Cap D'Amarres Residents' Association Incorporated v Edwards
[2012] NZHC 2184
•29 August 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2011-404-006434 [2012] NZHC 2184
IN THE MATTER OF a claim for equitable relief and damages
BETWEEN CAP D'AMARRES RESIDENTS' ASSOCIATION INCORPORATED First Plaintiff
ANDALAN FLITCROFT AND CHRYSTINE FLITCROFT
Second Plaintiffs
ANDIAN CLARENCE JONES, SHIRLEY GWENDOLINE JONES AND SHALE CHAMBERS
Third Plaintiffs
ANDSIMON JEREMY REI EDWARDS, KIT PING TANG AND CST TRUSTEES LIMITED
First Defendants
ANDDAVID DONALD MORGAN, GLENNIS DOREEN MORGAN AND SPICERS TRUSTEES COMPANY (2005) LIMITED Second Defendants
ANDJOHN WINTER, ANNA KARIN ELISABETH WINTER AND AUCKLAND TRUSTEES & EXECUTORS LIMITED
Third Defendants
Hearing: 14 June 2012
Appearances: S A Barker and P J Niven for the second and third plaintiffs
J M vonDadelszen and P McKendrick for the first to third defendants
Judgment: 29 August 2012
JUDGMENT OF GILBERT J
CAP D'AMARRES RESIDENTS' ASSOCIATION INCORPORATED V EDWARDS & ORS HC AK CIV 2011-
404-006434 [29 August 2012]
This judgment was delivered by me on 29 August 2012 at 2.00 pm
Pursuant to Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date:……………………….
Counsel: M von Dadelszen, Hastings [email protected]
Solicitors: Lee Salmon Long, Auckland: [email protected]
Buddle Findlay, Wellington: [email protected]
Glaister Ennor, Auckland [email protected]
Introduction
[1] Cap d’Amarres is one of the more recently established gated residential precincts in a major subdivision at Gulf Harbour on the Whangaparoa Peninsula. Each of the lots in Cap d’Amarres has an adjoining marina berth that can be used by the owner or sublicensed to a third party. Some lots have two berths. The second defendants, the Morgans, have not yet developed their lot and have sublicensed their two berths.
[2] The Morgans want their sublicensees and their invitees to be able to access their boats by driving into the Cap d’Amarres precinct, parking their cars on the Morgans’ undeveloped lot and then walking to the marina berths. The Morgans facilitated vehicular access to the precinct for their sublicensees and their invitees by passing on their remote control for the main gates. This resulted in numerous people driving in and out of the precinct at various times and as many as six or more vehicles being parked on the Morgans’ vacant lot at any one time. Vehicles were sometimes parked overnight or for longer periods while the boats were being used.
[3] The second and third plaintiffs, who have built on their lots and are living at Cap d’Amarres, objected to this practice. They say that the Morgans’ lot sometimes looked like an unsightly parking reserve. They also complained that having so many people driving in and out of the precinct compromised their security and interfered with their privacy.
[4] Unfortunately, the parties have been unable to resolve this conflict and it has developed into a significant and divisive issue for the owners. The first plaintiff, the Cap d’Amarres Residents’ Association (the CAP Association), disabled the remote control that had been issued to the Morgans. As a result their sublicensees and their invitees were forced to park outside the precinct and walk to their boats gaining access through a pedestrian access gate. The Morgans responded by applying for an interim injunction requiring the CAP Association to reactivate their remote control.
[5] Peters J dealt with the application immediately prior to Christmas 2011. She granted an interim injunction requiring the CAP Association to reactivate the
Morgans’ remote control but directed that no more than two cars may be parked on their lot at any one time. The relevant sublicense was not produced in evidence before Peters J and she proceeded on the basis that a valid sublicense had been granted. Peters J noted that she had not been able to review in detail the various constitutional and other documents that are relevant to the dispute. Accordingly, she stated that her decision was to meet immediate needs and was “not to be taken as anything more than that”. She reserved leave to the parties to make further application to the Court.
