Green Land Investment Limited v Mao

[2020] NZHC 2017

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2080

[2020] NZHC 2017

UNDER

S 143 of the Land Transfer Act 2017

IN THE MATTER

of a caveat 11536496.1

BETWEEN

GREEN LAND INVESTMENT LIMITED

Applicant

AND

LIANSEN MAO

Respondent

On the papers:	At Auckland
Judgment:	11 August 2020

JUDGMENT (No. 2) OF POWELL J

This judgment was delivered by me on 11 August 2020 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors/Counsel:           Heritage Law, Balmoral, Auckland

G M Illingworth QC, Auckland Mr L Mao, via email.

GREEN LAND INVESTMENT LIMITED v MAO [2020] NZHC 2017 [11 August 2020]

[1]                 The applicant, Green Land Investment Limited, has filed an originating application for an order that a caveat not lapse. The application is opposed by the respondent, Liansen Mao, the owner of the 423 Ormiston Road, Flat Bush property over which the caveat has been lodged.1

[2]                 In my first judgment in these proceedings issued on 23 October 20192 I made an interim order that caveat 11536496.1 not lapse pending further order of this Court.3

[3]                 Although the intention was the application would then be set down to be argued at the first available date before me, events have conspired to prevent this from occurring. After a number of false starts, complicated by the fact that Mr Mao became self-represented, the application was finally set down to be heard on 31 July 2020. However, the inability for Mr Mao (resident in the People’s Republic of China) to attend in person, or to make an application for the hearing to proceed by way of AVL, ultimately led to the parties agreeing the substantive application should be dealt with on the papers. As a result the fixture was vacated and my decision reserved on 29 July 2020.

[4]The principles for sustaining caveats are not in dispute and were summarised

by the Court of Appeal in Philpott v Noble Investments Ltd in the following terms:4

(a)The onus is on the applicants to demonstrate that they hold an interest in the land that is sufficient to support the caveat, but they need not establish that definitively;

(b)It is enough if the applicants put forward a reasonably arguable case to support the interest they claim;

(c)The summary procedures involved with applications of this nature are not suited to the determination of disputed questions of fact. An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained – either because there is no valid ground for lodging it in the first place, or because such a ground no longer exists; and

1      This property is referred to in other proceedings as 387 Ormiston Road.

2      Green Land Investment Ltd v Mao [2019] NZHC 2715.

3 At [4].

4     Philpott v Noble Investments Ltd [2015] NZCA 342 at [26] (footnotes omitted). See also Sims v Lowe [1988] 1 NZLR 656 (CA); Orams Marine (Auckland) Ltd v Ports of Auckland Ltd (1994) 6 TCLR 88 (CA) at 92; Geneva Healthcare Ltd v Essential Assets Ltd [2014] NZHC 3236, (2014) 15 NZCPR 826 at [27]-[28].

(d)When an applicant has discharged the burden upon it, the Court retains discretion to remove the caveat which it exercises on a cautious basis. Before it does so the Court must be satisfied that the caveator’s legitimate interest would not be prejudiced by removal.

The interest claimed by Green Land

[5]                 Green Land claims a caveatable interest in Mr Mao’s property at 423 Ormiston Road, Flat Bush, by virtue of the terms of a document entitled “Green Land Investments/the owners of 423 Ormiston Road – Land Owner Agreement” (“the Land Owner Agreement”).

[6]                 This document, dated 25 March 2015, and signed on behalf of Green Land and Mr Mao was negotiated to enable Green Land to facilitate the subdivision and development of its land at 411, 425, 425A and 431 Ormiston Road (“the Green Land project”). Specifically, to effect the Green Land project Green Land needed to acquire part of 423 Ormiston Road from Mr Mao (“the driveway area”). The Land Owner Agreement provided in broad terms that in exchange for Green Land providing     Mr Mao with two lots to be sub-divided and to undertake various works in accordance with approved plans Mr Mao would:

(a)transfer the driveway area to Green Land;5

(b)obtain the written consents of mortgagees, charge-holders and/or other parties with an interest in 423 Ormiston Road;6 and

(c)sign all forms, plans and provide all necessary consents as may be required.7

[7]                 Of particular relevance to the matters at issue in the present application, the section of the Land Owner Agreement specifying Green Land’s obligations concluded with a hand-written notation stating “no caveat on 423 Ormiston Road” (“the no caveat clause”).

