Berenice v 125 Gills Limited

[2013] NZHC 2559

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003134 [2013] NZHC 2559

UNDER

Section 145A of the Land Transfer Act 1952

IN THE MATTER OF

an application that caveat 9356806.1 not lapse

BETWEEN

LIM SEOK EE BERENICE

Applicant

AND

125 GILLS LIMITED

Respondent

Hearing:

1 October 2013

Appearances:

D Hoskin for Applicant

J K Goodall for Respondent

Judgment:

1 October 2013

ORAL JUDGMENT OF VENNING J

on application for discovery

Solicitors:             Steindle Williams Legal, Auckland

Beca & Co, Auckland J K Goodall, Auckland

BERENICE v 125 GILLS LTD [2013] NZHC 2559 [1 October 2013]

[1]  The substantive application before the Court is an application for an order that a caveat lodged by the applicant not lapse. In a minute issued on 6 June 2013 Associate Judge Sargisson provided directions for that substantive application to be heard on 4 October 2013, this Friday.

[2] On 25 September the applicant filed an interlocutory application for leave to apply for an order for particular discovery against the respondent. The application was directed at obtaining discovery of any agreement or deed between the partners, including the general or limited partners of 125 Gills Limited Partnership and, if any partner is a trustee, a copy of the deed creating that trust.

[3] The background to the matter can be stated shortly for present purposes. The applicant claims an equitable interest in development land at 125 Gills Road, Albany Heights, pursuant to a purchaser’s lien. The applicant has paid a deposit towards units 67 and 68. The applicant submits the contract was in effect equivalent to a sale and purchase. As the development has not proceeded she says she is now entitled to a refund of the deposit paid and also further compensation in terms of the agreement.

[4] The option documents in issue were completed  in  January  2011.  In December 2012 the vendor sold the property to the respondent.

[5]   In the original notice of opposition filed the respondent took the point that if the applicant had an equitable interest in the land arising during the ownership of the previous registered proprietor, the interest was not enforceable as against the respondent because it had obtained indefeasible title to the land.

[6] In response to that aspect of the notice of opposition the applicant has sought discovery of the documents referred to above.

[7] There have been a number of discussions and an exchange of correspondence between counsel in relation to this issue. The respondent, through its advisers, made it clear that it was prepared to, for the purpose of the caveat hearing, withdraw the ground of opposition that relied on indefeasibility of title. The respondent says that in those circumstances the discovery sought is irrelevant.

[8] The respondent was not prepared  to  make  any  more  formal acknowledgement than that.  The applicant has therefore pursued the application.

[9]  The respondent has now filed an amended notice of opposition confirming that the respondent’s opposition to the caveat is restricted to arguments that the applicant has no interest in the land under the option agreement or any payment made pursuant to it because the applicant has waived her rights under the agreement and/or acknowledged under clause 9.4 of the agreement that any payment would not create any security interest, and further, the applicant has expressly agreed under clause 4.9 of the agreement in respect of unit 66 at least, not to lodge a caveat over the land.

[10] It is, as counsel for the respondent submits, in the helpful submissions for this discovery application, rare for orders for particular discovery to be made on this type of application.

[11] The short position reached now is that, in light of the amended notice of opposition, which has formalised the position the respondent offered to the applicant, the indefeasibility of title issue is not a ground of opposition to the application to sustain the caveat. The documents sought by the applicant are therefore not relevant to the substantive hearing for the sustaining of the caveat.

[12] The respondent accepts that if the applicant can establish an  arguable, equitable interest capable of supporting a caveat immediately prior to the transfer to the respondent then the caveat can be sustained, at least in the interim, so that the only issues for determination are whether there is an arguable case that the applicant’s rights under the relevant option agreements can give rise to the equitable interest claimed and whether or not the applicant has waived those rights.

[13] I agree with the submissions for the respondent that the issue of the respondent’s knowledge and any relationship between the respondent and the former vendor is irrelevant to those issues. For those reasons the application for particular discovery in relation to the caveat application is dismissed.

[14] In relation to costs I note that on 16 September the respondent’s solicitors confirmed that, while their client had no intention of filing any formal admission they offered to amend the notice of opposition to remove the opposition based on indefeasibility.  That should have been sufficient to see matters resolved.  However, I accept that it was appropriate for the applicant to require the amended notice of opposition.

[15] The respondent, having succeeded in its opposition to this application, is entitled to costs but I limit the costs to scale costs on a 2B basis.  I allow a quarter of a day for the hearing.

Venning J