MIRAMS V NICHOLAS BRUCE AND BRUCE HC HAM CIV 2006-419-705

MIRAMS V NICHOLAS BRUCE AND BRUCE HC HAM CIV 2006-419-705 14 June 2006IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY CIV 2006-419-705UNDER THE LAND TRANSFER ACT 1952 IN THE MATTER OF Caveat No. 6875001 (South Auckland Registry) BETWEEN TIMOTHY JOHN MIRAMS AND IMOGEN MIRAMS Plaintiffs AND NICHOLAS BRUCE AND SUSAN ELAINE BRUCE Defendants Hearing: 8 June 2006 Appearances: J A MacGillivray for plaintiffs C Patterson for defendants Judgment: 14 June 2006JUDGMENT OF ALLAN JSolicitors: Lovegroves, PO Box 25066, St Heliers, Auckland chris.patterson@waterloochambers.net Tompkins Wake, PO Box 258, Hamilton Jmacgillivray@tomwake.co.nz[1] The plaintiffs are the registered proprietors of a lifestyle block situated at 1174A Horotiu Road, Whatawhata. They agreed to sell the property to the defendants. The agreement for sale and purchase was subject to a provision which entitled the solicitors for the respective parties to give or withhold their approval within a stipulated period. The plaintiffs' solicitors notified the defendants' solicitors within the period so provided, that they did not approve the agreement. The defendants do not accept that, in the circumstances of this case, the disapproval was valid. [2] The plaintiffs have signed a back up agreement, which is now unconditional. Settlement of that agreement is due on Friday 16 June 2006. [3] The defendants have lodged a caveat in order to protect their interest as purchaser under their agreement with the plaintiffs. In order to settle with the back up purchasers, the plaintiffs must obtain clear title. They accordingly apply under s 143 of the Land Transfer Act 1952, for an order directing removal of the caveat. [4] The outcome of the application turns upon the single question of whether the plaintiffs' solicitors were, in all the circumstances of the case, entitled to disapprove the agreement. If they were, then the plaintiffs' agreement with the defendants is at an end, and the caveat cannot be sustained. On the other hand, if the notice of disapproval was invalid, then the agreement between the plaintiffs and the defendants remains on foot, and the defendants are entitled to maintain their caveat.Background[5] The agreement between the plaintiffs and the defendants is dated 9 May 2006. It provides for a purchase price of $445,000, payable as to a deposit of $43,000 immediately and as to the balance on 21 July 2006, upon which date possession was to be given and taken. The agreement contained the following special terms:15.0 Notwithstanding that this agreement is an immediate and binding contract, the obligations of both the Vendors and the Purchasers hereunder shall be suspended until this agreement has been approved by the respective parties' solicitors, such notice to be received withinfive working days from the date of this agreement. If such notice is not received within the aforesaid time the respective parties shall be deemed to have waived their rights under this condition. 16.0 This agreement is conditional upon the purchasers entering into a contract for the sale of the purchaser's property at 2 Truman Street, St Johns Park, Auckland, on terms and conditions satisfactory to the Purchaser, which contract is to become unconditional no later than 4.00 pm on 23 day of June 2006. The Purchaser is to notify the Vendor or the Vendor's solicitor by 5.00 pm on that date this condition has been satisfied or this agreement will be at an end. This condition is for the sole benefit of the Purchaser.[6] The plaintiffs referred the agreement to their solicitors, Tompkins Wake. Mr Parham, a consultant in that firm, had overall responsibility for the file, but most of the work was done by Mrs Judson, a very experienced legal executive. When Mrs Judson reviewed the agreement, she identified a problem for the plaintiffs. Difficulties arose in two respects, both associated with the provisions of an earlier agreement into which they had entered for the purchase of a property at 1872 McClure St, Pirongia. That earlier agreement is dated 5 April 2006. The purchase price was likewise $445,000, payable by way of a deposit of $20,000 with the balance due on the settlement date, 30 June 2006. That agreement contained the following special term:15.0 This agreement is conditional upon the purchasers entering into a contract for the sale of the purchaser's property at 1174A Horotui Road, Hamilton on terms and conditions satisfactory to the Purchaser which contract is to become unconditional no later than 4.00 pm on 2 nd day of June 2006. The purchaser is to notify the Vendor or the Vendor's Solicitor by 5.00 pm on that date this condition has been satisfied or this agreement will be at an end. This condition is for the sole benefit of the Purchaser. 16.0 If before this agreement becomes unconditional the Vendor enters into another agreement which is unconditional in all respects except for it being subject to non-confirmation of this prior agreement, and which the Vendor in the Vendor's judgment considers to be no less favourable, the Vendor may deliver to the Purchaser or the Purchaser's solicitor notice in writing requiring the Purchaser to confirm this agreement as being unconditional. The Purchaser shall have until 4.00 pm on the fifth working day after delivery of such notice to advise the Vendor by delivery of notice in writing to the Vendor or the Vendor's solicitor that this agreement is unconditional, otherwise this agreement shall terminate. This condition is for the sole benefit of the Vendor.