Mao v Mao
[2020] NZHC 738
•9 April 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-2720
[2020] NZHC 738
BETWEEN LIANSEN MAO
First Plaintiff
GREENLAND INVESTMENT LIMITED
Second PlaintiffAND
JIALING MAO
First Defendant
GUOPING NIU
Second Defendant
Hearing: 20 March 2020 Appearances:
GM Illingworth & D Liu for the Plaintiffs In attendance Ms Jiawen Mao
No appearance for the Defendants
Judgment:
9 April 2020
INTERIM JUDGMENT OF ASSOCIATE JUDGE SMITH
This judgment was delivered by me on 9 April 2020 at 3.30pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
D Liu, Heritage Law, Auckland
Copy to:
Liansen Mao Jiawen Mao Jialing Mao Guoping Niu
Mao v Mao [2020] NZHC 738 [9 April 2020]
[1] The plaintiffs apply by way of summary judgment for orders directing the defendants to discharge their mortgages registered over certain land at Ormiston Road, Flat Bush, Auckland, of which the first plaintiff (Mr Mao) is the registered proprietor. The defendants, who are respectively Mr Mao’s daughter and sister-in-law, did not file notices of opposition, but a notice of opposition was filed by Mr Mao.
[2] That unusual state of affairs arose because the proceeding was commenced by the second plaintiff (Green Land) in its own right, and in the purported exercise of an irrevocable power of attorney given to it by Mr Mao, under which Green Land says that it was entitled to issue the proceeding on Mr Mao’s behalf and in his name.
[3] While a notice of opposition and affidavit in opposition were filed by Mr Mao, he did not appear and was not represented by counsel at the hearing. Mr Mao’s daughter, Ms Jiawen Mao, who holds a power of attorney from Mr Mao, sought to appear on his behalf in the proceeding, but a direction was made by Gault J on 3 March 2020 that, in order to oppose, Mr Mao would need to appear at the hearing in person or instruct a lawyer on his behalf.1 In the event, Mr Mao did neither, and I declined to allow Ms Jiawen Mao to make submissions on his behalf at the hearing.
Background
[4] Green Land was formed in 2012 for the purpose of acquiring and subdividing land in Ormiston Road, Flat Bush, formerly known as numbers 411, 425, 425A and 431 Ormiston Road (the Project). Mr Mao was and is the registered proprietor of the adjoining land at 423 Ormiston Road, Flat Bush (now known as 387 Ormiston Road).
[5] Green Land successfully completed Part 1 of the Project, comprising 100 lots. Stage 2 of the Project was to comprise an additional 37 lots. In order to complete Stage 2 of the Project, Green Land needed to acquire an area of land owned by Mr Mao, which formed the driveway of 387 Ormiston Road (“the driveway land”). The driveway land would have to be vested in Auckland Council as road, to service the various lots that were being subdivided from Stage 2 of the Project.
1 Minute of Gault J, 3 March 2020.
[6] So to complete Stage 2 of the Project, Green Land needed to acquire the driveway land from Mr Mao. In broad terms, it achieved that by agreeing to transfer two lots in Stage 2 of the Project to Mr Mao, and to install certain stormwater drainage and service utilities on Mr Mao’s land (sufficient for Mr Mao to subdivide his own land into 25 separate lots), in exchange for the driveway land. Green Land entered into an agreement with Mr Mao on 1 April 2015 (the Land Owner Agreement) to give effect to that agreement. The Land Owner Agreement contained the following provisions:
(i)Mr Mao agreed to transfer the driveway land to Green Land. The process for the transfer and vesting of the driveway land in Auckland Council was that the subdivisional construction works were to be completed and engineering and survey releases provided by Auckland Council under the Resource Management Act 1991. On the issue of those certificates, LINZ would complete the land transfer process allowing for the creation of all new titles and the vesting of various pieces of land (including the driveway land) as road.
(ii)Green Land agreed to transfer to Mr Mao Lots 118 and 119 in Stage 2 of the Project. Alternatively, Green Land could transfer the existing Lots 3 and 4 from the (completed) Stage 1 of the Project.
(iii)Mr Mao agreed to obtain the written consents of mortgagees, chargeholders, and any other parties who had an interest in 387 Ormiston Road, to the various transactions contemplated under the Land Owner Agreement.
(iv)Mr Mao agreed to sign all forms or plans and provide all necessary consents for the Project to proceed, and to refrain from directly or indirectly taking any actions that would frustrate or delay the progress of the Project.
(v)Green Land was to provide sewer and stormwater drains through 387 Ormiston Road, to serve the upstream catchment and also to allow for any future development of 387 Ormiston Road to which Auckland Council might consent in due course. Green Land agreed to undertake all construction works for this development, including clearing earthworks, installation of the sewer and stormwater lines, installation of utility services and the construction of roading and footpaths, at no cost to Mr Mao. The construction work was to be completed in accordance with certain drawings prepared by Candor, Green Land’s engineers.
(vi)Green Land was to ensure that adequate capacity (up to 25 units or lots) was provided within the reticulation and utility services installed in accordance with the plans, to cater for any future development on 387 Ormiston Road, and to vest all works and land for road and reserve in Council on completion and obtain title for lots as part of the development at no cost to Mr Mao as owner of 387 Ormiston Road.
(vii)Green Land was to complete the physical works by 18 December 2015, with all necessary releases obtained from the Council and titles for Stage 2 of the Project by the end of March 2016.
(viii)Mr Mao agreed to sign all forms as may be required by Auckland Council to allow it to grant consent or issue completion certificates for Stage 2 of the Project, without delay or re-negotiation of any terms of the Land Owner Agreement.
(ix)Mr Mao was to give an irrevocable power of attorney to Green Land or its nominee to sign any forms, plans, certificates or any other documents contemplated by certain clauses in the Land Owner Agreement.
