KAWARAU VILLAGE HOLDINGS LIMITED v HO KOK SUN AND OTHERS [2017] NZSC 150 [6 October 2017]

KAWARAU VILLAGE HOLDINGS LIMITED v HO KOK SUN AND OTHERS [2017] NZSC 150 [6 October 2017]

The agreements for sale and purchase included a covenant (cl 5.7 read in context with the agreements and associated consents and precinct governance provisions) obliging the vendor to complete the Precinct (the three stages); that obligation was an essential term of the contracts; because the vendor had put it out of its power to complete stages two and three at the time it called for settlement the purchasers were not obliged to settle and were entitled to cancel; appeal dismissed and appellants ordered to pay costs.

Citation
[2017] NZSC 150
Parties
First Appellant: Kawarau Village Holdings Limited; Second Appellant: Melview (Kawarau Falls Station) Investments Limited (in receivership); First Respondents: Ho Kok Sun and Others; Second Respondent: Peninsula Road Limited (in receivership and in liquidation); Third Respondent: Russell McVeagh
Court
Supreme Court
Jurisdiction
New Zealand
Judgment Date
6 October 2017
Procedural Posture
Civil Appeal / Supreme Court Appeal Judgment
Legal Topics
Contract Interpretation, Essential Term, Anticipatory Breach, Settlement Notice, Off the Plan Sales, Cancellation and Damages
Contract Law Property Law Commercial Law Real Estate Development Law Contract Interpretation Essential Term Anticipatory Breach Settlement Notice +2 more

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Parties

Kawarau Village Holdings Limited

First Appellant

Melview (Kawarau Falls Station) Investments Limited (in receivership)

Second Appellant

Ho Kok Sun and Others

First Respondents

Peninsula Road Limited (in receivership and in liquidation)

Second Respondent

Russell McVeagh

Third Respondent

Procedural Posture

Civil Appeal / Supreme Court Appeal Judgment

Legal Issues

  1. 1 Whether the vendor was contractually obliged to complete stages two and three of the Precinct
  2. 2 Whether completion of the three-stage development was an essential term entitling purchasers to cancel on breach or anticipatory breach
  3. 3 Whether purchasers were entitled to refuse to settle when vendor called for settlement given vendor's inability to complete later stages

Ratio Decidendi

The agreements for sale and purchase included a covenant (cl 5.7 read in context with the agreements and associated consents and precinct governance provisions) obliging the vendor to complete the Precinct (the three stages); that obligation was an essential term of the contracts; because the vendor had put it out of its power to complete stages two and three at the time it called for settlement the purchasers were not obliged to settle and were entitled to cancel; appeal dismissed and appellants ordered to pay costs.