Koppens v Thornton Park Limited HC Hamilton CIV 2010-419-1496

[2010] NZHC 2010

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2010-419-1496

BETWEEN  LISA JOYCE KOPPENS Applicant

ANDTHORNTON PARK LIMITED Respondent

Hearing:         18 November 2010 (by telephone) Counsel:     C T Gudsell QC for Applicant

M J Till for Respondent

Judgment:      18 November 2010

(ORAL) JUDGMENT OF HEATH J

Solicitors:

North End Law, PO Box 20555, Te Rapa Till & Clarke, PO Box 3, Cambridge Counsel:

C T Gudsell QC, PO Box 19085, Hamilton

KOPPENS V THORNTON PARK LIMITED HC HAM CIV 2010-419-1496  18 November 2010

Introduction

[1]      Ms Koppens seeks an interim injunction to prevent an auction of a property at

205 Thornton Road, RD 1, Cambridge, from proceeding at 11am today.

[2]      A hearing was conducted by telephone, at 9.30am this morning.  The grounds on which the interim injunction is sought involve a claim by Ms Koppens that she has been prevented from pursuing an interest in the property through the lapsing of a caveat that she lodged to protect that alleged interest.  The caveat lapsed as a result of actions taken when she was no longer living at the property, which was the address for service of the caveator.

[3]      The injunction is sought pending disposition of an application for leave to lodge a second caveat, in relation to the interest which Ms Koppens asserts.

Background

[4]      The background to the application is set out helpfully in Mr Gudsell QC’s memorandum  in  support  of  the  application,  on  which  I draw  for  the  following summary.

[5]      Ms Koppens entered into an Agreement for Sale and Purchase of land on 6

March 2006.  The vendor was  Thornton Park Ltd.  The directors of that company, Mr and Mrs Bunn, were known to Ms Koppens.  They had been friends for many years.  The agreement was subject to a resource consent being obtained by 1 June

2007, on conditions satisfactory to both vendor and purchaser.

[6]      In the meantime, Ms Koppens lived in the house on the land she had agreed to buy, with the consent of Thornton Park’s directors.

[7]      In July 2007 resource consent was obtained, subject to various conditions. During 2008, progress was made with the subdivision.

[8]      Subsequently, disputes arose between the parties as to whether the agreement remained enforceable.  I understand from Mr Till, for Thornton Park, for example, that there is a document purporting to vary the contract on which Mr Bunn alleges that his signature has been forged.  For present purposes, I take the view that there are genuine disputes which are capable of serious argument both ways.

[9]      Ms Koppens moved out of the property in early 2009.  She deposes that Mr and Mrs Bunn knew she had moved.  Mr Till confirmed that today.  Mr Till received instructions from the directors of Thornton Park to take steps to lapse the first caveat through  notice  under  s 145A  of  the  Land  Transfer  Act  1952.    He  made  no independent inquiries at that stage as to Ms Koppens’ place of residence.  He relied on the address for service given in the caveat.  There can be no criticism of Mr Till for acting in that way.

[10]     The notice did not come to the attention of Ms Koppens, on the evidence she has given in support of the application, until she was overseas in October 2010.  She found out because a friend informed her that an auction had been advertised for the property.  She returned to New Zealand and took steps to revive the protection she had sought.  Those steps appear to have been taken from 30 October 2010, but the application itself was not filed until yesterday.

Analysis

[11]     In directions that I gave yesterday, I indicated I was not prepared to grant relief on a without notice basis and gave an opportunity to Thornton Park to file evidence on the question whether it was known that Ms Koppens was no longer living at the property when the notice was served.   Mr Till, for reasons he has explained today, understandably has been unable to obtain affidavit evidence in time but has indicated that the directors did have knowledge that Ms Koppens was no longer resident there.

[12]     If the auction does not proceed there will be wasted costs in relation to the arrangement and promotion of the auction.  There is also the risk that a lower price

might be obtained later.  Mr Till indicates that something in the order of $14,000 has been sunk into promotional and relevant professional costs.

