Harding v Blake HC Whangarei CIV 2010-488-218

[2010] NZHC 1316

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2010-488-000218

UNDER  the Property Law Act 2007

BETWEEN  CAROLE ANN HARDING Plaintiff

ANDCALEB JOHN BLAKE First Defendant

ANDALAN ROBERT HARDING Second Defendant

Hearing:         19 and 20 July 2010

Appearances: D R James for Plaintiff

R Bowden and J Bunbury (20 July only) for First Defendant
No appearance for Second Defendant

Judgment:      22 July 2010 at 5:00 pm

JUDGMENT OF ASSOCIATE JUDGE BELL

This judgment was delivered by me on 22 July 2010 at 5:00 pm pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar

Date: ………………….

Solicitors/Counsel:

Palmer Macauley, PO Box 576, Kerikeri

Egan & Kite, PO Box 146, Gisborne

Urlich McNab Kilpatrick, PO Box 633, Whangarei

R Bowden, PO Box 11134, Ellerslie, Auckland

[1]      Carole Ann Harding is a part owner of the property at 36 Tasman Heights

Road, Ahipara, described in Identifier NA121D/449.  She is the sole occupier.  She is paying all the outgoings on the property.  She wants to sell the property.

C A HARDING V C J BLAKE AND ANOR HC WHA CIV-2010-488-000218  22 July 2010

[2]      Her  husband  is  another  co-owner.     He  has  taken  no  steps  under  the proceeding.  The other co-owner is the first defendant, Mr Blake.  Mr Blake does not oppose a sale in principle, but he says that before there can be any sale, the owners have to have an arbitration.

[3]      Mrs Harding has applied for an order for sale under s 339 of the Property Law Act 2007.  She has also applied for summary judgment.  Mr Blake opposes.  He has also cross-applied for a stay of the proceeding under Article 8 of the First Schedule of the Arbitration Act 1996.   He says that there are matters in dispute which must be determined by arbitration before there can be any sale.

[4]      Before 2004, Mr and Mrs Harding owned the property as joint tenants.  The National Bank had first mortgage and it continues to have first mortgage.  It now has priority up to $400,000.

[5]      In 2004, the Hardings wanted to raise cash to buy an interest in neighbouring land with others, with a view to subdivision and development.   Mr Blake and his wife owned a neighbouring property.   Mr Blake bought a half interest in the Hardings’ property at 36 Tasman Heights Road. The arrangement was recorded in an agreement for sale and purchase dated 4 June 2004.  The Hardings sold Mr Blake an undivided one-half share in the land for $260,000, with the Hardings and Mr Blake to own the property as tenants in common in equal shares.  Mr Blake did not want to give personal covenants to the National Bank for its mortgage.  Accordingly, instead of becoming registered as the owner of a half-share in the property, the Hardings signed a memorandum of mortgage in favour of Mr Blake, which was registered as a second mortgage, securing payment of $260,000.  Mr Blake financed the purchase of the half-interest by taking out a loan with Westpac New Zealand Ltd which was secured against his own property.

[6]      Under  the  agreement  for  sale  and  purchase,  the  Hardings  were  solely responsible for paying the National Bank mortgage.   They continued to have exclusive use, occupation and enjoyment of the property.  They were not required to pay any rent, interest or other money to Mr Blake, were solely liable for rates, insurance and other outgoings and had to maintain the property in good condition.

No earlier than two years, but no later than four years after the agreement, the property was to be sold.  Clause 7 says:

The proceeds of sale of the vendors’ lands shall be applied:

a)In  payment  of  real  estate  agent’s  commission  and  appropriate advertising costs;

b)        In payment of legal expenses incurred in connection with the sale;

c)As to the balance, it being divided equally between the vendors and the purchaser (with the vendors assuming sole liability for the repayment of the NBNZ mortgage).

[7]      Clause 9 says the parties may from time to time agree to vary this agreement providing that any such variation is recorded in writing and signed by the parties.

[8]      Clause 10 says:

If any dispute shall arise between the parties concerning this agreement:

a)        The parties shall first meet in the spirit of mutual co-operation to endeavour to resolve that dispute;

b)If the dispute has not been resolved within 14 days then either party may call for the dispute to be resolved with the assistance of an independent mediator;

c)If  within  a  further  14  days  mediation  does  not  take  place  or mediation does not resolve the dispute then the dispute shall be submitted to arbitration before a sole arbitrator to be agreed by the parties or failing agreement nominated by the President of the Northland District Law Society.

