Goodmore Investments (New Zealand) Limited v Lau

[2023] NZHC 2214

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1528

[2023] NZHC 2214

IN THE MATTER OF

an application to remove notice of claim number 12791541.1 pursuant to s 142 of the Land Transfer Act 2017

BETWEEN

GOODMORE INVESTMENTS (NEW ZEALAND) LIMITED

Applicant

AND

EE KUOH LAU

Respondent

Hearing:	16 August 2023
Appearances:	S C Gollin and H Jaques for Applicant Respondent in person
Judgment:	16 August 2023

JUDGMENT OF LANG J

[application to remove notice of claim]

This judgment was delivered by Justice Lang On 16 August 2023 at 3.30 pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:
MinterEllisonRuddWatts, Auckland

Copy to: Mr E K Lau

GOODMORE INVESTMENTS (NEW ZEALAND) LTD v LAU [2023] NZHC 2214 [16 August 2023]

[1]    Goodmore Investments (New Zealand) Ltd (Goodmore) holds a registered mortgage over land situated at 27 Umbria Lane, Flat Bush. This is owned by a company called LC1521319 Development Co Ltd (Devco). Ms Liyun Chen is the sole director of Devco and also the majority shareholder. The respondent, Mr Lau, was formerly Ms Chen’s partner.

[2]    Devco defaulted in its obligations under a facility loan agreement that it entered into with Goodmore on 20 January 2021. Goodmore has entered into a contract to sell the property using its power of sale under the mortgage. It is currently prevented from doing so because Mr Lau filed a notice of claim against the title to the property. This purports to protect an interest that Mr Lau asserts he has in the property as Ms Chen’s former partner.

[3]    Goodmore now seeks an order under s 142 of the Land Transfer Act 2017 that the notice of claim be removed so it can complete the sale of the property. Settlement of the sale is now overdue.

Background

[4]    Goodmore advanced $4.54 million to Devco under the loan agreement. The interest rate was to be  9.2 per  cent per  annum  and the  default interest  rate  was  15 per cent on top of this. This meant Devco was required to pay interest at the rate of 24.2 per cent per annum following default. The loan was to be repaid on 21 January 2022.

[5]    This is not the first occasion on which Mr Lau has attempted to prevent Goodmore exercising its power of  sale  under  the  mortgage.  On  27  July  2023 van Bohemen J made an order removing a caveat Mr Lau had lodged against the title on 6 July 2023 to the property.1 This purported to protect an interest Mr Lau claimed under a long term pre-paid lease, as well as under an agreement for sale and purchase under which Mr Lau had agreed to purchase the property. Mr Lau also claimed he was the beneficiary of a constructive trust under which Devco was trustee. Undeterred by this setback Mr Lau lodged the present notice of claim on 27 July 2023.

1      Goodmore Investments (New Zealand) Ltd v Lau [2023] NZHC 1983.

[6]    Ms Chen has also attempted to derail the sale process. She applied for an injunction to prevent the sale from taking place but Venning J dismissed her application on 24 July 2023.2

Decision

[7]    As van Bohemen J noted, the  relationship  property  agreement  on  which Mr Lau relies post-dated the loan agreement and registration of the mortgage to Goodmore by several months.3 This means any equitable interest Mr Lau may have in the property is subject to Goodmore’s prior registered interest under the mortgage. Further, Goodmore never consented to the arrangement contained in the agreement and was not aware of it until Mr Lay sent a copy of the agreement to Goodmore’s solicitors on 25 July 2023. The existence of the agreement cannot detract from Goodmore’s right to sell the property in exercise of its power of sale under the mortgage.

Result

[8]    I make an order under s 142 of the Land Transfer Act 2017 that, upon presentation for registration of an instrument for transfer of title from the applicant to the applicant’s purchaser, notice of claim number 12791541.1 shall be removed from the land described in certificate of title 551438 (North Auckland Registry).

Costs

[9]    Goodmore is entitled to costs against Mr Lau on a category 2B basis together with disbursements as fixed by the Registrar.

Lang J

2      Chen v Goodmore Investments (New Zealand) Ltd [2023] NZHC 1942.

3      Goodmore Investments (New Zealand) Ltd v Lau, above n 1, at [20].