HND Holding Limited v Lau - [2023] NZHC 1194

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2951

[2023] NZHC 1194

UNDER Section 142 of the Land Transfer Act 2017

IN THE MATTER OF

an application for an order removing caveat no. 12790668.1 (North Auckland Registry)

BETWEEN

HND HOLDING LIMITED

Applicant

AND

EE KUOH LAU

Respondent

Hearing: 12 December 2023

Counsel:

R O Parmenter for the Applicant Respondent in person

Date of Judgment:

14 December 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 14 December 2023 at 4 pm Pursuant to Rule 11.5 of the High Court Rules.

…………………..
Registrar/Deputy Registrar

Solicitors/Counsel:
R Parmenter, Auckland
Ganda & Associates, Auckland

HND HOLDING LTD v LAU [2023] NZHC 1194 [14 December 2023]

Introduction

[1] This is an application by HND Holding Limited, as mortgagee, for an order removing a caveat from the title to a property that HND has sold exercising its power of sale. HND is prevented from completing settlement of the sale by a caveat lodged against the title by Mr Lau.

[2] HND applied without notice for an order removing the caveat. I directed HND to proceed on a Pickwick basis. Mr Lau was served, and he appeared by VMR when this proceeding was called in the Caveats List on 12 December 2023. Mr Lau has since filed a notice of opposition, supporting affidavit from Jian Tan, and written submissions.

[3] When the matter was called on 12 December 2023, the parties agreed that I should determine the matter on the papers, which I now do.

Background

[4] HND holds a registered mortgage over the property at 18 Newington Road, Henderson, Record of Title Identifier NA902/189. The mortgagor and registered owner is Golden Circle Investment Limited. HND’s mortgage was registered on 25 March 2022.

[5] Golden Circle defaulted in its obligations to re-pay a loan to HND. HND has entered into a contract to sell the mortgaged property to a third-party, North Harbour Development Limited, in exercise of HND’s power of sale under the mortgage. Settlement of the sale to North Harbour Development Limited is scheduled to occur five working days after removal of Mr Lau’s caveat.

[6] Mr Lau registered his caveat against the title to the property on 26 July 2023. Mr Lau’s caveat asserts the following equitable interests in the land:

(a)an interest as beneficiary under a constructive trust, where Golden Circle is constructive trustee;

(b)an interest as purchaser of the land under an agreement for sale and purchase dated 11 November 2022; and

(c)an interest as lessee of the land under a pre-paid lease of the property pursuant to which he is entitled to rent the property from 11 November 2022 until 11 November 2047.

[7] HND seeks an order removing the caveat, under s 142 of the Land Transfer Act 2017, so that it can complete the sale of the property.

[8] This is at least the fifth occasion on which Mr Lau has attempted to prevent a…

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: [2023] NZHC 1194
Decision Date: 14 December 2023

CaseChat Overview and Summary

HND Holding Limited, as a mortgagee, applied to the High Court of New Zealand to remove a caveat lodged by Mr. Lau against the title of a property located at 18 Newington Road, Henderson. The application was brought to enable HND to complete the sale of the property to North Harbour Development Limited, following the exercise of HND’s power of sale due to default by the mortgagor, Golden Circle Investment Limited. Mr. Lau’s caveat asserted several equitable interests, including a constructive trust beneficiary interest, a purchaser interest under an agreement for sale and purchase, and a lessee interest under a pre-paid lease. The court was required to determine whether these asserted interests were sufficient to prevent HND from exercising its power of sale under the mortgage.

The court examined the nature and validity of the interests claimed by Mr. Lau. It noted that similar claims by Mr. Lau had been previously rejected in other cases. The court held that Mr. Lau’s equitable interests were not sufficient to defeat the power of the mortgagee to sell the property. The court also dismissed the allegations made by Ms. Tan, who claimed to be a representative of the mortgagor, as irrelevant to Mr. Lau’s ability to sustain the caveat. The court concluded that the caveat was an attempt by Mr. Lau to disrupt the mortgagee sale process without legitimate grounds.

The court ordered the removal of the caveat and directed Mr. Lau to pay costs to HND on a 2B basis, limited to the filing of the originating application and supporting affidavit, as well as a list appearance on 12 December 2023, plus disbursements as fixed by the Registrar. This decision aligns with previous rulings that Mr. Lau’s claimed interests were insufficient to prevent the mortgagee from exercising its power of sale.

Orders