[9]      In  2005, Mr and Mrs  Harding separated.   Mrs Harding remained in  the property at 36 Tasman Heights Road.

[10]     The property was not sold before June 2008, as envisaged by the agreement for sale and purchase.

[11]     Mr Blake says that at the start of 2008, he perceived a weakening of the real estate market in Ahipara and wanted to get the property sold so as to cash himself out of the investment and repay his debt to Westpac.  He emailed both Mr Harding and Mrs Harding about this on 11 January 2008.  He says that shortly afterwards, he and Mr Harding agreed that they would jointly engage a registered valuer to provide

a valuation of the property.  If there was no dispute about the valuation, he would be paid one-half of the valuation figure before 1 July 2008. The valuation was carried out in  late  March  2008  and  showed  a  market  value  of  $735,000.    He  emailed Mr Harding on 27 March 2008 and gave him these choices:

a)        pay him $367,500 no later than 1 July 2008;  or b)      put up the property for sale.

[12]     He quotes Mr Harding’s reply of 30 March 2008:

Obviously option 1 is the one we are going to go for.  As far as I am concerned there is no option 2.  I need title on the subdivision in my name so as I can offer the Bank security.  The road is more or less the last thing that has to be done before title is issued.  I think this is under way again.  I will talk to Carole and make sure all this is going smoothly.

[13]     Mr Blake said he was led to believe that Mr Harding was acting as agent for Mrs Harding.   Mrs Harding’s position in the present proceeding is that she is not bound by the arrangement described by Mr Blake.  Mr Blake says that in early May, Mr Harding advised that time was required before he could obtain title to the land being subdivided and asked for some grace.   Mr Blake said that he agreed to an extension if he was reimbursed for his ongoing interest payments to the Westpac Bank  after  1 July  2008.    He  also  says  that  Mr  Harding  indicated  his  general acceptance of this, and that Mr Harding gave assurances about protecting him for his ongoing interest expenses.  Mr Blake’s position is that, because of the arrangements negotiated with Mr Harding, he is entitled to be paid the sum of $367,500 and, in addition, is to be reimbursed for interest payments he has made on his Westpac loan after 1 July 2008.  He says that the amount payable to him at 5 July 2010 would be

$424,205.77.

[14]     Since  the  second  half  of  2009,  Mrs  Harding  has  been  trying  to  put  the property on the market for sale.  Correspondence between her lawyer and Mr Blake’s lawyer to try and resolve matters has been unavailing.  Mrs Harding says that she is employed as a school administrator at a local primary school.  She receives a limited income from that job. She is also running an accommodation business from the

property.  She says that the National Bank mortgage is a considerable burden and she gets little or no assistance from Mr Harding in paying it.   She wishes to be independent from both Mr Blake and Mr Harding as co-owners of the property.

[15]     Because she has been unable to secure Mr Blake’s co-operation in the sale of the property, she has applied under s 339 for the sale of the property.

[16]     The matter was first called before me on 17 May 2010.  I made a declaration that the property was to be sold, but did not make any order.   Any order for sale would be toothless without directions how the property was to be sold.  I adjourned the matter until 19 July 2010 to give the parties the opportunity to have discussions and reach agreement on directions for a sale.  It seemed to me then that, if the parties could not agree on directions for sale, these were differences that would have to be referred  to  arbitration.    Arbitration  would  be  an  unduly lengthy,  expensive  and burdensome process to resolve these issues.  I reserved all other issues.

[17]     When the matter was called before me on 19 July 2010, the parties were still apart. In particular, Mr Blake continued to oppose any orders being made for sale under s 339(1)(a).  His case was that there was insufficient evidence before the Court to properly consider matters under s 342, and the summary judgment proceeding was inappropriate for resolving factual disputes.    The matters said to require determination were:

a)       Assessing the hardship to Mrs Harding of not ordering a sale without full discovery of her full financial position, including the income she derives from the property and the outgoings that she is liable for;

b)The hardship to Mr Blake of ordering a sale,  or alternatively not ordering a sale without first determining the dispute as to the agreement of 2008;  and

c)       The  hardship  and  other  factors  relating  to  the  first  defendant’s agreement to postpone the date of sale following the Hardings’ separation and breakdown of their marriage, and the negative impact

this has had on the plaintiff given the fall in the market value of the property from that time.

