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Lu v Wila Development (Ormiston) LP

Lu v Wila Development (Ormiston) LP

Case [2021] NZHC 2772 18 October 2021

Contract Formation

Unconscionable Conduct

Specific Performance

Restitution

Non-Assignment Clause

No-Caveat Clause

Res Judicata

Property Law

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-981

[2021] NZHC 2772

UNDER the Land Transfer Act 2017

IN THE MATTER OF

an application that caveats do not lapse

BETWEEN

HAO YUAN LU

Applicant

AND

WILA DEVELOPMENT (ORMISTON) LP

Respondent

Hearing: 29 September 2021

Appearances:

Mr Lu is self-represented (with interpreter George Chang) S J Humphrey for the Respondent

Judgment:

18 October 2021

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 18 October 2021 at 11:00am
pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:
Lee Salmon Long (S J Humphrey), Auckland, for the Respondent

HAO YUAN LU v WILA DEVELOPMENT (ORMISTON) LP [2021] NZHC 2772 [18 October 2021]

[1] Mr Lu applies under s 143 of the Land Transfer Act 2017 for orders that two caveats not lapse. He has lodged the caveats saying that he is the purchaser of lots in a subdivision by Wila Development (Ormiston) LP at Argento Avenue, Flat Bush, Auckland. Caveat 12064040.1 is for four lots. The interest claimed under the caveat is:

The abovenamed caveator claims interest in the land contained part in the CTs 810051 (Lots 11, 12, 13, 16 as per attached documents marked “A” and “B”) p[u]rsuant to sales and purchase agreements dated 23.7.2019 between the registered owner Wila Developments (Ormiston) LP and caveator Haoyuan LU.

Lots 11, 12, 13 and 16 now have individual records of title: 962488, 062489, 962490 and 962493 respectively. They show that the caveat was registered on 23 March 2021.

[2]Caveat 12076153.1, for lot 10 in the same subdivision, claims this interest:

The above named caveator claims interest in the land contained part in the CTs 810051 (Lot 10) p[u]rsuant to sales and purchase agreements dated 23.7.2019 between the registered owner Wila Developments (Ormiston) LP and caveator Hao Yuan LU.

Lot 10 now has a separate record of title, 962487, which shows that the caveat was lodged on 1 April 2021.

[3] In opposition, Wila, the registered proprietor, says that Mr Lu is claiming as the nominee under four of the agreements (Lots 10, 12, 13 and 16), but the nominations were ineffective because the agreements for sale and purchase have a non-assignment clause and it did not consent to the assignments to Mr Lu. Wila also says that the agreements are no longer in force for these reasons:

(a)Each agreement for sale and purchase had a sunset clause, setting a date by which titles for each lot were to issue. When titles did not issue by that date, it exercised its contractual right to avoid the agreements.

(b)Each agreement has a no-caveat clause. Wila was entitled to cancel the agreement for Lot 11 because of Mr Lu’s breach of that term.

(c)The agreements have been cancelled for repudiation.

Wila also submits that the court should also apply the residual discretion to lapse the caveats.

[4] I find for Wila. Mr Lu could not caveat…

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.

Continue reading Lu v Wila Development (Ormiston) LP

Details

AGLC: Lu v Wila Development (Ormiston) LP [2021] NZHC 2772
Case: [2021] NZHC 2772
Decision Date: 18 October 2021

CaseChat Overview and Summary

In the High Court of New Zealand, Hao Yuan Lu applied for orders under section 143 of the Land Transfer Act 2017 to prevent two caveats from lapsing. He claimed to be the purchaser of lots in a subdivision by Wila Development (Ormiston) LP at Argento Avenue, Flat Bush, Auckland. The court had to determine whether Mr Lu had a reasonably arguable case for the interest claimed in the caveats, and if not, whether the caveats should be removed under the court's discretion. The legal issues were whether Mr Lu was a purchaser of the lots, whether the caveats were lodged in breach of the no-caveat clause, and whether the court should exercise its discretion to remove the caveats.

The court found that Mr Lu could not caveat lots 10, 12, 13 and 16 because he was not a purchaser of those lots. The deeds of nomination were ineffective to transfer the benefits of the agreements to Mr Lu. He could not lodge a caveat claiming to be a purchaser for those lots. Mr Lu was the purchaser only for lot 11, and had a caveatable equitable interest in that lot. However, Wila was entitled to cancel the agreement for lot 11 because Mr Lu breached the no-caveat clause by lodging the caveat. The caveats will lapse. The court also found that the court has a residual discretion to remove caveats that have little more than a nuisance value and a negotiation tool. In this case, the court would exercise the discretion to remove the caveats.

The final orders of the court were that the caveats are to lapse now on the delivery of this judgment, and Mr Lu is to pay Wila the costs of this application. The parties were encouraged to confer as to costs, and if they could not agree, Wila may file a memorandum as to proposed costs. Mr Lu should file any response within five working days after that. Another Judge will decide costs.

Orders