[7] The problems identified by Mrs Judson were: a) The agreement between the plaintiffs and the defendants provided for possession to be given and the balance of the purchase price to be paid on 21 July 2006, but the purchase by the plaintiffs of their new property was due for settlement on 30 June 2006, some three weeks earlier. The plaintiffs needed the net proceeds of the sale to the defendants in order to settle the purchase of their new property, but those proceeds would not be available on 30 June 2006. b) The agreement between the plaintiffs and the defendants was conditional upon the defendants entering into an unconditional agreement to sell their Auckland property by 23 June 2006, so the plaintiffs may not have known whether they had an unconditional sale until that date. However, the plaintiffs' agreement to purchase the Pirongia property was conditional upon the plaintiffs entering into an unconditional agreement to sell the Horotiu Road property by 2 June 2006. There was therefore, the prospect that the plaintiffs might lose the Pirongia property because by 2 June they had no unconditional sale, and it would have been too risky for them to waive the condition in the Pirongia agreement. [8] Mrs Judson discussed the matter with her clients. They agreed that they were in an unsatisfactory position and that something would need to be done to resolve it. [9] On her clients' instructions, on 16 May 2006 (the last day for solicitor's approval in the Horotiu Road agreement), Mrs Judson asked the solicitors for the defendants for an extension of the time within which solicitor's approval was required by clause 15.0. The extension sought was for a period of two days, to 18 May 2006. The defendants, through their solicitors, agreed to that extension. [10] At the same time Mrs Judson asked for an extension of the settlement date for the Pirongia purchase to 21 July 2006, so that it would match the date for settlement of the Horotiu Road sale. I infer that that request was made by telephone.Mrs Judson's affidavit is silent as to precisely how she communicated with the solicitors concerned. There is no reference in her affidavit to any document relevant to the request. [11] On 17 May 2006 the plaintiffs entered into a back up agreement for the sale of the Horotiu Road property. That was the day after the request was made by Mrs Judson for a two day extension of the time for solicitor's approval, and the day before the extended period was to expire. The back up agreement provided for a purchase price of $445,000, a figure identical to the price to be paid by the defendants pursuant to their agreement with the plaintiffs. There was to be a deposit of $5000, with the balance to be paid on settlement day, which, as earlier noted, was 16 June 2006. [12] Paragraph 15.0 of the back up agreement provides:15.0 This agreement is conditional upon the cancellation or termination of the existing agreement for the sale of the property. The vendor agrees to take all necessary steps to cancel or terminate the said agreement immediately the Vendor is lawfully entitled so to do and the Vendor also agrees not to grant any extension of the condition date thereunder nor to waive any right of cancellation or termination thereunder.[13] By 18 May, there had still been no response from the solicitors for the vendors of the Pirongia property to the proposals for the extensions of time earlier put to them by Mrs Judson. The plaintiffs' predicament remained unresolved. Mrs Judson was conscious of the fact that, unless she notified the defendants' solicitors by 5 pm on 18 May that solicitor's approval was not available, that agreement would become unconditional. In the absence of subsequent variations to the agreements, that would require that the plaintiffs find the money to purchase the Pirongia property without having available to them the proceeds of sale of Horotiu Road. [14] Mrs Judson spoke to Mrs Mirams on the afternoon of 18 May 2006, and explained the position to her. In the circumstances, Mrs Judson advised Mrs Mirams to cancel the agreement with the defendants, and sought and obtained instructions tothat effect. Mrs Judson wrote to the solicitors for the defendants in the following terms:We confirm clause 15.0 being the vendors' solicitor's approval clause is not satisfied and the contract is at an end.