HND Holding Ltd v Lau - [2023] NZHC 3482

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2761

[2023] NZHC 3482

UNDER Section 142 of the Land Transfer Act 2017

IN THE MATTER OF

an application for an order removing caveat 12780856.1 (North Auckland Registry)

BETWEEN

HND HOLDING LIMITED

Applicant

AND

EE KUOH LAU

Respondent

CIV-2023-404-2783

IN THE MATTER OF

an application for an order removing caveat 12780903.1 (North Auckland Registry)

BETWEEN

HND HOLDING LIMITED

Applicant

AND

EE KUOH LAU

Respondent

Hearing: 29 November 2023

Counsel:

R O Parmenter for the Applicant Respondent in person

Judgment:

1 December 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

Solicitors/Counsel:

This judgment was delivered by me on 1 December 2023 at 12 midday Pursuant to Rule 11.5 of the High Court Rules.

…………………..
Registrar/Deputy Registrar

R Parmenter, Auckland
Ganda & Associates, Auckland

HND HOLDING LIMITED v LAU [2023] NZHC 3482 [1 December 2023]

Introduction

[1] These two proceedings are applications by HND Holding Limited (HND), as mortgagee, for an order removing caveats from the titles to two properties that HND has sold exercising its power of sale. HND is prevented from completing settlement of the sales by caveats lodged against the two titles by Mr Lau.

[2] HND applied without notice for orders removing the caveats. I directed HND to proceed on a Pickwick basis. Mr Lau was served, and he appeared when these proceedings were called in the caveats list on 28 November 2023. Mr Lau has filed a memorandum setting out his grounds of opposition, and two affidavits. The applications were heard together on 29 November 2023. Mr Lau appeared. Pursuant to my direction, Mr Lau subsequently filed further written submissions dated 29 November 2023.

Background

[3]HND holds a registered mortgage over the following properties:

(a)205 Sutton Road, Drury, owned by DASP Properties Limited (DASP). The mortgage was registered against the title to the property on 23 July 2021.

(b)419 Bremner Road, Karaka, owned by Daniel Kwok Properties Limited (DKP). The mortgage was registered against the title to the property on 3 August 2021.

[4] Mr Lau registered his caveat against the titles to both properties on 12 July 2023.

[5] DASP and DKP are companies controlled by Daniel Kwok. The mortgages are related to other advances and securities between HND and Mr Kwok, or companies that he controls.

[6] DASP and DKP defaulted in their obligations to repay loans to HND. HND has entered into a contract to sell the properties to a third party, Joe Holdings

Limited (Joe Holdings), using its power of sale under the mortgages. It is currently prevented from completing settlement of the sales because Mr Lau has lodged caveats against the titles to the properties, based on the following asserted equitable interests in the land:

(a)an interest as beneficiary under a constructive trust, where DASP or DKP is constructive trustee;

(b)an interest as purchaser of the land under an agreement for sale and purchase dated 8 June 2021; and

(c)an interest as lessee of the land…

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 3482
Decision Date: 1 December 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, HND Holding Limited, as a mortgagee, applied for orders to remove caveats lodged by EE Kuoh Lau against the titles of two properties. The properties, located at 205 Sutton Road, Drury, and 419 Bremner Road, Karaka, were subject to mortgages held by HND. The mortgagors, DASP Properties Limited and Daniel Kwok Properties Limited, defaulted on their obligations to repay loans to HND. HND exercised its power of sale and entered into contracts to sell the properties to Joe Holdings Limited, but the sales were stalled by the caveats lodged by Lau. Lau claimed equitable interests in the properties, including being a beneficiary under a constructive trust, a purchaser under an agreement for sale and purchase, and a lessee under a pre-paid lease. HND sought orders to remove the caveats to allow the sale to proceed.

The legal issues before the court were whether Lau's claims of equitable interests were sufficient to prevent HND from exercising its power of sale under the mortgages. The court needed to determine if Lau's interests could defeat the registered interests of HND. The court also considered the procedural fairness of the application, including whether Lau had a bona fide interest and if the application should proceed without notice. Additionally, the court examined the relevance of previous cases involving Lau's similar claims.

The court found that Lau's claims of equitable interests were not sufficient to defeat the power of HND to sell the properties under the mortgages. Lau's interests did not alter the priority of the registered interests held by HND. The court noted that this was at least the fourth occasion Lau had attempted to prevent a financier from exercising its power of sale under a mortgage, and previous cases had ruled against Lau's claims. Lau's allegations that the sales were not bona fide were unsupported by evidence, and the other matters raised did not assist in sustaining the caveats. The directors of HND had no knowledge of or consent to the interests Lau claimed. Consequently, the court ordered that the caveats be removed and Lau pay costs to HND.

The final orders of the court were that caveat number 12780856.1 be removed from Record of Title Identifier 909429, and caveat number 12780903.1 be removed from Record of Title Identifier NA82B/163. Lau was ordered to pay costs to HND for each proceeding: for CIV-2023-404-2761, on a category 2B basis in the sum of $10,874.50 plus disbursements of $590, and for CIV-2023-404-2783, on a category 2A basis in the sum of $2,868 plus disbursements of $590.

Orders