View West Limited v Sanders [2016] NZHC 2105 (6 September 2016)

Last Updated: 26 December 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-000890 [2016] NZHC 2105

BETWEEN	VIEW WEST LIMITED Plaintiff
AND	YVONNE SANDERS Defendant

Hearing:	30 August 2016
Appearances:	A E Hansen for the Plaintiff P Dalkie for the Defendant
Judgment:	6 September 2016

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

06.09.16 at 3:00pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date...............

VIEW WEST LIMITED v Y SANDERS [2016] NZHC 2105 [6 September 2016]

[1] The plaintiff (View West) applies for summary judgment upon its claim that the defendant (Ms Sanders) is bound by the terms of her written agreement to purchase from View West, Unit 1, 31 Esplanade Road, Mt Eden, Auckland. Specifically View West seeks an order that Ms Sanders pay the sum of $254,900 being the balance of the purchase deposit claimed to be due.

[2] The parties’ written agreement is in the form of the 9^th edition approved by the Real Estate Institute of New Zealand and the Auckland District Law Society.

[3] By its terms, Ms Sanders agreed to pay $2,599,000. A deposit of $5,000 was paid on execution of the agreement. The balance of the deposit was required to be paid upon satisfaction of conditions contained in clause 22 including, inter alia:

22.1 The issue of resource consents and building consents.

22.2 That View West obtains by 31 March 2016 a minimum level of sales of units for prices and on terms acceptable to View West.

22.3 Provided View West’s conditional agreement to purchase the property from the registered proprietor became unconditional by 30 November 2015.

[4] Clauses 22.1 and 22.2 were expressed to be for the sole benefit of View West.

[5] Ms Sanders’ defence concerns representations she says were made by or on behalf of View West which induced her to sign the purchase agreement.

[6] The evidence of both parties focuses upon how the property was advertised, and upon claims of what was said at the time. Ms Sanders' case now focuses upon claims that an alleged pre contractual misrepresentation amounts to misleading and deceptive conduct in trade. For Ms Sanders, Mr Dalkie submits the essential elements of a Fair Trading Act 1986 misconduct claim are apparent here, namely:

(a) They concern a representation made by one person to another;

(b) There was a misrepresentation (whether innocent or fraudulent);

(c) That induced the representee to enter into a contract; and
(d) That caused damage.

[7] Ms Sanders account of relevant events notes, inter alia:

(a) She read the property sale advertisement in the property section of the NZ Herald on 7 November 2015 (the newspaper advertisement) and in response called Ms Clark of Bayleys Real Estate Agency, the property sale agents.

(b) On 10 November Ms Sanders met with Ms Clark and Mr Tanner also of Bayleys. An agreement had been prepared and that morning at the conclusion of their meeting it was signed by Ms Sanders.

(c) The initial deposit of $5,000 was paid on 19 November.

(d) On 4 April 2016 Ms Clark sent a text to Ms Sanders advising that the proposed development of the 18 apartment block would not be going ahead.

(e) The following day Ms Clark was informed that View West had waived the clause 22 covenants. Thereby Ms Sanders was given advice that the development she had purchased an interest in would proceed. Then View West claimed the second part of the deposit be paid immediately.

[8] View West’s position is that the clause 22 provisions clearly were contained for the sole benefit of View West. Those related to obtaining the required resource and building consents; to permitting View West to be satisfied that a minimum level of sales of units had been obtained; and to recognise that View West had a conditional agreement to purchase the property it had for the development.

The newspaper advertisement

[9] A coloured copy of that advertisement was exhibited with Mr Tanner’s affidavit. A photograph noted in the foreground a coloured image of the old church
and surrounding vegetation. In the background there featured the faded building of the proposed apartment block. The text of the advertisement read:

VIEW WEST

RESIDENCES & APARTMENTS

The View West Residences consists of four immaculately appointed residences accommodated within the revitalised

St James Church corner of Esplanade Rd and View Rd, Mt Eden

Offering options of 2 & 3 bedrooms 1 & 2 living spaces with prices starting from $1,599,000

Featuring showcase interiors and the latest in European appliances, contemporary fittings and elegant durable finishes. Occupants will enjoy individual, discreet entrances, private landscaped areas and exclusive parking

The View West Residences are scheduled for completion in December 2016

18 bespoke ultra-contemporary apartments – 1, 2 & 3 bedroom floor plans with prices from $650,000

For further information visit www.viewwest.co.nz

Ms Sanders’ evidence

[10] Ms Sanders recalls seeing the NZ Herald advertisement on 7 November 2015. She knew the area where the development was going to be constructed and recognised the existing old church building in the forefront of the sales promotion image. The development proposed the church building be developed into four separate apartments (the residences). Ms Sanders deposes:

5. What was immediately important to me, from both the drawing depiction of the development and description of it, was that the existing church building, which was going to house four apartments was going to be an integral part of a much larger development complex behind which would have another 18 apartments. It was, accordingly, the complex as a whole that I was drawn to by the advertisement which interested me in the possibility of purchasing an apartment in the church building part.