[15] There is evidence that this letter was received by facsimile in the offices of the defendants' solicitors at 3.07 pm on 18 May. The solicitor acting for the defendants was Mr K W Harborne of Lovegroves, an Auckland firm. Under his supervision the bulk of the work on the file was being carried out by a Ms Crawley, an experienced legal executive. [16] On receipt of Mrs Judson's letter, Ms Crawley telephoned Mrs Judson to ask why the agreement had not been approved. It is not in dispute that Mrs Judson simply reconfirmed the fact of non-approval, and the fact that she had instructions to bring the agreement to an end. Ms Crawley protested that the solicitor's approval clause could not be used to cancel the agreement unless there was a defect in the agreement from a conveyancing point of view, but Mrs Judson nonetheless confirmed that she had instructions to cancel. [17] At 3.55 pm that same afternoon, Ms Crawley wrote to Mrs Judson as follows:Mirams to Bruce: 1174A Horotiu Road, WhatawhataThank you for your letter of 18 May 2006 advising of non-approval of clause 15 by you as the vendors' solicitors. We note that during our subsequent telephone conversation, we requested to know the reason for the non-approval of the agreement, and the writer was advised by you that 'your client had instructed you to do so'. The policy of the Court of Appeal to solicitor's approval conditions is 'to construe solicitor's approval conditions consistently as conditions subsequent to a binding contractual relationship, on the same basis as, for example, finance conditions, and to allow only a narrow range of available grounds for withholding approval'.Further in Boote v R T Shiels & Co Ltd Cooke J said that 'The solicitor's approval could not be withheld capriciously or merely on the instructions of his client, but was meant to ensure that the conveyancing aspects of the transaction were satisfactory from the vendor's/purchaser's point of view'.We therefore do not accept the non-approval of clause 15 of the agreement based on your verbal advice that your client had instructed you to cancel theagreement. In the event that your client has received a further offer to purchase the property, then we note that the agreement contains an escape clause (clause 17) and we therefore invite you to operate this clause. We look forward to hearing from you.[18] Mrs Judson says she was unaware of the existence of the back up agreement when she took instructions from Mrs Mirams on 18 May, and wrote on that day to the defendants' solicitors advising that the agreement was not approved. [19] She responded to the letter from Lovegroves that same afternoon in the following terms:Timothy John & Imogen Mirams – Sale to Nicholas Bruce & Susan Elaine Bruce – Property at 1174A Horotiu Road, WhatawhataWe advised our client that the transaction was not satisfactory to them in accordance with clause 15 and we asked for their instructions to cancel the agreement and they confirmed we should do so. We could not cancel the agreement without our clients' instructions based on the advice we gave them.[20] The response from Lovegroves reads as follows:Mirams to Bruce: 1174A Horotiu Road, WhatawhataWe acknowledge receipt of your second letter of 18 May 2006. This is semantics. You are still cancelling the agreement on your client's instructions. If the agreement was not satisfactory to you, as solicitors for the vendor, then in what way was it not satisfactory? We look forward to hearing from you.[21] The reply from Tompkins Wake was as follows:Timothy John & Imogen Mirams – Sale to Nicholas Bruce & Susan Elaine Bruce – Property at 1174A Horotiu Road, WhatawhataWe are not obliged to give a reason. We advised our client on conveyancing aspects relating to the transaction and recommended that the agreement be cancelled. They then instructed us to do so.[22] On the following day, 19 May, Lovegroves wrote to Tompkins Wake as follows:Mirams to Bruce: 1174A Horotiu Road, WhatawhataWhen you asked why clause 15 was not approved you replied that your client had instructed you to do so. You are not entitled to do this in terms of the law and our clients' contract is therefore still on foot and we intend to register a caveat to protect our clients' interests.[23] The reply from Tompkins Wake reads as follows:Timothy John & Imogen Mirams – Sale to Nicholas Bruce & Susan Elaine Bruce – Property at 1174A Horotiu Road, WhatawhataThe agreement clause provides that the obligations of the parties are suspended until this agreement has been approved by the respective solicitors. We did not approve it. The condition had to be dealt with as it would otherwise have been deemed to be approved. We informed our clients and they agreed. The agreement is at an end and we will not respond to any further correspondence.[24] That same day, 19 May, Lovegroves wrote to Mrs Judson at Tompkins Wake to advise that all conditions in the agreement between the plaintiffs and the defendants had been satisfied and that the agreement " may therefore be regarded as unconditional". [25] That letter brought a rather more detailed reply from Tompkins Wake. The conduct of the file in that firm had by then apparently passed to Mr MacGillivray who appeared before me as counsel for the plaintiffs. It is appropriate to set out his letter of 22 May in full, because it largely encapsulates the stance of the plaintiffs and of their solicitors.1. We refer to previous correspondence in relation to this matter. We refer particularly to your letter of 19 May 2006 purporting to declare the cancelled agreement between our respective clients as unconditional and your earlier letter of the same date threatening to register a caveat against the title to our client's property. 