With prices softening, a land-banking company controlled by Waikato GJ Gardiner franchise owner Jeffrey de Leeuw was ordered to pay for its agreed purchase of five residential lots in a Cambridge subdivision over top of his complaints that the advertised subdivision was being cheapened by now allowing nearby construction of small duplex-style houses.
The High Court was told Construction Properties Ltd signed up in 2022 to purchase five lots at Abergeldie Way in a Stratton Properties Ltd subdivision at Cambridge. Construction Properties holds the bare land in readiness for onsale as GJ Gardiner ‘house and land’ deals.
Mr de Leeuw’s urgency in getting hold of the land and putting his company in prime position to make further purchases was evidenced by him waiving any due diligence and with it the right to exit if he did not like how Stratton might choose to develop later stages of the subdivision.
One day before settlement date in May 2023, Construction Properties cancelled. Stratton had misrepresented the development, Mr de Leeuw said. Now allowing compact housing development had cheapened the subdivision, no longer upholding the quality assured at time of purchase, he claimed.
Associate judge Brittain ruled contract clauses allowing Stratton to make later changes to the subdivision consent were binding on Construction Properties. Any Stratton representations at time of sale about how or when further stages of its Cambridge subdivision might be developed were of no relevance.
Construction Properties was ordered to make good its promise to buy.
The court was told Stratton has Mr de Leeuw on the hook as guarantor for the purchase price if Construction Properties backs out.
Stratton Properties Ltd v. Construction Properties Ltd – High Court (25.09.23)
23.167