[11] Regarding the development plans that were available Ms Sanders deposed, inter alia, that they were only plans for the first stage which concerned the renovation and construction of four residences within the old church building at the front. She
states however that the whole complex was to include the building next door or adjoined, which would include another 18 apartments. This was she says critical to her decision to purchase because it “would affect prices long term”.¹

[12] Ms Sanders had been informed the residences development completion was due in December 2016 which suited her because she was thinking of selling her house in Leigh and moving back to Auckland.

[13] Ms Sanders says that critical to her decision to purchase the front apartment in the church building development was her understanding she was buying into a fully integrated development which included not only the old church building renovation but also the proposed development of 18 apartments within a building behind. In that regard Ms Sanders said she had a discussion with Ms Clark and Mr Tanner about the standard and quality of finish of the other 18 adjoining apartments. Ms Sanders says “that was important to maintain the price of any individual apartment I bought”.

[14] Ms Sanders states that she relied on the development proceeding as “a whole integrated project”.² It was on that basis she signed the contract. She said “had that not been the position, I would never had signed the contract at all”.

[15] Ms Sanders said she was surprised to receive on 4 April 2016 the email advising that the View West development would not include the construction of the 18 apartment block proposed. Ms Sanders states³:

The whole nature of the development project had fundamentally changed; and, changed in a very short space of time. In fact, it was so close to the time I signed the contract in November the year before that the vendor must have known that at the time the project was not going ahead as represented to me. And, I was now potentially buying something that was never represented to me at all.

[16] Ms Sanders concludes:

18. I have been misled or deceived into purchasing an apartment from a developer who had no intention at all of constructing the building project as

¹ Paragraph 7 of Ms Sanders' affidavit. ² Paragraph 9 of Ms Sanders' affidavit. ³ Paragraph 11 of Ms Sanders' affidavit.

represented to me. And, that was critical to my decision to sign the agreement to purchase in the first place...

[17] By Ms Sanders’ opposition as it was initially filed, a number of issues were raised with claims that challenged representations contained within the parties’ contract terms including those which View West claimed were inserted for its benefit only. As submissions proceeded it was clear those did not assume any significance in the submissions made on Ms Sanders’ behalf. Rather and appropriately it seems to the Court, the focus of the opposition was upon considerations of pre contractual representation and inducement.

Evidence in reply

[18] This evidence is provided primarily by Ms Clark and Mr Tanner, licensed real estate agents working for Bayleys, which was the agency appointed to sell the four residences at the View West development. Ms Clark is a friend of Ms Sanders and has known her for more than 10 years and has sold her properties on two other occasions.

[19] At a meeting on 10 November Ms Clark says she and Mr Tanner, Bayleys lead agent responsible for the View West promotion, met with Ms Sanders and a friend of hers. Ms Clark says they went through the contract and development arrangements step by step. The vendor’s requirement of an initial deposit payment of $5,000 was explained, as was the requirement to pay the balance of the deposit when the resource consent issued. The special deposit conditions were specified at clause 21 of the draft contract.

[20] Ms Clark says she asked Ms Sanders if she would like to visit the site and to go inside the church to get a better idea of the interior space. She said Ms Sanders stated that would not be needed as she loved the concept and had been waiting for something unique to buy.

[21] Ms Clark says neither she nor Mr Tanner made statements about the standard and quality of finish of the other 18 adjoining apartments. She said no detail was available regarding those. She explains that Bayleys only had scant details about what else was being proposed; that the developer was calling for expressions of interest in
the possible construction of a stage 2 option for the development of 18 apartments at the rear of View West. She said the extent of Bayleys knowledge at that time was that there could be apartments for sale which were to be cheaper than those currently for sale at View West and that one, two and three bedroom apartments were proposed. Ms Clark commented that the proposal was depicted as a shaded out building on the front page of Bayleys marketing material for View West as it was only under consideration; that no firm plans were in place; and that no floor plans had been sighted. Further that proposal was not part of the stage 1 development or the resource consent application and nor was it referred to in Ms Sanders’ purchase agreement.

