringing the contract to an end.
[37] We respectfully disagree with that analysis. In our view the only method of avoiding the contract is by the giving of notice under cl 8.7(5). MacKenzie J said this would effectively mean that notice avoiding the contract would have to wait until the end of the due diligence period, and that a purchaser who had indicated that the due diligence condition would not be satisfied prior to the end of the due diligence period could change his or her mind before the contact was formally avoided by the vendor. That may well be the case, but if the option analysis is adopted, there does not seem to be any particular difficulty with that: in effect the vendor has allowed the purchaser to play all the cards during the due diligence period, and remains committed to a sale to the purchaser until the due diligence period has ended and the due diligence condition has not been satisfied. Of course, it would always be open to the parties to agree to terminate the contract prior to the end of the due diligence period if that was acceptable to both of them.

Mr Dyer’s agency

[38] That conclusion means that the case turns on the effect of the 11 July fax, which in turn requires consideration of the status of Mr Dyer: was he the agent of the respondent only, the appellant only, or both parties at the same time?
[39] We are satisfied that, if Mr Dyer was the agent for the respondent only, then the fax he sent on 11 July could not amount to a notice under cl 8.7(5) avoiding the contract. In effect, it would be no more than the reporting by a vendor’s agent to the vendor of the outcome of discussions with the intended purchaser, and the agent’s assessment of their impact on the contractual position.
[40] Clause 11.1 of the agreement has the necessary consequence that Horsfalls/Mr Dyer cannot have been agents for the appellant only. Thus, the only issue which we must decide is whether Horsfalls/Mr Dyer were agents for the respondent only, or for both the appellant and the respondent at the crucial time, namely when the 11 July fax was sent.
[41] The High Court Judge concluded that Mr Dyer was agent for both the appellant and the respondent, and that his action in sending the fax on 11 July was undertaken in his capacity as agent for the appellant. In reaching the conclusion that Mr Dyer could be agent for both parties in relation to the same transaction, MacKenzie J relied in part on the decision of the High Court of Australia in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) [2004] HCA 52; 219 CLR 165.
[42] Counsel for the appellant, Mr Dobson QC, argued that Horsfalls, and therefore Mr Dyer, was agent for the respondent only. He relied in particular on cl 11.1 (see [7] above) which recorded that the sale had been made “through that agent [Horsfalls]” and that the respondent appointed Horsfalls as the respondent’s agent “to effect the sale”. He said that the respondent had not discharged the onus of proving that an agency relationship existed at any relevant time between the appellant and Horsfalls/Mr Dyer, and that the Judge had been wrong to find that that onus had been discharged.
[43] Mr Dobson said that while Mr Dyer’s initial approach to the Hawkes was before his appointment as their agent (which happened only when the agreement was signed), this did not indicate that he was acting as Mr Burrell’s agent in making that approach. Rather, he said it was the action of a broker seeking a commission in circumstances where his actions were self-generated.
[44] The evidence before the Judge was that there had been an ongoing professional relationship between Mr Burrell and Mr Dyer, but that Mr Dyer was not the only real estate agent who had that kind of relationship with Mr Burrell. However, counsel for the respondent, Mr Dewar, said it was clear that Mr Dyer’s approach to the Hawkes was not an attempt by Mr Dyer to obtain a general commission to sell the property: it was clearly made on behalf of the appellant only and was designed to secure a transaction for the appellant as purchaser. He said this was more consistent with an agency relationship than a self-starting broker status as suggested by Mr Dobson. We agree with that submission.
[45] Mr Dobson said there was no evidence that Mr Dyer would be paid by the appellant. We do not see that as a controlling factor. There was evidence of a previous deal involving Mr Burrell and Mr Dyer where, for various reasons, the deal happened in a way that did not yield a fee to Mr Dyer. In that case, Mr Burrell paid Mr Dyer a fee even though he was not contractually bound to do so.
[46] On the last day of the trial, counsel for Horsfalls filed a memorandum setting out its position on this issue. The position as disclosed in that memorandum was:

(a) [Horsfalls] accepts that in the very unusual facts of this case, as revealed in evidence, Mr [Dyer] and vicariously Horsfalls, were the agents of both the vendor and purchaser on the 11th of July 2003.

(b) That the fax of 11 July 2003 was effective notice, given with the authority of the purchaser, of the avoidance of the agreement.

