Golestaneh v Tang

[2024] NZHC 3888

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-980

[2024] NZHC 3888

UNDER

the Land Transfer Act 2017

IN THE MATTER

of Caveat no. 12954918.1

BETWEEN

MARJANEH SEYEDEH GOLESTANEH

Applicant

AND

FEI TANG and JUN YANG

Respondents

Hearing:	13 December 2024 (Telephone Hearing)
Counsel:	A R Gilchrist for Applicant P J Napier for Respondents
Judgment:	18 December 2024

JUDGMENT OF ASSOCIATE JUDGE LESTER

(costs in relation to application to sustain caveat)

This judgment was delivered by me on 18 December 2024 at 12:30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

GOLESTANEH v TANG [2024] NZHC 3888 [18 December 2024]

[1]                 On 26 November 2024 (the November judgment), I released a judgment granting Ms Golestaneh’s opposed application to sustain her caveat over a property in Albany, Auckland.1

[2]                 While Ms Golestaneh’s application was granted, it was not on the basis she sought nor were the grounds of opposition raised by the vendors accepted.

[3]In respect of costs I said:

[30] Given the incorrect original analysis by both parties, my instincts are that costs should lie where they fall but if counsel wish to be heard, memoranda may be filed of not more than five pages, to be filed and served within five working days.

[4]                 Notwithstanding  the  above  indication,  both  parties  have  sought  costs.  Mr Gilchrist, counsel for Ms Golestaneh, submits that she should be entitled to costs on a 2B basis because ultimately her application was granted. Mr Gilchrist is correct that the starting point is that costs should follow the event. However, while that is the starting point pursuant to r 14.2(1)(a)  of the High Court Rules 2016 (the Rules),     r 14.7(f)(ii) provides costs can be refused or reduced if the successful party contributed unnecessarily to the time or expense of the proceeding by pursuing an argument that lacked merit.

[5]                 In the November judgment, I addressed at [8]-[12] why Ms Golestaneh’s primary argument lacked merit.

[6]                 In summary, the respondent vendors made an offer to vary the settlement date of Ms Golestaneh’s purchase to link it to their obtaining a Certificate of Acceptance (COA) for alterations to the property.

[7]                 Ms Golestaneh’s response to the offer to defer settlement did not amount to an acceptance of that offer. “An acceptance will only be effective where the offeree agrees to be bound by the exact  terms  proposed  in  the offer”.2  The final  paragraph  of Ms Golestaneh’s solicitor’s reply to the offer was: “Without prejudice to our client’s

1      Golestaneh v Yang [2024] NZHC 3560.

2      Stephen Todd and Matthew Barker Burrows, Finn & Todd on The Law of Contract in New Zealand

(7th ed, Lexis Nexis, Wellington, 2022) at [3.4.6].

legal options, our client will  make a decision when COA is  obtained”.  This  was Ms Golestaneh saying she would make a decision about settlement when a COA was obtained. However, the vendors’ offer, if accepted, required settlement after a COA had been obtained. Even though it was in the context of a caveat hearing, I  found  Ms Golestaneh did not accept the offer to defer settlement.

[8]                 That settlement had in fact been deferred in terms of the vendors’ offer was central to Ms Golestaneh’s application. However, I also dismissed the vendors’ argument they had validly cancelled the contract. The vendors had, at one point, proceeded as if the offer to defer settlement until after a COA was obtained had been accepted. Because the vendors took the view that a COA was no longer available, it suited them to treat the settlement as being so deferred as they argued the contract had become frustrated because a COA was not available.

[9]                 This argument was untenable for two reasons: first, there had not been an agreement to defer settlement as already described, and secondly, even if there had been, such would not mean the contract had been frustrated by a COA not being available.

[10]             Even if Ms Golestaneh’s response to the vendors offer to defer settlement was treated as a counter offer by her, that counter offer was never accepted by the vendors.

[11]             I do not accept Ms Golestaneh persisting with the argument that settlement had been deferred represented her, as submitted by her counsel Mr Gilchrist, as dealing “with the circumstances that were before her”. Nor I do accept Mr Gilchrist’s submission that it was the vendors’ “incorrect analysis that dictated the steps that were taken”, or that it was “for Ms Golestaneh to be reactive”. By the time of the hearing on 25 November 2024, it was clear that the vendors were not relying on frustration as their primary argument.

[12]             In short, Ms Golestaneh’s fundamental position was that settlement was tied to the vendors obtaining a COA. That argument failed. That this was Ms Golestaneh’s primary argument was confirmed by subsequent events. Ms Golestaneh appealed the November judgment, in particular the conditions attached to her caveat being

sustained which required her to settle. My conclusion was that if Ms Golestaneh considered the contract was on foot then, as she had not cancelled the contract for  the misrepresentations she asserted, she had to settle and claim compensation pursuant to the provisions in the contract. That meant Ms Golestaneh had to pay the deposit (the vendors having refunded the deposit when they considered the contract had been frustrated).

[13]             A stay was sought and granted, but on the basis that Ms Golestaneh had to pay the deposit as whether settlement was linked to a COA being obtained or not, the deposit was still payable.3 Ms Golestaneh failed to pay the deposit and indeed then purported  to  cancel  the  contract.  The   vendors   cancelled   the   contract   for   Ms Golestaneh’s failure to pay the deposit and the caveat was removed.

[14]             This demonstrates, in my view, that the error in respect of settlement being linked to the COA was fundamental to Ms Golestaneh’s position.

[15]             However, that does not mean that the vendors are entitled to costs. Mr Napier, counsel for the vendors, submits the vendors were satisfied with the outcome of the caveat hearing, in particular the finding that the contract was still on foot and that  Ms Golestaneh had to settle. This, Mr Napier submitted, reflected the position the vendors ultimately wanted to achieve. None of that, however, undoes the fact that the vendors challenged Ms Golestaneh’s caveat on an incorrect basis (the frustration point) and then sought to resist her application on the grounds they had been entitled to issue a settlement notice and cancel the agreement when Ms Golestaneh did not settle on the original settlement date, notwithstanding that the vendors had returned the deposit and treated the contract at an end.

[16]             I see no principled basis to require Ms Golestaneh to pay the costs of the unsuccessful party simply because the outcome reached was one that, at the end of the day, suited them.

3      Golestaneh v Tang [2024] NZHC 3693.

[17]             Accordingly, I confirm that there is no order as to costs in respect of the hearing on 25 November 2024. Costs in respect of that hearing are to lie where they fall, as will costs in respect of the costs submissions.

Associate Judge Lester

Solicitors:

K3 Legal Limited, Auckland Octagon Law, Auckland

Copy to counsel:
A Gilchrist, Barrister, Auckland