BRUCE ROBIN ANSLEY AND JUSTINE ANN ANSLEY V PROSPECTUS NOMINEES UNLIMITED CA CA13/03

BRUCE ROBIN ANSLEY AND JUSTINE ANN ANSLEY V PROSPECTUS NOMINEES UNLIMITED CA CA13/03 3 March 2004IN THE COURT OF APPEAL OF NEW ZEALAND CA13/03BETWEEN BRUCE ROBIN ANSLEY AND JUSTINE ANN ANSLEY Appellants AND PROSPECTUS NOMINEES UNLIMITED Respondent Hearing: 1 December 2003 Coram: Gault P McGrath J Anderson J Appearances: R J Asher QC and G M Illingworth QC for Appellants F B Barton and S M Grieve for Respondent Judgment: 3 March 2004JUDGMENT OF THE COURT DELIVERED BY GAULT P[1] The appellants, Mr and Mrs Ansley, sued the respondent in the High Court seeking specific performance of a contract for sale and purchase of land at Wanaka. In a judgment delivered on 20 December 2002, John Hansen J dismissed the claim, finding that the respondent was entitled to treat the contract as at an end for failure of a condition that the vendor obtain, prior to 28 February 2002, a land use consent satisfactory to the vendor and the purchasers. The appeal is against that judgment and is advanced on two principal grounds. It is said first that on a correct construction of the contract the condition was satisfied. Secondly it is said that the respondent cannot rely on the failure of the condition because that was brought about by its own default.The facts[2] The land in question (Lot 129 DP 27493) was part of a block which the respondent (a nominee company) had subdivided for sale of residential sections. It lies between some of those sections and a road reserve bordering the lake. Unlike the residential sections, this land is zoned Rural General Land in respect of which residential use is a discretionary activity. [3] The respondent had earlier attempted to have the local authority, Queenstown Lakes District Council (the council), accept the land together with adjoining land (now Lot 118) for a reserve and in satisfaction of the reserves contribution payable in respect of the subdivision. The council did not agree and its stance was upheld in the Environment Court. Lot 118 was, however, transferred to the council as local purpose reserve (stormwater). [4] Lot 129 has an area of 2.2096 hectares and is of irregular shape with a narrow strip extending to the south between the subdivided residential sections and Lot 118. That strip was conveniently referred to in the proceeding as the "panhandle". Having been unsuccessful in having the council take the Lot 129 land, the respondent sought resource management consent to its use as a residential site. The objective was to obtain consent to enable the building of a single dwelling on the northern part of the land with a view to its sale. As part of its proposal the respondent sought to have the council acquire the panhandle as reserve. This would mean it would become part of the wetland with Lot 118 and would give the purchasers of other residential sections access to the lake across the reserve land. The advantages for the respondent were that they would thereby discharge the "moral" obligations to purchasers of the other residential sections to provide access to the lake at that point and would have the council assume responsibility for maintenance of the access way. The respondent wanted the council to accept the panhandle in part satisfaction of its reserves contribution. The council declined this and also declined consent for a dwelling on the other part of Lot 129.[5] The respondent appealed again to the Environment Court. The appeal was filed on 9 December 2000 but was not argued until late in September 2001. In the intervening time there were some inconclusive discussions with the council, which was opposed to any development on the land. [6] On 9 June 2001 the respondent entered into a conditional contract to sell the land subject to the respondent obtaining, within 90 days of the agreement, a land use consent to erect a single dwelling on the land. An early hearing of the appeal was sought and arranged, but the contract eventually lapsed through non-fulfilment of the condition. [7] While the decision of the Environment Court was still pending, the respondent entered into another agreement for sale and purchase, with Mr and Mrs Ansley. This agreement was dated 25 October 2001. It provided for a purchase price of $1.05m and was conditional upon the vendor obtaining a land use consent prior to 28 February 2002. The relevant clause in the agreement reads:14.0 LAND USE CONSENT14.1 This Agreement is subject to and conditional upon the Vendor at the Vendor's expense obtaining prior to 28 th February 2002 a Land Use Consent satisfactory in every respect to both the vendor and the purchaser to permit. (a) the construction of a single dwelling house and outbuildings normally appurtenant to a dwelling house on the land now sold, 14.2 The Vendor will proceed with all due diligence and without any unnecessary delay, the Vendor's Land Use Consent appeal in order to obtain such Land Use Consent. 