SHIRLEEN SHIA LING SIM V NEW ZEALAND HOME BONDS LTD CA697/2009

SHIRLEEN SHIA LING SIM V NEW ZEALAND HOME BONDS LTD CA697/2009 17 May 2010IN THE COURT OF APPEAL OF NEW ZEALAND CA697/2009 [2010] NZCA 192BETWEEN SHIRLEEN SHIA LING SIM Appellant AND NEW ZEALAND HOME BONDS LIMITED Respondent Hearing: 15 March 2010 Court: Arnold, Panckhurst and Harrison JJ Counsel: D Singh for Appellant D M Lester for Respondent Judgment: 17 May 2010 at 10 amJUDGMENT OF THE COURTA The appeal is dismissed. B The appellant must pay the respondent costs for a standard appeal on a band A basis, and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Panckhurst J)Introduction[1] This appeal concerns the interpretation of a bond. Shirleen Sim, the appellant, entered into an agreement to purchase three residential apartments. Shedid not pay a cash deposit, but rather purchased a bond to be delivered to the vendor which secured payment of a $44,000 deposit. New Zealand Home Bonds Ltd (NZHB) provided the bond. [2] Almost three years later the bond holder (on assignment from the vendor) called for payment of the $44,000 by NZHB. Demand was made on the basis that the appellant had failed to settle the purchase of the three apartments, despite the service of settlement notices. [3] In due course NZHB made payment to the assignee, unsuccessfully sought reimbursement from the appellant and then issued this proceeding. The claim was for the sum of $44,000, plus interest and indemnity costs. [4] NZHB applied for summary judgment. This was granted by Judge Farish in the District Court. On appeal Fogarty J expressed doubts as to whether summary judgment was appropriate, but considered that he should follow the reasoning of this Court in Singh v New Zealand Home Bonds Ltd. 1 Although the bond provided for payment of the bond to its holder "following failure by a purchaser to settle the Agreement", Fogarty J considered that the reasoning in Singh obviated any need for inquiry by NZHB into whether there was good reason for the failure to settle. 2 He dismissed the appeal. [5] However, Fogarty J subsequently granted leave to appeal because he was satisfied that "the question of the meaning of the word 'failure' is an issue which needs to go back to the Court of Appeal". 3The factual background[6] On 23 July 2004 Ms Sim entered into an agreement for sale and purchase (the agreement) with Winsun Developments Ltd (Winsun) to purchase three residential1 Singh v New Zealand Home Bonds Ltd [2009] NZCA 103.2 Sim v New Zealand Home Bonds Ltd HC Christchurch CIV 2009-409-394, 29 September 2009 at [30].3 Sim v New Zealand Home Bonds Ltd HC Christchurch CIV 2009-409-394, 21 October 2009 at [6].apartments for a total sum of $455,000. The agreement provided two options in relation to the payment of a deposit. Option 1 provided for a cash deposit of 15 per cent payable to a stakeholder's trust account within 15 working days. If the agreement did not become unconditional, the deposit with interest was repayable to the purchaser. [7] The second option provided for a 10 per cent deposit through the issue of what was termed a development home bond (bond) to the vendor. Ms Sim was required to pay a total of $1,500 in cash to the stakeholder, and in addition apply to NZHB for a $44,000 bond. When some preliminary conditions of the agreement were satisfied, the vendor could call for the issue of the bond "in full satisfaction of the Purchaser's deposit obligations to the Vendor". 4 Ms Sim opted for the bond option. [8] The apartment blocks were not constructed at the date of the agreement. Clause 5 provided that the agreement was conditional in various respects, including that certificates of title to the units or certificates of practical completion (whichever was the later) must issue by 12 May 2008, or the agreement would lapse. [9] On 30 August 2004 Ms Sim made application to NZHB for the issue of a bond. Her application was finally approved on 17 September 2004. A condition of the approval was that Ms Sim provide a caveat by way of security over her then home. [10] The bond was issued on 29 November 2004. NZHB bound itself to pay $44,000 to the vendor under the agreement for sale and purchase if:Purchaser Default8) If the Purchaser fails to settle the Agreement following: a) expiry of a settlement notice served on the Purchaser on or before the Expiry Date (including any extension thereof); and b) delivery to NZHB on or before the Expiry Date of a certified copy of the settlement notice and proof of valid service; NZHB will within 7 days pay the amount of the Development Homebond to the4 Clause 4.5 of the agreement.Vendor. NZHB will, if requested by the Vendor, delay payment of the amount of the Development Homebond without prejudicing NZHB's obligation to make that payment.