Deliu v Ying
[2017] NZHC 814
•27 April 2017
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2017-404-000705 [2017] NZHC 814
BETWEEN GABRIELA DELIU
First Applicant
FRANCISC CATALIN DELIU Second Applicant
AND
HSIANG FEN YING Defendant
Hearing: 27 April 2017 Appearances:
D Zhang for First Applicant
F Deliu in person
H Ying in personJudgment:
27 April 2017
ORAL JUDGMENT WYLIE J
Solicitors:
Jesse & Associates, Auckland
Copies to Mr and Mrs Deliu
H Ying
DELIU v YING [2017] NZHC 814 [27 April 2017]
Introduction
[1] The applicants, Mr and Mrs Deliu, own a property situation in Fleetwood Drive, Waitakere, Auckland. The property has recently been sold by auction. Settlement is due tomorrow – 28 April 2017.
[2] On 3 April 2017, the respondent, Ms Ying, lodged a caveat against the title to Mr Deliu’s property, under No. 10751654.1. The interest claimed to support the caveat reads as follows:
Where the caveator claims a beneficial interest in the estate as cestuis que trust by virtue of a constructive or implied trust.
[3] Mr and Mrs Deliu have filed an originating application seeking that the caveat should be removed and further seeking an order that Land Information New Zealand should be directed not to accept any further applications made by Ms Ying, her husband or her children.
[4] The Delius’ application was dated 13 April 2017. It was referred to me in my capacity as duty Judge on 19 April 2017. I declined to deal with the application on a without notice basis. The caveat had not been exhibited and I did not know what interest Ms Ying was asserting. I put in place an abbreviated timetable to enable the matter to be heard today prior to settlement of the sale.
[5] Ms Ying has filed a notice of opposition and an affidavit in support. Mr
Deliu has filed an affidavit in reply.
[6] Ms Ying sought to file a further affidavit today. Copies of that affidavit had not been made available in advance to either Mr Deliu or to Mr Zhang, appearing on behalf of Mrs Deliu. Given the exigencies of time, I declined to accept the further affidavit.
Background
[7] The background to this matter is set out in a judgment issued by Palmer J, dated 13 December 2016.1 It can briefly be summarised as follows.
[8] Ms Ying and her husband, Mr Young, are from Taiwan. They have been in New Zealand since 1995. Ms Ying was the shareholder and sole director of a company, King David Investments Ltd, which is now in liquidation.
[9] King David owned a property in Hoteo Avenue, Papatoetoe. In early April
2013, it agreed to sell that property to a Ms Zhang. The sale price was $399,000 and settlement was due to occur on 28 May 2013.
[10] Settlement did not occur. Ms Zhang had to pay for alternative accommodation. She lodged a caveat on the property and filed proceedings in this Court. Mr Deliu was acting for her in this regard as a barrister, on instructions from Ms Zhang’s solicitors. Ms Zhang sued King David in contract. She sought a declaration and transfer of the property to her by way of specific performance. She also sought damages.
[11] The matter was set down for hearing on 4 July 2016. Ms Ying and her husband had been in China, but they were back in New Zealand on that morning. The hearing commenced on 4 July 2016, but on 5 July 2016, the parties agreed to settle the proceedings. The settlement agreement was drafted by Mr Deliu as counsel for Ms Zhang. Ms Ying had her own lawyer at that stage, Mr Hurd. The settlement agreement was signed by Ms Zhang, Ms Ying and her husband, Mr Young. It provided as follows:
(a) that King David would specifically perform the agreement for sale and purchase by transferring the property to Ms Zhang by 13
September 2016;
(b)King David would pay $220,000 to Ms Zhang by way of a set off from the sale price on settlement; and
1 Zhang v King David Investments Ltd (in liquidation) [2016] NZHC 3018.
(c) the proceedings against Mr Young would be discontinued and costs would lie where they fell in relation to that issue.
[12] On the same day, Duffy J made consent orders in terms of the settlement agreement.
[13] Ms Ying and Mr Young went on to challenge the consent order. Emails were sent to the Court Registry. They sought to withdraw their signatures to the consent orders. On 12 July 2016, the Chief High Court Judge sent a letter to Ms Ying and Mr Young. He advised them to take legal advice.
[14] By 25 July 2016, Ms Ying was no longer represented. Her husband, Mr Young, who has been admitted as a solicitor in New Zealand, filed a 10 page application for leave to set aside the consent orders. It was not however properly filed and it did not proceed.
[15] On 26 July 2016, King David applied for an order that Ms Zhang’s caveat over the Hoteo Avenue property lapse. The application was signed by Ms Ying. Ms Zhang took no steps and in the event, the caveat did lapse.
[16] Subsequently, Mr Young sought to appeal the consent orders to the Court of Appeal. On 7 September 2016, the Court of Appeal issued a judgment dismissing the appeal and recording that it had no jurisdiction and that the appropriate course was to apply to the High Court to set the orders aside.