14.3 The Vendor will provide the Purchaser's solicitor with a copy of the decision determining the Appeal and all related terms, stipulations and requirements relating to the Land Use Consent ("the decision") immediately upon receipt of the same. the Purchaser shall have (7) working days after his solicitor receives the decision to approve the details. If the Purchaser fails to notify the Vendor's solicitor in writing within thisperiod, the Purchaser shall be deemed to have accepted the decision. [8] Clause 18 was directed to the "panhandle" which was cross-hatched on a plan attached to the contract: 18.0 Purchaser Acknowledges 18.1 The Purchaser acknowledges and accepts that part of the land in CT 19A/1200 immediately to the [east] of the land described as Lot 118 DP 27003 crosshatched on the copy plan attached to this Agreement may, as part of the negotiation process with the Queenstown Lakes District Council, be included in the wetland reserve (Lot 118 DP 27003), and if so, be excluded from this sale and subdivided from CT 19A/1200 on the basis set out in Further Term 18.2. There shall be no adjustment to the sale price if such is a requirement of the terms of the Land Use Consent but the Vendor will, if permitted by the Resource Consent, use its best endeavours to create a right of way easement from the roadside boundary of Beacon Point Road substantially along the line of the existing vehicle track, in favour of the remaining balance of the land in CT 19A/1200 as dominant tenement. Such easement shall not be less than 6 metres wide. Any terms and conditions attaching to the creation of such easement shall be subject to approval by the Purchaser's solicitor within five working days of the purchaser's solicitor receiving notice of same. Such approval shall not be unreasonably or arbitrarily withheld. In particular, the easement if created shall provide that the right of way is for the exclusive use of the registered proprietors of dominant land and their successors, contractors, tenants, and persons authorised by them. 18.2 If the land crosshatched on the plan attached is included in the wetland reserve as provided for in clause 18.1, and if the subdivision process severing the crosshatched land from CT 19A/1200 is not completed by possession date, the Vendor and the Purchaser will settle in full on the basis that all of the land in CT 19A/1200 will be transferred to the Purchaser, but the Purchaser agrees to do and sign all such acts and things as are within their power in order to complete the subdivision of the crosshatched portion of land and to transfer that land back to the Vendor upon request.The cost of subdivision of the crosshatched land will be met by the Vendor, who will instruct the Vendor's solicitors to carry out the necessary work. The Purchaser will be entitled to have the Purchaser's solicitor peruse any documentation to be signed by the Purchaser and the reasonable cost of same will also be borne by the Vendor. Neither party will sell or dispose of their respective interest in any of the land involved without procuring any transferee to enter into an agreement incorporating the provisions of this Further Term 18 including this paragraph so as to bind all future transferees if any. [9] The Ansleys accepted that the land would be subject to a pedestrian right of way for the benefit of the sections of the subdivision on its eastern side. While it is not clear to us from material provided, this seems to have been intended to give access to, or across, the panhandle. [10] The decision of the Environment Court is dated 21 December 2001 and is endorsed as having been issued on 24 December. It records the application as for discretionary consent for the construction of a single residential unit and notes a number of "significant mitigation measures proposed by the appellant which are of relevance to the scope of the application". Among these was listed "Access". The decision records: It is currently proposed that there be vehicular access to the house from the north although in opening and closing Mr More indicated that his client sought the ability to bring in the access road across the site from the south. It is intended that the southerly portion of the site be retired and conjoined with Lot 118 to form part of the reserve to be transferred to the Council. This will include a walkway around the northerly side of Lot 118 and also a broader expanse of land from the southerly end of the access road along the easterly side of Lot 118 to a position in line with the determination of the existing access road through the subdivision (area shaded on Annexure "B"). [11] The Court recorded that: In answer to questions from the Court the appellant offered that none of the building, excavation or construction work would take place until such time as the landscaping had been attended to on site. They also indicated that in the event this Council did not wish to have theextra reserve area transferred to it then it would investigate alternatives including covenanting the land. [12] In a part of the decision headed "Site Assessment" the Court referred to the matter of the panhandle. Lot 129 is currently some 2.2 hectares. The appellant proposes to undertake a boundary adjustment between Lots 118 and 129 to include within Lot 118 the finger of land to the south and a further 2-3 metres to the north. If a common boundary adjustment to Lot 118 and Lot 129 was made to Lot 118 in accordance with the suggestions made by the applicant, this would reduce the area of the site (Lot 129) to something in the order of 1.5 to 2 hectares. Mr More advises that they seek to retain a right of way over the finger of land to the south for vehicle access. We agree that Lot 118 should include the land to its eastern boundary, currently part of Lot 129. We do not consider that any vehicle access to Lot 129 should be permitted over that land. The land on which the right of way is sought is higher than that in Lot 118 and vehicle access would be visually intrusive with a track several hundred metres long running parallel to the access road. [13] In these paragraphs the Court clearly stated that it favoured the amalgamation of the panhandle with Lot 118 as reserve but did not approve (let alone require) the right of way contemplated in the second part of cl 18.1 of the agreement for sale and purchase. [14] We note that it was common ground that the Environment Court could not require the council to take the panhandle land as reserve. [15] In assessing the relevant criteria the Court said: There is an integration between this development