(x)If, despite Green Land’s best efforts, a resource consent for Stage 2 of the Project was not issued by 4 June 2015, and Mr Mao had complied with his obligations under the Land Owner Agreement, the parties agreed that the last date for delivering new titles (31 March 2016) would be extended by the same length of time as the issue of resource consent was delayed. Subject to that, if Green Land did not deliver the new titles on time, it was to pay $3,000 per day to Mr Mao for every day the titles were delayed beyond the end of March 2016.
(xi)Once signed, the Land Owner Agreement would be binding on the parties and would be irrevocable until such time as the works were physically complete, titles issued and roads vested in Auckland (sic) Transport, and drainage and other services vested in Council as appropriate.
[7] Disputes arose fairly soon after the Land Owner Agreement was completed. First, Mr Mao initially opposed an application made by Green Land to this Court to remove certain land covenants from the title to 387 Ormiston Road.2 That opposition was resolved by an agreement made between Green Land and Mr Mao in December 2015 (the December 2015 Agreement), under which Mr Mao agreed to withdraw his opposition in consideration for Green Land transferring to him Lot 129 from Stage 2 of the Project.
[8] Secondly, resource consent for Stage 2 of the Project was not in fact obtained until 2 June 2016, and Mr Mao says that no explanation has been provided by Green Land as to why it took so long. The delay in obtaining the resource consent had the effect of pushing out the deadline for completion of the Project to around the end of March 2017.
2 Proceeding CIV-2015-404-2187.
[9] By September 2016, Mr Mao says that he had obtained the oral consent from his then-mortgagee Westpac New Zealand Limited (Westpac) to the arrangements in the Land Owner Agreement, including the transfer of the driveway land to Green Land. However, Green Land had not at that stage asked for a formal consent from Westpac, and Mr Mao took the view that mortgagee consent was not required until the development work was completed.
[10] When Green Land had not transferred the two lots to Mr Mao under the Land Owner Agreement by September 2016, Mr Mao issued a proceeding in this Court under CIV-2016-404-1241 (“the 1241 proceeding”), claiming the two lots of land, as well as $3000 per day for the delay in transferring the lots. Green Land filed a statement of defence and counterclaim, alleging various defaults or delays on Mr Mao’s part, including failure to obtain his mortgagee’s consent.
[11] Mr Mao had also lodged a caveat against certain land owned by Green Land. Green Land challenged the caveat, and by early 2017 Mr Mao had commenced a proceeding (proceeding CIV-2017-404-220 – “the caveat proceeding”) to sustain his caveat.
[12] By Deed dated 28 March 2017 (the Settlement Deed), Green Land and Mr Mao agreed to resolve the caveat proceeding on the terms and conditions set out in the Settlement Deed, without prejudice to their rights under the Land Owner Agreement and their respective claims in the 1241 proceeding.
[13] The Settlement Deed recorded that disputes had arisen between Green Land and Mr Mao, in which both parties have alleged serious breaches of the Land Owner Agreement by the other party.
[14] The settlement comprised in the Settlement Deed broadly consisted of Green Land agreeing to transfer two Stage 1 Lots to Mr Mao, (in lieu of Lots 118 and 119 from Stage 2), and agreeing to pay $25,000 to Mr Mao, in consideration for certain undertakings provided by Mr Mao.
[15]Mr Mao provided the following undertakings:
4.Mao undertakes and warrants that he and his agents, relatives, employees and contractors (in particular Augustine Lau also known as Ee Kuoh Lau) will not lodge any further caveats against Green Land Properties and will refrain from objecting or obstructing, or procuring any other party to object or obstruct Green Land’s development and subdivision of the Stage 2 Land generally in accordance with the plan set out in Schedule 1 (Stage 2 Subdivision) and that they will actively support Green Land in completing the Stage 2 Subdivision.
5.Mao undertakes and warrants that he will obtain all caveator and mortgagee consents necessary for that part of his land shown in Schedule 1 to vest in the Auckland Council as road.
6.Mao hereby irrevocably nominates and appoints Green Land or any nominee of Green Land as his true and lawful attorney for the purposes of executing all documents and plans and consents and to perform all acts, matters and things as may be necessary to withdraw any caveat lodged by Mao and/or to enable Green Land to complete the Stage 2 subdivision including but not limited to the vesting of that part of Mao’s land as shown in the annexed plan as road on completion of the Stage 2 subdivision. Production of this Deed to Mao’s solicitors, agents or mortgagee from time to time shall without further requirement or reference to Mao comprise an irrevocable authorisation and instruction to the person involved or Mao’s mortgagee to execute any consents sought by Green Land in relation to the Stage 2 Subdivision including but not limited to the deposit of survey plan and the issue of titles. This Power of Attorney shall only take effect following the complete performance of [certain undertakings to be provided by Mr Mao’s solicitor] and the complete performance of [Green Land’s solicitor] in respect of [the provision of certain undertakings to Mr Mao, which would effectively secure to Mr Mao the transfer of the two lots and the payment of the $25,000 to Mr Mao’s solicitors].
[16]Clauses 14 and 15 of the Settlement Deed provided as follows:
Settlement Without Prejudice
14.It is recorded that this Deed does not settle [the 1241 proceeding], and that the terms of settlement herein are without prejudice to any claims that Green Land and Mao may have against the other for breaches of the Land Owner Agreement.
15.Green Land and Mao acknowledge that, save as modified herein, the Land Owner Agreement remains in full force and effect, and they mutually covenant that they will respectively perform and observe the covenants, conditions and stipulations in the Land Owner Agreement.
[17] Mr Mao duly provided the power of attorney required by the Settlement Deed. It was dated 28 March 2017, and it was executed for Mr Mao by his attorney Jiawen Mao.
