GP96 Ltd v F M Custodians Ltd - [2019] NZHC 1183

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2011-409-000627

[2019] NZHC 1183

BETWEEN
GP96 LIMITED

Plaintiff

AND

F M CUSTODIANS LIMITED

Defendant

CIV-2019-409-000089

BETWEEN

PVG SECURITIES TRUSTEE LIMITED
Applicant

AND

GP96 LIMITED

First Respondent

F M CUSTODIANS LIMITED

Second Respondent

Hearing: 15 – 16 April 2019

Appearances:

J Moss for GP96 Limited

E Bayley for F M Custodians Limited K C Francis for PVG Securities Limited

Judgment:

28 May 2019

JUDGMENT OF GENDALL J

Introduction

[1]Before the Court are two applications:

(a)An application by the applicant in proceeding CIV-2019-409-89 PVG Securities Trustee Limited (PVG) for an order to remove

GP96 LIMITED v F M CUSTODIANS LIMITED [2019] NZHC 1183 [28 May 2019]

caveat 11228460.1 (the Caveat) lodged by the first respondent GP96 Limited (GP96) against a commercial property located at 96 Lichfield Street, Christchurch, being all the land in Certificate of Title CB22F/432 (the Property); and

(b)An application by GP96 as the plaintiff in proceeding CIV-2011-409- 627 for orders:

(i)Restraining the defendant in that proceeding, FM Custodians Limited (FMC) from completing settlement under an Agreement for Sale and Purchase dated 11 December 2018 relating to the sale of the Property, chattels and a security system at the Property, and an insurance claim to a purchaser, Elizabeth Harris (Ms Harris); and

(ii)Restraining FMC from discharging or authorising any discharge of its registered mortgages 7114247.13 and 8346521.1 (Canterbury Registry) over the Property or assigning or registering any transfer of those mortgages.

[2] The second application by GP96 in effect seeks orders extending an interim injunction (the 2011 Interim Injunction) already granted in GP96’s favour against FMC pursuant to a judgment of Chisholm J in this Court dated 24 May 2011 in that proceeding CIV-2011-409-000627.

[3]Both of the applications referred to in para [1] are opposed.

[4] It is appropriate to consider the Caveat removal application noted at para [1](a) above first as, depending on the outcome, this may effectively determine the dispute between the parties on GP96’s application noted at [1](b) above. Shortly I will turn to consider that Caveat removal application and, if necessary, the second application.

[5]But, first, some brief factual background to this matter is helpful.

Factual background

[6] The Property the subject of this proceeding since the Christchurch earthquake sequence has been unoccupied and, according to PVG, since at least the February 2011 earthquake has been untenantable. It is one of a number of properties in and around “SOL Square” in Christchurch, originally controlled by Mr David Henderson (Mr Henderson) through his company, Property Ventures Limited (in liquidation) (PVL) and its subsidiaries, prior to those companies being placed in liquidation.

[7] The registered owner of the Property is Lichfield Ventures Limited (in liquidation) (LVL), a wholly owned subsidiary of PVL. Both PVL and LVL have been in liquidation since 2010.

[8] GP96 is a company also associated with Mr Henderson. It lodged the Caveat in question against the title to the Property on 12 September 2018. The Caveat claims…

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.

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Details

Case: [2019] NZHC 1183
Decision Date: 28 May 2019

CaseChat Overview and Summary

In the High Court of New Zealand, GP96 Limited sought to remove a caveat lodged against a commercial property located at 96 Lichfield Street, Christchurch, and to restrain F M Custodians Limited (FMC) from completing a sale of the property. PVG Securities Trustee Limited sought to remove the caveat. The central issue was whether GP96's claimed lease interest was binding on PVG, the second mortgagee, and if not, whether the caveat could be sustained. The Court held that PVG had not consented to the lease, and thus the lease did not bind the mortgage. The Court found that the caveat was lodged in breach of the lease terms and that the balance of convenience favoured removing the caveat. Consequently, the Court ordered the caveat to be removed and denied GP96's application to extend the 2011 Interim Injunction. The Court also ordered that GP96 be prevented from relodging a caveat without leave of the Court. Costs were awarded to PVG and FMC.

Orders