Decided 02 November 1998 Location New Zealand | Citation(s) [1999] 2 NZLR 74 End date November 2, 1998 | |
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Full case name Boat Park Limited (First Appellant) & Licaka Holdings Limited (Second Appellant) v Hutchinson & Findlay (Respondents) Ruling court Court of Appeal of New Zealand Judge sittings John Henry, Ted Thomas, Andrew Tipping | ||
Boat Park Ltd v Hutchinson [1999] 2 NZLR 74 is a cited case in New Zealand regarding what evidence is admissible when considering the express terms of a contract. It follows the English case of the Investors Compensation Scheme.
Contents
Background
Boat Park purchased a Whangarei property from Hutchinson for $1,050,000, with Hutchinson agreeing to provide vendor finance of up to 75 percent of "a registered valuer's valuation of the property".
However, when it came to settlement, Boat Park supplied a valuation report that gave a valuation of $3.5 million, more than triple the purchase price, which if accepted, would have effectively meant vendor finance of 100%.
The valuation was based not on the current market value of the property, but on the estimated value after it had been subdivided and developed, but this valuation made no account for any risk for such matters if the council consents were not approved or that the sections did not sell.
Hutchinson refused to accept this valuation as a fair market value, and initially refused to settle, but reluctantly agreed to settle, and later successfully referred the dispute to the High Court.
Boat Park appealed the High Court judgment.
Held
Boat Parks appeal was dismissed. The court applied the Investors Compensation Scheme principles, and held that the purchaser's valuation was not a fair valuation.
Footnote: Not disclosed during the High Court trial, but subsequently discovered for the appeal was that at the time Boatparks valuer valued the property at $3.5 million, at the same time, their valuer supplied a valuation of $1.135 million for the very same property, that was supplied to another party.