Love Homes Limited v Li

[2021] NZHC 1339

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2021-404-640

[2021] NZHC 1339

BETWEEN

LOVE HOMES LIMITED

First Applicant

AND

YUN ZHENG

Second Applicant

SUNRISE LAND LIMITED
Third Applicant

ENOCH NZ LIMITED

Fourth Applicant Continued …. /2

YUTIAN LI

Respondent

Hearing:

19 May 2021

Appearances:

R O Parmenter for the First Applicant and for the Second to Seventeenth Applicants

No appearance for or on behalf of the Respondent

Judgment:

19 May 2021

Reasons:

8 June 2021

REASONS JUDGMENT OF DUFFY J

This reasons judgment was delivered by me on 8 June 2021 at 4 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors/Counsel:

Carson Fox Bradley, Auckland

R O Parmenter, Barrister, Auckland

LOVE HOMES LTD & ORS v LI [2021] NZHC 1339 [19 May 2021]

…2

CIV-2021-404-640

ZHONG WEI ZHOU

Fifth Applicant

BO LIN
Sixth Applicant

JIYUAN WU
Seventh Applicant

TOP IDEAL HOMES LIMITED
Eighth Applicant

FANG YU
Ninth Applicant

WMW TRUSTEE LIMITED
Tenth Applicant

HIGH GRADE HOMES LIMITED
Eleventh Applicant

XIN ZHAO
Twelfth Applicant

REESE HOMES LIMITED
Thirteenth Applicant

ZELIX TRADING LIMITED
Fourteenth Applicant

WENQING CHEN

Fifteenth Applicant

QIN XIN ZENG and AIXUAN GUO
Sixteenth Applicant

JCM NZ LIMITED
Seventeenth Applicant

[1]                 On 19 May 2021, I made orders removing various caveats and granting an injunction to restrain the respondent from placing further caveats on the subject properties. My reasons now follow.

[2]                 In this proceeding the applicants have sought orders removing various caveats and an injunction to restrain the respondent from lodging further caveats on the subject properties (the application). The basis for those orders is set out below.

[3]                 Green Land Investment Limited (Green Land) is a developer of land at 411-431 Ormiston Road, Flat Bush, Auckland; it has subdivided the land into approximately 30 titles (the issued titles). The applicants, as purchasers under unconditional sale and purchase agreements with Green Land, have acquired an interest in those titles. Settlement of those sales by Green Land to the various applicants was due on 22 February 2021.

[4]                 However, from about 5 February 2021 the respondent has attempted to lodge various caveats over Green Land’s land, including the issued titles that the applicants are purchasing. Of these caveats, at least 16 have been requisitioned or rejected by LINZ. At the time the result judgment was delivered, several caveats were currently lodged with LINZ pending a decision on registration. Some or all of those caveats might have been registered, since this application was brought. The caveats essentially assert that the respondent has an interest in the various issued titles in the form of a beneficial interest in the land pursuant to a constructive trust of which the registered owner (Green Land) is trustee.

[5]                 Through its solicitors, Loo & Koo, Green Land has represented to the applicants that the respondent is unrelated to Green Land. Their solicitors have further advised the applicants that Green Land is frustrated by delays caused by the respondent’s caveats and is very keen to settle. Green Land contends that the respondent does not have any caveatable interest in the issued titles.

[6]                 However, in a letter dated 19 March 2021, Loo & Koo advised the applicants that it was aware of a proposal by the respondent to the effect that if the applicants would pay an extra $50,000 purchase price per lot, the respondent’s caveats would be

withdrawn. In the same letter, Loo & Koo stated that if the applicants chose not to agree to pay the $50,000 then Green Land would try to remove the caveats. However, as at the date of the result decision, Loo & Koo had not issued any such proceeding. Moreover, Loo & Koo had not responded to three requests by the applicants for information that would have allowed the applicants to make an application to remove the caveats.

[7]                 On 22 April 2021, Venning J issued a minute in which the Judge made directions that it was appropriate the application for removal of the caveats be heard as soon as it could be, and therefore he set it down for hearing on 4 June 2021. At [7] of the minute the Judge made directions as to service on the respondent. At [8] of the minute the Judge made timetable directions in relation to the hearing of the application for injunction and for the removal of caveats. At [10] the Judge directed that if the respondent failed to comply with the direction at [8](a) to file a notice of opposition and any affidavits in support by 14 May 2021, leave was reserved to the applicants to have their application re-listed in the Duty Judge List on Wednesday, 19 May 2021 in order to seek orders by default.

[8]                 On 29 April 2021, Venning J issued a further minute relevant to service on the respondent. By then the applicants’ counsel had filed a further memorandum which included advice his instructing solicitors had received regarding attempted service of documents on the respondent. It appeared that documents attempted to be served in accordance with the service directions made on 22 April 2021 had either been refused or returned.

[9]                 On 19 May 2021, the application was before me in the Duty Judge List. At the time it was clear that the respondent had not filed any notice of opposition and any affidavits in support thereof by 14 May 2021, as directed in the minute of Venning J dated 22 April 2021. The matter was called and there was no appearance for the respondent.

[10]              The applicants submitted that it could be inferred from the circumstances that the respondent had “concocted a claim to caveatable interests” in the issued titles and was “attempting to extort the purchaser applicants to pay Green Land $50,000 per

agreement, so that settlement [could] take place”. Further, the descriptions given in the caveats of the alleged caveatable interest lacked specificity to support the claims. The applicants contended, therefore, that the respondent did not have an arguable case for a caveatable interest.

[11]              In the memorandum dated 18 May 2021 the respondent advised that he was in China. He then argued why, in his view, the applicants had no right to bring the application to the Court because they were obliged to pay money the respondent was owed by the current owner of the issued titles. The respondent threatened to bring his own legal proceedings against the applicants if they did not withdraw their application.

[12]              After hearing from Mr Parmenter for the applicants and the arguments he advanced in support of the application, I was satisfied that the respondent had been properly served in accordance with the service directions made by Venning J on 22 April 2021 and subsequently confirmed in the Judge’s minute of 29 April 2021. I was also satisfied that the respondent had failed to comply with those directions, because neither the respondent’s email dated 14 May 2021, nor his memorandum dated 18 May 2021, met the timetable directions at [8](a) of Venning J’s minute of 22 April 2021. I considered it was appropriate in the circumstances to proceed in the manner foreshadowed at [10] of Venning J’s minute of 22 April 2021 by granting the orders the applicants sought by default. Accordingly, I did so.

Duffy J