[18]     Mr Blake also developed an argument that it may be possible to sell the property so that he could be paid in full his entitlement under the 2008 agreement without  the  National  Bank  first  being  satisfied  from  the  proceeds  of  sale. Possibilities floated were that the National Bank could be paid out of other funds, the National Bank could be repaid in full before the sale went ahead, or the Bank could simply agree to a discharge of the mortgage without repayment.   The Court’s equitable jurisdiction was pressed on me.

[19]     During the hearing, I pointed out to Mr Blake’s counsel the implausibility of the National Bank giving a discharge without being repaid in full, and that on the current state of the market, even if the balance of the proceeds remaining after payment of the costs of sale and the discharge of mortgage were paid to Mr Blake, he would not receive his entitlement under the 2004 agreement.  Mr Blake’s counsel acknowledged that there might be a point in that and I adjourned the matter for the parties to discuss overnight.

[20]     I held a telephone conference on 20 July 2010, which Mr Blake’s Gisborne solicitors also joined.

Discussion

[21]     In an application for summary judgment, the plaintiff has the legal burden of showing that the defendant does not have any arguable defence to the plaintiff’s claims.  Sections 339, 342 and 343 of the Property Law Act say:

339   Court may order division of property

(1) A court may make, in respect of property owned by co-owners, an order--

(a)      for the sale of the property and the division of the proceeds among the co- owners; or

(b)      for the division of the property in kind among the co-owners; or

(c)       requiring 1 or more co-owners to purchase the share in the property of 1 or more other co-owners at a fair and reasonable price.

(2) An order under subsection (1) (and any related order under subsection (4)) may be made--

(a)      despite anything to the contrary in the Land Transfer Act 1952; but

(b)      only if it does not contravene section 340(1); and

(c)       only on an application made and served in the manner required by or under section 341; and

(d)      only after having regard to the matters specified in section 342.

(3) Before determining whether to make an order under this section, the court may order the property to be valued and may direct how the cost of the valuation is to be borne.

(4) A court making an order under subsection (1) may, in addition, make a further order specified in section 343.

(5) Unless the court orders otherwise, every co-owner of the property (whether a party to the proceeding or not) is bound by an order under subsection (1) (and by any related order under subsection (4)).

(6) An order under subsection (1)(b) (and any related order under subsection (4))

may be registered as an instrument under--

(a)      the Land Transfer Act 1952; or

(b)      the Deeds Registration Act 1908; or

(c)       Part 1 of the Crown Minerals Act 1991.

342   Relevant considerations

A court considering whether to make an order under section 339(1) (and any related order under section 339(4)) must have regard to the following:

(a)      the extent of the share in the property of any co-owner by whom, or in respect of whose estate or interest, the application for the order is made:

(b)      the nature and location of the property:

(c)       the number of other co-owners and the extent of their shares:

(d)      the hardship that would be caused to the applicant by the refusal of the order, in comparison with the hardship that would be caused to any other person by

the making of the order:

(e)       the value of any contribution made by any co-owner to the cost of improvements to, or the maintenance of, the property:

(f)       any other matters the court considers relevant.

343  Further powers of court

A further order referred to in section 339(4) is an order that is made in addition to an order under section 339(1) and that does all or any of the following:

(a)    requires the payment of compensation by 1 or more co-owners of the property to 1 or more other co-owners:

(b)     fixes a reserve price on any sale of the property:

(c)     directs how the expenses of any sale or division of the property are to be borne:

(d)    directs how the proceeds of any sale of the property, and any interest on the purchase amount, are to be divided or applied:

(e)    allows a co-owner, on a sale of the property, to make an offer for it, on any terms the court considers reasonable concerning--

(i)       the non-payment of a deposit; or

(ii)       the setting-off or accounting for all or part of the purchase price instead of paying it in cash:

(f)     requires the payment by any person of a fair occupation rent for all or any part

of the property:

(g)    provides for, or requires, any other matters or steps the court considers necessary or desirable as a consequence of the making of the order under section 339(1).

