Chacko v Palaparambil - [2025] NZHC 1974

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-0003

[2025] NZHC 1974

BETWEEN
JOSEPH VALLAPPURACKAL CHACKO

Applicant

AND

JEEJO VELAYUDHAN PALAPARAMBIL

First Respondent

SUDHA JEEJO

Second Respondent

Hearing: 24 March 2025

Appearances:

A Nair for the Applicant

S Khan and M Orange for the Respondent

Judgment:

18 July 2025

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 18 July 2025 at 10 am pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Nair & Associates, Auckland
Fortune Manning Lawyers, Auckland

CHACKO v PALAPARAMBIL [2025] NZHC 1974 [18 July 2025]

Introduction

[1] The applicant, Mr Chacko, has applied to sustain the caveat he has lodged against a property in Retreat Drive, Mangere.

[2]Mr Chacko submits the caveat ought to be sustained on two grounds:

(a)an equitable interest arising from an alleged agreement with Mr Palaparambil, the first respondent, to repay a debt from the sale proceeds of Retreat Drive; and

(b)a beneficial interest in Retreat Drive as a beneficiary under a trust deed.

[3] The interest recorded on the caveat is only as a beneficiary under the trust deed. There is no reference to any equitable interest arising from an alleged agreement.

[4] The respondents accept that Mr Chacko has a beneficial interest in Retreat Drive under a trust deed and that this is a sufficient basis for the caveat to be sustained. However, the respondents submit that the Court ought to exercise its discretion to lapse the caveat because Mr Chacko’s legitimate interests would not be prejudiced by such lapse.

[5] It is clear that the Court has such a discretion and that the circumstances of the lodging of the caveat are unusual.

[6] First, Mr Chacko signed a sale and purchase agreement to purchase Retreat Drive in the name of a company for which he is the sole director and shareholder. He then lodged the caveat several weeks later, relying on the following interest:
…as beneficiary in an express declaration of trust dated 31 August 2021 with the registered proprietors Sudha Jeejo and Jeejo Velayudhan Palaparambil as trustees.

[7] The caveat prevented settlement of the sale of the property to the caveator’s own company.

[8] As a result of both the caveat and other issues arising, including entry into commercial leases by Mr Chacko allegedly without the consent of the trustees or other beneficiaries and the alleged dumping of soil on the property, the trustees cancelled the sale and purchase agreement.

[9] I set out the legal principles applying to the sustaining of caveats below before considering whether the caveat can be maintained on both bases claimed or just on the basis of the bare trust. This will assist in determining the legitimate interests that the caveat can protect before considering whether the discretion to lapse ought to be exercised on the basis that those legitimate interests will not be prejudiced.

Relevant legal principles

[10] Section 138 of the Land Transfer Act…

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.

Continue reading Chacko v Palaparambil

Details

AGLC: Chacko v Palaparambil [2025] NZHC 1974
Case: [2025] NZHC 1974
Decision Date: 18 July 2025

CaseChat Overview and Summary

In the case of Chacko v Palaparambil, Joseph Vallapurackal Chacko has applied to sustain the caveat he has lodged against a property located at Retreat Drive, Mangere. Mr Chacko claims two interests in the property: an equitable interest arising from an alleged agreement with Jeejo Velayudhan Palaparambil, the first respondent, and a beneficial interest as a beneficiary under a trust deed. The respondents, Sudha Jeejo and Jeejo Velayudhan Palaparambil, accept that Mr Chacko has a beneficial interest in the property under the trust deed, which is a sufficient basis for the caveat to be sustained. However, they argue that the Court should exercise its discretion to lapse the caveat because Mr Chacko's legitimate interests would not be prejudiced by such lapse. The Court has the discretion to remove the caveat if it is satisfied that the caveator's legitimate interests will not be prejudiced by removal. The circumstances of the lodging of the caveat are unusual, and the Court must consider whether the caveat can be maintained on both bases claimed or just on the basis of the bare trust. The legal principles applicable to the sustaining of caveats under the Land Transfer Act 2017 (LTA) were set out in Green & McCahill Holdings Ltd v Ara Weiti Development Ltd and Philpott v Noble Investments Ltd. The applicant must demonstrate that they hold an interest in the land that is sufficient to support the caveat, but they need not establish that definitively. The Court of Appeal in Green & McCahill Holdings Ltd v Ara Weiti Development Ltd held that the Court must be satisfied that the caveator's legitimate interests will not be prejudiced by removal. The respondents argue that Mr Chacko's legitimate interests would not be prejudiced by the lapse of the caveat because a sale of Retreat Drive does not threaten his 25 per cent share of the property, and a sale of the property would only convert his equitable interest under the Trust Deed from real property to cash. The respondents further propose that if the Court considers it "absolutely necessary," they would be prepared to give an undertaking that if Retreat Drive is sold, Mr Chacko's 25 per cent share of the proceeds and any disputed portion of the first respondent's 12.5 per cent share be held in a solicitor's trust account pending resolution of Mr Chacko's claims. The Court is satisfied in the circumstances of this case that it is appropriate to exercise its discretion to lapse the caveat as Mr Chacko's legitimate interests can be protected by requiring his 25 per cent share of the profits from the sale of Retreat Drive to be paid to him within 20 working days of the settlement of the sale. The Court orders that the caveat lodged by Mr Chacko over the property in Retreat Drive, Mangere, is to lapse on condition that 25 per cent of the profits of sale are to be paid to Mr Chacko within 20 working days of settlement of the sale of Retreat Drive with leave to return to Court if issues arise (preferably by joint memorandum with any differences set out). The Court asks the parties to confer and try to agree costs but indicates its preliminary view that costs on an increased basis may be payable given the circumstances in this case.

Orders