and Penrith subdivision and particularly this is reflected in the accessway which can be incorporated within Lot 118 as a result of approval of this application. In this case the ability to join further land onto Lot 118 and enable the Penrith subdivision to access the water via the walkway is a significant advantage of this application. Short of allowing a consentthere does not appear to be any legal basis for the Council to require the developers to make land available to provide access through the walkways. It was suggested by Council officers that such an access was unnecessary. Having regard to the fact that the only other access method is by road we do not accept that this is a reasonable approach in the circumstances. We see significant benefit from incorporating the accessways to the Beacon Point access track. The ability to allow passive recreation around the outside of the pond is also a benefit which will be enhanced by the plantings suggested by the appellant. [16] After reviewing all the applicable criteria the Court concluded: Having regard to all of the matters we have identified and in particular recognising and providing for the maintenance and enhancement of public access to Lake Wanaka under section 6(d) we consider the appellant has made a clear case for a grant of consent for both the building platform and the building itself. Having concluded that the consent should be granted we note that both counsel indicated that they do not ask the court to set the final conditions of consent. We have already indicated that we consider that the consent should be subject to a number of conditions which have been offered by the appellant. We do not believe it is necessary for the applicant to obtain a resource consent for the actual building as constructed although a condition should require that the building construction not commence until the landscaping works have been undertaken. The building would have to meet the requirements set out in the conditions of consent and be approved by the relevant Council officer as having attained those objectives prior to any building consent being issued. Those are matters that can be included within the draft conditions of consent. We also believe that it is appropriate for the Court to sight the proposed covenants and proposals for the creation and transfer of the access before finalising the terms and conditions of consent. We note that Mr Marquet said that the Council was not committed to accepting the additional land as part of the reserve. For our part, having regard to section 6(d) we conclude it is desirable that the Council should allow such access as it provides a linkage from the subdivision to the margins of the rivers and lake. Issues of maintenance of that land could be addressed as part of the conditions of consent. We invite the parties to file a memorandum jointly if possible or failing that from the appellant within 25 working days with 10 working days for any response. Any application for costs shouldalso be filed for consideration by the Court within the same time frame with the same period for response. [17] In the absence of power to impose a requirement, it is difficult to envisage stronger encouragement to the council to agree to the amalgamation of the panhandle strip with Lot 118 with the consequent provision of access to the lake front for the rest of the subdivision. [18] The council did not indicate agreement nor were memoranda filed with the Environment Court before 28 February 2002. The respondent took the position on 1 March that the condition in clause 14(1) of the agreement had not been met and the contract was at an end, no satisfactory land use consent having been obtained. [19] Mr and Mrs Ansley brought the present proceeding in the High Court claiming in the alternative that the condition had been fulfilled within the specified time but, if it had not, the respondent was in breach of its obligation in cl 14.2 to "proceed" with all due diligence and without unnecessary delay the land use consent appeal and that by purporting to cancel the contract on 1 March 2002 it had unlawfully repudiated it. [20] Initially the Ansleys sought specific performance but, by the time the appeal was heard, the land had been sold and the dispute was directed to the proceeds of sale which were considerably in excess of the price at which the Ansleys had agreed to buy.The High Court judgment[21] In his judgment delivered on 20 December 2002 John Hansen J, found against the Ansleys on both grounds. They had argued that "Land Use Consent" referred to in cl 14 was the decision by the Environment Court to give consent to erect a single dwelling and outbuildings. All that remained at that point was for the parties to consider whether the conditions imposed by the Court in the decision were "satisfactory in all respects". The only real issue to be resolved was the status of the panhandle, and this could never have been a condition of the consent because the Environment Court had no power to require the council to take the land as reserve.The appellant's position was that fulfilment of the condition in cl 14 could not reasonably have been intended to depend on the drafting and resolution of the reserve issue. The possession date was specified as being 200 days after "the Court ruling of the resource consent appeal (clause 14) or such sooner date as the purchaser nominates". It was submitted that there would be no purpose for this long period if cl 14 required the resource consent to actually have been issued by 28 February. [22] The Judge, however, did not consider cl 14 to be ambiguous, and accepted the respondent's interpretation. The purpose of the Land Use Consent was to permit the construction of a dwelling, and the Environment Court decision