[47] That acknowledgment obviously supports the respondent’s view.
[48] The Judge made a finding of fact that Mr Dyer referred to Mr Burrell of the appellant as “my client”, which indicated that Mr Dyer regarded himself as being in an agent/client relationship with the appellant. This was denied by Mr Dyer but the Judge’s finding of fact was to the contrary. Mr Dobson said that the Judge had given too much weight to this factor.
[49] Mr Dewar noted that, contrary to the concession made by Horsfalls at trial, Mr Dyer and Mr Burrell both denied that an agency relationship existed between them. He said that the Judge had rejected their evidence in a number of respects. This included rejecting Mr Dyer’s denials of referring to Mr Burrell as “my client”. He said Mr Dyer’s references to Mr Burrell as his client, given that they occurred at the time of the relevant events, were indicative, though of course not conclusive, of an appreciation on Mr Dyer’s part that the appellant was his principal.
[50] We agree with the High Court Judge that the reference by Mr Dyer to Mr Burrell as his client is relevant. But it is far from conclusive. Nevertheless, it is a factor favouring the respondent’s position.
[51] Mr Dobson said MacKenzie J had also read too much into the fact that Mr Burrell asked Mr Dyer to organise the meeting of 10 July with Mr and Mrs Hawkes. He said that it was simply a practical way of arranging a meeting, and could be consistent with Mr Dyer being agent for the respondent. Matters of weight are usually for the trial Judge. In our view he was entitled to see this factor as counting in favour of the respondent’s case.
[52] We are satisfied that, on the evidence before him, the Judge was entitled to reach the conclusion that the initial approaches to the Hawkes were made by Mr Dyer in his capacity as agent for the appellant and that Mr Dyer continued to act as agent for the appellant after the agreement was signed, including at the 10 July meeting and on 11 July. There is nothing in cl 11.1 of the agreement that is contrary to the former finding (it says the agreement was made “through that agent”, but does not suggest the agent was the vendor’s agent exclusively). And the appointment by the vendor in that clause is to “effect the sale” which does not on its face preclude acting for the purchaser as well, no matter how unwise that may be. The agent binds itself to do nothing and gives no undertaking to refrain from acting as agent for the other party. There is no provision for it to sign the agreement and neither Horsfalls nor Mr Dyer signed it in this case. But the agent’s entitlement to the specified fee is no doubt contingent on performance of its role in “effecting the sale”.
[53] The judgment made by MacKenzie J that Mr Dyer was agent for both parties was fact-specific and the Judge was well placed to evaluate those facts. We do not believe there was any error on his part in reaching the conclusion that he did on that point.

