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Botany Land Development Ltd v Auckland Council

Botany Land Development Ltd v Auckland Council

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Case Copied 13 March 2014 24 min read

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA732/2013
[2014] NZCA 61

BETWEEN	BOTANY LAND DEVELOPMENT LIMITED Appellant
AND	AUCKLAND COUNCIL First Respondent
AND	MARGARET ELLEN PALLISTER, WENDY JUNE PALLISTER AND JILLIAN MARY MENZIES Second Respondents

Hearing:	18 February 2014
Court:	O'Regan P, Stevens and Asher JJ
Counsel:	N R Campbell QC and R D Butler for Appellant B J Upton and T K Cunningham-Adams for First Respondent No appearance for Second Respondents
Judgment:	13 March 2014 at 10.00 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellant must pay the first respondent costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Stevens J)

A caveat to protect the Council’s interest

This appeal concerns the proposed sale of a 1.9 hectare parcel of land at Umupuia Beach near Maraetai. The land has been owned by members of the Duder family for more than 150 years. It is currently owned by the trustees of the Margaret E Pallister Family Trust (the trustees). Mrs Pallister is a member of the Duder family and is one of the trustees.
On 5 November 2012 the trustees entered into a conditional agreement, which later became unconditional, to sell the land to the appellant, Botany Land Development Ltd (Botany Land). Completion of the sale, due to settle on the 24 June 2013, cannot proceed because the Auckland Council (the Council) has lodged a caveat against the title to the land.
The Council filed a proceeding in the High Court seeking to sustain the caveat, contending that the trustees are obliged to offer to sell the land to the Council by virtue of a covenant in gross, contained in a memorandum of encumbrance registered against the title in February 1988. The Council says it has a contractual right to receive that offer and argues that it is entitled to protect its interest in the land pursuant to that covenant by a caveat. Botany Land and the trustees argue that the caveat should be removed so that the agreement for sale and purchase might be completed.
In the High Court, Lang J granted the Council’s application for an order that the caveat be sustained.[1] The order was made conditional upon the Council issuing a proceeding seeking specific performance of the relevant obligations secured by the covenants in the encumbrance.[2] We were told that such proceeding has been issued and is awaiting a hearing.
[1]Auckland Council v Pallister [2013] NZHC 2717, [2014] 2 NZLR 405 [High Court judgment].
[2]At [55].
Botany Land appeals against the High Court decision of Lang J.
There are two issues to be determined:
(a)Whether the Council has a reasonably arguable case for a caveatable interest in the land; and
(b)Whether the Council’s existing registered interest under the encumbrance means that it was not entitled to lodge the caveat.

Some further background

The land now owned by the trustees was once part of a larger block, in excess of 3.46…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NZCA 61
Decision Date: 13 March 2014 at 10.00 am

CaseChat Overview and Summary

Botany Land Development Limited (Botany Land) appealed against the decision of Lang J to sustain a caveat lodged by the Auckland Council (the Council) over a parcel of land at Umupuia Beach. Botany Land had entered into a sale and purchase agreement with the trustees of the Margaret E Pallister Family Trust (the trustees), who were contracted to provide vacant possession on settlement of the sale. The Council had lodged the caveat on the basis of a covenant in gross contained in an encumbrance registered against the title in 1988. The covenant required the trustees to offer to sell the land to the Council if it ceased to be occupied by a member of the Duder family. Botany Land submitted that the Council had no caveatable interest in the land, and that the terms of the covenant were not sufficiently certain to ground an order for specific performance. The Court held that there was a reasonably arguable case that the Council could obtain an order for specific performance, and that the Council's existing registered interest under the encumbrance did not mean it was not entitled to lodge the caveat. The appeal was dismissed.

Orders