Court finds Murphys Park met contractual obligations despite delay in completion of enabling works
The Court of Appeal upheld a ruling that Murphys Park Development LP did not breach its contractual obligation to use “all reasonable commercial endeavours” to complete infrastructure works associated with a land transaction in Flatbush, Auckland.
The Court of Appeal rejected all seven grounds of appeal advanced by Green City Developments Ltd and confirmed that Murphys Park was entitled to recover disputed costs relating to earthworks undertaken as part of the development project.
The dispute arose from a 2016 agreement under which Murphys Park agreed to sell Green City a parcel of land known as the boundary adjustment land (BAL). Completion of utility and infrastructure connections, referred to as the “enabling works,” was required before the land could receive a separate title. Green City subsequently entered into an on-sale agreement with a third-party purchaser, making timely completion of the enabling works commercially significant.
The parties later executed a variation agreement in December 2017 that extended the anticipated completion date for the enabling works to August 2018 and introduced a land swap option. The land swap altered the BAL’s boundaries and ultimately required the enabling works to cross an area affected by a separate Transpower underground transmission line project.
The Court of Appeal found that the land swap fundamentally changed the scope of the enabling works and rendered the original programme unachievable. It noted that Green City exercised the land-swap option before the final alignment of the Transpower infrastructure was confirmed, creating additional constraints on the project.
Green City argued that Murphys Park failed to explore alternative methods of completing the works and should have warned that the revised programme was no longer realistic. It also contended that the court below applied the wrong burden of proof and failed to properly consider expert evidence regarding project delays.
The Court of Appeal rejected those arguments. It held that Green City bore the burden of identifying specific steps Murphys Park could reasonably have taken to complete the works earlier. The court concluded that Green City failed to establish any practical alternative that would have accelerated completion, particularly given the restrictions imposed by the Transpower project and the subsequent delays caused by weather, COVID-19 disruptions, and regulatory approvals.
The court also dismissed Green City’s argument that “completion” should be measured by the eventual issuance of a separate title in 2024 rather than the physical completion of the enabling works in August 2021. The contractual obligation, it said, concerned completion of the works themselves, not later title processes.
Finally, the appeal court upheld the findings that Green City was responsible for the cost of filling a sediment-control pond. It agreed that the pond-related work formed part of separate earthworks undertaken on Green City’s behalf rather than part of the enabling works that Murphys Park was contractually required to fund. Ultimately, the court dismissed the appeal in its entirety.
