BETWEEN HND HOLDING LIMITED Applicant AND EE KUOH (AUGUSTINE) LAU First Respondent REGISTRAR-GENERAL OF LAND Second Respondent
[2023] NZHC 3755
•18 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-002985
[2023] NZHC 3755
UNDER Section 142 Land Transfer Act 2017 IN THE MATTER
of an application for an order removing caveat no. 12899587.1 and 1289917.1 (North Auckland Registry)
BETWEEN
HND HOLDING LIMITED
Applicant
AND
EE KUOH (AUGUSTINE) LAU
First Respondent
REGISTRAR-GENERAL OF LAND
Second Respondent
Hearing: 14 December 2023 Appearances:
R O Parmenter for Applicant
Judgment:
18 December 2023
JUDGMENT OF VAN BOHEMEN J
This judgment was delivered by me on 18 December 2023 at 3 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………..
Counsel/Solicitors:
R O Parmenter, Auckland Ganda & Associates, Auckland
HND HOLDING LTD v EE KUOH LAU [2023] NZHC 3755 [18 December 2023]
[1] On 13 December 2023, HND Holding Ltd (HND) has applied without notice, and not on a Pickwick basis, for:
(a)orders pursuant to s 142 of the Land Transfer Act 2017 directing the removal of two caveats lodged by EE Kuoh (Augustine) Lau on 8 December 2023 against the certificates of title of 419 Bremner Road, Karaka (Bremner Rd) and 205 Sutton Road, Drury (Sutton Rd), two properties in respect of which HND is a registered mortgagee;
(b)an injunction prohibiting Mr Lau from lodging caveats, without the leave of the Court, against the titles to Bremner Road, Sutton Road and three other properties of which HND is a registered mortgagee: 111 Waitakere Road, Waitakere; Unit 2, 14 Haseler Crescent, Howick and Hudsons Road, Lincoln (the other HND mortgagee properties);
(c)an order directing the Registrar-General of Land to reject any caveat dealings proposed by Mr Lau in respect of Bremner Road, Sutton Road and the other HND mortgagee properties and to remove any caveats lodged by Mr Lau in respect of those properties since HND’s application for the removal of the Bremner Road and Sutton Road caveats was filed.
[2]HND also seeks costs against Mr Lau.
[3] An affidavit affirmed by Binbin Suo, the personal assistant of Mr Zhang, the beneficial owner of HND, was filed in support of the application, together with an undertaking as to damages signed by Xiao Miao Fan, a Director of HND.
[4] HND’s application was heard at the Duty Judge List on 14 December 2023. After hearing from Mr Parmenter, I said I would make the orders sought. I was satisfied that it was in the interests of justice to make the orders and that there was no need for the Court to hear from Mr Lau. I reached those conclusions because of Mr Lau’s history of filing caveats that have been found to have no sustainable basis and, in particular, because Mr Lau lodged the caveats against the titles to Bremner
Road and Sutton Road within days of this Court ordering the removal of caveats lodged by Mr Lau against the titles of those properties.
Relevant background
[5] Bremner Road is owned by Daniel Kwok Properties Ltd (DKP). Sutton Road is owned by DASP Properties Ltd (DASP). DKP and DASP are companied controlled by Daniel Kwok. HND has mortgages registered against the titles to both properties securing advances and other securities between HND and Mr Kwok or his companies. The mortgage in respect of Bremner Road was registered on 3 August 2021. The mortgage in respect of Sutton Road was registered on 23 July 2021.
[6]Mr Lau registered caveats against the titles to both properties on 12 July 2023.
[7] Following default by DKP and DASP in their repayment obligations to HND, HND exercised its rights as mortgagee and has entered into agreements for the sale of Bremner Road and Sutton Road to a third party. Settlement of those sales is contingent upon the removal of any caveats registered against the properties. Accordingly, HND applied to this Court for the removal of the caveats. That application was heard by Associate Judge Brittain at a hearing on 29 November 2023, which Mr Lau attended in person.
Associate Judge Brittain’s decision
[8] In a judgment issued on 1 December 2023, Associate Judge Brittain directed that the caveats lodged by Mr Lau against Bremner Road and Sutton Road in July 2023 be removed.1
[9] In his decision Associate Judge Brittain noted the three bases upon which Mr Lau asserted equitable interests in the properties. In summary, these were:2
(a)as beneficiary under a constructive trust;
1 HND Holding Ltd v Lau [2023] NZHC 3482.
2 At [6].
(b)as purchaser of the land under an agreement for sale and purchase dated 8 June 2021; and
(c)as lessee under a pre-paid lease for the period 8 June 2021 to 8 June 2041.
