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Eastern Services Ltd v No 68 Ltd

Eastern Services Ltd v No 68 Ltd

Case [2006] NZSC 42 15 June 2006

Unconscionable Conduct

Property Law

Equity

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IN THE SUPREME COURT OF NEW ZEALAND
SC 64/2005
[2006] NZSC 42
BETWEENEASTERN SERVICES LIMITED

Appellant

ANDNO 68 LIMITED

Respondent

Hearing:28 March 2006

Court:Elias CJ, Blanchard, Tipping, Anderson and Eichelbaum JJ
Counsel:H C Keyte QC, D L Schnauer and C Latham for Appellant

R B Stewart QC and E St John for Respondent

Judgment:15 June 2006

JUDGMENT OF THE COURT

A.The appeal is dismissed.
B. The respondent is awarded costs of $15,000 together with disbursements to be fixed if necessary by the Registrar.

REASONS
(Given by Anderson J)
[1]       This is an appeal from a decision of the Court of Appeal, which reversed a judgment of the High Court given by Baragwanath J. The case concerns the application of the doctrine of laches in circumstances where the purchaser of a right of way delayed more than 20 years in seeking a registrable transfer from the vendor.
[2]       The appellant, Eastern, then called Beltons Holdings Limited, was the registered proprietor of two adjoining pieces of land in Auckland, numbers 68 and 70 Anzac Avenue. On each was a commercial building. In 1977 the appellant contracted with a social club, Maritime, to sell it number 68.
[3]       The memorandum of agreement for sale and purchase also provided for the appellant to create and transfer to Maritime a right of way easement over part of 70, although its obligation to do so was conditional on its obtaining all necessary consents. Maritime wanted the right of way in order to give it vehicular access to a parking area to be constructed in the building on 68, and the agreement acknowledged that. Number 68 was transferred to Maritime which paid the full price of $150,000 apart from the sum of $10,000 which, in accordance with the terms of the agreement, was retained pending council approval of the right of way.
[4]       A plan showing the creation of the right of way was approved by Auckland City Council. It was deposited in the Land Transfer Office in March 1979. Its form permits the creation of a registered easement over 70 in favour of 68. Maritime authorised the release to the appellant of the $10,000.
[5]       The agreement relating to the easement provided that the cost of construction of the way should be borne as to one-half by Maritime and one-half by Eastern; and that after three years from the date of settlement, but not earlier, either could call on the other party by six months notice in writing to proceed with the construction. There were also provisions that the cost of future maintenance should be borne equally; that references to grantor and grantee included their successors in title; and that all differences between them including construction and maintenance should be referred to arbitration.
[6]       Engineering works were undertaken to render the right of way usable by vehicles. Maritime contributed in work and materials to some extent, assessed by Baragwanath J as representing nine per cent…

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 Eastern Services Ltd v No 68 Ltd

Details

AGLC: Eastern Services Ltd v No 68 Ltd [2006] NZSC 42
Case: [2006] NZSC 42
Decision Date: 15 June 2006

CaseChat Overview and Summary

The Supreme Court of New Zealand heard an appeal from Eastern Services Limited against a decision of the Court of Appeal, which had reversed a judgment of the High Court. The case revolves around the application of the doctrine of laches, where the purchaser of a right of way delayed more than 20 years in seeking a registrable transfer from the vendor. Eastern Services Limited, then Beltons Holdings Limited, was the registered proprietor of two adjoining pieces of land in Auckland. In 1977, Eastern entered into a contract with Maritime to sell one of the properties, along with a right of way easement over the other. Although the agreement provided for the creation and transfer of the easement, it was conditional on obtaining necessary consents. Maritime, the original purchaser, later sold the property to the respondent, No 68 Limited. When Eastern refused to transfer legal title of the right of way, the respondent sued for specific performance, and Eastern raised a plea of laches as a defense.

The court considered whether Eastern is entitled to set up the doctrine of laches in bar of the respondent's claim for specific performance. The court found that the respondent, as the successor of Maritime, has an equitable interest in the right of way easement, as it paid valuable consideration as part of the agreement for sale and purchase. The court rejected Eastern's argument that mere delay without actual prejudice may defeat an equitable claim on the grounds of laches. Instead, the court held that the doctrine of laches requires a balancing of equities and that delay without prejudice is not enough to bar specific performance.

The court concluded that the balance of equities did not require withholding specific performance. The appeal was dismissed, and the respondent was awarded costs of $15,000, together with disbursements to be fixed if necessary by the Registrar.

Orders