Cassiny Limited v Hounslow Holdings Limited
[2021] NZHC 3116
•17 November 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-1992
[2021] NZHC 3116
UNDER Land Transfer Act 2017 IN THE MATTER
of an application to sustain caveats on land
BETWEEN
CASSINY LIMITED
First Plaintiff/Applicant
CASSINY LANDS LIMITED
Second Plaintiff/ApplicantAND
HOUNSLOW HOLDINGS LIMITED
Defendant/Respondent
Hearing: 17 November 2021 (by telephone) Appearances:
K J Sheehan for Plaintiffs/Applicants
K G Davenport QC and A M Cameron for Defendant/Respondent
Judgment:
17 November 2021
Reasons:
18 November 2021
REASONS FOR JUDGMENT OF VENNING J ON APPLICATION FOR STAY
This judgment was delivered by me on 18 November 2021 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Kate Sheehan Lawyers, Auckland
Sellars & Co, Helensville
Counsel: K Davenport QC/A M Cameron, Auckland
CASSINY LTD v HOUNSLOW HOLDINGS LTD [2021] NZHC 3116 [17 November 2021]
Introduction
[1] In a judgment delivered on 10 November 2021 the Court declined to make the interim orders sought by Cassiny Limited (Cassiny) and Cassiny Lands Limited (CLL) that caveats registered by them against the title to land owned by Hounslow Holdings Limited (Hounslow) not lapse.1 In doing so the Court accepted that Hounslow had validly cancelled an agreement for sale and purchase (ASP) entered with Cassiny. The Court directed the caveats were to lapse.
[2]On 15 November 2021 Cassiny and CLL filed an application seeking:2
(a)leave to appeal against the judgment;
(b)stay of proceedings;
(c)order/interim orders/adjournment pursuant to s 143 of the Land Transfer Act 2017;
(d)interim injunction;
(e)leave to lodge a second caveat.
[3]The application is opposed by Hounslow.
[4] Ms Sheehan also filed an urgent memorandum requesting a hearing before 17 November 2021. She understood the caveats would lapse at 5.00 pm that date. The Court allocated a teleconference at 2.15 pm, 17 November 2021 and heard from the parties. At the conclusion of the conference the Court advised that the application for stay was declined with reasons to follow. These are the reasons.
1 Cassiny Ltd v Hounslow Holdings Ltd [2021] NZHC 3039.
2 This was in an amended application filed on 15 November 2021. The original application filed earlier that day did not seek interim injunction or leave to lodge a second caveat.
Background
[5] The factual background to the proceedings is set out in the judgment. It is unnecessary to refer to it on this application for stay.
Preliminary matters
[6] Leave is not required to appeal the judgment. The application dealt with by the Court was an originating application. An appeal lies as of right from the judgment.
[7] The focus of the application was on the application for stay. The other orders referred to in the application (said to be for interim or injunctive relief) effectively sought the same relief, namely that in one form or another the caveats remain on Hounslow’s property pending the appeal.
[8] Although the application was made in the name of both Cassiny and CLL, Ms Sheehan’s submissions focused on the position of CLL.
Applicable principles – stay
[9] The application for stay falls to be dealt with under r 12 of the Court of Appeal (Civil) Rules 2005. Ms Sheehan’s reference to the High Court Rules 2016 at HCR 20.10.(2) was in error. Part 20 of the High Court Rules only applies to appeals to the High Court.
[10]The factors to be taken into account on an application for stay are:
(a)whether the appeal may be rendered nugatory by the lack of a stay;
(b)the bona fides of the applicant as to the prosecution of the appeal;
(c)whether the successful party would be injuriously affected by the stay;
(d)the effect on any third parties;
(e)the importance or public interest;
(f)the strength of the appeal; and
(g)the overall balance of convenience.3
Will the appeal be rendered nugatory if a stay is not granted?
[11] Ms Sheehan argued that if the stay was declined, CLL’s caveat would not remain over Hounslow’s property pending the appeal. The appeal would be rendered nugatory.
[12] Ms Sheehan submitted that as CLL had paid the deposit it wished to maintain a caveat over Hounslow’s property, effectively as security for its claim for the recovery of the deposit and compensation. The separate proceedings it (and Cassiny) have issued plead the cancellation was invalid.
[13] A preliminary point arises. Following the judgment the Court’s orders were sealed and delivered to Land Information New Zealand (LINZ). Towards the conclusion of the telephone hearing Mr Cameron advised the Court that a search he had just carried out revealed the caveats had been removed from the title. To that extent the judgment has been perfected and the orders in it executed. In the circumstances, conceptually it is difficult to say that refusal to grant a stay will render the appeal nugatory. There is nothing to stay.
[14] The purpose of the caveat is apparently to achieve a form of security over Hounslow’s land pending the hearing of CLL’s claim against it for the return of the deposit and its claim for compensation. There are other avenues available to it in that regard which do not require an appeal. If there is a proper basis to do so then it could apply to lodge a second caveat. If it considers that Hounslow is seeking to do away with its property to avoid paying a judgment it has other remedies.
3 Keung v GBR Investment Ltd [2010] NZCA 396 at [11]; Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].
Bona fides
[15] I accept that Ms Sheehan’s current instructions are that CLL intends to pursue the appeal. Appropriate timetable orders could be made to bring that on promptly.