[22]     Both parties accepted that an application under s 339 differs markedly from the application under s 140 of the Property Law Act 1952.   Under the 1952 Act, where a party owned a half-share or greater, the Court was required to order either a sale or partition, and the only matter for decision was whether there should a sale or partition.

[23]     Under the 2007 Act, the Court takes into account a range of factors which can include matters of relative hardship to the parties.

[24]     Under the 1952 Act, summary judgment applications seeking orders for sale were not uncommon.   Orders for sale were made as a matter of course where the applicant owned at least a half-share in the property.  Now that the decision whether to order a sale is a matter of discretion where a range of factors need to be evaluated, successful summary judgment applications will be less common.     Nevertheless, cases may arise where a plaintiff can say that the case for a particular order is so convincing that a defendant can have no arguable defence to the application.

[25]     Article 8 of the First Schedule of the Arbitration Act says:

1.A court before which proceedings are bought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting that party’s first statement on the substance of the dispute, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative, or incapable of being performed, or that there is not in fact  any  dispute  between  the  parties  with  regard  to  the  matters agreed to be referred.

[26]     The relationship between article 8 and summary judgment applications is now clearly established.   When a defendant  applies for  a stay of the  summary judgment application, the Court considers both applications together.  If it holds that

there is no defence to the plaintiff’s claim, it will enter summary judgment and dismiss the application for stay and reference.  Conversely, if it holds that arguable defences are raised which preclude the entry of summary judgment, it will dismiss the application for summary judgment and instead grant a stay under article 8:  Royal Oak Mall Ltd v Savory Holdings Ltd CA 106/89, 2 November 1989, Rayonier MDF New Zealand Ltd v Metso Panelboard Ltd HC Auckland CIV-2002-404-1747, 27

May 2003.  The plaintiff also drew my attention to Todd Energy Ltd v Kiwi Power (1995) Ltd HC Wellington CP46/01, 29 October 2001, which gives a contrary view. In that case, Master Thompson decided that Parliament had erred in adding the last clause in article 8(1) of the First Schedule of the Arbitration Act.  He expressed a preference for the approach taken in England under the United Kingdom Arbitration Act 1996.   Under the current English approach, proof of a dispute is no longer required to order a stay.

[27]     The short point is that article 8 adopts wording used in English arbitration legislation in force before the 1996 Act, and authorities such as S L Sethia Liners Ltd v State Trading Corporation of India Ltd [1986] 2 All ER 395, govern the interpretation of those words.

[28]     I will consider whether Mr Blake has arguable defences to particular parts of the plaintiff’s case, bearing in mind that the plaintiff has the legal onus of showing that Mr Blake does not have an arguable defence.

Sale of the property

[29]     In the hearing on 9 May 2010, Mr Blake accepted that there should be a sale of the property.  In the hearing on 19 July 2002, Mr Blake did not submit against a sale of the property.  Mr Blake has an obvious interest in getting his money out of the property and that can be achieved by selling the property.  Mr Blake does not have an arguable defence that the property should not be sold.

Payment  of  real  estate  commission,  advertising  costs  and  legal  expenses incurred on the sale

[30]     Clause 7(a) and (b) of the 2004 agreement provides that on the sale of the property, these are to be paid before the distribution of other proceeds of sale.  Mr Blake does not say that this provision has been subsequently varied.  Mr Blake does not have a defence that these costs should not be paid in priority when the proceeds of sale are distributed.

Payment of the National Bank mortgage

[31]     The National Bank has a registered first mortgage which has priority over Mr Blake’s interest.  The National Bank will not give a discharge unless it is paid the amount secured by the mortgage.  Mr James advised that, at 6 July 2010, the amount secured by the mortgage was $332,044.   Mr Blake’s submissions that the Bank might give a discharge without being paid in full from the proceeds of sale are simply speculative and unrealistic.  Mr Blake does not have an arguable defence that the National Bank should not be repaid in priority to any payment to him.