2. The agreement between the parties was conditional on us, as the vendors' solicitors, approving the agreement by 16 May 2006. This condition was not fulfilled and our clients were entitled to bring the agreement to an end which they have done. We are well aware of the basis upon which solicitor's approval can be validly withheld and that approval cannot be withheld capriciously or simply because of a client's wishes. We considered whether this agreement was satisfactory to our clients from a conveyancing perspective. We concluded that it was not. In particular, the settlement date under the agreement was unsatisfactory as it would not have permitted ourclients to fulfil their obligations under an existing agreement to purchase another property. Had we been consulted in advance, we would never have advised our client to enter into an agreement on these terms and, accordingly, it would have been negligent of us to have approved the agreement. 3. With respect, you seem to have become distracted by the fact that Jackie Judson has stated that our client instructed us to bring the agreement to an end. It is always possible for a client to disregard our advice and to instruct us declare a condition satisfied even though we consider that aspects of an agreement are unsatisfactory. In this case, having advised our client that we would not approve this agreement, our client instructed us that they wished to cancel the agreement for the failure of that condition. This does mean that we withheld our approval because our client instructed us to do so. 4. Accordingly, the agreement is not unconditional and is in fact at an end. Were you to lodge a caveat on the title to this property, we would apply immediately to the High Court for an order that the caveat be removed. We reserve the right to produce a copy of this letter to the Court in support of a claim for costs on any such application and we would look to your clients to recover any other losses or expenses that might be caused by the lodging of a caveat.[26] The defendants lodged a caveat on 23 May. Tompkins Wake sought the removal of that caveat by letter to Lovegroves, but in a letter of 29 May that firm declined to withdraw the caveat and indicated an intention to defend any proceedings which might be brought by the plaintiffs. This application has followed.The law[27] It is well established that an order for the removal of a caveat will not be made under s 143 unless it is patently clear that the caveat cannot be maintained, either because there was no valid ground for lodging it, or that any such valid ground as existed no longer does: Sims v Lowe [1988] 1 NZLR 656, 659-660. It is for the caveator to demonstrate that a reasonably arguable case exists for the continued existence of a caveat: Sims v Lowe p 660. That was accepted by counsel in this case, who agreed that Mr Patterson for the defendants should begin. [28] In some circumstances it will not be possible to resolve contested issues relating to a caveat without oral evidence, including cross-examination, in an ordinarily constituted proceeding. But where the facts are fully before the Court and not in dispute, and there has been an opportunity for full argument as to the law, thesection 143 procedure will be appropriate: Field v Fitton [1988] 1 NZLR 482, 491 (CA). Counsel were agreed that no material fact is in dispute, although the parties are at odds in respect of the inferences which ought to be drawn from those facts, and as to the legal ramifications of what has occurred. But I agree that it is possible in this case to resolve the matter on the papers. [29] The leading case on the construction and application of solicitor's approval clauses remains Provost Developments Ltd v Collingwood Towers Ltd [1980] 2 NZLR 205 (CA). There the Court of Appeal considered a clause in an agreement for sale and purchase of a number of adjoining house properties which read:Subject to solicitor's approval by Friday, 30 June 1978 by 5 pm.[30] At p 208 of the judgment Woodhouse J referred to the earlier decision of the Court of Appeal in Boote v R T Shiels & Co Ltd [1978] 1 NZLR 445 in which the Court expressed the view (at p 451), thatA solicitor's approval could not be withheld capriciously or merely on the instructions of his client, but were meant to ensure that the conveyancing aspects of the transaction were satisfactory from the purchaser's point of view.[31] Woodhouse J (p 209) affirmed that approach in the course of a discussion as to the elements of the discretion vested in solicitors by such clauses. He said:I am satisfied that its purpose must be found on the more limited basis associated with the usual function of a solicitor who is asked to assess the legal implications of a contract for sale already arranged by the parties and which is to be given effect subject only to that professional assessment. Cooke J used the convenient phrase "conveyancing aspects" in order to describe the same kind of responsibilities and I would adopt it subject only to the words being read in the liberal sense that a solicitor could properly take into account such a matter for example as some legal impediment that could prevent vacant possession being given by the stipulated time for completion.[32] Further assistance is to be gleaned from the judgment of Richardson J (p.213):It is, I think, implicit that what is contemplated is approval of the particular agreement. So the solicitor is not to consider the wisdom of selling the property at all at that time. Any further limitation on the scope of his inquiry and advice must stem from the reference to "solicitors" in the context inwhich it is used. The parties provided for the approval of their solicitors. Not of their accountants or financial advisers. That choice must reflect their perception of the role a solicitor would perform for them.