(New Zealand Court of Appeal) A block of apartments was sold with possession to be given on ‘the first Friday three months after confirmation’. Special conditions required a sub-divisional consent to be obtained within 60 days of acceptance, and that the vendor make one unit available for marketing once the contract became unconditional. There was also a unilateral waiver clause.
Held: The special conditions were for the sole benefit of the purchaser, were severable and could therefore be waived without undermining the agreement. The vendors’ only legitimate interest was in knowing whether the transaction would proceed or not. When the purchaser waived the special conditions, the relevant certainty was provided. Implicitly, the court held that if a benefit was to be found in favour of the purchaser it had to go to the issue of certainty of completion after the waiver. On the court’s analysis, the vendor could not properly claim any relevant benefit in that respect.
Blanchard J said, applying Hawker: ‘The argument against waiver rests upon the desirability of certainty for a vendor from being able immediately to bring the contract to an end, or see it immediately collapse, once the given time has elapsed. But certainty is achieved by a different rule, namely that any waiver must occur on or before the condition date, or at least before the contract is actually brought to an end (if it is not automatically void). It has to be remembered that we are at this point concerned with a situation in which it is to be accepted that there is no substantive benefit to [the vendors]. Therefore, their only legitimate interest is in knowing whether the transaction is to proceed or not. Once the time allowed for the fulfilment of the condition expires they can forthwith give notice of cancellation if they have not already been informed that the sale will go ahead. It matters not to them whether it does so because of fulfilment or because the purchaser elects to proceed anyway. The achieving of certainty is in the vendors’ own hands if there has been no action by the purchaser. If there has been a waiver the transaction proceeds as it would have done if the condition had been satisfied on the date of the waiver . . We conclude therefore that a distinction is to be drawn between the benefit of the substance of the condition and the benefit of the time limit.’
Judges:
Blanchard J
Citations:
[1998] 3 NZLR 331
Citing:
Applied – Hawker v Vickers 1991
(New Zealand Court of Appeal) The court considered the ability of a party to waive compliance with a condition, saying: ‘there is nothing inconsistent in providing expressly or by necessary implication for unilateral waiver of a condition up to a . .
Cited by:
Cited – Irwin v Wilson and Others ChD 23-Feb-2011
The claimant sought a declaration that his contract for the sale of leasehold property to the defendants had been lawfully terminated by a letter from his solicitors. The defendants had moved in before completion, but the claimant found himself . .
Lists of cited by and citing cases may be incomplete.
Commonwealth, Contract
Updated: 02 May 2022; Ref: scu.430312