[6] The second and third plaintiffs apply to rescind the injunction on the grounds that the Morgans have no arguable entitlement to permit their sublicensees and their invitees to drive into Cap d’Amarres or to park on their lot. They argue that:
(a) the sublicense agreement is not valid;
(b) the sublicense agreement prohibits sublicensees from driving into the
Cap d’Amarres precinct;
(c) the CAP Association rules do not permit sublicensees and their invitees to have access to the Cap d’Amarres precinct;
(d) no more than one vehicle may be parked in the open on any lot in
Cap d’Amarres at any one time; and
(e) the interim injunction should therefore be rescinded.
[7] The second and third plaintiffs also apply for an order joining the Gulf Harbour Marine Village Residents’ Society Incorporated (the Village Association) to the proceeding. I deal with this application at the end of this judgment.
[8] Before addressing the specific grounds of the plaintiffs’ application I should say something about the proper approach to an application for rescission of an interlocutory order made following full argument from the parties. Such applications will generally only be entertained if relevant evidence was overlooked at the original
hearing or there has been a change of circumstances. This is because it is generally inappropriate for a Court to allow a matter to be re-litigated rather than appealed.
Is the sublicense agreement valid?
[9] The Morgans and their sublicensee, Mr Bakker, have signed the standard form of sublicense agreement approved by the Village Association. The Morgans say that Centurion Management Services Limited, the secretary of the Village Association, verbally approved the sublicense agreement and that it is accordingly valid even though the Village Association has not signed it.
[10] The Morgans argue that the administration of the Village Association has been delegated to the Committee which may in turn delegate any of its powers to the Manager. They claim that Centurion approved all sublicense agreements including the Morgans’ and that its approval was sufficient in terms of the Village Constitution. They also argue that there is nothing in the Constitution requiring sublicense agreements to be signed by the Village Association.
[11] I do not accept these submissions. In my view, the sublicense agreement is not valid for two reasons. First, it has only been signed by two of the three parties. Second, the requisite written approval of the Village Association was not given.
[12] All owners of residential lots are required to join the Village Association and comply with its Constitution. The waterway and the strip of land that separates the residential lots from the water are owned by the Village Association. Owners’ rights to use their marina berths derive from the Village Constitution, as do their rights to sublicense their berths.
[13] The Village Constitution permits berth sublicensing so long as this is done strictly in accordance with the Constitution.1 The Constitution requires that prior written approval of the Village Association must be given for any sublicense
agreement2 and provides that the chairperson must sign all documents requiring
1 Rule 7.8 of the Village Constitution.
2 Clause 4.2 of Schedule 3 and Rule 18.13 of the Village Constitution.
execution on behalf of the Village Association.3 There is nothing in the Constitution permitting the chairperson to delegate this responsibility.
[14] The standard form of sublicense agreement is a contract between three parties: the Village Association as owner of the waterway and licensor of the berth; the licensee; and the sublicensee. In the present case, the Morgans, as licensee, and Mr Bakker, as sublicensee, have signed the agreement but the Village Association, as licensor and owner of the waterway, has not. The agreement has therefore not been executed.
[15] As is clear from the preamble to the standard form of sublicense agreement the written consent of the Village Association is intended to be given by signing the agreement: “The Association hereby grants permission to the licensee to sublet the berth in accordance with Clause 4.2 of the Berth License Terms.” Because the agreement has not been signed by the Village Association, this consent was not given. Centurion, as secretary, had no power to give the requisite written approval on behalf of the Village Association or to sign the agreement on its behalf and it did not purport to do so.
[16] The Morgans argue that they are entitled to rely on the indoor management rule. They contend that the sublicense agreement is valid because it was approved by the secretary of the Village Association. I do not accept this. The Morgans have constructive notice of the fact that all sublicense agreements must be approved in writing by the Village Association and that such approval must be given by the chairperson. The Morgans would have seen from the sublicense agreement that the Village Association’s written consent was to be given by it signing the agreement. The Morgans must have known that the Village Association did not sign. In my view, the indoor management rule cannot assist the Morgans.