[22] In February Ms Clark attempted to contact Ms Sanders seeking to update her about progress with the resource consent because when that consent was available the balance of her deposit would be required. Ms Clark said she received no answer to her calls and it was not until 1 April that she next heard from Ms Sanders with advice that Ms Sanders had health problems.

[23] Ms Clark says it was on 5 April she became aware that resource consent had issued. Then Ms Sanders’ solicitor was advised and a request for payment of the balance of the deposit was made.

[24] On 4 and 11 April Ms Clark texted Ms Sanders to notify her that stage 2 was not going to proceed. Ms Clark advises that the feedback Bayleys received from potential purchasers of the residences was that they would prefer that stage 2 did not proceed due to concerns that negative impact construction could have on the front four residences. Ms Clark considered that stage 2 not proceeding was an additional advantage to Ms Sanders and Ms Clark was pleased to inform her of this.

[25] Ms Clark states that when she notified Ms Sanders that stage 2 was not going to proceed that Ms Sanders did not say anything about stage 2 having been critical to her decision to purchase. Further, such a view was in stark contrast to the feedback they were receiving from potential purchasers.

[26] Ms Clark reports that in reply to her texts, Ms Sanders by text on 12 April informed her that she had spoken to her lawyer and that she understood she had two
options, to proceed with the purchase and settle or seek to sell the residence before settlement. Ms Clark comments that Ms Sanders’ health had caused her to put the purchase to the back of her mind, and that it appeared she was not really interested in the purchase any longer.

[27] Ms Clark states that the next substantive text exchange with Ms Sanders was on 21 April 2016 when Ms Sanders informed Ms Clark that her solicitor had advised that the vendor would not let her out of the contract as the vendor had gained funding based on her contract. Ms Clark reports Ms Sanders telling her that she would not be proceeding and that the property needed to be resold and that she believed she would have no problem reselling. Ms Clark’s response was that nothing could be done until the deposit was paid. She said Ms Sanders replied that she would not be paying the deposit and that she would contact her solicitor regarding cancellation.

[28] Ms Clark says there was no discussion about there being a fully integrated development involving the construction of 18 apartments behind. She says at no point did Ms Sanders ever state that stage 2 was critical to her decision to buy. Rather, that Ms Sanders said she wanted the biggest and best residence which was available for sale and that that was what she agreed to purchase.

[29] Ms Clark says Ms Sanders gave her no reason to believe that she bought her residence because of the proposed stage 2 18 apartment block development.

[30] Ms Clark expresses surprise by the change of position provided in Ms Sanders’ affidavit. She says Ms Sanders main concern, as expressed to her was that she wanted to buy the biggest and best of the residences before anyone else got the chance. She said Ms Sanders told her the reason she would not settle was because of personal health concerns and because she was dealing with difficult personal circumstances. Ms Clark said she offered to try and on-sell Ms Sanders’ residence to another once her deposit was paid which, Ms Clark says is a common occurrence when buying off the plans, but Ms Sanders decided to try and do this herself instead.

Discussion

[31] It is submitted on behalf of Ms Sanders that the fact that whole development would include 18 apartments was a critical factor for her. Mr Dalkie for Ms Sanders submits the evidence of Mr Tanner provides an admission that the proposal for the development of the 18 apartments was never in fact as good as the advertisement of it. Mr Tanner had said that at the meeting with Ms Sanders he was aware from discussions with the vendor’s director that the vendor was considering building 18 apartments but that Mr Tanner understood that the vendor had no firm plans in that regard but wanted to advertise the apartments to see if any expressions of interest was received for that proposed development.

[32] Mr Dalkie notes that Mr Tanner did not say on oath in his affidavit that he told any of this to Ms Sanders. Nor did he say that contrary to what she might have understood from the advertisement there were no firm plans for the apartment development. Mr Dalkie submits Mr Tanner had an opportunity to correct any misapprehension any reader of that advertisement might have understood – but that he did not do this.

[33] Mr Dalkie submits that although the advertisement did not necessarily give the impression of two stages of development there was an indication of there being four apartments and another 18 apartments and, regarding the latter, there was reference to one, two and three bedroom floor plans with prices from $650,000.

[34] Mr Dalkie submits that to the objective reasonably minded observer and reader of the advertisement that there were floor plans available.