[33] Richardson J went on to note that the scope of a lawyer's advisory role cannot be stated with any precision. Solicitors have, as he noted, a wide expertise, drawing on their knowledge of commercial and financial matters, just as much on their knowledge of any particular branch of the law. And, he continued:What advice will be expected by the client and given by the solicitor will depend on all the circumstances, including the nature and money value of the transaction and its legal and commercial ramifications and the relationship between the particular client and his lawyer.[34] In that case the Judge noted that the parties had already entered into a binding agreement and had had reached a consensus as to the terms of that agreement, past the point at which the commercial advantages and disadvantages of the transaction were open for further consideration. So, Richardson J said, they must have been taken to have excluded the involvement of their solicitors as general advisers. [35] That being so, he held (p 214) he held:The role of the solicitor was to be limited to consideration of what might loosely but conveniently be termed the legal implications of the transaction, including in that description the form of the agreement, its validity, and the burden of the commitments entered into thereunder by their respective clients.[36] Richardson J went on to observe that it is necessarily implicit in a solicitor's approval clause that each party would engage a solicitor and consult that solicitor in good faith, and that the solicitor would give an honest opinion. Where evidence is given as to the reasons why a solicitor refused to approve the contract, it will still be a matter of determining whether the implied term has been complied with in that respect. [37] In New Zealand Wines & Spirits (Properties) Ltd v Commercial Realties (NZ) Ltd (1984) 2 NZCPR 157, Savage J had occasion to consider a challenge to the withholding of approval by a solicitor pursuant to a solicitor's approval clause. The plaintiff had entered into an agreement to sell to the defendant certain commercial premises, subject to a number of existing leases. The contract contained a clausemaking it conditional on the approval of the defendant's solicitors, which was refused on the ground that there were no personal covenants guaranteeing performance of the lessee companies' obligations under the leases. The plaintiffs sued for specific performance, arguing that the solicitor's approval had been wrongly withheld. [38] The Judge found for the plaintiffs. He said:The situation of the parties when this agreement was entered into on 11 August was that the parties had been negotiating over the transaction for some weeks before the agreement was executed. The defendant had had full details of the property, having been supplied with various reports and valuations, and the existing leases. The defendant knew precisely what it was buying and the terms of the purchase had clearly been very carefully considered, for there were to be both a mortgage back and a lease back. The defendant was well aware that under the existing leases the rents were to be reviewed within a relatively short time and it expected substantial increases. The function of the solicitors to the defendant in those circumstances was, in my view, no more than that of the solicitors in the Provost case. It was to consider the conveyancing aspects of the transaction between vendor and purchaser, including all legal impediments and implications, but it did not include the elements and merits of the bargain that had been reached. Here the defendant had agreed to purchase the property subject to the existing leases; that was the bargain.[39] His Honour went on to hold that the grounds given for refusing approval amounted to no more than an expression of the client's concern that the commercial bargain was worth less than would have been the case had the leases which passed with the premises been supported by personal covenants. The commercial elements of the bargain had been the subject of careful and lengthy negotiation: it was not for the solicitor, under the umbrella of a solicitor's approval clause, to seek to extract his client from a binding commercial arrangement already reached. [40] A convenient and helpful summary of the principles which emerge from theProvost Developments case is to be found in the judgment of Wild J in Dashwood Vineyards Ltd v F M & C M Hammond HC BLM CP15/99 21 July 2000. At [45] His Honour said:Legal Principles[45] I see the following as the principles emerging from Provost Developments Ltd v Collingwood Towers Ltd [1980] 2 NZLR 205 and the cases which follow it:[a] A solicitor's approval clause is a condition subsequent: it attaches to the parties' binding agreement and may operate to bring that agreement to an end. [b] The wording of the particular clause (since solicitor's approval clauses vary) needs to be interpreted, and in the context of the particular agreement. What might be expected of a conveyancing solicitor will vary according to the kind of parties involved and/or