Division of the proceeds of sale

[32]     The  highest  case  for  Mrs  Harding  is  that  she  is  not  bound  by  the arrangements negotiated by Mr Blake and Mr Harding in 2008, and she is not liable to compensate Mr Blake for any losses he has suffered arising from the delay in sale. Of course, this is not Mr Blake’s position.  But even if Mrs Harding’s position were correct (not something I decide in this judgment), there is no reasonable prospect of her receiving any of the proceeds of sale.   This arises because of the undisputed evidence as to the current market value of the property.  The registered valuer who gave Mr Blake a valuation of $735,000 for the property in 2008 provided Mrs Harding’s lawyers with another valuation report in October 2009.   He gave the property a current market value of $640,000.  His report says:

Sales volumes and levels have decreased over recent years compared to the very buoyant period of 2004-2006.   The market is best described as soft.

There are very few recent sales and extended listing periods particularly for upper value end properties.   We believe that the market will not improve significantly in the next three months.

In light of the sales, evidence analysed and the current state of the market, I consider  the  subject’s  market  value  range  to  be  $640,000  to  $690,000. Given the current state of the market I choose to adopt $640,000 being the lower end of the value range ...

[33]     Interestingly, Mrs Harding also obtained advice from a local real estate agent for the marketing of the property.   The land agent’s report, given in late 2009, suggests that the market value of the property is in the range of $490,000-$520,000. Obviously, this is not a report by a registered valuer, but it does point to the market trend.

[34]     For Mr Blake to receive his half-share under the 2004 agreement, he would have to receive $332,044 – an amount equal to the National Bank mortgage.  For Mr Blake to receive that sum the property would have to sell for about $695,000, once the real estate agent’s commission and costs of sale (estimated at $30,000) are taken into account.  In other words, if the property sells for less than $695,000, once the costs of sale are paid and the National Bank mortgage is discharged, there will not be enough available to pay Mr Blake his equal half-share under clause 7 of the 2004 agreement.

[35]     On the valuation evidence available, I regard the prospect of the property selling for more than $690,000 as quite unrealistic and not worth entertaining. Accordingly, none of the parties can have any sound objection to an order that Mr Blake  be paid  the  balance  of  the  proceeds  of  sale after  payment  of  real  estate commission, legal conveyancing costs and the discharge of the National Bank mortgage.

The claim by Mr Blake for a shortfall under 2004 agreement

[36]     Because of the reduced value of the property, Mr Blake will suffer a shortfall on what he is entitled to under the 2004 agreement.   Mr James accepted that Mrs Harding could have no objection to an order being made that Mr and Mrs Harding

must pay Mr Blake for any shortfall on his entitlement under clause 7 of the 2004 agreement.

Directions for sale

[37]     Mr  Blake’s  lawyer  outlined  conditions  he  said  were  commonly  used  in Gisborne on Court ordered sales of property.  For Mrs Harding, Mr James accepted that he could not reasonably oppose orders in those terms.   Mr Blake’s solicitors have now tendered those draft directions and they are incorporated in the orders for sale.  The proposed directions provide for the Court to appoint a registered valuer. The valuer appointed is Mr Russell Garton.  The lawyers based in the north accepted that he was appropriately qualified for the task and Mr Bunbury did not submit otherwise.

[38]     The directions proposed also require the Court to appoint an independent firm of  solicitors  to  undertake  the  conveyancing.    The  solicitor  appointed  is  Clive Patterson of Patterson Law, 117 Commerce Street, Kaitaia.

[39]     Mr Blake does not have a defence to any of the matters considered above. Summary judgment can be given against Mr Blake for the above matters. Correspondingly, there is no dispute about those matters, and therefore no need to order a stay under article 8 of the First Schedule of the Arbitration Act.

[40]     In her statement of claim, Mrs Harding has claimed $5000 damages for pre- litigation legal costs and costs of marketing.  She has also claimed general damages for Mr Blake’s failure to agree to the sale of the property.  Those matters are clearly arguable and must be referred to arbitration.  Mrs Harding’s claims for these matters in the statement of claim are stayed pending the determination by arbitration.