as it stood did not allow that. A process of negotiation and final approval by the Environment Court was needed before it could be said that the respondents had obtained a Land Use Consent that would have permitted the erection of a house. At the time of the Environment Court decision there was nothing tangible that could be capable of being satisfactory to both parties, and this remained the case at 28 February. "Resource consent" is defined in the Resource Management Act to include all conditions to which the consent is subject (s2). There was clearly a major issue in relation to access and the panhandle that remained to be resolved, which the Court could not order. Accordingly the condition in cl 14 had not been satisfied by the deadline. The Judge declined to order specific performance. [23] With reference to the alternative claim, the Judge applied the following principles in assessing the reasonableness of the respondent's actions: (a) The matter is not to be viewed in hindsight. (b) The test is an objective one in determining whether or not a party has used reasonable endeavours to satisfy a condition. The party must apply itself conscientiously to the task of securing approval to a level that would be expected if the party was prudently protecting its own interests. (c) The party should not be held to have failed to satisfy a condition requiring it to use its best endeavours if the failure was not material to the lack of success in satisfying those conditions. [24] The Judge reviewed the conduct of the various persons involved. There was Mr Morse, the solicitor for the Ansleys, who had taken the view that conditions ofconsent needed to be fixed by 28 February 2001 and was pressing for this to be done. There were Mr Frost who was responsible for conducting the business of the respondent, Mr More counsel who appeared before the Environment Court and was adviser to the respondent on resource management issues, and Messrs Moore and Thomas the respondent's solicitors. [25] The Judge referred to the diligence of Mr Morse in endeavouring to get the respondent to move quickly to settle the conditions. Upon discovering that Mr Moore was away until the end of January, he communicated with Mr Thomas, another partner at Anderson Lloyd Caudwell but received the impression that there was little sense of urgency to progress the consent. On 24 January Mr Morse received a telephone call from Mr Frost informing him that the business of obtaining consent was being dealt with by Mr More not Anderson Lloyd Caudwell. Becoming increasingly frustrated, Mr Morse faxed Mr More, and also contacted the council directly, but made little progress in his dealings with them. Mr More informed Mr Morse that counsel for the council (Mr Marquet) had been told on 1 February of the existence of the contract and the 28 February time limit, but Mr Marquet subsequently said to Mr Morse that he was not aware of any contract or deadline. On 19 February Mr More informed Mr Morse that the matter was in the hands of Mr Marquet and that no further response had been forthcoming from him. [26] Mr Frost had given evidence that when Mr More told him on 31 January that Mr Marquet had not responded to a letter of 24 January, Mr Frost requested that Mr More write again seeking an urgent response. Mr More's evidence was that even after 28 February he continued to have discussions with the council's solicitor. A draft set of conditions was not received from the council until 17 May. Comments from Mr Frost, who had been overseas, were obtained by 10 July. The draft conditions still did not allow for the council to assume ownership and maintenance of the right of way, and Mr More accordingly redrafted them. The new proposed conditions were forwarded to the council on 28 August. Receiving no response Mr More wrote to Mr Marquet on 10 and 18 September, and eventually filed a memorandum with the Environment Court informing the Court of the position. On 8 November he was contacted by the Court and told that a teleconference was arranged for the next day. As it turned out, the council had already filed a letter stating that itwould take over the right of way (without accepting the strip of land as part of the reserve fund contributions), but Mr Marquet had not copied the letter to Mr More. Therefore the conditions of consent were finally settled shortly before the High Court hearing in the present case. [27] The Judge accepted that settlement of the issue of the panhandle and the accessway was critical, and "even if the direction from the Environment Court relating to the filing of memoranda had been complied with, that it would have been impossible to have the matter finalised by the 28 th February". The council was opposed to taking the panhandle and there was no indication that had a meeting taken place between the parties the issue would have been resolved before 28 February. There was also no evidence that the respondent had conspired with its two lawyers to delay the process so the deadline could not be met. Mr More was aware of the deadline and, viewed objectively, was taking appropriate steps. There was no obligation on the respondent to inform the Environment Court of the contract in an attempt to get an earlier decision. Nor was there an obligation, knowing of the reputation of the council's solicitor for tardiness, to go behind counsel and direct to the council to resolve the issue. This would be a significant departure from normal practice, and would require the imposition of a subjective standard in cases where counsel has personal knowledge of another solicitor. In any event, when Mr Morse contacted the council directly himself it did not advance matters any further. The second cause of action failed.Appellants' submissions[28] For the appellants