the type of property being sold. The interpretation principles adopted by the Court of Appeal in Boat Park v Hutchinson [1999] 2 NZLR 74 will apply i.e. the agreement is to be given the meaning it would have to a reasonable person having all the background knowledge which would reasonably have been available to the parties at the time of the contract. [c] The solicitor's approval function is limited to the "conveyancing aspects" or "legal implications" of the agreement. Although those phrases are to be liberally construed, they are still restricted to considerations peculiarly within the solicitor's sphere. The solicitor may not act as a general or financial/business adviser. The solicitor may not review the "wisdom" or "appropriateness" of the bargain as a whole, or its commercial advantages/disadvantages. Nor may the solicitor be "the alter ego" of the client in a commercial sense. In short, the solicitor is only entitled to refuse approval if there are genuine legal objections or impediments to the bargain the parties have made. [d] Although obviously obliged to act in the client's interests, the solicitor must exercise honest, genuine professional judgment, with the objectivity and reasonableness that entails, and may not simply do what the client instructs. [e] It is the reasons given by the solicitor for declining approval which the Court must look at. Reasons subsequently added should be treated with circumspection, if not ignored as ex poste facto justification irrelevant to the timely exercise of the solicitor's approval function.[41] I adopt that summary, save that it is perhaps necessary to observe in relation to principle (e) as indeed did Wild J at [47] of his judgment, that there is nothing obliging a solicitor refusing approval to give any reason or reasons: Metcalfe v Skyline Holdings Ltd (1982) 1 NZCPR 480, 491-492. But I agree with Wild J that the Court will ordinarily expect a solicitor, when refusing to approve a contract, to convey to the other party at least the essence of any reason or reasons for disapproval. A failure to do so might lead to a conclusion that the reasons ultimately proffered might amount to no more than a belated reliance on reasons which might have prompted the withholding of approval, but did not.Discussion[42] Mr Patterson sought to support his clients' caveat on two separate grounds. First, he argued that no valid grounds existed upon which the solicitor's approval might be withheld. Second, even if he was wrong in that, he argued that the plaintiffs had failed to comply with the positive obligation imposed upon them by clause 8.7(2) of the agreement, which provides that:If this agreement is expressed to be subject either to the above or to any other condition(s), then in relation to each such condition the following shall apply unless otherwise expressly provided: (2) The party or parties for whose benefit the condition has been inserted must do all things which may reasonably be necessary to enable the condition to be fulfilled by the date for fulfilment.[43] If Mr Patterson is right in his first argument, then it will be unnecessary to consider the second. [44] At the outset it is appropriate to consider the circumstances in which the reasons now relied upon by the plaintiffs were conveyed to the defendants. The first of those reasons, which relates to the mismatch in settlement dates, was not conveyed to the purchasers' solicitors by Mrs Judson at the time at which she advised her non-approval to those solicitors. Neither was that or any other reason given in the correspondence which passed between the solicitors over succeeding days. It was only on 22 May 2006, some four days later, that for the first time the defendants became aware of the problems which Mrs Judson perceived with respect to the misaligned settlement dates. [45] The second of the reasons, which relates to mismatched dates for declaring respective contracts unconditional, was never conveyed to the defendants prior to the commencement of this proceeding, and indeed, was not mentioned at all in Mrs Judson's first affidavit. It is referred to for the first time in her reply affidavit where she says that:In reviewing my file to make this reply affidavit, I have realised that I omitted in my first affidavit to explain a second but related respect in which the agreement between Mr and Mrs Bruce and Mr and Mrs Mirams, was unsatisfactory.[46] Mr Patterson complained somewhat bitterly about the late introduction of what is clearly new material in the reply affidavit, but responsibly accepted that the Court had a discretion to admit such material if it thought proper, and to give it what weight the Court thought fit, if it came in. [47] The late introduction of this fresh evidence was not satisfactorily explained, but I exercise my discretion to admit the evidence in any event. I do so because the second reason is similar in character to the first, and adds little or no weight to the plaintiffs' case. If the first reason is valid, then the plaintiffs are entitled to the relief they seek. If the first reason is not valid, then neither is the second. [48] I turn therefore to a consideration of the first reason relied upon by the plaintiffs, namely the mismatch in the settlement dates with its consequential financial implications for the plaintiffs. I