[35] Mr Dalkie submits Ms Clark and Mr Tanner knew when they first met Ms Sanders and prior to contract, exactly what View West was proposing and knew it was contrary to the words and meaning that would be conveyed to anybody reading the advertisement. He submitted that they admitted they knew the defendant had read the advertisement but neither of them told Ms Sanders what they actually knew the true position to be. Their purpose, counsel implies, was to have the contract signed up and that is what they achieved.
[36] That in essence appears to encompass those factors of claims of misleading or deceptive conduct. For that to be a foundation for Ms Sanders defence, Ms Sanders must show she has acted in reliance upon those representations or lack of them that Ms Sanders said occurred on 10 November 2015. There must be reliance on the conduct complained of as supplying a sufficient cause or connection between that conduct and the loss of damage said to have occurred because of it.⁴ Also Ms Sanders must show she suffered loss or damage.

[37] The Court’s purpose is to look to see whether it is provable that Ms Sanders has suffered loss or damage due to the conduct of View West and its Bayleys’ agents. A practical or commonsense approach is required. The Court needs ask itself whether Ms Sanders was misled or deceived by the conduct of those others and whether, if there was deceit, it was an operating element of claims of loss or damage occurring. In that regard the Court can consider whether Ms Sanders had taken sufficient care to avoid the consequences complained of and whether that may have been the sole or significant operative cause for her loss. In that regard Gleeson CJ commented in Henville v Walker⁵:

The purpose of the legislation is not restricted to the protection of the careful or the astute. Negligence on the part of the victim of a contravention is not a bar to an action under [the Australian equivalent of s 43] unless the conduct of the victim is such as to destroy the causal connection between contravention and loss or damage.

[38] Ms Sanders asserts it was the fact the whole development would include the 18 apartments that was the critical factor for her. As Mr Dalkie notes, she expressed this in a variety of ways including “what was immediately important to me...”, “based on these representations, I... signed...”; and “had that not been the position, I would never have signed the contract at all”.

[39] Mr Dalkie submits that while some points were argued about dates of events not being met, and the real property not being in the name of the plaintiff, and about the deposit, and while those do not give rise to a defence or any particular claim

⁴ Elders Trustee and Executors Co Ltd v EG Reeves Pty Ltd (1987) ATPR (Digest) 46–030 per Gummow J.

⁵ [2001] HCA 52.

presently, what they do is to give context and background to the environment in which the whole nature of the development was changed within a short space of time.

Principles

[40] If there are disputed issues of material facts or if material facts need to be determined by a Court and for which purpose further evidence will be required, then it is inappropriate to grant summary judgment. Therefore if summary judgment is to be granted a Court has to be satisfied the affidavit evidence will dispose of issues of fact.

[41] If in the Court’s assessment of the affidavit evidence it appears clear that issues of credibility arise upon which oral evidence should be heard, then an order for summary judgment ought not to be considered.

[42] A Court is however encouraged to be robust and in that regard may readily accept the affidavit evidence in support of a summary judgment application if the affidavit evidence provided in opposition inherently lacks credibility or is inconsistent with undisputed contemporary documents or is inherently improbable.⁶

Considerations

[43] Ms Sanders case alleges misrepresentations were made on 10 November 2015; that the development would proceed as a “whole integrated project”. Ms Sanders invites the Court to infer representations were made by the form of the newspaper advertisement in which a picture image of the old church building was shown and in the background a shaded (or faded) image revealed the existence of a proposed apartment block building.

[44] By her notice of opposition to the summary judgment application it is also claimed that contract terms were misleading or deceptive or likely to mislead or deceive. However the notice does not identify/specify the contract terms in question. Moreover the defence focus is not so much the contractual terms but more about the

⁶ Eng Mee Yong & Ors v Letchumanan [1980] AC 331.

newspaper advertisement and what was said or not said at the first meeting with the Bayleys’ agents.

[45] The contract terms required a 10 per cent deposit to be paid of which $5,000 was to be paid on execution of the agreement and the balance upon satisfaction of conditions contained in clause 22. Clause 22 included conditions for the sole benefit of View West. In essence View West could elect not to proceed if resource and building consents were issued on terms unacceptable to it, or if a minimum level of sales was not achieved on terms and at prices satisfactory to it. Also View West’s purchase of the property in question had to be completed on terms acceptable to it.

[46] On 5 April 2016 View West’s solicitors confirmed to Ms Sanders’ solicitors that the vendor conditions contained in clause 22 of the agreement were satisfied and/or waived, and advised that the balance of the 10 per cent deposit was payable immediately.

[47] Issues affecting Ms Sanders’ ill health apparently account for the delay in responding to the request for payment. Then on 9 May 2016 Ms Sanders advised Ms Clark that she was going to resell the residence and would undercut the advertised price. Then on 16 May 2016 she provided evidence of her having advertised the residence for sale.

[48] Ms Sanders’ case is founded on allegations of misrepresentation, namely that the development would proceed as a whole integrated project which included the 18 unit apartment block.