[18] The power of attorney given by Mr Mao to Green Land duly appointed Green Land as Mr Mao’s attorney for a number of purposes, including the following:
…
(b)To apply, [in Mr Mao’s name], for the deposit of the Title Plan and to execute any consent, authority and instruction form, instrument, easement and order for new computer register for the production of [Mr Mao’s] New Title in accordance with the Title Plan, or other writing which [Green Land] considers necessary or desirable for the completion of the Stage 2 Subdivision (“Documents”).
(c)To obtain the consent of any mortgagee, caveator or encumbrancer of any part of [387 Ormiston Road] necessary or required to enable the deposit of Title Plan and production of [Mr Mao’s] New Title.
…
(e) To do all other acts or things as may be necessary for the Title Plan to deposit and to complete the Stage 2 Subdivision in accordance with the Resource Consent.
[19] The power of attorney document defined Mr Mao’s “New Title” as the new title to issue in Mr Mao’s name for the balance land contained in [387 Ormiston Road] following the vesting of [the driveway land] in Auckland Council as a legal road. The “Resource Consent” was defined as the Resource Consent for Stage 2 of the Project, granted by Auckland Council on 2 June 2016.
[20] In clause 2.2, Mr Mao agreed and declared that the power of attorney was irrevocable, even in the event of his bankruptcy or other disability, because it was given for valuable consideration.
[21] Clause 4.1 of the power of attorney provided that no person or body corporate dealing with Green Land acting as Mr Mao’s attorney need enquire as to the propriety or expediency of anything done by Green Land as attorney in Mr Mao’s name.
[22] As noted above, both the Settlement Deed and the power of attorney were signed on Mr Mao’s behalf by Jiawen Mao as his attorney. A copy of the power of attorney given by Mr Mao to Jiawen Mao, dated 7 July 2014, was provided in evidence. Generally, Mr Mao appointed Jiawen Mao his attorney to act for him in his name and on his behalf and his interest in all matters with which he might be in any way connected, interested or concerned as fully and effectually as Mr Mao could if personally present. The power of attorney also delegated to Jiawen Mao, during Mr Mao’s absence from New Zealand and during any periods of temporary physical incapacity, the exercise of any powers and discretions held by Mr Mao as trustee under any will or instrument of trust.
[23] Without limiting those powers, Mr Mao conferred on Jiawen Mao as his attorney the following further powers:
(a)To enter into or perform any contract in relation to my property or affairs present or future which I might enter into personally. Extend to sign as guarantor for all bank loan, family trust and all other matters.
(b)To exercise any right power authority or discretion of whatsoever nature which the ownership or possession of any property or my legal relation thereto confers upon me or which by virtue of any fact or circumstance I am entitled to exercise.
…
(f)To appoint in place of my attorney one or more attorney or attorneys to exercise any or all of the powers and authorities hereby conferred and from time to time to revoke any such appointment and appoint any further one or more attorney in place of such attorney.
[24] In April 2017 Green Land transferred the two Stage 1 Lots to Mr Mao, and paid him the $25,000, as required by the Settlement Deed. It says that it has completed all of its obligations under the Settlement Deed.
[25] Mr Mao says that there followed a period of substantial further delay when little progress was made on the subdivisional works, including in particular the provision of the utilities on Mr Mao’s land. Mr Mao contends (in affidavits filed by Jiawen Mao) that the delays resulted in substantial losses by way of interest payments for which Mr Mao was liable on his Westpac mortgage. Ms Jiawen Mao said in an
affidavit sworn in the 1241 proceeding on 6 September 2019, that the work was only 80% complete around February 2019.
[26] By early July 2017 Westpac had demanded repayment of Mr Mao’s indebtedness secured over 387 Ormiston Road. At that stage the secured debt to Westpac comprised a loan taken out by Mr Mao as trustee of a family trust called the Trillion Brillion and Others Family Trust of $2,219,894.33, and a personal loan taken out by Mr Mao of $5,063.63. The documents produced by Jiawen Mao show that the Westpac loans were repaid in early July 2017, following payment by Mr Mao to his solicitors of the sum of $2,301,730. After deduction of various costs and expenses, the solicitors refunded $73,397.04 of that sum to Mr Mao on 5 July 2017.
[27] On 4 July 2017, mortgages numbers 10838561.1 and 1083856.2 were registered on the title to 387 Ormiston Road by the first defendant and the second defendant.
[28]In an affidavit sworn in this proceeding on 16 March 2020, Jiawen Mao said:
22.Defendants did lent/guarantor the loan of originally of 2.3 million as per [various documents annexed to the affidavit].
[29] In an affidavit filed by Mr Augustine Lau in a separate proceeding (proceeding CIV-2019-404-2080), which Mr Mao referred to in his notice of opposition filed in this proceeding, Mr Lau said that “Mr Mao had no choice but to re-mortgage in July 2017. He borrowed money from [the first and second defendants] …”
[30] The documents produced by Jiawen Mao with her affidavit of 16 March 2020 do not show that any funds that may have been advanced by the first or second defendant to Mr Mao remain owing by him (if any funds were ever advanced).
[31] In its statement of claim, verified by Green Land’s manager, Mr Hao Yuan Lu, Green Land specifically pleaded:
9.No funds have been advanced by the first and second defendants to [Mr Mao] pursuant to [the defendants’ mortgages].
10.There are no outstanding sums or unperformed obligations under the first and second defendants’ mortgages.
[32] In his notice of opposition filed in this proceeding, Mr Mao did not appear to take issue with those allegations (beyond referring in general terms to two affidavits sworn by Jiawen Mao in the 1241 proceeding, and Jiawen Mao’s affidavit filed in this proceeding on 27 February 2020). None of those affidavits appears to suggest that any funds remain owing, or obligations remained unperformed, under the defendants’ mortgages.