it was submitted that the Judge erred in his interpretation of cl 14. The agreement must be interpreted against the background of the circumstances known to the parties at the time it was entered into: Boat Park Ltd v Hutchinson [1999] 2 NZLR 74. The appellants had no knowledge that the parties to the appeal had requested that the Environment Court defer finalising the wording of the consent until conditions had been agreed upon. Therefore cl 14 cannot be read as expressing a common intention to wait until the Environment Court's decision (including the wording of the deferred conditions) had been finalised before requiring the parties to decide whether it was satisfactory. The appellants had sevendays to approve "the decision determining the appeal and all related terms, stipulations and requirements relating to the Land Use Consent". Related terms and stipulations must have meant any materials not included within the judgment itself that might be needed to make the judgment comprehensible. It could not refer to the wording of deferred conditions that the appellants were unaware of when they entered the contract. On 4 February Mr Morse received the remainder of the information relating to the Environment Court judgment (having been sent the decision itself in early January). At that point he had all the information he had sought under cl 14.3 concerning "the decision". Therefore the period for the appellants to object ran from that date, and as no objection was taken within the ensuing seven working day period, the appellants were deemed to have accepted the decision. [29] With reference to cl 18 of the contract, the submission was that cl 14 required the respondent to proceed with obtaining the Land Use Consent with the utmost due diligence and speed but, provided it did not breach that obligation, it could continue to try to persuade the Council to change its position and accept the panhandle as a reserve. Clause 18.2 expressly contemplated that the process of severing the panhandle area might be completed after the possession date. Therefore there could be no legitimate implication that the negotiation process had to be completed before the agreement could become unconditional. [30] In relation to the second cause of action, counsel submitted that during the two months between the signing of the contract and the delivery of the Environment Court decision, the respondent took no steps to formulate or propose draft conditions. Even after the judgment had been released, the respondent took no steps to draft conditions or to submit a memorandum to the Environment Court as directed. Therefore the respondent breached its undertaking to proceed with all due diligence and without any unnecessary delay. This is a stringent test that imposes a higher standard of effort than the "reasonable endeavours" test adopted by the Judge. In any event, the Judge erred in failing to consider the actions (or inaction) of the respondent prior to the delivery of the Environment Court decision. The value of the property increased significantly (up to 50 percent) in the five months following thesigning of the agreement. The appellants' position was that this was the reason the respondent delayed complying with cl 14. [31] It was submitted also that the Judge erred in requiring the appellants to establish, on the balance of probabilities, that the respondent had failed to use reasonable endeavours to obtain the consent. It was argued that the "onus of proving that a condition has not been fulfilled lies on the party seeking to rely upon that to argue that the contract has been terminated". Respondent's submissions [32] The respondent supported the interpretation of the contract adopted by the Judge, and maintained that cl 14 is clear and unambiguous. Consideration of background knowledge and the "matrix of facts" is only relevant where a contract is ambiguous. In this case the simple question was whether or not the Environment Court decision, on its own, was sufficient to constitute a "Land Use Consentto permit the construction of a single dwelling house". The respondent submitted that the clear answer is "no". The appellants could not obtain a building consent on the basis of the Environment Court decision as it stood on 28 February. The purpose of cl 14 was to provide certainty so that the parties knew where they stood by the deadline. It was clear from the Court decision that there were still major issues to be resolved and that the matter would need to come back before the Court for final approval. If the contract was able to become unconditional and the Environment Court was subsequently able to impose onerous conditions on the consent, then the appellants would have had little recourse. The plain meaning of cl 14.3 shows that it can only have been intended to include conditions, and that its purpose was to protect both parties: The wording in the clause - "the decision determining the appeal and all related terms, stipulations and requirements relating to the land use consent" plainly indicated the intention that the conditions were to be fixed. [33] The respondent submitted that cl 18 highlights the importance of the panhandle issue at the time the contract was signed. It shows there were outstanding matters that needed to be finalised before the consent could be satisfactory to both parties. Even if it was contemplated that the subdivision process would notnecessarily be completed prior to settlement, it does not follow that the negotiations over the land could continue after the contract had become unconditional. In terms of the Environment Court decision that was something that needed to be finalised. [34] Counsel submitted that the fact that there was insufficient time for the consent to be obtained was simply