LAND DEVELOPMENT AND CONDITIONAL CONTRACTS

Valentines Properties Ltd and Valentines Restaurant and Bar (NZ) Ltd v Huntco Corporation Ltd and Steeple Transport Holdings (1993) Ltd ((2001) unreported, 29 March, PC)

A date fixed by a conditional contract as the date by which the relevant condition is to be fulfilled must, in the absence of contrary indication, be strictly adhered to. In the event of delay, a ‘miss is as good as a mile’ and the time allowed is not to be extended by reference to equitable principles: Aberfoyle Plantations Ltd v Cheng [1960] 1 AC 115 at 125. In construing the clause, and inquiring whether a contrary intention is shown, the court may look at the commercial purpose of the contract and its context. In general, a meaning which advances the purpose of the term imposing the condition is to be preferred to one which would frustrate it. Where a contract between a developer of land and the client was conditional on the client’s approval within a set period of resource management conditions imposed by the local authority (such approval not to be unreasonably withheld) the set period began to run from the date of original imposition of the conditions and was not suspended until any appeal mechanism was exhausted.