[33] Also, in his affidavit verifying the statement of claim, Mr Lu said that, based on the documents and information Green Land had obtained from Mr Mao in the 1241 proceeding, Green Land had good reasons to believe:
(a) Mr Mao has deliberately encumbered or allowed his property at 387 Ormiston Road to be encumbered in order to frustrate Green Land’s rights and claims …
…
(c)Mortgages 10838561.1 and 10838561.2 granted in favour of the first and second defendants are not genuine as no funds have been advanced by the first and second defendants to Mr Mao.
[34] Mr Lu went on to say that Green Land would seek leave to produce the documents that supported the abovementioned beliefs, if it became necessary to do so.
[35] Again, Mr Lu’s statements were not challenged in the notice of opposition or the affidavits of Jiawen Mao filed in opposition, beyond the bare statement that the defendants did lend (or possibly guarantee) a loan of “originally” $2.3m.3
[36] On 12 September 2019, the solicitors then acting for Green Land wrote to Lucy Chu Lawyers, the solicitors then acting for the defendants, asking on Mr Mao’s behalf4 that the mortgages be discharged, so that Green Land could complete the subdivision of the Stage 2 land. Lucy Chu Lawyers responded on 18 September 2019 advising that they did not at that time have instruction. A follow-up email was sent on 4 October 2019, this time to the defendants at their personal email addresses. The email asked the defendants to have their mortgages discharged within three working days, failing
3 Jianwen Mao’s affidavit in this proceeding dated 16 March 2020.
4 Pursuant to the March 2000 power of attorney given by Mr Mao to Green Land.
which the solicitors would apply to the High Court (on Green Land’s instruction) to have the mortgages discharged.
[37] Lucy Chu Lawyers responded on 7 October 2019, passing on the following advice from the defendants:
Please forward the above documents to [the solicitors then acting for Green Land] and tell them their authorisation had been cancelled as at 23.4.2019 due to their substantial delay in their project that supposed to be completed in 16.3.2018 as per enclosed schedule provided by Green Land.
[38] While neither defendant filed a notice of opposition in this proceeding, the first defendant, Jialing Mao, sent an email to the Registrar on 17 March 2020. She advised that she was in Australia and could not come to New Zealand. On the substance of Green Land’s claims, the first defendant said:
Green Land never asked my permission for the consent.
They delay so long and try to robbery the land by not paying the interest. They delay the project for 2 years.
They promised to finish by 16/03/2018. Please see the photo attached [no photograph appears to have been attached].
My mortgagee consent extend to them until 1/4/2018 from September 2017. Later no news from them.
Mr Mao purports to cancel the Land Owner Agreement
[39] On 18 April 2019, Mr Mao wrote to the solicitor then acting for Green Land, contending that Green Land was in breach of clauses 2, 8 and 19 of the Land Owner Agreement (relating, amongst other things, to Green Land’s obligation to complete sewer and stormwater lines on 387 Ormiston Road, Green Land’s obligation to complete the subdivisional works within the agreed time, and Green Land’s obligation to pay a penalty of $3000 per day for failure to complete the subdivisional works and deliver titles by the agreed time). Mr Mao requested Green Land to provide a satisfactory explanation by 23 April 2019, failing which the Land Owner Agreement would be cancelled automatically as of 12pm on that day.
[40] On 23 April 2019, Mr Mao sent a further email to Green Land’s solicitor, formally notifying Green Land that the Land Owner Agreement (except clauses 7 and
10) and the Settlement Deed would be cancelled unless by 3.30pm on 26 April 2019 Green Land:
(1)Paid all outstanding penalties as claimed by Mr Mao in the 1241 proceeding;
(2)Paid all remaining costs to complete clauses 1, 2 and 3 of the Land Owner Agreement;
(3)Paid certain costs to Mr Mao’s solicitors.
[41] Green Land’s solicitors rejected the purported cancellation, by letter dated 26 April 2019. On behalf of Green Land, they denied the breaches alleged by Mr Mao and contended that Mr Mao was in serious breach of the Land Owner Agreement (for the reasons pleaded in Green Land’s statement of defence and counterclaim in the 1241 proceeding). The solicitors contended that Mr Mao had failed to meet his own obligations to obtain mortgagee consent to the transactions, and to refrain from taking steps that could delay the development. They contended that Mr Mao could not rely on his own breaches, and that he had no right to cancel. They advised that Green Land would treat any attempt by Mr Mao to cancel the Land Owner Agreement as a repudiation.
[42] Green Land’s solicitors asked Mr Mao to explain the steps taken (if any) to seek mortgagee and chargeholder consents to the transaction.
[43] On 30 July 2019, Amicus Law, the solicitors then acting for Mr Mao, sent a detailed letter to Green Land’s solicitors. Amicus Law set out various claimed breaches of the Land Owner Agreement, including an alleged breach by Green Land of its obligation under the Land Owner Agreement to provide Mr Mao with fortnightly progress reports. They referred to a construction contract entered into by Green Land which showed that completion of the construction was not expected to occur before March 2018. Amicus Law said that they had received no explanation for the failure to
provide fortnightly reports, or as-built plans that had been requested for Mr Mao. They noted that Green Land had said in its own pleadings in the 1241 proceeding that the development work should have finished by July 2018.
[44] Amicus Law then referred to Mr Mao’s emails of 18 April and 23 April 2019. They noted that Green Land provided no explanation in response to the first of those emails, and they asserted that that amounted to a repudiation of the Land Owner Agreement. They noted that, on 23 April 2019, Mr Mao emailed Green Land again confirming that, due to lack of explanation, he cancelled the Land Owner Agreement.
[45] Amicus Law acknowledged that they had since received some short reports from Candor, the engineering firm, advising of current progress. But nothing had been received subsequent to a report provided on 6 June 2019.
