Gu v Lau

[2023] NZHC 1177

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-880

[2023] NZHC 1177

UNDER

s 142 of the Land Transfer Act 2017

IN THE MATTER

of an application for an order removing caveat no. 12730391.1 (North Auckland Registry)

BETWEEN

XIWEN GU and KUN LIU

Applicants

AND

EE KUOH LAU (also known as Augustine Lau)

Respondent

Hearing:	16 May 2023
Appearances:	R O Parmenter for the Applicants Respondent in person
Judgment:	16 May 2023

JUDGMENT OF GAULT J

This judgment was delivered by me on 16 May 2023 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Parties / Solicitors / Counsel:

Mr R O Parmenter, Barrister, Auckland

Mr SCS Ngu (applicants’ instructing solicitor) Mr E K Lau

GU and LIU v LAU [2023] NZHC 1177 [16 May 2023]

[1]                On 11 May 2023 the applicants filed a without notice originating application for an order removing caveat. The application was accompanied by an affidavit and memorandum from counsel in support.

[2]                The application was made without notice on the ground that requiring the applicants to proceed on notice would cause undue delay or prejudice.1 However,  Mr Parmenter, for the applicants, sought to proceed on a Pickwick basis.

[3]                In my minute of 12 May 2023, I accepted that the application was sufficiently urgent to proceed on a Pickwick basis. I listed the application in the caveat list this morning (on a Pickwick basis) so the respondent, Mr Lau, had an opportunity to participate.

[4]                In advance of the list, Mr Lau filed a number of documents in answer but   Mr Parmenter accepted that this is still a without notice application.

Factual background

[5]The applicants own a property at 97 Stamford Park Road, Mt Roskill,

Auckland (the property).2

[6]                On 29 March 2023, the applicants entered into an agreement for sale and purchase to sell the property. The settlement date was stated to be 6 June 2023, but this was brought forward to 9 May 2023.

[7]                On 9 May 2023, Mr Lau lodged a caveat (number 12730391.1) on the title to the property and the titles to three other properties of the applicants. The caveat prevented settlement of the sale and purchase of the property. The application to remove caveat relates only to the property.

1      High Court Rules 2016, rr 7.23(2)(a)(i) and 7.46(3)(a).

2      Identifier 1017543.

Applicable principles

[8]                Section 142 of the Land Transfer Act 2017 gives a summary remedy to persons who are currently on the register. The same principles are applied by the Court as on an application under s 143 for an order extending a caveat. The caveator bears the onus of establishing a reasonably arguable case. A conflict between affidavits will generally be resolved in the caveator’s favour. However, the Court is not bound to accept uncritically statements in an affidavit that are equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently  improbable.  If the caveator establishes an arguable case,  the caveat will be sustained unless the Court exercises a residual discretion to remove the caveat or to allow the caveat to lapse.

Discussion

[9]                The applicants say Mr Lau has  no  caveatable  interest  in  the  property. They infer from communications between their conveyancing solicitor and Mr Lau that the alleged basis for Mr Lau’s caveat is a money judgment obtained by Mr Hu against Ms Liu in this Court on 28 April 2023.3 Mr Lau does not suggest otherwise. Indeed, his documents in answer rely on an assignment  of that judgment  debt  by Mr Hu to Mr Lau dated 6 May 2023.

[10]            The amount owing under that judgment has not yet been paid. The applicants say the judgment will be appealed and they anticipate having to put the judgment sum in trust in order to achieve a stay of execution pending appeal.

[11]Mr Lau alleges:

(a)that Ms Liu is attempting to defeat her creditors;

(b)that Mr Gu planned to dispose of the property without paying the “fruits of success” to Mr Hu; and

3      Hu v Liu [2023] NZHC 972. That judgment relates to Ms Liu’s failure to pay a deposit under a sale and purchase agreement relating to a property in Papakura. A second cause of action remains to be determined in that proceeding.

(c)fraud.

[12]            Mr Lau also says that he has reported the matter to the Law Society, and served a bankruptcy notice on Ms Liu yesterday. He relied on the judgment of this Court in WNY Group Ltd v Crown Range Holdings Ltd, where a caveat was sustained.4 He also asked me to consider the risk that the applicants may have little equity in the other three properties subject to the caveat.

[13]            It is unnecessary to engage with Mr Lau’s allegations. Irrespective of their merit, any assignment of Mr Hu’s money judgment to Mr Lau does not give Mr Lau a caveatable interest in the property.

[14]            WNY Group Ltd v Crown Range Holdings Ltd does not suggest otherwise. The reasonably arguable caveatable interest in that case was based on an alleged loan agreement which included a right to a mortgage as an unregistered charge.

[15]            Mr Lau does not have  a reasonably arguable  case to  sustain the  caveat.     It should be removed from the title to the property so that settlement of the sale and purchase agreement can proceed.

Result

[16]            I make an order that caveat no. 1273039.1 lodged by Mr Lau against the applicants’ land comprised in identifier 1017543 be removed.

[17]            The applicants are entitled to costs. Costs memoranda (not exceeding three pages) are to be filed and served within 10 working days.

Gault J

4      WNY Group Ltd v Crown Range Holdings Ltd [2020] NZHC 1585.