Effect on successful party/third party
[16] As the Court has said on a number of occasions a caveat is a charge on land and prevents the registered proprietor from dealing with their property. For that reason the onus is on the caveator to satisfy the Court the caveat should be sustained. Mr Kidd, a director of Hounslow, confirmed in his affidavit in the previous proceedings that Hounslow does not wish to wait any further for the resource consents Cassiny (and/or CLL) would need to develop the land. For that reason they cancelled the ASP when the settlement date passed. Some shareholders of Hounslow have had to refinance because they expected to pay off loans from the sale proceeds. Hounslow wishes to deal with its property. A caveat would fetter its ability to deal with its property.
Importance or public interest
[17] Apart from the commercial interests of the parties the proposed appeal does not raise any issue of importance or any broader interest.
The merits of the appeal
[18] The basis of the appeal as it appears from Ms Sheehan’s submissions is that the Court was wrong in saying there could only be one purchaser. Ms Sheehan (I accept correctly), noted that an assignee of a purchaser’s interest under an agreement for sale and purchase may have a caveatable interest. She submitted that Cassiny had nominated CLL. She also made the point that the settlement notice which Hounslow relied on to cancel the contract was directed to Cassiny, not CLL.
[19] Again, there is a preliminary point. Although Ms Sheehan’s submissions and CLL’s case now seem to be based on CLL’s interest in the deposit, or a claim for contributions to the land, that was not the basis of the caveat as lodged with LINZ. The interest claimed in the caveat was based on the ASP which has now been
cancelled. It is not the interest which CLL now apparently relies on to support the caveat.
[20] The next fundamental point which the proposed appeal overlooks is that there was only one agreement for sale and purchase. The original purchaser named was Cassiny. If that agreement was validly cancelled then CLL can have no better interest or claim in or under that agreement for sale and purchase as its nominee than Cassiny as the original purchaser had.
[21] Cassini’s attempt to challenge the settlement notices was rejected by Woolford J in his judgment.4 Hounslow then cancelled the ASP. There has been no appeal from Woolford J’s decision. As matters stand, the ASP has been cancelled.
[22] As noted, the argument advanced on behalf of CLL for an interest in Hounslow’s land is based on its nomination as purchaser. There are a number of issues with that proposition. First, there is no evidence before the Court that the nomination was executed so as to comply with the requirements of s 50(1) and s 50(6)(b) of the Property Law Act 2017. While there is no longer a need for notice, there is no evidence before the Court the deed of nomination was signed by both parties.
[23] Mr Kidd’s affidavit in the previous proceeding attached correspondence which refers to the nomination. There was an email from Cassiny’s original conveyancing solicitor dated 15 February 2021 which advised:
Please note that we will be nominating the agreement to Cassini Lands Limited. We will forward you a copy of the signed Deed of Nomination in due course.
[24] There was then a further email of 29 July 2021 from the current conveyancing solicitor acting for Cassiny in which it was noted:
Our client Company has nominated Cassiny Lands Limited to complete settlement. We will provide you with a copy of the Deed of Nomination once executed.
4 Cassiny Ltd v Hounslow Holdings Ltd [2021] NZHC 2528.
[25] It appears that at least as at that date the deed of nomination had not been completed. Further, in an email of 20 October 2021 its current solicitor confirmed that in relation to CLL:
Its caveatable interest is as purchaser by nomination. We were going to supply you with a copy of the deed of nomination on settlement, but as you are aware, we never got that far.
[26] As noted, Ms Sheehan submitted that CLL had paid the deposit. However, as Ms Davenport QC noted, Hounslow would not have known which entity paid the deposit.
[27] Next, when Hounslow issued the settlement notice, the response to it was by Cassiny, rather than CLL. Although Cassiny and CLL are represented by the same solicitors, only Cassiny was named as plaintiff. At least at that stage Mr Ebrahim, Cassiny and CLL’s director did not seem to consider the assignment had been completed, otherwise the application would have been in the name of CLL as the properly nominated purchaser holding the interest in the agreement for sale and purchase.
[28] Further, in any event, the settlement notice referred to the proposed nomination and also noted that neither Cassiny nor CLL had completed settlement by the due date. The notice was notice to the purchaser (whichever entity that was) as it was given to the conveyancing solicitor acting for both.
[29] The confusion between Cassini and CLL remains in the separate proceedings. They cannot both be entitled to the same relief but that is the way the claim is pleaded. The pleading does not identify a date when it says the nomination was effected.
Balance of convenience
[30] As noted, it was apparent from Ms Sheehan’s submissions that CLL’s interest is in recovering the $300,000 deposit and the compensation it seeks.
[31] There is no evidence before the Court or reason for the Court to consider at this stage that Hounslow would not be in a position to repay the $300,000 deposit and compensation if ultimately CLL succeeds in its claim.
[32] Against that, if a caveat is registered against the property Hounslow will be prevented from dealing with its property.
Result/orders
[33] Consideration of the above factors did not support a stay. For those reasons the Court declined the application for stay.
[34] The further interim orders sought in the application sought orders or directions that both caveats not lapse or that the caveat lodged by CLL not lapse could not be made as the caveats had lapsed and are no longer on the title.
[35] Without suggesting there is any merit in doing so, if CLL still considers it has a proper basis to lodge a second caveat it should make a formal separate and focused application in relation to that supported by evidence which addresses the requirements for the grant of leave. Such an application can then be responded to in the proper way by Hounslow if required.
Costs
[36] The applicants are jointly and severally liable to pay costs to Hounslow on a 2B basis for the memorandum in response and the hearing.
Venning J
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