[11] Consistent with cl 8 of the bond, cl 27 of the application for the issue of the bond defined Ms Sim's position in these terms:Purchaser Default27. Following failure by a Purchaser to settle an Agreement, the Purchaser acknowledges that the Vendor may, before the last day of the Anticipated Bond Period (as extended) deliver to NZHB a written demand which (a) confirms the failure of the Purchaser to settle the Agreement and (b) attaches a certified copy of an expired settlement notice and proof of valid service on the Purchaser. The Purchaser further acknowledges that NZHB will within 7 days of receipt of a claim pay the amount of the Development Homebond ("the Amount") to the Vendor. NZHB may, if requested by the Vendor, delay payment of the Amount without prejudicing NZHB's obligation to make that payment.[12] Although the initial expiry date of the bond was eight months after its issue, the term was extended from time to time. It remained current in early 2008 when demand for payment of the bond was made. The bond had been assigned, initially to Westpac New Zealand Ltd (Westpac), and then to Hanover Finance Ltd (Hanover). [13] On 12 September 2007 solicitors acting for Winsun sent settlement notices to Mr Sam Ngu, the solicitor then acting for Ms Sim. The notices allowed 10 working days from service for settlement, failing which Winsun would exercise its rights under the agreement. [14] On 26 September 2007 Mr Ngu responded to the settlement notices on behalf of Ms Sim. Relevantly the letter said that there were no valid grounds for issuing the notices because the transaction "involved a misrepresentation issue". No further explanation was provided. [15] On 21 January 2008 solicitors acting for Hanover made demand upon NZHB for payment under the bond. [16] On 30 January 2008 the credit manager of NZHB, Mr Miller, wrote to Ms Sim advising of the demand received from Hanover. The letter recorded thatMs Sim had defaulted in her obligation to settle the purchase of the three apartments and that, accordingly, NZHB had seven days in which to make payment to Hanover. [17] The letter included this:You are currently in default with NZHB. When NZHB pay this claim you will be liable to NZHB for $44,000.00 plus any interest and costs incurred by NZHB. The only circumstances in which NZHB will not make such a payment is if NZHB is in receipt of a copy of a court order or injunction restraining the vendor from enforcing settlement and/or preventing NZHB from paying the deposit to them. You now have until the Wednesday 5th February 2008 in which to provide NZHB with a court order or injunction.The letter demanded payment of $44,000 into the trust account of NZHB's solicitors. [18] Ms Sim had meanwhile obtained new legal representation. On 4 February 2008 a solicitor in Mr Singh's office, Mr Sharma, wrote to NZHB and to Winsun's solicitors. The letter to NZHB enclosed a copy of the Winsun letter. In combination the letters made the following points: (a) That Mr Singh's firm was now acting for Ms Sim. (b) That Winsun was in receivership and liquidation and accordingly the September settlement notices were issued by Wadsworth Ray, the solicitors acting for Winsun, "without authority". (c) That on some unspecified date Winsun "accepted there was no agreement between the purchaser and it"; and NZHB accepted this position and released "all the purchasers from any home bond obligations they had". (d) If the agreement was not mutually cancelled, then the "alleged agreement was rendered nugatory..." in that after the issue of "an invalid settlement notice and without any notice of cancellation of the agreement, the vendor sold the property to a third party in December 2007".On these grounds it was said that the deposit was not payable, any sum paid by Ms Sim by way of deposit was refundable and that withdrawal of the caveat over Ms Sim's property was required. [19] Although there is no direct evidence on the point, we infer that Winsun did in fact resell the apartments in late 2007. Clause 18.3(ii) of the agreement entitled Winsun to cancel the contract upon non-compliance with a settlement notice. In that event Winsun could forfeit and retain the deposit, and interest thereon. Entry by Winsun into a resale agreement effected a cancellation of