Homestead Bay Trustees Limited v Fiordland Experience Group Limited

[2023] NZHC 3248

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2022-404-2160

[2023] NZHC 3248

BETWEEN

HOMESTEAD BAY TRUSTEES LIMITED

Applicant

AND

FIORDLAND EXPERIENCE GROUP LIMITED

Respondent

Hearing:

Further submissions:

14 June 2023

3 and 18 July 2023

Appearances:

R Hollyman KC and R Stewart for the applicant A Butler KC and R Harrington for the respondent

Judgment:

16 November 2023

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 16 November 2023 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

HOMESTEAD BAY TRUSTEES LIMITED v FIORDLAND EXPERIENCE GROUP LIMITED [2023] NZHC

3248 [16 November 2023]

[1]                 The applicant, Homestead Bay Trustees Ltd (HBTL), owns land in Homestead Bay, near Queenstown (the land). The respondent, Fiordland Experience Group Ltd (FEG), lodged a caveat against dealings with the land. FEG claims an interest in the land pursuant to an agreement with HBTL under which HBTL granted FEG an option to purchase lots to be subdivided from the land.

[2]                 HBTL applies for an order that FEG’s caveat be removed. HBTL says FEG does not have a reasonably arguable case to support the interest it claims in the land. HBTL says this is for several reasons: the agreement on which FEG relies is illegal and unenforceable; the agreement has been avoided by HBTL; the agreement has been cancelled by FEG; and in any event the agreement never conferred a caveatable interest in the land. Further, HBTL says that even if FEG has a reasonably arguable case for a caveatable interest, I should exercise my residual discretion to remove the caveat.

Background

The players

[3]                 The current directors of HBTL are Hong Biao (Brian) Chen and Dan (Cassie) Xiao. Mr Chen and Ms Xiao are also, together with a Hong Kong company, the current shareholders of HBTL.

[4]                 HBTL is one of several property development companies of which Mr Chen and Ms Xiao are directors and shareholders. Another is Murphys Development Ltd (MDL).

[5]                 Another director of both HBTL and MDL was Andrew Guest. Mr Guest was a director of those companies at relevant times until August 2021. He has, however, never been a shareholder of either HBTL or MDL.

[6]                 Mr Guest has, since 2010, been a director and shareholder of Viranda Holdings Ltd (VHL). VHL provides commercial property services including acquisition analysis. One of Mr Guest’s co-directors and co-shareholders in VHL is Mark Bridgman.

[7]                 FEG was incorporated in 1987. Roy Toms was a director and shareholder of FEG for many years, until his death in August 2020. Mr Toms was a good friend of Mr Guest. FEG traded as Air Fiordland until 2010, when it sold all its business assets. Mr Guest deposed that in 2010 he and Mr Toms “decided to use FEG as a company for the pursuit of joint ventures by us in Central Otago”.

[8]                 Mr Chen and Ms Xiao,…