[13]     On the other hand, if an order were not to be made it would effectively render nugatory Ms Koppens claims that she is entitled to obtain the property under the relevant Sale and Purchase Agreement.

[14]     The first question is whether there is a serious question to be tried.  There are plainly disputes of a genuine nature in relation to the enforceability of the Agreement for Sale and Purchase, both ways.

[15]     The discretion to allow a second caveat to be entered is conferred by s 148(1)

of the Land Transfer Act 1952, which provides:

148   No second caveat may be entered

(1)   If a caveat has been removed under section 143 or has lapsed, no second caveat may be lodged by or on behalf of the same person in respect of the same interest except by order of the High Court.

....

[16]     The discretion is conferred in unfettered terms.  Three factors were identified in Muellner v Montagnat[1]  which are relevant for present purposes.  The first is the strength of the case made by an applicant to support the estate or interest.   The second is whether the caveat has lapsed due to the caveator failing to exercise rights. If so, some explanation for the failure will be required.   The third is that leave is unlikely to be granted, save on terms that endeavour to avoid prejudice to those who

[1] Muellner v Montagnat (1986) 2 NZCPR 520 (HC) at 523-524. See also, Lowther v Kim [2003] 1 NZLR 327 (HC) at [18] and [19]..

have acted in reliance on the state of the Register and in the belief the caveator was not pursuing his or her claim.

[17]     The critical issue for present purposes is the way in which the notice was served.   I accept Mr Till’s submission that, from a legal point of view, it was unnecessary for him to make further inquiries before the notice under s 145A was served.  However, it seems to me given the long standing history of this case that the notice not being drawn to the attention of Ms Koppens is significant, when the

directors of Thornton Park knew she was no longer at the property which was the address for service.  Further, that property was in fact owned by Thornton Park Ltd, so it was unlikely that the notice would come to Ms Koppens’ attention through other means.

[18]     On a balance of convenience, it is the losses due to the prevention of the auction proceeding must be considered against the claim by Ms Koppens being rendered nugatory.  I consider that she should be entitled to progress her claim for a second caveat on terms requiring a sum of money to be paid, by way of estimate, to Thornton Park Ltd to compensate for at least some of the wasted costs.  In that way Ms Koppens will be able to pursue a claim to have a second caveat lodged on discretionary grounds and any losses that arise from the prevention of the auction, in the event that she is unsuccessful in that claim, will be minimised.

Result

[19]     On that basis, I make an order granting an interim injunction on the following terms.   Thornton Park Ltd by itself or its agents or otherwise, are enjoined from selling the property at 205 Thornton Road, RD 1, Cambridge, more particularly described and comprised in Identifier 479472, Lot 2, Deposited Plan 420855, South Auckland Registry, pending determination of an application by Ms Koppens to the Court  for  leave  to  lodge  a  second  caveat  against  that  land.    That  order  is  in conformity with the draft provided by Mr Gudsell and the Registrar is authorised to seal the order in the terms he has submitted, save for one matter to which I shall now refer.

[20]     I consider that, as part of the indulgence being granted to Ms Kopppens, she should be required to pay a sum of $10,000 to Thornton Park Ltd in any event, in respect of an estimate of wasted costs.   That sum shall be paid by 5pm on 26

November 2010.   If that sum were not paid, the Associate Judge who hears the application for leave to lodge a second caveat will be entitled to take that into account in exercising his or her discretion under s 148.

[21]     Costs are reserved on the present application.  Those costs can be determined at the same time as any costs are resolved on the application for leave to lodge a second caveat.

[22]     To progress the second caveat application, that is adjourned for a telephone conference before Associate Judge Faire, at 3.30pm today.  A copy of this judgment will  be  made  available  to  the  Associate  Judge  and  he  will  be  able  to  make

timetabling directions for as prompt a hearing as is practicable in the circumstances.

P R Heath J