[17] The Morgans also claim that Mr Bakker, as sublicensee, is entitled to rely on equitable estoppel because he reasonably believed that the sublicenses were validly approved and signed. I do not accept this argument either. Mr Bakker cannot have
reasonably believed that the sublicense had been validly executed by the
3 Rule 14.3 of the Village Constitution.
Village Association because no one has even purported to sign the document on its behalf. In any event, even if Mr Bakker could raise an equitable estoppel, this cannot assist the Morgans.
[18] For the reasons given, I consider that the sublicense agreement is not valid. It has not been approved in the manner required by the Village Constitution, nor has it been signed by all parties.
Does the sublicense agreement prohibit sublicensees from driving into the
Cap d’Amarres precinct?
[19] The standard form of sublicense agreement prohibits the sublicensee and his or her agents and invitees from driving a vehicle or permitting a vehicle to be driven within the confines of the Gulf Harbour Marine Village property or the Common Areas. “Gulf Harbour Marine Village property” is not defined in the agreement. “Common Area” is defined as including the “Entrances, Courtyards between the garages and car ports and the passageways between the buildings”. However “Entrances” and “Courtyards” are not defined in the agreement. Nor are “Common Area”, “Entrances” and “Courtyards” defined in the Village Constitution.
[20] The preamble to the agreement records:
The land between the public road and the Residential Fringe is a Common Area owned by members of the various Bodies Corporate and is therefore private land. To gain access to the marina berths, it is necessary to cross the Common Areas, requiring the consent of a resident who is a member of a Body Corporate.
There is no provision for visitor parking within the Common Areas. The roadside parking bays are reserved for casual parking for residents guests. Renters are advised that overnight and/or extended parking is available in the Gulf Harbour Marine Village town centre located to the north of the canal.
[21] The Residential Fringe is defined in the Village Constitution as meaning the strip of land above the high water mark between the owners’ lots and the water. The definition of “Common Area” in the agreement is inclusive. It appears from the preamble that land owned by members of the various bodies corporate that separates the public road from the Residential Fringe is a Common Area for the purposes of the agreement. The road leading from the Cap d’Amarres’ gate to the residents’
properties is owned by the members of the Cap d’Amarres body corporate, being the CAP Association. This road forms part of the private land separating the public road from the Residential Fringe and therefore appears to be a Common Area in terms of the agreement. On the basis of the evidence I have seen, it would appear that sublicensees are prohibited by the standard sublicense agreement from driving on this road. I am not able to express a definitive view because this part of the standard sublicense agreement is not well drafted and may be capable of differing interpretations. I recognise that it is possible that further evidence could be available at trial that could change my preliminary assessment.
Are sublicensees and their invitees entitled to access the Cap d’Amarres
precinct?
[22] All owners of lots in Cap d’Amarres are bound by the CAP Association rules. These entitle owners and their invitees, but no one else, to make “full use” of their individual lots and the Common Facilities.4 An “invitee” means any invitee, visitor
or occupier of the lots authorised or approved by an owner.5 Each owner is
responsible for the acts or omissions of any of his or her invitees and for acquainting them with the CAP Association rules.6
[23] The plaintiffs argue that sublicensees are not “invitees” for the purposes of this rule because they are not invitees or visitors. At common law an invitee is a person who comes on to an occupier’s property with his or her consent on business in which the occupier and the invitee have a common interest.7 The plaintiffs claim that sublicensees are not invitees in this sense. Rather, they contend that sublicensees are contractual visitors with an implied contractual right to enter the owner’s lot to access the berth. The plaintiffs maintain that a contractual visitor is not a visitor because a “visitor” should be interpreted under the CAP Association
rules as being confined to a person visiting an owner for social reasons.
4 Rules 5.1 and 5.2 of the CAP Association Rules.
5 Rule 2.1 of the CAP Association Rules.
6 Rules 8.1 and 8.2 of the CAP Association Rules.7 Pearson v Lambeth Borough Council [1950] 2 KB 353,366 (CA)
[24] I am not persuaded that the position is as clear as the plaintiffs contend. It seems that sublicensees are commonly given pedestrian access to Cap d’Amarres and other gated precincts in the Gulf Harbour Marine Village. This is what one might expect and is consistent with the preamble to the sublicense agreement quoted above.