Mr Sim's agreement, so that the resale was "deemed to have occurred after cancellation".5[20] On 7 February 2008 NZHB paid $44,000 to Hanover. Subsequently, it issued a claim in the District Court to recover the amount of the bond, interest at 18 per cent per annum from the date of default and indemnity costs. [21] The notice of opposition filed by Ms Sim in the District Court raised two grounds, namely that the agreement between Winsun and Ms Sim was mutually cancelled, so that no deposit was payable, and, in the alternative, that the liquidator of Winsun repudiated the agreement by selling the apartments to a third party without cancelling the agreement.Issues on appeal[22] Although in granting leave to appeal Fogarty J identified the interpretation of the word "failure" in cl 27 of the bond application form as the issue warranting the attention of this Court, the appeal was advanced on broader grounds. [23] In the result four grounds of appeal were raised: (a) that the agreement was mutually cancelled by agreement of the parties sometime about 1 September 2004; (b) that the 12 September 2007 settlement notices were issued without authority, in that Winsun was in receivership or liquidation and the5 Clause18.4.solicitors who issued the notices were not acting on behalf of the receivers or liquidator; (c) that the requirements of cl 27 of the bond application form were not complied with, in that certified copies of the expired settlement notices, and proof of valid service on Ms Sim, were not provided to NZHB; and (d) that the evidence did not disclose a "failure by [Ms Sim] to settle the Agreement", in that NZHB was put on notice of disputes between the vendor and the purchaser which precluded a determination (at least in a summary judgment context) that a failure had occurred.Mutual cancellation of the agreement in 2004[24] Mr Ee Kuoh Lau swore an affidavit in opposition to the application for summary judgment. He was Ms Sim's partner in 2004 (although they are now separated) and participated with her in the conclusion of the agreement. [25] His affidavit contains this:6. AS at the date of the purchase agreement, clauses 5.1 and 5.2 were not satisfied. We were advised of this by the director of Winsun Ms. Lily Zhong. By oral agreement, we set a date of 1 September 2004 by which these conditions had to be satisfied. 7. ACCORDINGLY, the purchase agreement was conditional. ... 14. AFTER the dates by which the conditions in clauses 5.1 and 5.2 had to be fulfilled had passed (i.e. 1 September 2004), Winsun agreed with [Ms Sim] and others of our family who also had similar agreements, that it could not keep up the promise it had made. 15. BY mutual agreement the purchase agreement was cancelled. At least I am aware that [Ms Sim] cancelled the agreement under clause 17(c). As she is currently in Malaysia I am not able to provide the documentation in relation to this at this stage.[26] Mr Lester, counsel for NZHB, submitted that Mr Lau's evidence was not credible and did not raise an arguable defence: Pemberton v Chappell. 6 He pointed out that cl 5.2 made the agreement conditional upon the availability of certificates of title or certificates of practical completion, by 12 May 2008. No doubt this condition6 Pemberton v Chappell [1987] 1 NZLR 1 (CA).was inserted to ensure that the apartments were constructed within a reasonable timeframe, given that this was a major development. Yet, Mr Lau asserted that Ms Zhong agreed to bring the completion date forward by almost four years (to 1 September 2004), with the result that the agreement was cancelled by mutual agreement at about that time. This makes no sense. Counsel also pointed out that cl 24.1 provides that the agreement itself contains the entire agreement between the parties. [27] In addition, the asserted variation and subsequent cancellation is at odds with the conduct of the parties. Ms Sim applied for the development home bond in August 2004. On 6 September 2004 NZHB conditionally approved her application. Two conditions were the payment of a $100 application fee and confirmation that a caveat over Ms Sim's existing property would be provided. An application fee (of $300 – presumably because there were three apartments) was duly paid. On 17 September 2004 the application was unconditionally approved. On 29 November 2004 the bond was issued in favour of Winsun. [28] Contemporaneously Winsun paid a bond creation fee of $2,704 and subsequently made regular periodic payments of $374 to NZHB until the end of 2007. Further, Winsun