[17] On 30 August 2016, Ms Ying sold the Hoteo Avenue property to a third party for $655,000. That sale was settled on 12 September 2016. The entire proceeds were applied to reduce King David’s mortgage.
[18] On 19 July 2016, King David gifted another property at Wintere Road, Papatoetoe, to Ms Ying and Mr Young’s children. That property was also then sold to another third party.
[19] On 21 September 2016, on a without notice basis, Ms Zhang applied to this
Court for an order that Ms Ying and Mr Young were in contempt of Court unless
they disgorged the proceeds of sale of the Hoteo Avenue property, and for a freezing order over another property in Haseler Crescent, Howick, owned by a trust established by Ms Ying and Mr Young.
[20] The Court directed that that application be served on the defendants. It was served, but the defendants failed to appear when the matter was set down for call. Instead, by shareholders resolution on 26 September, Ms Ying put King David into liquidation. Palmer J found that the company was liquidated in order to avoid the consequences of dishonouring the consent order.
[21] Ms Zhang’s application was set down for hearing by Woodhouse J on 27
September 2016. Further, on 29 September 2016, Woodhouse J froze King David’s bank account pending further order of the Court, and on 28 September 2016, Ms Zhang lodged a caveat over the Wintere Road property, which had been transferred to the children.
[22] On 17 November 2016, Toogood J ordered, with the consent of the parties, that the children were to procure that, upon settlement of the sale and purchase of the Wintere Road property, $550,000 was to be paid into Court, to be held by the Registrar on interest bearing deposit, and that the caveat lodged by Ms Zhang should not lapse until either further order of the Court, or withdrawal by Ms Zhang, which was to occur when the monies were paid into Court.
[23] The monies were paid into Court on 23 November 2016. The caveat was then withdrawn.
[24] On 7 October 2016, Ms Ying and Mr Young applied to set aside the consent order, for leave to withdraw their consent, and to discharge the interim freezing order over the Haseler Crescent property.
[25] The hearing was held before Palmer J on 28 October 2016, and again on 17
November 2016.
[26] Palmer J declined to set aside the consent orders. He did, however, vary them to remove the obligation to transfer the Hoteo Avenue property to Ms Zhang. Rather, he directed the Registry to pay to Ms Zhang as soon as practicable the sum of
$506,000 from the $550,000 which had been paid into Court as ordered by Toogood J. He declared Ms Ying to be in contempt in Court and fined her the sum of $10,000. The freezing order over King David’s bank account was discharged by consent.
[27] Ms Ying and Mr Young have appealed Palmer J’s judgment to the Court of Appeal. There was a hearing in that regard on 27 February 2017 and in a judgment issued on 2 March 2017, the Court held, inter alia, that the notice of appeal filed did not comply with the High Court Rules. It directed the appellants to file a complying notice of appeal. I am advised by Ms Ying today that this has occurred.
[28] Ms Ying and Mr Young have also applied to stay Palmer J’s judgment. A stay
has been declined.
[29] The Registrar, in association with the orders made by Palmer J, paid out
$506,000 of the monies held in Court to Ms Zhang’s solicitors.
Submissions
[30] Against this background, Ms Ying asserts that she is entitled to lodge a caveat against Mr and Mrs Deliu’s personal property. She alleges that Mr Deliu has acted improperly and that he has somehow withdrawn the $560,000 from the Registrar’s account, and used it to his own advantage – perhaps by paying off his mortgage. She asserts that she has a reasonably arguable case for an interest in Mr and Mrs Deliu’s property, either pursuant to a constructive trust or pursuant to the equity of tracing.
[31] Mr Zhang appeared for Mrs Deliu and Mr Deliu appeared on his own behalf. Both asserted that Ms Ying has no caveatable interest in the Delius’ property at Fleetwood Drive.
Analysis
[32] A caveat is a creature of statute and it may only be lodged by a person upon whom a right to lodge it has been conferred by statute.2
[33] Relevantly, s 137 of the Land Transfer Act provides as follows:
Caveat against dealings with land under Act
(1) Any person may lodge with the Registrar a caveat in the prescribed form against dealings in any land or estate or interest under this Act if the person—
(a) claims to be entitled to, or to be beneficially interested in, the land or estate or interest by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise; or
(b) is transferring the land or estate or interest to any other person to be held in trust.
…
[34] There is some dispute on the authorities as to whether or not the Courts should take a narrow view of this section or a broader view. A narrower view finds support in Court of Appeal authorities and in the judgment of the Privy Council in Miller v Minister of Mines.3
[35] Regardless of which view is taken in the present case, I can see nothing in the papers which have been filed which supports Ms Ying’s argument that she has a caveatable interest in the Delius’ personal property.
