[1] The applicants are the former owners of a property at 212 Bush Road, Mosgiel, now registered in the name of the respondent. They have lodged a caveat over the title to that property, claiming an interest arising out of arrangements made between the parties which led to the respondent acquiring the property at a mortgagee sale.

[2] In essence, the respondent bid for, and obtained, the property at the mortgagee sale as “a white knight” to give the applicants an opportunity to raise the money to repurchase the property or, alternatively, to give them time to secure a purchaser for market value.

[3] The respondent says that the arrangement was only ever intended to be for a limited period (approximately one year). It wishes to sell the property to repay substantial borrowings and recover cash contributions either to the purchase or to outgoings. The applicants claim that they have a continuing interest in the property. In separate proceedings they are resisting the respondent’s efforts to obtain possession of the land and an order for sale. The dispute is before the Court now on an application by the applicants to sustain a caveat.

Background

[4] The dispute has already been before this Court and the Court of Appeal on the respondent’s proceedings seeking orders for possession and sale. The history of the matter is succinctly stated in the following passages from the judgment of the Court of Appeal in that proceeding:1

[3] The Goodwins owned a residential property at Mosgiel, near Dunedin, known as “Chelmsford”. They fell into financial difficulties and faced a sale by the mortgagee, Westpac Banking Corporation.

[4] The Goodwins’ son-in-law, Campbell Harvey, agreed to assist in saving Chelmsford from sale. Mr Harvey and some colleagues were shareholders in RSL, a small private company. RSL agreed to borrow a sufficient sum to buy the property at the mortgagee’s sale and to cover financing costs for a year after purchase while the Goodwins recovered financially. The ultimate purpose was to enable the Goodwins to buy Chelmsford back in their own names or through a nominee.

1 Goodwin v Rocket Surgery Ltd [2013] NZCA 172 at [3] – [6].

[5] It was agreed in principle that RSL would derive some reward for providing the finance. Apart from an understanding that when repurchasing the Goodwins would repay RSL all outgoings spent on…

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 Goodwin v Rocket Surgery Ltd

Details

AGLC: Goodwin v Rocket Surgery Ltd [2013] NZHC 2046
Case: [2013] NZHC 2046
Decision Date: 13 August 2013

CaseChat Overview and Summary

The applicants, former owners of a property at Mosgiel, lodged a caveat over the title of the property in the name of the respondent, who acquired the property at a mortgagee sale. The applicants claim an interest in the property arising from an agreement with the respondent, who purchased the property as a "white knight" to allow the applicants time to repurchase the property or secure a purchaser for market value. The respondent argues that the arrangement was intended to be for a limited period and seeks to sell the property to repay its borrowings and recover its contributions. The applicants are resisting the respondent's efforts to obtain possession and an order for sale in separate proceedings. The applicants applied to sustain a caveat over the property.

The legal issues in this case were whether the applicants had established an arguable case for an equitable interest in the property and whether the interest claimed in the caveat was a caveatable interest. The Court held that the interest claimed in the caveat was not a beneficial interest in the land, but rather an interest in the proceeds of sale. The Court also found that the applicants had not established a sufficient evidential basis for a beneficial interest in the land. However, the Court exercised its discretion to discharge the caveat on terms that the net proceeds of sale be preserved pending determination of the applicants' claim for contribution. The Court also ordered the applicants to pay the respondent's costs on a scale 2B basis.

The final orders of the Court were that the application for an order that the caveat not lapse was dismissed on terms that the net proceeds of sale be applied to repay any sums due under mortgages secured against the title, sums borrowed by the respondent to effect the purchase of the property, and the costs of sale. The balance of the proceeds of sale was to be held by the respondent's solicitor, on an interest-bearing deposit, and to be paid out to the parties either in accordance with their agreement or as directed by the Court. The Court also ordered the applicants to pay the respondent's costs on a scale 2B basis, together with disbursements as fixed by the Registrar, allowing for counsel's airfare to argue the matter urgently on 8 August 2013.

Orders