assigned the bond to Westpac, which in turn assigned it to Hanover in November 2007. It is highly unlikely that these commercial entities did not ensure that the bond remained current at that time. This indicates that Winsun must have made the necessary payments to ensure that the bond did not expire. [29] This history is incompatible with the bare assertion that the agreement was cancelled by mutual agreement in September 2004. We accept that Mr Lau's evidence is not credible and does not raise a creditable defence.Authority to issue the settlement notices[30] The settlement notices dated 12 September 2007 were issued and signed by Wadsworth Ray as the solicitors and duly authorised agents of Winsun. Mr Singh contended that this firm must have acted without authority in issuing them. He pointed to a letter to his firm from Wadsworth Ray dated 15 February 2008, in whicha partner other than the person who signed the settlement notices said "we took no action on behalf of Winsun ... after a Receiver was appointed". The writer of the letter requested a copy of the settlement notice alleged to have been issued after appointment of a receiver. [31] It does not appear that this issue was raised in either the District Court or the High Court. In any event Mr Lester responded to the argument by reference to a copy of the receiver's final report on the receivership of Winsun. Counsel did so on the basis the report was made to the High Court and was, therefore, a matter of public record. [32] The report noted that on 9 August 2007 Hanover exercised its rights under a second mortgage to repay Winsun's loan to Westpac, and take an assignment of Westpac's first mortgage. On 14 August Hanover appointed two chartered accountants as the receivers of the income of Winsun's property. On 18 October 2007 a liquidator was appointed, but in the meantime the settlement notices had been issued by Wadsworth Ray (in mid-September). [33] Mr Lester submitted that this history disclosed no want of authority on Wadsworth Ray's part. The settlement notices were issued while Winsun remained under the management and control of its director, albeit that a receiver of income had been appointed. We accept this analysis. 7Non-compliance with cl 27[34] This clause in the application form provides that following failure by a purchaser to settle an agreement written demand may be made to NZHB which demand confirms the failure and "attaches a certified copy of an expired settlement notice and proof of valid service on the purchaser". If these requirements are met NZHB must pay the amount of the claim within seven days, unless the vendor (or its assignee) authorises a delay in payment.7 See Hawkesbury Development Co Ltd v Landmark Finance Pty Ltd [1969] 2 NSWR 782 and Peter Blanchard and Michael Gedye Law of Company Receiverships in New Zealand and Australia (2 ed, Butterworths, New Zealand, 1994) at 224.[35] Mr Singh submitted that in seeking summary judgment NZHB had failed to provide evidence of a failure to settle, the provision of certified settlement notices or proof of their service on Ms Sim. [36] Mr Lester submitted that these formalities were never put in issue. On 26 September 2007 Mr Ngu wrote to Wadsworth Ray in response to the settlement notices, acknowledged their receipt and asserted that Ms Sim was not required to settle the transaction on account of a "misrepresentation issue". Hence, this evidence, adduced on behalf of Ms Sim, confirmed the refusal to settle and receipt of the settlement notices. As to the cl 27 requirement for certification of the settlement notices, we agree with Fogarty J's observation in his substantive decision 8 that this was for the benefit of NZHB, which waived the requirement. Ms Sim cannot assert an absence of form based on a term of the contract included for the benefit of another party. [37] For these reasons this ground of defence is also untenable."Failure" to settle the agreement[38] Fogarty J, in granting leave to appeal, expressed concerns about aspects of this Court's decision in Singh v NZHB.9 It is convenient to begin by reference to this decision.Singh v NZHB[39] Mr Singh acted for clients who obtained a bond in lieu of payment of a cash deposit to, as it happens, Winsun. The clients provided a caveat over their home as security for the bond. They wished to refinance their property. NZHB agreed to this, provided that Mr Singh gave a solicitor's undertaking to hold cash in trust in substitution for the caveat. Mr Singh gave an undertaking "to hold $73,000 following refinance on behalf of [NZHB]".8 At [32].9 Singh v New Zealand Home Bonds Ltd [2009] NZCA 103.