The 11 July fax

[54] Mr Dobson submitted that Mr Dyer’s actions in sending the 11 July fax were not done as agent for the appellant. He said the evidence established that Mr Burrell did not ask Mr Dyer to send a fax or communicate with the respondent on 11 July regarding the expiry of the time for the due diligence condition. The Judge was influenced by the fact that, contrary to earlier evidence given by Mr Burrell, there were two telephone calls between Mr Dyer and Mr Burrell in the two hours or so before the fax was sent. Mr Dobson said that Mr Burrell’s evidence, accepted by the Judge, was that he said to Mr Dyer during one of these conversations that “it was not going to happen today” (i.e. the condition in cl 14 would not be satisfied). He said there was nothing in this that indicated any instruction by Mr Burrell that this should be communicated to the respondent, and certainly not that it should be done by Mr Dyer as the appellant’s agent.
[55] Mr Dewar made much of the fact that Mr Burrell’s initial evidence was that there had been no telephone calls between him and Mr Dyer on 11 July, which Mr Burrell corrected once discovery was made of his and Mr Dyer’s telephone records just prior to trial. But the existence of these telephone calls does not really take the case one way or the other. It was equally as plausible that Mr Burrell would talk to Mr Dyer in Mr Dyer’s capacity as agent for the respondent as it was that he would do so in Mr Dyer’s capacity as agent for Mr Burrell. So this is a relatively neutral factor.
[56] Mr Dobson said the evidence was clear that, from the appellant’s point of view, it was better for the agreement to continue than to be avoided. He said it was not credible that Mr Dyer would have acted in a way that was so obviously contrary to the interests of the party who is alleged to have been his principal.
[57] Mr Dewar painted quite a different picture of events. He suggested that Mr Dyer’s sending of the facsimile was part of a plan to create confusion in the minds of the respondent and its lawyer so that they would be lulled into leaving the contractual position open, rather than giving the notice of avoidance of the contract.
[58] He sought to rely on an affidavit of a Lower Hutt practitioner outlining events that have a striking similarity to the present case, in which another company associated with Mr Burrell sought to declare unconditional a contract many months after the due diligence period had ended on the basis that the lawyers acting for the vendor had omitted to give formal notice of avoidance. He suggested that the Court should take this into account on a similar fact basis because of the similarity of the two situations, and should deduce from that that Mr Dyer’s conduct involved a concerted effort with Mr Burrell to create similar confusion for the same purpose.
[59] The difficulty with that position is that the evidence contained in the affidavit was not adduced at trial. Rather, it was adduced in the context of the appellant’s application for a stay of the High Court decision. No application was made to this Court to introduce it as new evidence in this Court, and it is unlikely that if such an application had been made it would have been allowed because the evidence could have been adduced at trial. Thus there was no proper basis on which the respondent could rely on the evidence and we put it to one side.
[60] Mr Dewar suggested that, even if that evidence were not taken into account, there was evidence which was presented at trial which indicated that the actions of the appellant amounted to opportunism and sharp practice. Thus, it was open to us to conclude that Mr Dyer was, in fact, acting in the interests of the appellant in sending the fax. We do not accept that making a moral judgment of the kind suggested by Mr Dewar assists in analysing the legal position, and we reject Mr Dewar’s submission on this point.
[61] Having said that, we do not consider the fact that the 11 July fax was not in the appellant’s interests is of great significance. Given the impact of the 11 July fax on subsequent events, it was not in the respondent’s interests either.
[62] Mr Dobson said it was not possible to be a dual agent, but we are satisfied that this is clearly not so: see for example the decision of this Court in Powierza v Daley [1985] 1 NZLR 558. While, as Mr Dobson said, acting in a dual role can lead to conflicts of interest, that only suggests that agency for both parties to a transaction is not a desirable practice. But it is not a legal impossibility.
[63] The Judge found that Mr Dyer had express authority of the appellant to communicate the first sentence of the 11 July fax to the respondent. In the light of the conversations between Mr Burrell and Mr Dyer two hours before that fax was sent, and the Judge’s finding that Mr Burrell expected Mr Dyer to tell Ms James that the due diligence condition would not be satisfied by the deadline, we do not think there is any proper basis for us to interfere with that finding. It was an inference which could properly be reached from the facts as found by the Judge.
[64] Mr Dobson was critical of the fact that the judgment did not explain whether the finding was that Mr Dyer had express actual authority, implied actual authority or usual/customary actual authority to communicate the first sentence of the fax. We think it is clear from the Judge’s reasoning that it is the first of those.
[65] We are satisfied that there is no basis for us to interfere with the Judge’s finding in the light of the overall relationship between Mr Dyer and Mr Burrell in the period leading up to the sending of the fax, his findings about the communications between Mr Burrell and Mr Dyer on the day on which the fax was sent, and his rejection of the position taken by Mr Burrell and Mr Dyer at trial.
[66] In relation to the second sentence of the fax, the Judge found that Mr Dyer had either implied actual authority or apparent authority to communicate the fact that the contract was at an end to the respondent. Mr Dobson said he was wrong to do so.
[67] Mr Dobson said that the statement that the contract was that an end was contrary to Mr Burrell’s desire that it be kept on foot (as he had made clear to the Hawkes at the 10 July meeting, in Mr Dyer’s presence). So it was not open to the Judge to find that Mr Dyer communicated that statement pursuant to an implied duty under an express actual authority from the appellant. Equally, he argued that there was no basis for a finding that Mr Dyer had apparent authority.
[68] The Judge was not specific in this regard: he simply noted that in circumstances where Mr Dyer had actual authority to convey the message contained in the first part of the fax, it would be unrealistic to hold that he did not also have implied authority to convey the information that the contract was at an end.
[69] In our view, this finding was open to the Judge on the evidence before him. He found that Mr Dyer’s initial approaches to the Hawkes were on the basis that he was agent for Mr Burrell, that Mr Dyer had arranged the 10 July meeting on behalf of Mr Burrell, that he had attended that meeting together with Mr Burrell, and that he had had the telephone conversations with Mr Burrell prior to the sending of the fax. In addition, it should be noted that the Judge’s finding was that the Hawkes made it clear in no uncertain terms (in the context of a heated meeting) that the due diligence period would not be extended, and that the appellant would be held to the deadline of 5 pm on 11 July 2003.
[70] So the context in which the fax was sent was that failure to satisfy the due diligence condition on time would lead to the agreement being brought to an end one way or another. Mr Burrell could not reasonably have anticipated an extension, and could not have foreseen that Ms James would not identify the need to trigger the ending of the agreement by a notice of avoidance. So he could not have expected the respondent to let the agreement run on. He operated through the agency of Mr Dyer in organising the 10 July meeting. He represented to the respondent that Mr Dyer spoke for him on such issues, and the respondent, its principals and its advisers were entitled to proceed on the basis that Mr Dyer spoke for the appellant on matters relating to the due diligence condition. While Mr Dyer may have done more than Mr Burrell wanted him to, the consequences count against the appellant not the respondent. Having clothed Mr Dyer with apparent authority to represent it in this way, the appellant is estopped from denying his authority and bound by what he said in the 11 July fax.
[71] We are satisfied that there are no grounds for interfering with the Judge’s finding that the 11 July fax in its entirety was sent by Mr Dyer as agent for Mr Burrell. It was a notice in writing sent in accordance with cl 1.2 to the solicitor for the respondent, and had the effect of avoiding the agreement in terms of cl 8.7(5). The agreement was therefore avoided on 11 July 2003 and, from that time onwards, the appellant had no rights to the property.

Result

[72] Accordingly, although we have disagreed with some of the conclusions reached by the Judge, we are satisfied that there is no basis for appellate interference with his key conclusion, namely that the 11 July fax had the effect of avoiding the agreement. The appeal therefore fails, and we dismiss it.
[73] We award costs to the respondent of $6,000 plus usual disbursements.

Solicitors:
Morrison Kent for Appellant
Thomas Dewar Sziranyi & Letts for Respondent

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