Hobson Views Limited v Hayward - [2020] NZHC 395

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2181

[2020] NZHC 395

BETWEEN
HOBSON VIEWS LIMITED

Applicant

AND

OWEN EYRE HAYWARD AND MARY JANE HAYWARD

Respondents

Hearing: (on the papers)

Judgment:

6 March 2020

JUDGMENT OF POWELL J

[Costs]

This judgment was delivered by me on 6 March 2020 at 3.30 pm pursuant to R 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

HOBSON VIEWS LIMITED v HAYWARD [2020] NZHC 395 [6 March 2020]

[1] Somewhat unusually, both parties seek costs following resolution of an application to remove a caveat pursuant to s 142 of the Land Transfer Act 2017. Although the proceedings were discontinued both parties claim victory:

(a)Hobson Views Limited (“Hobson”) claim costs on the basis that its application was a necessary push to get Owen and Mary Jane Hayward, to remove a caveat so as to enable Hobson to refinance; whereas

(b)Mr and Mrs Hayward claim costs on the basis Hobson’s application was unnecessary; they had an undisputed caveatable interest and were always prepared to remove the caveat to allow the refinancing once they received information and answers they were seeking from Hobson.

Background

[2] Hobson is the registered proprietor of a leasehold estate in North Auckland (“the property”). Mr and Mrs Hayward are sub-lessees of Hobson under an unregistered railway lease. Mr and Mrs Hayward have a caveat lodged over the property and there is no dispute that their interest is genuine and sufficient to support a caveat.

[3] In September 2019, for financial reasons, Hobson sought to re-finance their mortgage over the property in favour of the Bank of China Limited (“the Bank”). However, due to the presence of the caveat, any refinancing required the consent of the respondent caveators. Hobson sought Mr and Mrs Hayward’s consent, but Mr and Mrs Hayward were unwilling to provide it due to concerns it would be detrimental to their interest in the property.

[4] On 16 September 2019, Mr and Mrs Hayward sought to obtain a copy of Hobson’s financial records but Hobson informed Mr and Mrs Hayward this was not an appropriate request and declined to provide the information. Similarly, on 20 September, Mr and Mrs Hayward asked to sight the mortgage documents but again Hobson informed Mr and Mrs Hayward that this was an inappropriate request.

[5] On 23 September, consent had still not been provided and counsel for Hobson informed Mr and Mrs Hayward that High Court proceedings would be initiated if they continued to withhold their consent.

[6] On 24 September, Mr and Mrs Hayward wrote to Hobson seeking an “insurance” from the Bank that it recognised their lease and that the lessee’s position would be protected in the event of default by the mortgagor. Mr and Mrs Hayward also sought to view the loan terms if “commercial reality” would allow it. Hobson responded by informing Mr and Mrs Hayward that s 145 of the Land Transfer Act 2017 applied and provided for…

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: [2020] NZHC 395
Decision Date: 6 March 2020

CaseChat Overview and Summary

Hobson Views Limited, the registered proprietor of a leasehold estate, applied to the court to remove a caveat over its property lodged by the Haywards, who are sub-lessees of the property. The Haywards refused to consent to the refinancing of the property unless they received certain information and assurances from Hobson. Hobson filed an application to remove the caveat, which was later withdrawn after the Haywards consented to the refinancing. Both parties sought costs from each other following the withdrawal of the application.

The court was required to decide whether it could confidently predict the outcome of the substantive application to remove the caveat and, if not, whether it was appropriate to make any order as to costs. The court considered the legal principles applicable to costs following the withdrawal of proceedings, including the principle that costs should follow the event, and the circumstances in which the court may make a costs order when the substantive proceedings have been resolved without trial.

The court found that it could not confidently predict the outcome of the substantive application to remove the caveat on the papers. The Haywards had a genuine interest in the property that was capable of sustaining a caveat, but it was unclear whether their interests would be prejudiced by the removal of the caveat. The Haywards were also entitled to make reasonable requests for assurance and information before consenting to the refinancing. The court held that it was not appropriate to make a costs order in the circumstances, as the matter was finely balanced and could not be confidently predicted on the papers.

The applications for costs by both Hobson and the Haywards were dismissed. Costs were to lie where they fell.

Orders