5      Land Owner Agreement clause 11.

6      Land Owner Agreement clause 16.

7      Land Owner Agreement clauses 12 and 13.

[8]                 Since the Land Owner Agreement was signed things have not run smoothly. Disputes over the removal of a covenant on Green Land’s properties, and caveats filed by Mr Mao resulted in two further agreements being negotiated between Mr Mao and Green Land, resulting in the transfer of the two lots referred to in the Land Owner Agreement, as well as the agreement to transfer a further lot from Green Land to   Mr Mao. More broadly, proceedings have been issued in this Court in which both Green Land and Mr Mao have accused the other of being in breach of the Land Owner Agreement and the subsequent agreements and consequent responsibility for the significant delays in completing the Green Land project (“the 1241 proceedings”).8 In addition, a number of caveats filed over 423 Ormiston Road have been the subject of a series of applications by Green Land against various respondents.

[9]                 In the course of these developments Mr Mao gave notice in April 2018 that he was purporting to terminate the Land Owner Agreement, to the effect that he was no longer required to transfer the driveway area to Green Land. Green Land dispute that Mr Mao is entitled to or even can terminate the Land Owner Agreement with the issue apparently standing to be determined in the course of the 1241 proceedings.

[10]              It is Green Land’s position that it clearly has an arguable interest in the driveway area of 423 Ormiston Road and that the caveat should therefore continue until at least the 1241 proceedings have been determined.

Mr Mao’s response

[11]              From the notice of opposition filed on behalf of Mr Mao and numerous submissions filed subsequently it appears Mr Mao opposes the application on three principal grounds:

(a)the caveat is defective as the interest claimed by Green Land relates to only a small part of 423 Ormiston Road;

(b)Green Land has no right to lodge a caveat under the Land Owner Agreement by virtue of the no caveat clause; and

8      Mao v Green Land Investment Ltd, CIV-2016-404-1241.

(c)as the Land Owner Agreement has been terminated legitimately by  Mr Mao as a result of numerous breaches by Green Land, Green Land can in any event no longer claim any substantive interest in the driveway area.

Discussion

[12]              I commence my analysis by observing that the caveat is not defective. Where a caveator claims an interest in part of the land comprised in a certificate of title, the caveat should typically relate to only that part, leaving the registered proprietor free to deal with the remaining interest in the land.9 Here, Green Land’s interest relates only to the driveway area and the caveat purports to relate to the entirety of the land comprising the title. However, as the title remains unsubdivided it is not possible, at this stage, to identify Green Land’s interest with any greater particularity than it has.10 In these circumstances, the failure to particularise the land over which Green Land’s interest is claimed, is not fatal to the maintenance of the caveat.

[13]              Likewise, as Mr Illingworth noted on behalf of Green Land the no caveat clause does not expressly provide that Green Land is not to lodge a caveat, let alone in any circumstances. It is however not necessary to reach a final conclusion as to the meaning of the clause. This is because the case law is clear that even where explicit a no caveat clause does not provide an absolute barrier to the lodgement of a caveat in appropriate circumstances. On the contrary, as in Landco Albany Ltd v Fu Hao Construction Ltd11 while the Court of Appeal determined that “no caveat” clauses will not be void or unenforceable for reasons of public policy, it nonetheless confirmed that there remained a “judicial discretion whether or not to order the removal of a caveat, or to make or decline an order preventing lapsing”,12 albeit recognising:13

And depending on the nature of competing interests, the discretion may be informed by an agreement by the parties against the lodging of a caveat.

9      Taylor v Couchman [1995] 3 NZLR 336.

10 See Parklane Infrastructure Ltd v Lu Trustee Ltd [2020] NZHC 1182 where Moore J, in similar circumstances, was satisfied that as further particularising of the caveatable interest was not possible, the failure to particularise did not render the caveat defective.

11 Landco Albany Ltd v Fu Hao Construction Ltd [2006] 2 NZLR 174 (CA).

12 At [52].

13 At [52].

[14]              In this case it is clear that the whole purpose of the Land Owner Agreement was  to  give  Green  Land  not  only   an   interest   in   the   driveway   area   of   423 Ormiston Road, but ultimately legal title to either itself or its nominee. As a result, in the absence of a no caveat clause, the Land Owner Agreement and the subsequent agreements entered into by Green Land and Mr Mao clearly provide a more than sufficient basis to argue a caveatable interest in 423 Ormiston Road.

[15]              Given that position it can be seen that Mr Mao’s assertion that the Land Owner Agreement was terminated directly threatens the rights acquired by Green Land. In such circumstances I am satisfied that it would be manifestly inappropriate to exercise my discretion to allow the caveat to lapse before the respective interests of Green Land and Mr Mao have been finally determined through the 1241 proceedings. I therefore conclude there should be an order that the caveat not lapse.

Decision

[16]              There is an order that caveat 11536496.1 in respect of 423 Ormiston Road, Flat Bush as comprised of Record of Title 482726 not lapse.

[17]              Costs on the present application are to be fixed on a 2B basis and are to be paid to the successful party at the conclusion of the 1241 proceedings.

Powell J