the result of a combination of unfortunate circumstances: the late issue of the Environment Court decision, the intervening holiday period and the slow pace of the council in progressing negotiations. The phrase "with all due diligence and without any unnecessary delay" is an unusual one, but the Judge applied the correct approach in holding that the test is an objective one and that the party must apply itself conscientiously to the task of securing approval to a level that would be expected if the party was prudently protecting its own interest. That is a lesser obligation than an undertaking to use "best endeavours", and is more analogous to "reasonable endeavours". It certainly did not require the respondent to exercise the highest level of diligence. [35] The respondent argued that it was not reasonable or realistic to have expected it to take any steps until the Environment Court decision had been released and the parties knew whether consent would be granted at all. There is no evidence that that would be normal practice, and in any event proposals had already been presented to the Court that would potentially form the conditions of any consent. There would have been no point in the respondent repeating those same proposals as draft conditions in the hope that the council would accept them before the Court ruling was made. Counsel further pointed out that the real delay was not caused by the respondent's drafting of conditions, but by the decision-making process of the council in relation to the panhandle issue. The evidence simply does not support the appellants' contention that, but for the respondent's alleged failure, the conditions could easily have been finalised by the deadline. As it turned out they were not finalised until November 2002.Decision[36] We do not accept the proposition that the factual matrix is to be considered only where there is ambiguity in the terms of a contract. We do not understand thatto be the view of Lord Hoffman in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 All ER 98, 115 on which this Court drew inBoat Park Ltd v Hutchinson. But we do not find this point material in ascertaining the meaning of cl 14 of the contract. [37] It does appear that the clause was drafted to convey that the land use consent would be determined by the appeal to the Environment Court. The difficulty arose because the decision that issued was not a final decision because conditions were left for further determination. While the vendor knew that the Environment Court had been asked not to settle conditions of consent, the purchasers did not know that. The clause must be construed objectively with reference to what both parties knew. However, whether or not the parties are taken to have contemplated that the decision would determine the consent, the condition required a "land use consent". That was not the consequence of the decision that issued. Though that was favourable, it did not on its issue result in a consent. [38] The submission that the purchasers were deemed to have accepted the decision after Mr Morse received further information does not address the need for the vendor to be satisfied also. It was said that the vendor obtained in the decision all it sought from the Environment Court in that no conditions were contemplated beyond those it volunteered. But that is not entirely correct. The vendor wanted, and preserved in cl 18.1, the prospect of pursuing by negotiation, a preferred form of providing access to the lake front for the rest of the subdivision. [39] Nor do we see how the contemplated negotiation in respect of the panhandle could continue after the contract became unconditional by the obtaining of a land use consent in respect of which access was a central issue. [40] We have not been persuaded that the clear requirement of a land use consent can, on the wording of cl 14, be construed as capable of being satisfied while conditions of consent were not fixed. We uphold the Judge's decision on the construction of the contract.[41] We have greater difficulty with the Judge's conclusion on the alternative claim that the respondent was in breach of the obligation under cl 14.2 of the agreement to "proceed" with all due diligence and without unnecessary delay the land use consent appeal in order to obtain such consent. The Judge found no breach and determined further that, even if counsel had complied with the Environment Court direction, consent would not have been obtained by 28 February. Those were conclusions of fact made on the Judge's assessment of the circumstances disclosed in the evidence. While there is, of course, the right to appeal against findings of fact, the difficulties are well recognised: Nomoi Holdings Ltd v Elders Pastoral Holdings Ltd CA79/00, judgment 17 July 2001. In this case, however, we are concerned not with findings of primary fact or reliability of oral evidence but with conclusions drawn from the proved circumstances. In respect of those, an appellate court is at no disadvantage as against a trial judge, and to the extent that there have been opinions of witnesses as to those conclusions they must similarly be open to review. [42] We do not consider this matter turns on the burden of proof but, since the point was argued, some comment is appropriate. John Hansen J expressed his conclusion in terms that the plaintiff had failed to establish on the balance of probabilities that the respondent had failed to use reasonable endeavours to obtain consent. Mr Asher QC for the Ansleys argued that the onus of proving that a condition has not been fulfilled lies on the party seeking to rely upon the condition to argue that the contract has been validly terminated. He relied on Knotts v Gray[1963] NZLR 398, Hydrabad Holdings Ltd v Horizon Resources