[36] Ms Ying is clearly disgruntled with the steps that Mr Deliu took when he was acting on behalf of his client. She may or may not have some grounds for this view, but even if she does have grounds for her view, those grounds do not and cannot support the registration of a caveat. Ms Ying is not entitled to, or beneficially interested in, the Delius’ property. She has no rights under any unregistered agreement or other instrument or transmission. The catch all words “or otherwise”
used in s 137 are not sufficiently wide to catch the entirely speculative assertions
2 Guardian Trust and Executors Co of NZ Ltd v Hall [1938] NZLR 1020 at 1025 (CA).
3 Miller v Minister of Mines [1963] AC 484 at [497], [1963] NZLR 560 at [569].
which Ms Ying makes. A claim to be able to bring proceedings against a land owner does not give rise to a caveatable interest, and, on the materials before me, I am far from persuaded that Ms Ying has any bona fide claim against Mr Deliu.
[37] In the circumstances I make orders as follows:
(a) directing Land Information New Zealand to remove Caveat No.
10751654.1 lodged by Ms Ying against certificate of title identifier NA123C/735 in the Land Registration District North Auckland – being Lot 34, Deposited Plan 194092 – immediately before registration of a transfer in exercise of the power of sale by Mr and Mrs Deliu; and
(b)Land Information New Zealand is not to accept any further applications from Ms Ying or from her husband, Mr Jinyue (Paul) Young, or from their children Ta-Lo Young and Ta-Wei Young to lodge any further caveats against the land prior to registration of the transfer in exercise of the power of sale by Mr and Mrs Deliu.
Costs
[38] Mr Zhang sought indemnity costs on behalf of his client. Mr Deliu accepts that he cannot seek indemnity costs in respect of his appearance because he represented himself. He asserts, however, that he is entitled to costs up until the decision to represent himself – which he says was made only this morning. He also claims his reasonable disbursements.
[39] Clearly there can be only be one costs order in favour of both Mr Deliu and Mrs Deliu. Equally clearly, Mr Deliu is not entitled to costs in respect of today’s hearing. He has been representing himself. He may be entitled to disbursements but I have no information before me in relation to those disbursements. Further, I have only limited information in regard to any bill of costs which Mrs Deliu and Mr Deliu face. I am not at this stage prepared to make an order for indemnity costs.
[40] Rather, I direct as follows:
(a) Mr Zhang is to file a memorandum detailing the costs he seeks on behalf of Mrs Deliu;
(b)Mr Deliu is to file a memorandum detailing any costs he seeks to recover himself;
(c) if indemnity costs are sought, I expect that the bill will be produced, that it will be itemised and that it will show the amount of time spent on each item of work undertaken, and the charge out rate applied. I also require confirmation that the bill has, or will be paid, by the Delius and that there is no arrangement for the Delius to be repaid;
(d)any memoranda on behalf of Mrs Deliu or by Mr Deliu are to be filed within 10 working days of this judgment. They are not to exceed five pages in length; and
(e) any memorandum in response from Ms Ying is to be filed within a further 10 working days. It is not to exceed 10 pages in length.
I will then deal with the issue of costs on the papers, unless I require the assistance of either Ms Ying, Mr Zhang or Mr Deliu;
Addendum
[41] After I had delivered this judgment, Mr Deliu pointed out that there is a second caveat which has been lodged by Ms Ying. The caveat is No. 10751654.2. The caveat is apparently intended to be against a property owned by Mr Deliu’s instructing solicitor, a Mr Zhao. Mr Deliu asserts that for some reason the caveat has been lodged not only against Mr Zhao’s property, but also against his property.
[42] Ms Ying accepts that there were two caveats and that the second caveat was intended to be registered and against Mr Zhao’s property, and not Mr Deliu’s property.
[43] I made it clear in my minute issued on 19 April 2017 that the caveats had not been exhibited and that I did not know what interest Ms Ying was asserting. The only caveat which has been exhibited is caveat 10751654.1.
[44] I was reluctant to accept evidence from Mr Deliu at this very late stage. I would request that Mr Deliu should forthwith file a brief affidavit annexing a copy of the certificate of title to his and his wife’s property, showing what caveats have been registered against it, and if possible, annex a copy of the second caveat apparently intended to be lodged over Mr Zhao’s property. I did offer to reconvene the hearing to deal with this issue but Ms Ying said that she was not available. If I am satisfied that that caveat should not have been registered against Mr Deliu’s property, then the order will be extended to record that caveat 10751654.2 is also to be removed from the title to the Delius’ property on registration of a transfer in exercise of the power of sale by Mr and Mrs Deliu.
Further Addendum
[45] I have since received a memorandum from Mr Zhao. He has confirmed that if caveat 10751654.1 is removed from the Delius’ property, then caveat 10751654.2 will fall away and it will not impede the sale. He withdrew the application insofar as
it related to caveat 10751654.2.
Wylie J
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