Lau v Silver Harbour Capital Trustee Limited
[2023] NZHC 3745
•18 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-2892
[2023] NZHC 3745
UNDER Section 143 of the Land Transfer Act 2017 IN THE MATTER OF
An application to sustain caveat number 12662538.1
BETWEEN
EE KUOH LAU
Applicant
AND
SILVER HARBOUR CAPITAL TRUSTEE LIMITED
Respondent
Hearing: 18 December 2023 Counsel:
No appearance for the Applicant
N J Robertson and L Kerr for the Respondent
Judgment:
18 December 2023
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 18 December 2023 at 12 midday.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Solicitors/Counsel:
Sanderson Weir, Auckland
Copy to: E E Lau
LAU v SILVER HARBOUR CAPITAL TRUSTEE LTD [2023] NZHC 3745 [18 December 2023]
Introduction
[1] This is an application by Mr Lau for an order sustaining a caveat Mr Lau has registered against the title to the property at 51A Murphys Road, Flatbush.
[2] Silver Harbour Capital Trustee Limited is the mortgagee of the property. Silver Harbour has exercised its power of sale and sold the property. Silver Harbour is prevented from completing settlement of the sale by the caveat.
[3] On 13 December 2023, I convened a telephone conference of the parties and directed Mr Lau to file and serve any affidavits in reply to Silver Harbour’s opposition by 9am on 18 December 2023. I scheduled a further telephone conference for 18 December 2023 at 10am.
[4] Mr Lau filed two affidavits and written submissions on 18 December 2023. One affidavit is from Mr Lau, unsworn. The second affidavit is from a director of the mortgagor.
[5] When the proceeding was called in the telephone conference on 18 December 2023, Mr Lau failed to appear. This matter is urgent. I therefore determine Mr Lau’s application on the papers, including all material filed by him on 18 December 2023.
Background
[6] Silver Harbour holds a registered mortgage over the property, Record of Title Identifier 759183. Silver Harbour’s mortgage was registered on 8 November 2021.
[7] The mortgagor and registered owner is One on One Property Development Ltd. One on One defaulted in repayment of a loan to Silver Harbour. Silver Harbour is owed more than $19m.
[8] Silver Harbour has entered into a contract to sell the mortgaged property to a third party, Apec Equity Ltd, in exercise of Silver Harbour’s power of sale under the mortgage. Settlement of the sale is scheduled to occur on 16 January 2024. The
purchase price is $12,880,000. There will be a significant shortfall owed to Silver Harbour after settlement of the mortgagee sale.
[9] Mr Lau registered his caveat against the title to the property on 7 February 2023. Mr Lau’s caveat asserts that Mr Lau has a beneficial interest in “the land contained in the CT NA42A/682”. On the face of it, the caveat discloses no interest in the land comprised in Record of Title Identifier 759183, against which it is registered, and is therefore defective. The caveat must be removed on that ground alone.
[10] In his caveat, Mr Lau describes his claimed interest as a beneficial interest under a constructive trust, of which the registered owner is constructive trustee.
[11] Even if the caveat had correctly referred to the land in Record of Title Identifier 759183, Silver Harbour has never had knowledge of the interest Mr Lau claims he holds in the property and has never consented to it. Mr Lau’s interest, if it exists, is subordinate to Silver Harbour’s prior indefeasible interest as mortgagee.
[12] This is at least the fifth occasion on which Mr Lau has attempted to prevent a financier from exercising its power of sale under a mortgage. The present proceeding is very similar to:
(a)Goodmore Investments (New Zealand) Ltd v Lau,1 where Mr Lau lodged a caveat against a title to a property in Flat Bush; and
(b)the situation in HND Holding Ltd v Lau (CIV-2023-404-1500)2 and
HND Holding Ltd v Lau (CIV-2023-404-2761 and 2783).3
[13] In Goodmore Investments, van Bohemen J held that the equitable interests asserted by Mr Lau were not sufficient to defeat the power of the mortgagee to sell the
1 Goodmore Investments (New Zealand) Ltd v Lau [2023] NZHC 1983.
2 HND Holding Ltd v Lau [2023] NZHC 2211.
3 HND Holding Ltd v Lau [2023] NZHC 3482.
property using its power of sale under the mortgage. In HND Holding Ltd v Lau,
Lang J made an equivalent finding. 4
[14] The matters relied on by Mr Lau relate to the relationship between the mortgagee and the mortgagor, and do not assist Mr Lau in sustaining his caveat.
[15] The caveat is an attempt by Mr Lau to derail the mortgagee sale process. The interest that he claims cannot prevent Silver Harbour from exercising its power under the mortgage to sell the property following default by One on One. The caveat must be removed.
[16] Further injunction
[17] Silver Harbour seeks an injunction restraining Mr Lau from lodging any further caveats against Record of Title Identifier 759183.
[18] Section 146 of the Land Transfer Act 2017 prohibits Mr Lau from lodging a second caveat purporting to protect the same claim or interest as the caveat ordered to be removed.
[19] Any further injunction is beyond my jurisdiction as an Associate Judge, pursuant to s 22(4)(g) of the Senior Courts Act 2016. The application for an injunction is adjourned. I grant leave to Silver Harbour to apply for the application for an injunction to be listed before the Duty Judge if necessary.
[20] Costs
[21] Mr Lau’s caveat was lodged in bad faith and is an abuse of process. Silver Harbour seeks, and is entitled to, indemnity costs.
Result
[22] I order that caveat number 12662538.1 be removed from Record of Title Identifier 759183.
4 HND Holding Ltd v Lau [2023] NZHC 2211.
[23] The applicant shall file and serve a memorandum as to costs, including supporting invoices, by 19 January 2024.
Associate Judge Brittain
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