Beynon v Burklakova

[2023] NZHC 1012

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-420

[2023] NZHC 1012

UNDER

the Contract and Commercial Act 2017

IN THE MATTER

of a claim for mistake on contract, breach of contract and rectification

BETWEEN

DENISE BEYNON

Plaintiff

AND

IRENA BURKLAKOVA

Defendant

Hearing:

24 April 2023

Appearances:

D J C Russ for the Plaintiff

No appearance for the Defendant

Judgment:

2 May 2023

JUDGMENT OF HARLAND J

Introduction

[1]        This proceeding relates to the omission by the defendant to transfer an accessway title to third parties, who have subsequently sold the property to which it relates to the plaintiff.

[2]        The proceeding is to be determined by me by formal proof. Although three causes of action were advanced in the statement of claim,1 the plaintiff agrees for it to be determined on the basis of the first cause of action only. The relief sought is slightly different from that originally pleaded but only in so far as the mechanism to achieve

1      Dated 21 September 2022.

BEYNON v BURKLAKOVA [2023] NZHC 1012 [2 May 2023]

the relief sought is concerned. The general pleading, inviting the Court to make any other such orders as it thinks fit, can cover this situation.

[3]        I have decided to enter judgment in favour of the plaintiff, the result of which will be that the accessway title can now be transferred to the plaintiff. This judgment sets out my reasons for reaching this conclusion.

Factual background

[4]        The plaintiff is the current registered proprietor of a property at 702/113 Worcester Street, Christchurch (property). It is an apartment located in a multilevel building, accessed by a lift or stairs which open into a shared corridor. This corridor is referred to in this judgment as “the accessway”.

[5]        The defendant was the registered proprietor of the property initially. On 23 December 2015, the defendant entered into an agreement for the sale and purchase of the property to Wim Peter Dykhoff and Lorna Adrienne Dykhoff (Dykhoffs). Unfortunately, the agreement did not include the legal description for the accessway to the property, being a one-sixth share of Unit 7J, Deposited Plan 325897, Unique Identifier 104844 (Canterbury Registration District). I refer to this as “the accessway title”.

[6]        The agreement between the defendant and the Dykhoffs was settled on 18 March 2016.

[7]        On 29 August 2017, the Dykhoffs entered into an agreement for sale and purchase of the property to the plaintiff. Settlement of the agreement took place on 16 October 2017.

[8]        Following settlement, the plaintiff became aware that the defendant had not transferred the accessway title to the Dykhoffs, who had then not been able to transfer the accessway title for the property to the plaintiff.

[9]        The accessway title remains registered to the defendant who has no other legal or equitable interest in the property.

[10]      In or about October 2020, the plaintiff’s solicitors entered into discussions with the defendant’s solicitors regarding this issue. The defendant agreed to transfer the accessway title to the plaintiff in consideration of the plaintiff agreeing to meet the defendant’s costs on the transfer. This agreement was recorded in email correspondence between the solicitors, which also noted that the plaintiff’s solicitors had provided the defendant’s solicitors with the documents necessary to effect a transfer of the accessway title from the defendant to the plaintiff.

[11]      The documents to effect the transfer were forwarded to the defendant’s daughter who it was agreed would sign the documents once a power of attorney had been granted by the defendant to her daughter. This was required because the defendant had returned to Russia. Unfortunately, although a power of attorney was granted by the defendant to her daughter, the documents recording this were not accepted by Land Information New Zealand.

[12]      On 5 September 2022, Mr Dykhoff, Mrs Dykhoff having died, assigned to the plaintiff by deed all rights, title, interest and benefit and any cause of action the Dykhoffs had arising out of their agreement with the plaintiff.

[13]      On 21 September 2022, the plaintiff issued these proceedings, which included the following three causes of action:

(a)        breach of the settlement agreement between the plaintiff and defendant;

(b)       a claim for rectification; and

(c)        a cause of action claiming the defendant and the Dykhoffs were influenced to enter their agreement mistakenly believing that the accessway title was part of that settlement.

[14]      An order for substituted service was eventually sought and granted by Paulsen AJ on 8 November 20222 authorising service of the proceedings on the defendant’s former lawyers. An affidavit of service was filed on 11 January 2023 confirming service.

2      Beynon v Burklakova [2022] NZHC 2927.

[15]      Although no formal steps have been taken in the proceedings by the defendant, as Mr Russ submitted, the defendant has been cooperative as far as she is able from a distance.

[16]      In support of the claim, I received an affidavit of the solicitor for the plaintiff Ian Ramsay Kearney dated 24 January 2023 and an affidavit of Mr Dykhoff dated 7 February 2023. I have also received and considered a memorandum of counsel seeking judgment by formal proof dated 8 February 2023. I have also read and considered the plaintiff’s submissions in support of the application for judgment by formal proof dated 8 February 2023.

Discussion

[17]      I am satisfied that the transfer of the accessway title was overlooked when the defendant entered into the agreement for sale and purchase with the Dykhoffs. The affidavit of Mr Kearney establishes that this ought to have occurred and that the defendant’s solicitor was provided with the documents necessary to effect the transfer of the accessway title after settlement. I am also satisfied that the defendant agreed to transfer the accessway title to the plaintiff in consideration for the costs of the transfer being met by the plaintiff.

[18]      I am also satisfied that responsible steps were taken by the defendant to arrange for the necessary documents to be signed but this proved difficult from Russia with the result that Land Information New Zealand would not accept the scanned copy of the power of attorney that had been provided by her to her daughter.

[19]      I am also satisfied that no one, including the defendant’s own solicitor, knows the whereabouts of the defendant. All relevant parties have been advised that she resides in a remote part of Russia.

[20]      I also have regard to Mr Kearney’s affidavit in which he deposes that, although he has been in practice for over 30 years and has handled numerous property transactions involving unit titles, the title arrangements for this property were highly unusual. I have regard to his statement that he cannot recall another transaction where he has encountered a separate unit title for ownership of part of an access corridor.

[21]      I am satisfied, through no fault of the defendant, there has nonetheless been a breach of the settlement agreement referred to in this judgment. The first cause of action has therefore been made out. That being the case, I do not need to consider the remaining causes of action.

[22]      In terms of the relief sought, I am satisfied that the most appropriate way to achieve the outcome is for me to make a declaration that the defendant is bound by the agreement dated 22 October 2020 but that the Registrar of the High Court at Christchurch is authorised to execute an Authority and Instruction form the transfer of the land from the defendant to the plaintiff. This was the approach taken in Meechan v Meechan3 by Venning J which I agree facilitates what is required here in the most efficient manner.

Orders

[23]I make the following orders:

(a)        there is a declaration that the defendant is bound by an agreement dated 22 October 2020 under which the defendant agreed to transfer to the plaintiff the defendant’s one-sixth share in Unit 7J, Deposited Plan 325897, Unique Identifier 104844 (Canterbury Registry); and

(b)       the Registrar of the High Court at Christchurch is authorised to execute an Authority and Instruction form for the transfer of the land from the defendant to the plaintiff.

[24]      Although accepting that it is unlikely that any order for costs will be enforceable against the defendant, nonetheless, the plaintiff seeks an order for costs on a 2B basis. I make an order accordingly.

Harland J

Solicitors:

Fletcher Vautier Moore, Christchurch Burton Partners, Auckland.

3      Meechan v Meechan CIV-2008-404-3736, 27 June 2008, HC Auckland.