[46] Amicus Law noted that as-built plans were eventually provided by Candor on 26 June 2019. By then, Green Land had made its application for engineering and survey releases under the Resource Management Act. Amicus Law noted that the application for those releases implied that, as far as Green Land was concerned, the development work had been completed.
[47] Amicus Law went on to detail various respects in which the development work was said not to have been completed. They referred by way of example to a manhole that had not been built in accordance with the plans contained in the Land Owner Agreement.
[48] Amicus Law contended that Green Land’s “longstanding and continuing refusal” to provide past and ongoing fortnightly reports amounted to a repudiation by conduct, entitling Mr Mao to cancel under s 37(1)(c) of the Contract and Commercial Law Act 2017 (the CCLA). They also contended that Green Land’s non-completion of the development work within 300 days, and its subsequent failure to complete by July 2018, were also breaches entitling Mr Mao to cancel, under s 37(1)(b) of the CCLA. Finally, Amicus Law contended that Green Land’s failure to complete the building works for Mr Mao’s utilities also entitled him to cancel under s 37(1)(b) of the CCLA. They said:
Mr Mao therefore cancels the [Land Owner Agreement] (if it was not already cancelled).
[49] On the issue of Mr Mao not obtaining mortgagees’ consent, Amicus Law said that Mr Mao had obtained time-limited consents from the mortgagees in the past, but Green Land had not completed the development work within the agreed timeframe. As such, the previous consent had lapsed. They also contended that Green Land had still not done all that was necessary to take the development project to the stage where Mr Mao was required to hand over his land. Therefore, any delay in providing mortgagees’ consent (without accepting that there was any delay) has caused no harm and was of no consequence.
Plaintiffs’ statement of claim
[50] The statement of claim (“the Claim”) pleads the Land Owner Agreement, and in particular Mr Mao’s agreement to transfer the driveway land to Green Land in order for the driveway land to vest in Auckland Council as road. The Claim then pleads the Settlement Deed, and Mr Mao’s irrevocable appointment of Green Land as his attorney to perform “all acts, matters and things necessary to complete the transfer of [the driveway land] from [Mr Mao] to [Green Land] and to have [the driveway land] vested in Auckland Council as road.
[51] The Claim refers to the mortgages registered by the first and second defendants, and pleads that those mortgages are subject to the following covenant (implied by s 95 and cl 18 of Part 1 of the Second Schedule to the Property Law Act 2007 (the PLA)):
18 Discharge of mortgage
The mortgagee will, on payment by the mortgagor of all amounts and the performance of all other obligations secured by the mortgage,—
(a) return to the mortgagor the mortgage instrument; and
(b) give to the mortgagor a mortgage discharge instrument executed in compliance with section 83 of the Property Law Act 2007; and
(c) if the mortgage is registered, do all things that are reasonably necessary to allow a mortgage discharge instrument to be registered; and
(d) give to the mortgagor all certificates or instruments of title and other documents deposited with the mortgagee on account of the mortgage (if any).
[52] The Claim pleads that the defendants have not advanced any money to Mr Mao under their mortgages or otherwise, and that there are no outstanding sums or unperformed obligations under the mortgages.
[53] The Claim says that the discharges of the defendants’ mortgages are necessary for the driveway land to be transferred to Green Land and to vest in Auckland Council as road.
[54] The Claim refers to the letter from Green Land’s solicitor dated 12 September 2019 in which Green Land, in its capacity as Mr Mao’s attorney, made demand from the defendants to discharge their mortgages. The Claim then pleads that the defendants have failed and/or refused to discharge their mortgages.
[55] The relief sought in the Claim includes orders directing the defendants to do all acts and execute all documents necessary to discharge their mortgages. The Claim then asks for an order that, in the event of the failure or refusal by the defendants to discharge their mortgages within five working days of judgment, the Registrar be authorised to perform such acts and execute such documents in the place and stead of the first and second defendants.
Mr Mao’s notice of opposition
[56] In his notice of opposition, Mr Mao alleged that Green Land has been repeatedly in breach of clauses 2, 3, 8 and 19 of the Land Owner Agreement. Mr Mao then referred to his “cancellation” email to Green Land’s solicitors dated 23 April 2019, contending that “the irrevocable Power of attorney that given by 1st plaintiff to 2nd plaintiff cancelled at the same day …”
[57] Mr Mao said that he had received a notice from Westpac issued under the PLA on 22 June 2017, demanding repayment of the loan (over $2.2m), including further penalty interest and costs. He asserted that the interest and costs had been caused by
Green Land’s repeated breaches of clauses 2, 3, 8 and 19 of the Land Owner Agreement.
[58] Next, Mr Mao contended that the construction work was still ongoing on the site as at 27 February 2020. Mr Mao referred to earlier timelines for completion of 27 March 2017 and 16 March 2018. He also asserted that a planning consultant with Auckland Council had advised by telephone on 20 February 2020 that she had been notified by Green Land’s representative that it was “in the process to fulfil the requirement under resource consent dated 2.6.2016”.
[59] Finally, Mr Mao asserted that Green Land has not completed the work it was required to complete under clause 2 of the Land Owner Agreement – four sewage connections, one sewage manhole, and one stormwater manhole have not been installed.
[60] The notice of opposition was accompanied by an affidavit affirmed by Jiawen Mao. It repeated the various contentions set out in the notice of opposition, and attached a number of documents.
Plaintiffs’ applications for summary judgment – legal principles
[61]Rule 12.2(1) of the High Court Rules 2016 provides:
12.2 Judgment when there is no defence or when no cause of action can succeed
(1) The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
…
[62] The proper approach to be taken to such applications was considered by the Court of Appeal in Krukziener v Hanover Finance Ltd, where the Court said:5
5 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26].
