Chao v Li - [2014] NZHC 516

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-004500 [2014] NZHC 516

UNDER
Section 145A of the Land Transfer Act

1952

IN THE MATTER

of an applicaton for an order that caveat
ID Number 927789.1 not lapse

BETWEEN

CATHERINE CHAO AND ZHONGJIAN (TOM) PENG

Applicants

AND

XIAOXI (RICHARD) LI and YUAN CHEN

Respondents

Hearing: 18 March 2014

Counsel:

M A Karam for the Applicants
C R Andrews and E L Moore for the Respondents

Judgment:

20 March 2014

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
20.03.14 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

C CHAO AND Z PENG v X LI and Y CHEN [2014] NZHC 516 [20 March 2014]

[1] On 16 October 2013 the applicants applied for an order that their caveat over the respondent’s property situated at 1/18 Inverary Avenue, Epsom (“the property”) not lapse. That application was heard on 21 February 2014 before Wylie J who noted that:

(a) the factual background was disputed and whilst the applicants asserted they were parties to a joint venture agreement involving the respondent Mr Li, Mr Li denied they were parties to a joint venture agreement involving the property;

(b)Mr Li accepted that he had obtained money from the applicants but said that this was to repay him for monies he had advanced in an earlier joint venture investment which failed;

(c) the applicants claim was solely against Mr Li and their evidence confirmed they had no dealings with the respondent Ms Chen;

(d)counsel for the applicants acknowledged the caveat was inappropriately worded by its reference to a claim over Ms Chen’s interest in the property; and

(e) counsel for the applicants acknowledged the application to sustain the caveat should be dismissed.

[2] For consideration here is the applicants’ application pursuant to s 148 of the Land Transfer Act 1952 seeking leave to lodge a second caveat. Leave is sought to lodge a caveat over the interest of Mr Li alone who holds a joint interest in the property.

[3] The application for leave confirms the error made when the original caveat was registered but said such an error was justifiable in the circumstances. It is asserted there would be no unavoidable prejudice “to parties acting in reliance on the register and in the belief that the caveator was not pursuing the claim”.

Background

[4] The applicants are husband and wife. They have known Mr Li since early

2009 or about three years prior to the alleged agreement giving rise to an interest in the property.

[5] The applicants and Mr Li, with others, have been involved in a number of property development projects between 2009 and 2012. The applicants say these were loose oral arrangements which were not recorded in writing but did involve numerous transfers of funds between their various bank accounts, and cash transactions.

[6] In 2011 the applicants and Mr Li invested in a gym business called “Harbour Fitness”. The business was…

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 Chao v Li

Details

AGLC: Chao v Li [2014] NZHC 516
Case: [2014] NZHC 516
Decision Date: 20 March 2014

CaseChat Overview and Summary

The applicants, Catherine Chao and Zhongjian (Tom) Peng, sought an order that their caveat over the respondents' property not lapse. The applicants and the respondents had a dispute over a joint venture involving the property at 1/18 Inverary Avenue, Epsom. The applicants sought leave to lodge a second caveat over the interest of Mr Li alone who holds a joint interest in the property. The court was required to decide whether leave should be granted to the applicants to lodge a second caveat. The court considered the strength of the case made by the applicants to support the claimed interest in the land, any explanation for failure to exercise the caveator’s rights under s 145, and whether unavoidable prejudice would be suffered by those who have acted in reliance on the register and in the belief that the caveator would not pursue the claim. The court found that the applicants had an arguable case to retain a caveat based on their claim as beneficiaries pursuant to an institutional constructive trust. The court concluded that leave should be granted to the applicants to file a second caveat. The applicants have until 4:00pm 28 March 2014 to lodge their second caveat for registration. It is appropriate to award costs to the applicants on a 2B basis for a hearing time of half a day. The applicants are also entitled to payment of their reasonable disbursements.

Orders