[25] In any event, I consider that the ultimate resolution of this issue may require evidence to determine what the parties intended by this particular provision. It is not appropriate for me to express any final conclusion on the issue in the context of this interlocutory application. It can only be determined at trial. However, in my view, it is at least arguable that sublicensees are invitees and therefore entitled to have access to Cap d’Amarres.
[26] It does not follow that invitees of sublicensees are also entitled to have access to Cap d’Amarres. Only invitees of owners have that entitlement. Invitees of sublicensees are not entitled to any access to Cap d’Amarres unless they are invitees of an owner.
[27] The CAP Association rules do not differentiate between vehicular access and pedestrian access. However, my preliminary view is that sublicensees are expressly forbidden from having vehicular access under the standard terms of the sublicense agreement.
[28] In summary, Mr Bakker is arguably entitled to vehicular and pedestrian access to Cap d’Amarres as an invitee of the Morgans. Mr Bakker’s invitees are not entitled to have any access to Cap d’Amarres unless they are also invitees of the Morgans. If Mr Bakker was party to a valid sublicense agreement this would restrict him from driving within the Cap d’Amarres precinct. However, there is no valid sublicense agreement with Mr Bakker. Even if there was, the plaintiffs would not be a party to it and could not enforce its terms.
[29] There is therefore no basis to disturb Peters J’s finding that the Morgans’ rights were arguably infringed when the CAP Association deactivated their remote control and prevented Mr Bakker from having access to Cap d’Amarres.
Can more than one vehicle be parked in the open on any lot in Cap d’Amarres
at any one time?
[30] The CAP Association rules require owners to comply with design guidelines.8
The design guidelines require that three parking spaces be provided on each lot with two of these being fully enclosed. The plaintiffs claim that it is implicit in these rules that owners of undeveloped lots may not have more than one vehicle parked on their lot at any time. They argue that the injunction, which permits two vehicles to park on the Morgans’ lot, breaches these rules. I do not accept this. In my view the design guidelines only apply to developed lots. Further, they require provision for car parking but do not restrict the number of cars that may be parked on a lot.
Should the interim injunction be rescinded?
[31] I have found that Mr Bakker does not have a valid sublicense agreement. The Village Association would be entitled to remove him from its waterway. However, the Village Association is not currently a party to the proceeding and it has not applied to remove Mr Bakker or his boat.
[32] The fact that Mr Bakker does not have a valid sublicense agreement does not necessarily mean that he is not an invitee of the Morgans for the purposes of the CAP Association rules. The Morgans have an arguable case that Mr Bakker is an invitee, despite not having a valid sublicense agreement, and that they are entitled to give him access to Cap d’Amarres.
[33] Peters J found that a sublicensee was arguably an invitee for the purposes of the CAP Association rules and therefore is arguably entitled to have access to Cap d’Amarres. I have reached the same conclusion. Given that there are two berths, I also agree with her interim decision, pending further order of the Court, that
two vehicles may be parked on the Morgans’ lot at any one time.
8Rule 7.1 CAP Association Rules, Bylaw 2.2 in Schedule 2 and Design Guidelines in Schedule 1.
[34] The new evidence available to me demonstrating the invalidity of the sublicense agreement is not a sufficient reason to justify rescinding the injunction granted by Peters J. The plaintiffs’ rescission application must therefore be declined.
Should the Village Association be joined to this proceeding?
[35] Because Mr Bakker’s sublicense agreement is not valid, his access rights will be determined on the basis of whether or not he is an invitee of the Morgans for the purposes of the CAP Association rules. The Village Association does not need to be a party to this proceeding for the purposes of determining that dispute. The plaintiffs’ application to join the Village Association to this proceeding must also be declined.
Result
[36] The plaintiffs’ application to rescind the interim injunction is dismissed.
[37] The plaintiffs’ application to join the Village Association as a party to this proceeding is also dismissed.
[38] The defendants are entitled to 2B costs on these applications.
M A Gilbert J
0
0
1