[49] Of concern to the Court is the lack of evidence of an express representation of the kind Ms Sanders implies. Assertions of misrepresentation imply that the agents ought to have informed Ms Sanders that the 18 unit apartment block might not proceed
– even though it is clear there was no express representation it would, nor at any time until 15 June 2016 when she filed her opposition did Ms Sanders claim that the 18 unit apartment block was important in her own consideration of matters.
[50] The clear and acceptable evidence of the agents is that at the time the 18 unit apartment development was a proposal intended to solicit expressions of interest.

[51] The 18 unit apartment development was not identified in the plans attached to Ms Sanders’ contract.

[52] When Ms Sanders advised through her solicitors that she would not be paying the balance of the deposit there were no reasons provided then of the type advanced in support of her defence of the summary judgment application. Also and of significance the Court considers, is the fact that Ms Sanders has not purported to cancel her agreement, but indeed by her conduct in attempting to resell the residence it is clearly arguable that she has a binding contract. By those actions she appears to be bound by s 7(5) of the Contractual Remedies Act 1979 and she will not be entitled to cancel the contract.

[53] Also of significance for the Court in its consideration are the further terms of sale provided by clauses 43 and 44 of the agreement. By those the parties acknowledge the agreement contains the entire agreement between the parties notwithstanding any negotiations or discussions prior to execution and anything contained in any brochure or other documents. Also Ms Sanders acknowledged that the agreement shall not include any representation, verbal or otherwise made on behalf of the vendor which was not set out in the agreement.

[54] Effectively those terms prevent any enquiry into or determination of any claims of misrepresentation if the Court considers it is fair and reasonable that those provisions are conclusive having regard to the circumstances of the case, the subject matter in value of the transaction, and the respective bargaining strengths of the parties.

[55] The evidence is clear that within a short period of time after executing the contract, Ms Sanders retained the services of solicitors. The evidence indicates that at no time until View West filed its summary judgment application did Ms Sanders advance claims of the kind she does now in her defence.
[56] Upon review it is clear that:

(a) There was no certainty that the development of the 18 unit apartment block would proceed, and they were never offered for sale.

(b) The 18 apartment units were not individually depicted on the sketch contained in the agreement and indeed were not referred to at all in the purchase agreement.

(c) Claims by Ms Sanders of a discussion that took place on 10 November 2015 included the quality and finish of the 18 unit adjoining apartment block are denied by Ms Clark and Mr Tanner. The evidence was they were not asked to sell the apartments and that they did not possess the information Ms Sanders claims was provided to her.

(d) Ms Sanders did not inform the agents that the project proceeding as an integrated whole was an essential term for her or that the agents assured her that the development would proceed as such.

(e) Not until her opposition of the summary judgment application was it claimed by her or on her behalf that an integrated development was essential or that a misrepresentation had occurred. Indeed the reason given for non-payment was that she was unwell.

(f) Ms Sanders’ pleadings nor her evidence particularises claims that the contractual terms were misleading or deceptive.

(g) No misrepresentation appears to be made in the documentation; nor is it asserted any such representation was made by Ms Clark or Mr Tanner. Instead Ms Sanders claims she was told about the standard and quality of finish of the proposed adjoining 18 unit apartment block by persons who have deposed to the Court that they did not have that information at the time.
(h) The clear evidence is that Ms Sanders advised on 12 April that after having spoken to her solicitors, her choice was to continue with the purchase or to resell.

Conclusion

[57] The Court agrees with the submission of Ms Hansen on behalf of the plaintiff that Ms Sanders has attempted to raise factual disputes to avoid liability by summary judgment. The Court is not required to accept uncritically those allegations of fact. The Court considers they lack credibility or are inherently improbable. It is available to the Court therefore to dismiss the misrepresentation grounds in opposition. In any event, by confirming that she intended to resell the residence and then by advertising it for sale, Ms Sanders indeed confirmed the contract was binding. Therefore it remains on foot and is enforceable according to its terms.

Judgment

[58] The application for summary judgment is granted.

[59] The defendant is ordered to pay to the plaintiff the sum of $254,900 within 14 days of this order being sealed or otherwise there shall be an order cancelling the parties’ agreement and entering judgment against the defendant for $254,900 and reserving leave for View West to seek further relief consequent upon the cancellation.

[60] The defendant is to pay the plaintiff’s costs on a 2B scale together with disbursements approved.

[61] Leave is reserved to the plaintiff to apply for such further orders that in the circumstances appear appropriate.

Associate Judge Christiansen