accept the evidence of Mrs Judson as to her concern right from the outset about that problem. Her evidence is supported by a brief affidavit from Mrs Mirams. The fact that the defendants' solicitors were not advised of the reason for some four days is not, in my view, of great consequence. It might perhaps stem from Mrs Judson's somewhat liberal view of the discretion vested in a solicitor acting under a solicitor's approval clause, and in that regard I note that when Mr MacGillvray became involved in the matter the defendants' solicitors were advised in writing forthwith of the reason for withholding of the approval. [49] Moreover, it is inherently likely that matters developed as Mrs Judson describes. The problem would have been relatively obvious to a competent conveyancer and created immediate and obvious difficulties for the plaintiffs. [50] Having reached that point, it is necessary to consider the scope of the discretion to refuse approval, in the light of clause 15.0 of the agreement between the parties. In some respects it is an unusual clause, which differs materially from the clause appearing in the Conveyancing Law Handbook 2nd ed 2003 (CCH New Zealand Ltd) at p 286, and which is in widespread use:The obligations of the purchaser under this agreement shall be suspended until the agreement has been approved in all respects by the purchaser'sconveyancer, who may take into account the commercial and conveyancing aspects of this contract and the wishes of the purchaser. If such approval has not been given by notice in writing on or before 5 pm on [day, month and year] the purchaser shall pay to the vendor the sum of $1 and, except for the obligation to make such a payment, this agreement shall be void and all money paid under it shall be refunded and neither party shall have any claim against the other.[51] That clause significantly expands the boundaries of the discretion considered in Provost Developments and spells out with some precision the consequences of the withholding of approval. In this present instance, the discretion is significantly circumscribed. [52] In the current case it is necessary to imply additional terms in order to confer business efficacy on the agreement. No difficulty exists where neither solicitor gives notice. In those circumstances the parties are deemed to have waived their rights under the condition, and the rights and obligations of the parties, suspended during the stipulated period of five working days, come into full force and effect. [53] But the drafting of clause 15.0 is somewhat awkward. It provides expressly for notices of approval. So if each solicitor notifies the other within the stipulated period that the agreement is approved, then the agreement is thereafter in full force and effect. But the consequences of giving a notice of non-approval are not spelled out at all. [54] Counsel were agreed, however, that a term must be implied to the effect that the agreement is to come to an end upon the giving of a valid notice of non-approval within the stipulated period of five working days. Counsel were also agreed that, despite the somewhat unusual language of clause 15.0, the principles outlined and developed in the line of cases of which Provost Developments forms part, apply in the instant case. [55] Mr Patterson submitted however that only reasons "due to conveyancing reasons of the transaction creating a legal impediment and adverse implication" will be valid reasons. As I understand it, that language (which I take from his written submissions) is drawn from the judgments in Provost Developments.[56] Mr MacGillvray on the other hand, submitted that the approach adopted ought perhaps to be a little different from that adopted in earlier cases, because this appears to be the first case, at least among those known to counsel, in which the parties concerned have contracted in respect of a private residence. In other words, the property is largely residential, rather than a commercial or farming property of the type in issue in earlier cases. Moreover, he submits the plaintiffs must be taken to be less experienced in business matters, and to have had less opportunity for negotiation than occurred in some of the earlier cases cited. Mr MacGillvray further submits that it is illogical and unrealistic to construe the agreement in such fashion as to prevent the plaintiffs' solicitors from advising them, not only with respect to the sale agreement in issue, but also with respect to the relationship between that agreement and another in which the plaintiffs are contemporaneously involved. [57] Mr MacGillvray submits, accordingly, that clause 15.0 must be construed in such fashion as to enable the plaintiffs' solicitors to take into account the plaintiffs' existing legal obligations under another conveyancing contract. Those obligations fall within the solicitor's sphere of practice as legal adviser to the plaintiffs, rather than within the sphere of a commercial or general adviser. The plaintiffs accept that wider advice of the sort that such a more general adviser might give cannot give rise to a valid disapproval. [58] While I have a measure of sympathy for the plaintiffs' argument, I am unable to accede to it. None of the cases cited to me contained any suggestion that a party's solicitor might decline to approve an agreement, simply by reason of the impact of the terms of that agreement upon some other transaction, in which the counter-party is not involved. To the contrary, there are express references in the cases to the need for the solicitor to confine his or her attention to the specific agreement under consideration. So, for example in Provost Developments Woodhouse J said (p 208) that:A solicitor's 'approval clause' must always be interpreted within the context of the particular contract concerned...