[41]     I also record that there are other matters that are not resolved between the parties.   They are not raised in Mrs Harding’s pleadings, but if they remain live issues, they will need to be referred to arbitration under clause 9 of the agreement for sale and purchase:

a)       Whether Mr Blake and Mr Harding entered into a binding agreement in 2008 varying the 2004 agreement;

b)        Whether Mrs Harding is bound by that agreement;

c)       Whether Mr  Blake is  entitled to compensation from the Hardings because  the  property was  not  sold  within  the  four  years,  and  the amount of that compensation;

d)Whether Mrs Harding is required to pay Mr Blake occupation rent for living in the property after the date on which it should have been sold, and the amount of that occupation rent;  and

e)        Whether Mrs Harding is required to disclose to Mr Blake her income. [42]    I make the following orders:

a)       The  parties  are  to  sell  the  property  at  36  Tasman  Heights  Road, Ahipara, described in Identifier NA121D/449, following these directions:

i)Russell Garton of Whangarei, registered valuer, is appointed to act for all purposes in carrying out these directions and further orders made by the Court relating to the sale;

ii)Russell  Garton  is  to  carry  out  forthwith  an  independent registered   valuation   of   the   property   to   determine   an appropriate reserve price for the property to be offered for sale on the open market and to provide that report to the parties;

iii)Within 10 working days of receiving Mr Garton’s report, the parties are to confer and agree on a firm of reputable real estate agents to market the property;

iv)Failing agreement within the 10 working days, Russell Garton is to appoint the firm of reputable real estate agents;

v)The firm of real estate agents is to be invited to submit to the parties a marketing plan for the property;

vi)Within 10 working days of receiving the marketing plan, the parties are to accept the plan or otherwise vary it by agreement amongst themselves;

vii)Failing agreement between the parties on the marketing plan, Russell Garton is to review it and accept it or vary it;

viii)The parties are to instruct the real estate agents to give effect to the marketing plan, as accepted or varied;

ix)      The property is to be offered on the open market over the spring/summer period to the end of February 2011;

x)       If the real estate agents do not obtain an offer for the sale of the property at or above the reserve price before the end of February 2001, Russell Garton is to review the matter to reassess the marketing plan and, if necessary (if not done already), consider offering the property for sale by way of auction and at a reduced reserve price;

xi)      If the real estate agents obtain an offer for the property at any time at or above the reserve price, it is to be referred to the parties for consideration;

xii)      The parties are to confer and agree to accept or reject the offer within five working days of receiving it;

xiii)     If the parties reject the offer, it should be referred to Mr Garton who shall decide whether or not the offer is reasonable, using

his knowledge of the market in the Far North.  If Mr Garton finds that the offer is reasonable in all the circumstances, the offer will be accepted and may be signed by the Registrar of the High Court, the Registrar’s signature to be binding on the parties;

xiv)     Clive Patterson of Patterson Law of 119, Commerce Street, Kaitaia, is appointed to carry out any conveyancing, at a price consistent  with  conveyancing  transactions  normally undertaken in the Far North; and

xv)      If  any party refuses  to  sign  a  transfer  or  an  authority and instruction form as may be required to transfer the property within five working days of being asked to do so, the Registrar of  the  Court  may  sign  that  document.     The  Registrar’s signature will be sufficient for the purpose of any such document and will bind all the parties;

b)        The proceeds of sale are to be applied as follows:

i)In payment of Mr Garton’s reasonable professional fees in carrying  out  these  directions  and  any  further  order  of  this Court relating to the sale;

ii)       In payment of the conveyancing fees of Clive Patterson;

iii)In paying the costs of sale, including real estate commission, advertising and marketing costs;

iv)      In  repayment  of  the  mortgage  to  the  National  Bank  of

New Zealand; and

v)       The balance remaining shall be paid to Caleb John Blake.

c)       Until such time as the mortgage to the National Bank of New Zealand is repaid, the plaintiff and the second defendant shall continue to pay all  instalments  falling due  under  the  mortgage  before  the  date  of completion of any sale;

d)The first defendant will have judgment against the plaintiff and the second defendant for the amount of any shortfall in the sum payable to him under clause 7 of the agreement for sale and purchase of June

2004;

e)       The plaintiff’s claim for pre-litigation legal and marketing costs and for general damages are stayed under article 8 of the First Schedule of the Arbitration Act; and

f)        The first defendant is to pay costs and disbursements to the plaintiff on a 2B basis.   If the parties are unable to agree costs, memoranda may be filed.

[43]    Mr Blake’s lawyers submitted against costs.   This proceeding has gone substantially in favour of Mrs Harding.  Mr Blake took an unrealistic position in this proceeding in proposing a stay and reference to arbitration on matters which were not in fact in dispute.   There is no good reason why costs should not follow the

event.

R M Bell

Associate Judge