[40] As in the present case NZHB was called upon to meet the bond, and did so, on the basis that the purchaser had failed to settle in response to a settlement notice. Mr Singh, however, declined to reimburse NZHB in terms of his undertaking. He maintained that NZHB was on notice that his clients disputed their liability to settle the agreement and that NZHB should not, therefore, have paid the amount of the bond. [41] This Court held that the meaning of the phrase "following failure by a Purchaser to settle an Agreement" in cl 27 was pivotal. It concluded:[41] The terms of the contract as a whole make it clear that dealings and disputes between the vendor and the purchasers are not relevant to the issue of whether or not [NZHB] was right to pay out the $73,000 and whether Mr Singh in turn was obliged to pay that sum to [NZHB]. Either upon settlement of the agreement or upon valid service by the vendor of, and non- compliance by the purchasers with, a demand for settlement, [NZHB] was entitled to demand the $73,000 from Mr Singh.Was summary judgment appropriate?[42] It is unfortunate that Mr Miller's evidence ... was so skeletal. Importantly, however, that evidence was not meaningfully challenged by Mr Singh. Mr Miller asserted in his affidavit that the settlement notice was valid, and that cl 27 was complied with. Mr Singh did not provide a satisfactory evidential challenge to that assertion before Associate Judge Christiansen.We note that the reference in [41] of Singh v NZHB to payment of the $73,000 "upon settlement of the agreement" was in error. NZHB's obligation to pay the bond only arose in a default situation (if the purchaser failed to settle in response to a settlement notice). If the purchaser settled in the normal manner the deposit formed part of the settlement sum, and the bond became redundant. [42] These paragraphs gave rise to Fogarty J's concerns in the present case. He doubted that the terms of the bond did make it clear that "failure" was to be construed in a neutral manner, in the sense that if settlement was not effected by the purchaser in response to a settlement notice there was a failure. Fogarty J thought it arguable that "failure", in the context of cl 27, meant a failure when the purchaser was contractually obliged to settle. Hence, if there was a genuine dispute as to the vendor's ability to call for settlement, a failure was not demonstrated and entry of summary judgment was inappropriate.[43] He also considered [41] and [42] quoted above to be contradictory. The former indicated that disputes between the vendor and purchaser were of no concern to NZHB. Yet in [42] the possibility of "a satisfactory evidential challenge" to Mr Miller's affidavit was raised, as if disputes could be of moment. This suggested that the Court in Singh did not consider that "failure" was an entirely neutral concept.The arguments in this case[44] Mr Lester submitted that cl 27 falls to be determined objectively and on a commercially reasonable and sensible basis. He said that a cash deposit and a deposit secured by way of a bond were alternative options under the agreement for sale and purchase, and the interpretation accorded cl 27 should recognise as much. A cash deposit was held by a stakeholder and was to be released to the vendor on the date of settlement, regardless of any contrary instructions from the purchaser. Mr Lester argued that a similar situation obtained in relation to a bond, provided a neutral interpretation was accorded to the word "failure" in cl 27. Regardless of the option chosen by the purchaser, the deposit was payable to the vendor by the stakeholder on, or by NZHB after, the settlement date even if the purchaser protested against payment. [45] Mr Singh supported the concerns raised by Fogarty J in dismissing the appeal, and then in granting leave to appeal to this Court. He urged the view that this case was distinguishable from Singh v NZHB, in that here an evidential foundation as to the existence of a genuine dispute was established by Ms Sim. Her solicitors wrote to NZHB before payment of the bond outlining the nature of that dispute. Mr Singh supported the concern voiced by Fogarty J that the reasoning inSingh v NZHB was wider than the material facts demanded, because there was no evidence that NZHB was on notice of a dispute. Hence, counsel submitted that the interpretation of failure should be revisited in this case.Evaluation[46] In a summary judgment context the key issue is whether evidence that the purchaser gave notice disputing her liability to settle the agreement affected NZHB's obligations under the bond. Was it required to inquire into the merits of the dispute? Or, is failure to be accorded a neutral interpretation with the result that NZHB was bound to meet its obligations under the bond regardless of the purchaser's protest? [47] We have already referred to cl 8 of the bond which deals with purchaser default. 