[59] And in the same case Richardson J said (p 213):It is, I think, implicit that what is contemplated is approval of the particular agreement.Later in his judgment he said (p 214) that the role of the solicitor must be limited to consideration:of what might loosely but conveniently be termed the legal implications of the transaction, including in that description the form of the agreement, its validity, and the burden of the commitments entered into thereunder by their respective clients. (emphasis added)[60] In New Zealand Wines & Spirits Savage J said (p 162) that:In my view the solicitors' function was restricted to what might reasonably be expected of a conveyancing solicitor in relation to the agreement before him, which was the agreement for sale and purchase.[61] In Dashwood Vineyards Ltd Wild J, while accepting that what might be expected of a conveyancing solicitor will vary according to the kinds of parties involved, and/or the type of property being sold, held at [45](c), applying Provost Developments that: the solicitor is only entitled to refuse approval if there are genuine legal objections or impediments to the bargain the parties have made.[62] While there is very little evidence on the point, I accept that it is a reasonable inference that the plaintiffs are not commercial or business people, and that they are contracting in respect of an owner occupied property. That being so, on the authorities, it is legitimate to expect that their solicitor could be entitled to take into account a wider range of considerations than might be the case where the parties concerned are experienced business people who have engaged in detailed negotiations over a long period before the contract is signed. [63] But having said that, I can find no warrant for holding that on the facts of this case, Mrs Judson was entitled to refuse approval, simply because the terms of this agreement, otherwise unobjectionable, happened to create a practical problem in respect of another contract in which the defendants were not involved. There are no legal impediments or difficulties at all under the contract between the plaintiffs and the defendants. There is no suggestion that the plaintiffs will be unable to providethe defendants with a clear title on the date for settlement, or that the defendants will be unable to discharge their obligations under the agreement. [64] The position is not materially different from an imaginary situation in which the settlement date in the agreement might operate to deprive the plaintiffs of the funds needed to participate in some new and potentially profitable commercial venture. That would be a commercial consideration which clearly would be disadvantageous to the plaintiffs, and no doubt of great concern to the plaintiffs' solicitors, but it would not constitute a reason entitling those solicitors to disapprove the agreement on behalf of the plaintiffs. The fact that in this instance the other transaction concerned is an agreement to purchase another property makes no difference. The reasons for disapproval do not thereby become "conveyancing" reasons. They may relate to an agreement for sale and purchase of other land, but the reasons for disapproval are not related to a difficulty pertaining to the agreement between the plaintiffs and the defendants. [65] It might be thought a number of practical steps are available to the plaintiffs. Any one of them might ameliorate their position. They may be able to bring forward by agreement the date for settlement with the defendants. By agreement, they may be able to defer the date for settlement with the vendors of the Pirongia property. They may be able to organise bridging finance. If none of these steps is practically available to them, then they may be entitled to look to any person (if there is such a person) who can be shown to be responsible for bringing about the mismatch in settlement dates. The plaintiffs' solicitors are of course not to be criticised in that respect. The agreement between the plaintiffs and the defendants came to them already signed. [66] In view of my conclusion, it is unnecessary to discuss the defendants' second argument based upon obligations said to arise under clause 8.7(2) of the agreement.Result[67] I have concluded that the plaintiffs' solicitors were not entitled to refuse to give their approval to the contract between the plaintiffs and the defendants in termsof clause 15.0 of that agreement. Consequently that contract was not validly cancelled by the plaintiffs and remains on foot. It follows that the defendants retain an interest in the property, and are therefore entitled to maintain their caveat. [68] The plaintiffs' application is dismissed. The defendants are entitled to costs. Counsel may file memoranda if they cannot agree.C J Allan J