Lu v Wila Developments (Ormiston) LP
[2021] NZHC 3099
•17 November 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-981
[2021] NZHC 3099
BETWEEN HAO YUAN LU
Applicant
AND
WILA DEVELOPMENTS (ORMISTON) LP
Respondent
Hearing: 17 November 2021 (by telephone) Appearances:
X Zhang for Applicant
S Humphrey for Respondent
Judgment:
17 November 2021
JUDGMENT OF VENNING J
Application for stay
This judgment was delivered by me on 17 November 2021 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
Solicitors: Lee Salmon Long, Auckland
Zhang Law Limited, Auckland
LU v WILA DEVELOPMENTS (ORMISTON) LP [2021] NZHC 3099 [17 November 2021]
Introduction
[1] In a judgment delivered on 12 November 2021 the Court granted the application by Wila Developments Limited (Ormiston) LP (Wila) to remove a caveat lodged by Mr Lu against titles to five of its properties.1 The Court also directed that Mr Lu was not to lodge any further caveat against the said properties. The caveat was the third that Mr Lu had lodged against the properties. In a judgment delivered on 18 October 2021 Associate Judge Bell had directed that the first two caveats lodged by Mr Lu against the properties were to lapse.2
[2]Mr Lu has now filed an application to stay the judgments of Associate Judge
Bell of 18 October and this Court’s recent judgment.3
[3] Mr Zhang appeared for Mr Lu. Mr Zhang had only recently been instructed by Mr Lu. He sought an adjournment of the application and an interim stay. I declined that application, as the material before the Court does not support an interim stay and there would be ongoing prejudice to Wila and third parties by the grant of even an interim stay.
Background
[4] The factual background is set out in the previous judgments of the Court. It is unnecessary to repeat it in this judgment.
[5] Mr Lu has filed a notice of appeal to the Court of Appeal against the judgment of Associate Judge Bell.
[6] The application in support of the stay refers to the grounds of appeal against Associate Judge Bell’s decision, but does not refer to an appeal against the decision of this Court on 12 November 2021.4
1 Wila Developments (Ormiston) LP v Lu [2021] NZHC 3068.
2 Lu v Wila Developments (Ormiston) LP [2021] NZHC 2772.
3 The application for stay is however only filed in the CIV-2021-404-981 proceeding.
4 At present there does not appear to be an appeal against this Court’s decision of 12 November 2021.
[7]The appeal grounds appear to be that Associate Judge Bell was in error by:
(a)not finding that Wila had repudiated the agreement by a letter of 17 March 2021; and
(b)Wila had invited a renegotiation of the contract in that letter of 17 March 2021 and had accordingly itself repudiated the agreements for sale and purchase; and
(c)that in breach of the sunset date clause Wila had retained Mr Lu’s deposit so that the sunset period was automatically extended for a further six months.
[8] On that basis it is said the Judge’s reliance on Mr Lu being in breach of the no caveats clause to entitle Wila to cancel the contract was in error as Wila had previously repudiated the agreement.
Principles
[9] Rule 12 of the Court of Appeal (Civil) Rules 2005 applies. This Court may order a stay of the execution of the decision(s) in the judgment pending the hearing of an appeal. The factors to be taken into account will vary from case to case, but include in this case:
(a)whether the appeal may be rendered nugatory;
(b)the bona fides of the appeal;
(c)whether the successful party will be injuriously affected by any stay;
(d)the effect on third parties;
(e)the apparent strength of the appeal; and
(f)the overall balance of convenience.5
Will the appeal be rendered nugatory?
[10] As a preliminary point, there appears to be no practical point in the appeal against the judgment of Associate Judge Bell as it has been perfected and acted on. The orders that the caveats lapse were sealed and the caveats have been removed from the titles. A stay to preserve the appeal rights appears pointless.
[11] To the extent that the purpose of the current appeal (or perhaps a further appeal against the judgment of 12 November) is to enable Mr Lu to retain some claim to an interest in the land which he could register against the titles, it could be said if a stay is not granted the appeal will be rendered nugatory. Wila intends to settle unconditional agreements for sale and purchase of the properties in issue and transfer the titles to third parties. However, against that, when Mr Lu was before the Court in relation to Wila’s application to dismiss his third caveat he made it clear that the reason he pursued the third caveat was to provide security for the return of the deposit he has paid.
[12] As discussed during the hearing, the solicitor acting on the conveyancing transaction for Wila holds the deposit in relation to lot 11, the only lot which Mr Lu originally held an interest in as purchaser. Following the hearing Mr Humphrey has confirmed the conveyancing solicitor has given an undertaking as follows:
I, Phillip Wong, director of Wong & Bong Law Office Limited (Wong & Bong), confirm that Wong & Bong holds an amount of $31,304, being equivalent to the deposit paid by Mr Hao Yuan Lu for the purchase of Lot 11, being a subdivision of Lot 802-803, 88 Argento Avenue, Flat Bush (DP 479772, CT 810051) under an agreement with Wila Developments (Ormiston) LP (Wila) dated 23 July 2019 (Deposit) in its trust account on interest bearing deposit, and that the Deposit and any interest accrued will not be paid away for any reason until Mr Lu's separate proceedings against Wila and Auckland Council with the filing number CIV-2021-404- 584 have been finally determined.
5 Keung v GBR Investment Ltd [2010] NZCA 396 at [11]; Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (HC) at [9].
Bona fides of prosecution of the appeal
[13] Instead of lodging an appeal against Associate Judge Bell’s decision on the day the decision was delivered, Mr Lu lodged the third caveat, which Wila then had to apply to have removed. Mr Lu apparently ignored and did not engage with correspondence from Wila’s solicitors regarding his actions. The inference is that he is seeking to achieve leverage by lodging the caveats against Wila’s property.
Effect on Wila and third parties
[14] A major consideration in the present case is the impact on Wila and the purchasers under the five agreements for sale and purchase. Following the decision of Associate Judge Bell, Wila entered unconditional agreements for sale and purchase. Settlement is now overdue. Wila is facing penalty interest claims and at risk of cancellation in the future. The third party purchasers have rights in the property and will also be adversely affected by any stay.
Novelty/Public interest
[15]There is no novelty or public interest in the proceedings.
Merits of the appeal
[16]The merits of the appeal are not strong.
[17]The passage in the 27 March 2021 letter of Wila’s solicitors that Mr Lu relies
on is:
My client is experiencing serious delays at Council despite earnest efforts to progress the issue of the 224c certificate, but it is becoming more and more likely that we are not going to meet the sunset date in the agreement of 31/3/2021. I am instructed to inform your clients that in that event, my client intends to cancel the agreement, but will give to your clients the first opportunity to renegotiate a new agreement.
[18] Mr Lu’s appeal is largely based on a construction of that letter amounting to a repudiation of the agreements for sale and purchase. That interpretation is not open on the wording of the letter. Wila’s formal cancellation followed after 31 March 2021.
[19] Further, Mr Lu’s reliance on cl 38 of the agreement for sale and purchase also seems misplaced. The clause required written notice of any extension to the sunset date. Wila at no time extended the sunset date by written notice to the purchaser.
Balance of convenience
[20] For the reasons set out by Associate Judge Bell and this Court in its judgment of 12 November and also given the developments since his judgment, the overall balance of convenience does not favour a stay.
Result
[21]The application for stay is declined.
Costs
[22]Costs to Wila on a 2B basis.
Venning J
3
0