10 This clause defines NZHB's obligations to the bond holder, whether the vendor or an assignee. By contrast, the relationship between NZHB and the purchaser is governed by the application for the issue of the bond, in particular cl 27.11 There is an obvious consistency between the two clauses, as one might expect. Payment of the bond is only to be made when: (a) a settlement notice has been served on the purchaser and has expired; (b) the purchaser has failed to settle the agreement in response to the notice; and (c) NZHB has received a demand for payment of the bond and confirmation of the purchaser's failure to settle, including a certified copy of the settlement notice and proof of its valid service on the purchaser. Hence, neither cl 8 nor cl 27 expressly addresses what, if anything, is required of NZHB in the event that the purchaser gives notice of a dispute. [48] In comparing the position of the two types of purchaser we note that cl 3.2 of the agreement provides in relation to a cash deposit that the stakeholder shall release the deposit "on the settlement date" and "notwithstanding any previous instructions to the contrary from the Purchaser or the Purchaser's solicitor". If, however, the10 See [10] above.11 See [11] above.agreement is cancelled, including for non-satisfaction of its conditions, the purchaser is entitled to the return of the deposit and interest. 12[49] The agreement, however, does not deal with payment of the bond to the vendor, since the payment obligation then lies with NZHB which is not of course a party to that agreement. The agreement simply provides that the vendor shall be entitled to call for the issue of the bond, when (relevantly for present purposes) "all conditions in this Agreement for the sale and purchase of the Unit are satisfied, excluding any conditions inserted for the sole benefit of the Vendor or any conditions relating to completion of the Development or the issue of titles". 13[50] The conditions are set out in cl 5. The agreement was conditional upon the vendor obtaining a minimum level of sales and all necessary consents and approvals relating to the development by 1 May 2004, at which point the vendor could call for the issue of the bond. Plainly this must have happened in this case, given the history to which we have already referred, although there is no specific evidence on the point. Clause 5.2 also made the agreement conditional upon the availability of title and of a certificate of practical completion, whichever was the later, by 12 May 2008; although these conditions were exempted by cl 4.5(c) and did not therefore affect the issue of the bond. [51] Importantly, the conditions in cl 5.2 concerning title and practical completion were central to identification of the settlement date. Clause 11.1 provides that settlement was to occur on the seventh working day after the date the vendor's solicitors provided to the purchaser or the purchaser's solicitors the certificate of practical completion and a copy of the certificate of title, whichever was the later. This provision tied back to cl 3.2 concerning release of the cash deposit to the vendor. The stakeholder could only do this "on the settlement date". In the result the release of a cash deposit was dependent on proof of both practical completion and the availability of title, but any protest by the purchaser was not relevant.12 Clause 3.7.13 Clause 4.5(c).