[10] Associate Judge Brittain noted that Mr Lau had provided no evidence other than his bare assertion that the sales were not bona fide.3 The Associate Judge also noted the application before him was at least the fourth occasion on which Mr Lau has attempted to prevent a financier from exercising its power of sale under a mortgage and appeared to be very similar to two other proceedings in which the Court ordered the removal of caveats lodged by Mr Lau.4
[11]In directing the removal of the caveats, the Associate Judge stated:
[13] The directors of HND have never had knowledge of the interests Mr Lau claims he holds in the mortgaged properties and have never consented to them. The caveats are an attempt by Mr Lau to derail the mortgagee sale process. The interests that he claims cannot prevent HND from exercising its power under the mortgages to sell the properties following default by DASP and DKP.
Mr Lau files applications to lodge new caveats
[12] Despite Associate Judge Brittain’s judgment, it appears that Mr Lau has applied to lodge caveats against the titles to Bremner Road and Sutton Road. As at the date of the hearing before me, the caveats had not been formally registered. However, a search of the titles to the properties on the website of Land Information New Zealand (LINZ) produced entries in respect of the titles to Bremner Road and Sutton Road under the heading “View Pending Transactions”. The entries recorded that EE Kuoh Lau lodged caveats against the titles to Bremner Road and Sutton Road on 8 December 2023.
[13] Because the caveats had not been formally registered, the interests that Mr Lau asserted when filing the caveats are not searchable. However, when asked by email
3 At [11].
4 At [9]. The decisions to which the Associate Judge referred were: Goodmore Investments (New Zealand) Ltd v Lau [2023] NZHC 1983 and HND Holding Ltd v Lau [2023] NZHC 2211.
by Mr Parmenter, counsel for HND, what interests he claimed in relation to the properties, Mr Lau replied:
U got the deed of assignment in Mr kwok affidavit as my 1/3 share of the beneficiaries of the properties
As my interest on the properties.
[14] In the affidavit sworn by Mr Kwok in the proceeding before Associate Judge Brittain, Mr Kwok stated:
2.I signed the Deed of assignment to the caveator, Mr Lau as 1/3 beneficiary of the properties for the nett profit of the properties as per document marked “D1”.
3.Mr Lau has been helping me on my business as advisor since June 2021 and I agreed to grant him the prepaid Deed of lease as deduction of his fees if I failed to pay him at the time where the subdivision of the properties completed as the security to him as translator advisor of my property development business.
[15] Document D1 exhibited to Mr Kwok’s affidavit is in the form of a deed of assignment between Mr Kwok, DKS and DASP (collectively defined as DKS) on the one part and Mr Lau on the other part dated 28 September 2023 (the Kwok Deed). Under the Kwok Deed, Mr Kwok and his companies purport to transfer to Mr Lau:
… 1/3 of DKS’s interest in the Amended statement of claim dated 22.9.2023 under CIV 2023-404-1504 and any future claim against HND holdings ltd and all other related companies; 1/3 of properties set out at schedule 1 below.
[16] Schedule 1 lists the identifier numbers of Bremner Road, Sutton Road, and the three other HND mortgagee properties.
Analysis
Removal of the caveats
[17] Arguably, the interest Mr Lau asserts under the Kwok Deed is different from the interests asserted by Mr Lau when he registered the caveats in July 2023. The Deed post-dated the registration of those caveats. However, it appears from Mr Kwok’s affidavit that the asserted assignment in relation to Mr Lau’s position as a beneficiary, which was one of the three interests asserted by Mr Lau. If that is the
case, the caveats registered by Mr Lau on 8 December 2023 should not have been lodged without a court order.5
[18] In any event, given that Mr Kwok’s affidavit was filed in support of Mr Lau’s opposition, it is clear that this basis of a claim to an interest in the properties was in evidence before Associate Judge Brittain and, if distinct from the other three interests asserted by Mr Lau, should have been raised by Mr Lau, given the interest in ensuring finality of litigation.
[19] Further, it is plain that the directors of HND had no more knowledge of this asserted assignment than the other interests of which, as Associate Judge Brittain held, they had no knowledge and to which they had not given consent. As with the other interests asserted by Mr Lau, the interest that Mr Lau apparently asserts under the Deed cannot prevent HND from exercising its power under the mortgages to sell Bremner Road and Sutton Road.
[20] I am satisfied that, in lodging these new caveats, Mr Lau is again attempting to derail the mortgagee sale process. Doing so within a week of the Court order removing the earlier caveats might also be considered to be in contempt of Court. However, I take that issue no further since Mr Lau is not before the Court on this occasion.
[21] In any event, I am satisfied that Mr Lau’s caveats that are or may about to be registered against the titles to Bremner Road and Sutton Road should be removed.
