HSW Holdings Limited v Cathro - [2015] NZHC 2895

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001184 [2015] NZHC 2895

BETWEEN
HSW HOLDINGS LIMITED

Plaintiff

AND

ANTHONY MARK CATHRO AND BERENIECE CATHRO

Defendant

Hearing: 24 August 2015

Appearances:

R O Parmenter for the Applicant
C Orton for the Respondents

Judgment:

20 November 2015

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 20 November 2015 at 10.00 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors / Counsel:

Winston Wang & Associates, Auckland
Corban Revell, Auckland

R O Parmenter, Auckland

HSW HOLDINGS LIMITED v CATHRO & Anor [2015] NZHC 2895 [20 November 2015]

[1] HSW Holdings Ltd is a developer. It owns a large block of land at Don Buck Road, Massey, which adjoins land owned by Anthony and Bereniece Cathro. It has lodged a caveat against the title to the Cathros’ land and has applied under s 145A1 of the Land Transfer Act 1952 for an order that the caveat not lapse, in response to steps that the Cathros have taken to have the caveat removed.

[2] The Cathros oppose the application.

[3] The overarching issue for determination is whether HSW arguably has a beneficial interest in part of the Cathros’ land, pursuant to an agreement for sale and purchase.

Background

[4] The parties entered into an agreement for sale and purchase on or about

13 December 2011. Under the agreement the Cathros agreed to sell 1,300 square metres of their land to HSW for the purpose of providing access to HSW’s proposed subdivision of its neighbouring land.

[5] The land to be sold is identified on a plan attached to the agreement, and it is part of a much larger parcel of 5,590 square metres that the Cathros own, which is described as Lot 3, DP 459824 in Identifier 602466 (North Auckland Registry). The agreement states the land is land “to be vested as road reserve”, implying that it was to become a public road essentially owned by the consenting local authority, Auckland Council. The agreement is subject to the usual ADLS standard terms and conditions, and additionally contains specific further terms of sale. The further terms of sale provide:

15.0The purchaser at their cost will with all due expedition, subject to delays (if any) beyond its control, complete the subdivision of the land the subject of this agreement in accordance with the plan attached and to the requirements of the Auckland City Council.

1 The application states that it is made under s 145, but it is apparent that it has been made in response to an application to the Registrar-General of Land for the caveat to lapse. It is therefore appropriately dealt with as an application under s 145A.

16.0 The agreement is conditional upon the granting of consent by
Auckland City Council for the subdivision of the purchaser’s land at
58C Don Buck Road on the terms acceptable to the purchaser.

17.0Settlement date shall be 7 working days after the plan of subdivision of…

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: [2015] NZHC 2895
Decision Date: 20 November 2015

CaseChat Overview and Summary

The case of HSW Holdings Limited v Cathro was heard in the High Court of New Zealand, Auckland Registry, involving a dispute between HSW Holdings Ltd, a developer, and Anthony and Bereniece Cathro, who own adjoining land. HSW lodged a caveat against the Cathros’ land and applied under section 145A1 of the Land Transfer Act 1952 for an order that the caveat not lapse, in response to the Cathros’ application to have the caveat removed. The Cathros opposed the application, leading to the overarching issue of whether HSW arguably has a beneficial interest in part of the Cathros’ land, pursuant to an agreement for sale and purchase.

The court had to determine whether HSW had an arguable interest in the land under the agreement for sale and purchase, considering the terms of the contract and the reasonableness of the conditions imposed by the Auckland Council. The Cathros argued that there was an implied term of reasonableness in the agreement that the conditions of subdivision consent must not be unreasonable, and that the Council's conditions were unreasonable, thus giving them a right to cancel the agreement. HSW contended that the Cathros' claim of an implied term was not clear enough to plainly rebut HSW's claimed interest under the agreement.

The court concluded that if there was an implied term, it was not the term the Cathros claimed to invoke as the basis for cancellation. The court could not conclude on the material before it that the implied term met the test of obviousness. Consequently, HSW established that it had an arguable interest in the Cathros' land pursuant to the agreement for sale and purchase.

As a result, the application to sustain the caveat was granted on the condition that HSW proceed with the diligent prosecution of the proceeding it had commenced in the District Court for specific performance of the agreement for sale and purchase. The Cathros were ordered to pay to HSW costs on a 2B basis together with disbursements as fixed by the Registrar.

Orders