[52] If settlement did not occur on the settlement date, either party could serve a settlement notice, but such notice was only effective if the party serving it was then ready, willing and able to settle.14 Should the vendor not comply with a purchaser's settlement notice, cl 18.7 entitled the purchaser to sue for specific performance or to cancel the agreement and require the vendor to repay the deposit (which could already have been released to the vendor by the stakeholder in terms of cl 11.1). [53] Does it follow that cash deposit purchasers on the one hand, and bond deposit purchasers on the other, were contractually in a similar position? In substance we think that they were. Payment of the deposit could occur in one of three ways. A cash deposit would be released on the settlement date. The stakeholder, being the vendor's solicitors, would know that the obligations to be met to bring about the settlement date were satisfied. [54] Secondly, a bond deposit purchaser could pay the deposit on settlement as part of the purchase price and be safe in the knowledge that certificates of practical completion and title were to hand. Thirdly, if the purchaser failed to settle in response to a settlement notice, NZHB was bound to pay the bond upon demand from the vendor, supported by the provision of an expired settlement notice and proof of its service. [55] In relation to a bond deposit purchaser there is a distinction between payment of the deposit by the purchaser's solicitors upon settlement, as opposed to payment of the bond by NZHB following a failure to settle. In the former situation the solicitors would be in receipt of a certificate of practical completion and a copy of the certificate of title, whereas in the latter NZHB would only have an expired settlement notice and proof of its service. But in our view the use of the words "settlement notice" in both cl 8 of the bond and cl 27 of the application form must contemplate the existence of a valid settlement notice in terms of the sale and purchase agreement. For a notice to be valid, the settlement date must have occurred through proof of both practical completion and the availability of title. Absent either there can be no valid settlement notice, as defined by the agreement.14 Clause 18.1.[56] To this extent the use of the word "failure" in cl 27 (and "fail" in cl 8) requires an element of fault. A default occurs only if there is a failure to settle in response to a valid settlement notice. Hence, should NZHB be put on notice that the settlement date has not occurred and that the settlement notice was not therefore valid, it would be obliged to inquire into the aspects of practical completion and availability of title. Thereby the word failure is accorded substance. The purchaser must be shown to have failed to settle in the face of a valid settlement notice, at least in any case where validity is put in issue. [57] The exception of a challenge to the validity of the settlement notice aside, we are satisfied that NZHB was bound to pay the bond regardless of protest by the purchaser or her solicitors. As Mr Lester submitted, NZHB is not required to become embroiled in disputes between the vendor and purchaser. Nor for that matter is the stakeholder, who must release a cash deposit to the vendor on the settlement date, regardless of protest by the purchaser. [58] Turning briefly to recovery of a deposit by a purchaser, we consider that cash deposit, and bond deposit, purchasers are in a comparable situation. A bond deposit purchaser would be in a disadvantaged position if NZHB was at liberty to pay out the bond and seek recovery from the purchaser, regardless of whether the settlement notice was valid or not. If this was so the purchaser would have no option but to pursue a likely impecunious vendor. But, if a failure to settle requires the existence of a valid settlement notice, both types of purchaser are in a similar situation. Both have the protection that proof of practical completion and availability of title must precede the release of the deposit, or payment of the bond, as the case may be. [59] The protest to payment of the bond made to NZHB on Ms Sim's behalf on 4 February 2008 15 raised disputes concerning issues other than practical completion and the availability of title. We consider that NZHB was not bound to inquire into disputes of this nature. [60] In any event, we have already considered two of the disputed issues and rejected them. The third was a contention that the agreement was mutually cancelled15 See [18] above.when Winsun sold the property to a third party in December 2007, which was after Ms Sim's failure to settle in September 2007. Following non-compliance with a settlement notice, the vendor was entitled to resell the units to a third party, 16 in which event entry into the resale took effect as a cancellation of Ms Sim's agreement. Hence, even if it were relevant, there is no apparent substance to this ground of complaint either.Result[61] The appeal is dismissed. The respondent is entitled to costs for a standard appeal on a band A basis and usual disbursements.16 Clause 18.4 of the agreement.