Injunction application
[22] HND also asks that the Court issue an injunction prohibiting Mr Lau from lodging caveats, without the leave of the Court, against Bremner Road, Sutton Road and the other HND mortgagee properties.
[23] Ordinarily, such an application would be considered only after a hearing at which Mr Lau had had an opportunity to be heard. However, the situation HND is
5 Section 146 of the Land Transfer Act 2017 provides:
Unless the court orders otherwise, a caveat against dealings must not be lodged by or on behalf of the same person to protect the same estate or interest as a caveat against dealings that has been removed under section 142 or lapsed under section 141(2)(a) or 143.
facing is not ordinary. It has confirmed agreements for the sale of Bremner Road and Sutton Road. Settlement of the agreements is contingent upon the removal of any caveats. The Court has already ordered the removal of caveats from the titles to Bremner Road and Sutton Road. It is now having to order the removal of two more caveats lodged from the titles to the same properties. Mr Lau has shown he has a propensity to use the caveat process either to derail a mortgagee sale process or to try to leverage some influence over that process. I am aware that the Court has had to deal with a number of other applications to remove caveats lodged by Mr Lau since the four examples to which Associate Judge Brittain referred. On no occasion has Mr Lau been able to satisfy the Court that he had an interest sufficient to sustain the caveats he lodged.
[24] As far as the other HND mortgagee properties are concerned, while they have not so far been subject to caveats lodged by Mr Lau, they are listed in the schedule to the Kwok Deed as being properties to which Mr Lau has rights under that Deed. In that respect, those properties are as liable to be caveated by Mr Lau as Bremner Road and Sutton Road.
[25]In these circumstances, I am satisfied that:
(a)There is a serious question as to whether Mr Lau has any sustainable interest in Bremner Road, Sutton Road or any of the other HND mortgagee properties.
(b)Given Mr Lau’s past behaviour, the lack of merit in past caveats lodged by Mr Lau and the fact that the injunction requires only that Mr Lau obtain court approval before lodging further caveats against the titles to Bremner Road, Sutton Road or any of the other HND mortgage properties, the balance of convenience lies strongly in favour of granting the injunction in the terms sought. In addition, the balance of convenience favours HND being able to settle mortgagee sales to recover funds owed to it by mortgagors.
(c)Damages will be an adequate remedy, particularly in view of the fact that Mr Lau is not in possession of any of those properties.
[26] Accordingly, I am satisfied that it is appropriate to grant the injunction essentially in the terms sought.
Order restricting further caveat dealings and ordering the removal of any caveats lodged since proceeding filed
[27] The remaining order sought by HND is an order directing the Registrar- General of Land:
(a)to reject any further caveat dealings by Mr Lau with regard to Bremner Road, Sutton Road and the other HND mortgagee properties;
(b)to remove any caveats that may have been lodged against those properties since the filing of the present proceeding.
[28] That order is consistent with the other orders I am making and ensures that HND does not have to come back to Court to seek removal of any caveats that may have been lodged in the interim.
Result and orders
I grant the application made by HND and make the following orders:
(a)Pursuant to s 142 of the Land Transfer Act 2017, I order that:
(i)Caveat dealing No 12899587.1 (North Auckland Registry) lodged by EE Kuoh Lau on 8 December 2023 against the certificate of title of 419 Bremner Road, Karaka, being the land comprised in Identifier 909429 (the Bremner Road land); and
(ii)Caveat dealing No 12899617.1 (North Auckland Registry) lodged by EE Kuoh Lau on 8 December 2023 against the
certificate of title of 205 Sutton Road, Drury, being the land comprised in Identifier 82B/163 (the Sutton Road land),
be rejected and/or removed by the Registrar-General of Land.
(b)EE Kuoh Lau is hereby restrained and prohibited from lodging any caveat or caveats against the following land without the leave of the Court:
(i)the Bremner Road land – RoT 909429;
(ii)the Sutton Road land – RoT 82B/163;
(iii)111 Waitakere Rd, Waitakere – RoT: NA87D/983;
(iv)Unit 2, 14 Haseler Crescent, Howick – RoT: NA102B/948; and
(v)Hudsons Road, Lincoln, Canterbury – RoT – 268603.
(c)Any pending caveat dealings lodged by Ee Kuoh Lau against any of the above land be rejected and/or removed by the Registrar-General of Land.
Costs
[30] This application has been necessitated by Mr Lau’s actions. I consider it appropriate, therefore, that he pay the costs of the application on a 2B basis.
[31] If Mr Lau wishes to make submissions in relation to this order, he may file a memorandum of no more than four pages.
G J van Bohemen J
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