Ltd (unreported High Court, Wellington CP159/00 Doogue J) and D W McMorland, Sale of Land(2ed) para 5.08. [43] Knotts v Gray and Martin v Macarthur [1963] NZLR 403 both proceeded on the acceptance of the law as stated by Cleary J in Barber v Crickett [1958] NZLR 1057. That is the case cited by McMorland for the propositions that the onus of proving that a condition has not been fulfilled lies on the party seeking to rely upon that to argue that the contract has been terminated, and that if the party relying on the failure of the condition was under an obligation to take all reasonable steps to fulfil the condition, that party must also show that the obligation was met. However, that is to be contrasted with the passage in para 5.03 of the same work which reads:The onus of proof that a party has failed to take all reasonable steps rests, as always, on the plaintiff. So, non-fulfilment of a condition will justify avoidance unless the other party is able to prove a failure to take all reasonable steps; it does not lie on the avoiding party to prove entitlement to avoid by showing that they did take all reasonable steps. [44] The authority cited for this is Plumor Pty Ltd v Handley (1996) 41 NSWLR 30. Notwithstanding the attempt by Potter J in Lerner v Schiehallion Nominees Ltd[2003] 3 NZLR 671 para [29] to reconcile them, we agree with the view of McLelland CJ in Equity in the Supreme Court of New South Wales in Plumor v Handley (p 35) that the authorities are in conflict. [45] As reviewed in Perry Corporation v Ithaca (Custodians) Ltd CA43/03, judgment 4 November 2003, para [44] et seq, there is a distinction to be drawn between the legal burden and an evidential burden. That distinction appears to lie at the base of the conflict in this area. [46] In Barber v Crickett Cleary J said (p 1060): In the light of the foregoing authorities, I think that where a contract is conditional on a purchaser raising a mortgage the purchaser can assert the non-fulfilment of the condition only where it occurs without any default on his part. As I have already mentioned, I think such a condition is one for the benefit and protection of the purchaser. In this respect, a condition of this kind differs from the stipulation in the New Zealand Shipping case [1919] AC 1 where, as Lord Shaw pointed out, the stipulation was one in favour of both parties in the contract (ibid., 12), but here it seems to me that the position is the same as in the cases which were discussed in argument dealing with contracts for the sale of goods conditional on the vendor obtaining an export licence or fulfilling some similar requirements. In Brauer & Co (Great Britain) Ltd v James Clark (Brush Materials) Ltd [1952] 2 All ER 497, Denning L J said: "The answer to all these questions is, I think, that this clause is a special exemption inserted in favour of the sellers. In order to enable them to take advantage of it they must show that notwithstanding that all reasonable steps were taken by them, they could not obtain a licence to export during any part of the shipment period, or, alternatively, that it was useless for them to take such steps, or any further steps, because it was quite impossible for them to obtain a licence" (ibid., 501) (emphasis added)[47] That appears to have been consistently adopted in New Zealand and accords with practicality since the knowledge of what steps were or were not taken to obtain fulfilment of the condition will be in the party on whom the obligation rested. But it is merely an evidential burden on that party arising when there has been put in issue whether the non-fulfilment of the condition arose from its default. That qualification to the general principle of "who asserts must prove" is not to be treated as if it reversed the legal burden of proof. [48] In the present case the substance of the condition in cl 14.1 of the contract cannot be said to have been included solely for the benefit of the purchaser: cf Globe Holdings Ltd v Floratos [1998] 3 NZLR 331. There is an express obligation imposed on the vendor in cl 14.2 and the allegation is of default in meeting that obligation. We find no error in the Judge having proceeded on the basis that the legal burden was on the Ansleys as the persons making that allegation and asserting non-fulfilment. That does not mean, however, that as the evidence came out, an evidential burden did not shift to the respondent to explain an appearance of default on its part. [49] We turn to the scope of the obligation under cl 14.2. It is to proceed with all due diligence and without unnecessary delay with the appeal in order to obtain the land use consent. We interpret "all due diligence" as meaning all diligence called for in the circumstances. Unnecessary delay similarly is to be assessed in the circumstances. An important circumstance was that the very purpose of the obligation was to obtain a land use consent by 28 February 2002. On the evidence of Mr Frost, the date was inserted because he knew that land values in the area were increasing and he wanted the status of the contract resolved within a comparatively short period. The obligation was directed to obtaining a land use consent and was assumed by the respondent vendor with full knowledge of what had occurred at the appeal hearing before the Environment Court, including that the parties to the appeal had requested the conditions not be fixed by the Court and that the respondent had asserted that if the council would not agree to take the panhandle land alternative means of giving access would be investigated. The circumstances also included that the Environment Court had given a timetable for advancing the matter. We considerthe obligation in this context was higher than that of "reasonable endeavours to obtain the consent" of