The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as, for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Young v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
[63] The Supreme Court has confirmed that the fact that the Court may be required to determine questions of law does not preclude summary judgment. In Zurich Australian Insurance Ltd v Cognition` Education Ltd, the Court said:6
… in other situations falling within the broad test (that is, the “no arguable defence” test applied on summary judgment), there will be what can properly be described as “disputes” even though they are ultimately capable of being determined by a summary process.
[37] To explain, it has been well established in New Zealand since Pemberton v Chappell that a court can properly determine questions of law on a summary judgment application, and that this includes issues of contractual interpretation. The Court of Appeal has accepted that such a determination may be made even though the question of law is difficult and requires argument (including reference to authority). In International Ore & Fertilizer Corp v East Coast Fertiliser Co Ltd, a case under the old bill writ procedure, Cooke P, by analogy with the summary judgment procedure which had just been introduced in New Zealand, said that where the facts were adequately ascertained and the Court could be confident that the point of issue turned on pure questions of law or interpretation, it should be prepared “to determine, on adequate argument, even difficult legal questions”. Similarly, in Jowada Holdings Ltd v Cullen Investments Ltd, McGrath J, delivering the judgment of the Court of Appeal, said that a court should be prepared to grant summary judgment “even if legal arguments must be ruled on to reach the decision”.
(footnotes omitted)
6 Zurich Australian Insurance Ltd v Cognition Education Ltd [2014] NZSC 188, [2015] 1 NZLR 383 at 404.
The issues to be decided
[64]The following issues arise:
(1)Is it reasonably arguable for Mr Mao and the defendants that there are unpaid monies, or outstanding obligations still to be performed by Mr Mao, under the defendants’ mortgages?
(2)Did the powers conferred on Jiawen Mao by Mr Mao in the power of attorney dated 7 July 2014 permit Jiawen Mao to “sub-delegate” the powers given to her, to Green Land?
(3)If the answer to Issue 2 is “yes”, is it reasonably arguable for Mr Mao and/or the defendants that the power of attorney given to Green Land on 28 March 2017 has been cancelled?
(4)If it is not reasonably arguable that the power of attorney given to Green Land on 28 March 2017 has been cancelled, what is the scope of that power of attorney? Is it arguable that it does not authorise Green Land to bring the present proceeding against the defendants in Mr Mao’s name?
(5)If the power of attorney given to Green Land on 28 March 2017 did not authorise it to commence the present proceeding by and on behalf of Mr Mao, is it clear that Green Land has standing to bring the present claim in its own right, as the equitable owner of the driveway land?
(6)Is Green Land entitled to the relief sought?
[65]I will address these issues in turn.
Issue (1) – Is it reasonably arguable for Mr Mao and the defendants that there are unpaid monies, or outstanding obligations still to be performed by Mr Mao, under the defendants’ mortgages?
[66]The answer to this issue is “no”. The relevant facts are set out at paragraphs
[30] to [38] of this judgment. The Claim clearly alleges that there are no outstanding sums or unperformed obligations under the first and second defendants’ mortgages, and Mr Lu has verified that allegation in his supporting affidavit. The allegation was not challenged by Mr Mao in his notice of opposition, and nor was it challenged by the defendants in the email sent by the first defendant to the Registrar on 17 March 2020.
[67] Mr Lu made it clear in his supporting affidavit that he had seen documents (disclosed in the 1241 proceeding) that gave him a proper basis to verify the allegation in the statement of claim, and he indicated that leave would be sought to produce the document or documents from the 1241 proceeding if the defendants took issue with Green Land’s contention that there are no outstanding sums or unperformed obligations under the mortgages.
[68] Mr Mao would clearly have been aware if any money remained unpaid, or any obligations remained to be performed by him, under the mortgages to the defendants. However, he has elected not to challenge Green Land’s contention that there are no unsatisfied obligations under the mortgages. The defendants could also have been expected to promptly advise if any money remained owing to them, or obligations of Mr Mao remained unperformed. They have not done so, despite having several opportunities to state that there were unpaid monies or unperformed obligations if that were the case.
[69] In all of those circumstances, I am satisfied that Green Land has produced sufficient evidence that the defendants have no defence on this issue.
Issue (2) – Did the powers conferred on Jiawen Mao by Mr Mao in the power of attorney dated 7 July 2014 permit Jiawen Mao to “sub-delegate” the powers given to her, to Green Land?
[70] This is not an issue taken by either the defendants or Mr Mao, but I will deal with it briefly as it was raised in a Minute issued by Associate Judge Bell on 13 December 2019. His Honour observed that there may be questions as to the power of attorney on which Green Land relies, because the power of attorney was granted by
someone exercising a (separate) power of attorney. Normally powers cannot be sub- delegated.7
[71] The learned authors of Powers of Attorney in Australia and New Zealand accept that, as a general rule, an agent appointed by power of attorney cannot appoint a sub-agent to act on his or her behalf in the course of the agency, or a substitute to act in his or her place.8 However, there are exceptions to that general rule, and one of the exceptions is where the instrument creating the agency at the same time creates a power in the agent to appoint a sub-agent – in that situation, the maximum delegatus non potest delegare has no application.9
[72] In this case, the power of attorney given by Mr Mao to Jiawen Mao on 7 July 2014 contained an express provision under which Mr Mao declared that his attorney had the power, for him and in his name:
(f)to appoint in place of my Attorney one or more attorney or attorneys to exercise all of the powers and authorities hereby conferred and from time to time to revoke any such appointment and appoint any further one or more attorney in place of such attorney.
[73] Among the powers and authorities conferred on Jiawen Mao by the power of attorney given by Mr Mao on 7 July 2014, were the power to “perform any contract in relation to my property or affairs present or future …”, and to “exercise any right, power, authority or discretion of whatsoever nature which the ownership or possession of any property or my legal relation thereto confers upon me or which by virtue of any fact or circumstance I am entitled to exercise”.
[74] The powers given by Mr Mao to Jiawen Mao are clearly very broad, and I am satisfied that the document gave Jiawen Mao sufficient power to enter into the Land Owner Agreement and the Settlement Deed on Mr Mao’s behalf, and to execute on his behalf the power of attorney given by Mr Mao to Green Land on 28 March 2017. The answer to this Issue is therefore “yes”.
7 Minute of Associate Judge Bell dated 13 December 2019, at [8].
8 Berna Collier & Shannon Lindsay, Powers of Attorney in Australia and New Zealand (The Federation Press, 1992) at 98.
9 At 98.
Issue (3) - If the answer to Issue 2 is “yes”, is it reasonably arguable for Mr Mao and/or the defendants that the power of attorney given to Green Land on 28 March 2017 has been cancelled?
[75] Broadly, Mr Mao contends that Green Land has repeatedly breached the Land Owner Agreement. He says that, as a consequence of those breaches, he has cancelled the Land Owner Agreement and the Settlement Deed, and with them the power of attorney dated 28 March 2017. According to Mr Mao’s notice of opposition, the cancellation occurred on 23 April 2019, when Mr Mao cancelled the Land Owner Agreement. Mr Mao’s 23 April 2019 email formally notified Green Land that the Land Owner Agreement and the Settlement Deed would be cancelled unless by 3.30pm on 26 April 2019 Green Land made certain payments.10
[76] The cancellation grounds were set out in more detail in the Amicus Law letter dated 30 July 2019. In short, Green Land is said to have been guilty of a longstanding and continuing refusal to provide fortnightly reports, it did not complete the development work within the agreed timeframe, and it has not completed building works for Mr Mao’s utilities. All of these grounds appear to involve claimed breaches of the Land Owner Agreement.
[77] In his submissions, Mr Illingworth submitted that the Land Owner Agreement and the Settlement Deed were distinct and separate contracts, and that alleged breaches of the Land Owner Agreement, even if proven, could not entitle Mr Mao to cancel the Settlement Deed. Only breaches of the Settlement Deed itself would entitle Mr Mao to cancel the Settlement Deed, and the unchallenged evidence of Mr Lu is that there are no unperformed obligations on the part of Green Land under the Settlement Deed.
[78] Recital K in the Settlement Deed records the parties’ agreement that the Settlement Deed was without prejudice to their rights under the Land Owner Agreement and their claims in the 1241 proceeding, and clause 14 in the operative part of the Settlement Deed again made clear that the terms of settlement were without
10 The purported cancellation of the Land Owner Agreement was clearly not valid, as it purported to stipulate that two clauses in the Land Owner Agreement (clauses 7 and 10) would remain in force. A party wishing to cancel a contract can not elect to save some part of the contract – cancellation is an all or nothing option.
prejudice to any claims that Green Land or Mr Mao might have against the other for breaches of the Land Owner Agreement. Recital K, in particular, seems to me to make it clear that the parties’ intention was that each party would discharge certain obligations under the Settlement Deed immediately, notwithstanding contentions either side might have that the other had breached the Land Owner Agreement.
[79] I think the background to the Settlement Deed supports that view. The Land Owner Agreement was expressed to be not only binding once signed, but also irrevocable until the various works had been completed, roads vested, and all new titles had been issued. Disputes then arose, and the 1241 proceeding was issued, with claims and counterclaims on each side. Mr Mao lodged his caveat on the titles to certain properties owned by Green Land, and the caveat proceeding was commenced.
[80] Green Land needed to get rid of the caveat that was the subject of the caveat proceeding, and it needed to obtain the various consents Mr Mao had agreed to provide. It wanted to achieve those objectives without waiting for the parties’ various disputes in the 1241 proceeding to eventually be determined.
[81] To achieve those ends, Green Land was prepared to transfer two Stage 1 Lots to Mr Mao, and to pay $25,000 to Mr Mao, immediately. In return, Mr Mao would be required to permanently put it beyond his power to do anything that would prevent Green Land from taking all steps it needed to take to complete the Project. That would be achieved by requiring Mr Mao to provide an irrevocable power of attorney to Green Land.
[82]Green Land duly transferred the two Lots to Mr Mao, and it paid him the
$25,000, in April 2017. In exchange, Mr Mao provided the irrevocable power of attorney.
[83] In the circumstances just discussed, the parties could not have intended that Mr Mao might take the two Lots and the $25,000, and later avoid his own (irrevocable) obligations to do all acts or things as may be necessary for the Title Plan to deposit and to complete the Stage 2 subdivision in accordance with the resource consent. The mechanism used to ensure that could not occur was the irrevocable power of attorney
given by Mr Mao to Green Land: it would effectively ensure that the completion of Stage 2 of the Project could never be thwarted by Mr Mao refusing to sign documents, or to take other steps that were necessary for the completion of the Project.
[84] It is true that clause 15 of the Settlement Deed provided that the Land Owner Agreement would remain in full force and effect, and the parties agreed to comply with it. But in my view clause 15 has to be read subject to Recital K and clause 14. The words “without prejudice to any claims that Green Land and Mao may have against the other for breaches of the Land Owner Agreement” in clause 14 did not restrict the “claims” to existing claims, as is apparent from the words “may have against the other” – the settlement recorded in the Settlement Deed was to be given effect to separately and distinctly from the parties’ ongoing rights under the Land Owner Agreement.
[85] For those reasons, I accept Mr Illingworth’s submission that, in order to cancel the Settlement Deed for breach, Mr Mao had to invoke some ground based on the Settlement Deed going beyond breaches of the Land Owner Agreement. A breach of the Land Owner Agreement could not justify cancellation, as the Land Owner Agreement was said to be “irrevocable”.