which the Judge found no proved failure. [50] We agree with the Judge that the steps taken or not taken are to be assessed with due allowance for the influence of hindsight but, at the same time, we consider relevant what did occur after 28 February 2002 in the assessment of what might have been done before that date. In this respect the Judge considered the contractual obligation required diligence to a level that would be expected if the party were prudently protecting its own interests. That too must be set in the same circumstances, particularly the known time constraint. In fact, after giving the notice of cancellation on 1 March, the respondent did pursue the matter for its own benefit and what occurred is instructive. [51] The conduct to be examined is that of the respondent on which the obligation fell. That encompasses the actions or inaction of solicitors and counsel attributable to the respondent. Mr Frost, who was responsible for co-ordinating the resource management appeal and the contract, learned of the Environment Court appeal decision on 31 December from Mr More who had called at his own office that day and become aware of it. Mr Frost did not tell Mr More of the existence of the contract and the time constraint. He spoke to Mr More on 24 January asking him to chase the solicitor for the council "in relation to whether or not the council intended to appeal". On the same day he referred Mr Morse, the Ansleys' solicitor, who was pressing for progress on the conditions, to Mr More. As a result Mr Morse communicated with Mr More who told Mr Morse on 1 February that he was not aware of the contract. [52] In the meantime Mr More had contacted Mr Marquet on 15 January seeking advice as to the council's position in respect of the panhandle land which the parties to the appeal needed to know before conditions could be determined. He followed this up by letter on 24 January suggesting that they meet when Mr Marquet had instructions. [53] When he learned of the contract from Mr Morse, Mr More wrote to Mr Marquet advising him of its existence. His letter, dated 1 February 2002,referred to his earlier letter but specified an incorrect lot number. It cannot be assumed that Mr Marquet made the connection. In fact he told Mr Morse on 12 February that he was not aware of the contract or of any deadline. In the event there was no response from Mr Marquet by 28 February despite being pressed by faxed letter from Mr More on 19 February. [54] We do not accept that the contractual obligation required the respondent to take any steps to endeavour to have the conditions settled prior to the issue of the Environment Court decision. But we are unable to accept that there was all due diligence shown by or on behalf of the respondent once the decision was issued. Mr Frost did not advise his counsel of the existence of the contract and the deadline. Mr More eventually learned of this from Mr Morse. Similarly it seems that Mr Marquet also learned of the contract from Mr Morse and only on 12 February. Mr Frost was content to enquire about the possibility of appeal and otherwise leave the issue of conditions of consent to Mr More and the pleasure of Mr Marquet. He took no steps himself to attempt to expedite matters. It is significant that, in an email to other participants in the respondent, undated but obviously sent about a week before the end of February, he said. Contract on front "reserve" lapses on 28 February if we don't have consent by then. We know that the purchaser still wants to buy the site and if consent does not come in time, we will revisit price (currently $1.05m) and settlement timing (currently 200 days). Given its location, it is most unlikely that the delay will disadvantage us. [55] No attempt was made to comply with the timetable set by the Environment Court which provided for unilateral action in the absence of agreement. It was contended, and the Judge held, that this would not have resulted in fulfilment of the condition before 28 February. We consider, on the evidence overall, that this conclusion was over-generous to the respondent. It is now known that it was not until September 2002 that the council was asked whether it would agree to the access proposal favoured by the Environment Court, and that it did so by 1 October after which agreed conditions of consent were quickly settled. [56] There was evidence from Mr More that he knew Mr Marquet responded best to timetables that relate to fixtures. Mr More's experience with the earlier contracthad been that the Environment Court responded to requests for urgency and conducted telephone conferences. The probability must be that had Mr More known of the contractual obligation and acted unilaterally (as he did eventually) upon the invitation at the end of the Court's judgment (which was treated as sufficiently firm for the Registrar to have followed it up), at least a telephone conference fixture would have been arranged. That would have necessitated Mr Marquet obtaining instructions as to the council's response to the judgment and would have seen the matter quickly resolved. [57] For the reasons given, we allow the appeal, set aside the judgment for the respondent and substitute judgment for Mr and Mrs Ansley in respect of the balance of the resale proceeds held in trust by the respondent's solicitors including interest earned thereon. [58] The appellants are entitled to costs in this Court and in the High Court. On the appeal we award costs of $6000 together with reasonable disbursements, including the travel and accommodation expenses of counsel as approved, if necessary, by the Registrar. Costs in the High Court should be fixed in that Court.Solicitors: Hamertons, Whakatane, for Appellants Anderson Lloyd Caudwell, Dunedin, for Respondent