[86] Furthermore, the breaches of the Land Owner Agreement alleged by Mr Mao would not in any event have justified cancellation. To the extent that either side was guilty of breach by delay in meeting its contractual obligations, the Land Owner Agreement provided for substantial liquidated damages ($3,000 per day). That in my view was an agreed remedy for delay in terms of s 34 of the CCLA, and, at least short of a repudiation of the Land Owner Agreement (for which there is no arguable basis), it had the effect of overriding the cancellation remedy provided by ss 36 and 37 of the CCLA.
[87] The other matters raised by Mr Mao as grounds for cancellation of the Land Owner Agreement (failure to provide fortnightly reports, and failure to complete what appear to be relatively minor aspects of the utilities work to be carried out on Mr Mao’s land) are not in my view reasonably arguable grounds for cancellation. I do not think it reasonably arguable that any breaches of those obligations has substantially reduced
the benefit of the Land Owner Agreement to Mr Mao, or substantially increased his burden under the Land Owner Agreement.11
[88] I add that Mr Mao’s pleadings in the 1241 proceeding (at least as recently as 17 October 2019) do not appear to have referred to the purported cancellation of either the Land Owner Agreement or the Settlement Deed. In an affidavit sworn by Mr Augustine Lau on 17 October 2019 in proceeding CIV-2019-404-2080, Mr Lau provided a copy of what he said was Mr Mao’s “current” amended statement of claim in the 1241 proceeding. The pleading was a second amended statement of claim dated 6 July 2018, and I infer that it had not been further amended before Mr Lau signed his affidavit in October 2019. The second amended statement of claim claimed ongoing damages at $3,000 per day, including for the period “to the date of completion of the development work of Stage 2 and delivery of new titles for the 2018 breach”. That pleading is consistent with Mr Mao accepting that his proper remedy for delay on the part of Green Land was to claim damages, not to purport to cancel.
[89] No separate breach of the Settlement Deed by Green Land (not being a breach of the Land Owner Agreement) has been identified by Mr Mao or the defendants.
[90] For all of those reasons, I find that it is not reasonably arguable for Mr Mao or the defendants that the Settlement Deed has been cancelled.
[91] The power of attorney on which Green Land relies was provided pursuant to the Settlement Deed, and it was intended to give effect to Mr Mao’s obligations under the Settlement Deed. In those circumstances, I do not consider it reasonably arguable for Mr Mao or the defendants that the power of attorney given by Mr Mao to Green Land on 28 March 2017 has been lawfully cancelled or revoked (even if that were possible, given the “irrevocable” nature of the power of attorney). The answer to Issue 3 is “no”.
11 Contract & Commercial Law Act 2017, s 37(2)(b)(i) and (ii).
Issue (4) - If it is not reasonably arguable that the power of attorney given to Green Land on 28 March 2017 has been cancelled, what is the scope of that power of attorney? Is it arguable that it does not authorise Green Land to bring the present proceeding against the defendants in Mr Mao’s name?
[92] Neither Mr Mao nor the defendants have suggested that the power of attorney given to Green Land on 28 March 2017 was not broad enough in its scope to permit Green Land to issue the present proceeding in Mr Mao’s name. Nevertheless, the issue was covered by Mr Illingworth in his submissions, so I will address it.
[93] Mr Illingworth accepted that powers of attorney are to be strictly construed, and interpreted as only conferring such authority as may be found within the four corners of the instrument, either in express terms or by necessary implication.12 He acknowledged that the power of attorney in this case does not expressly confer upon Green Land authority to issue legal proceedings, and he further acknowledged that there is scant authority on whether the power to commence legal proceedings must be expressly conferred on an attorney before the attorney is authorised to bring legal proceedings in the name of the donor. However, the authors of Powers of Attorney in Australia and New Zealand have expressed the view that there is no rule that such a power must be given expressly, and will not be inferred.13
[94] Mr Illingworth noted that the Settlement Deed (and the power of attorney) empowered Green Land to act as Mr Mao’s attorney to take the following steps:
(a)Obtain the consent of any mortgagee … necessary or required to enable the deposit of the Title Plan (as that term was defined under the Settlement Deed, which encompassed the vesting of the driveway land in Auckland Council as road); and
(b)To do all other acts or things as may be necessary for the Title Plan to deposit and to complete the Stage 2 subdivision in accordance with the resource consent.
12 Referring to Bryant, Powis & Bryant v La Banque du Peuple [1893] AC 170, 177, and Bowstead on Agency (15th Edition, 1985) at 98.
13 Berna Collier & Shannon Lindsay, Powers of Attorney in Australia and New Zealand, above n 8, at 55.
[95] He submitted that Green Land has exercised the first limb of its authority (subparagraph (a) of paragraph [94] above) by seeking the defendants’ consent as mortgagees for the deposit of the Title Plan, but that consent has been declined. He submitted that the defendants’ refusal to provide consent has rendered it necessary for their mortgages to be removed/discharged in order for the Title Plan to deposit. That is because s 238 of the Resource Management Act 1991 requires that (in this case) the driveway land be vested in Auckland Council “free from all interests including any encumbrances”. On that basis, Mr Illingworth submitted that it is squarely within the second limb of Green Land’s authority as Mr Mao’s attorney (subparagraph (b) of paragraph [85] above) to apply to the Court to have the defendants’ (defunct) mortgages removed from the title.
[96] I accept Mr Illingworth’s submissions on these issues. The defendants flatly refused to release their mortgages when they were approached to do so in September 2019. On 7 October 2019 they replied through Lucy Chu Lawyers rejecting the request to discharge their mortgages, contending that Green Land’s “authorization” had been cancelled due to its alleged substantial delay in completing the Project.
[97] Mr Mao contends that mortgagees’ consents had been obtained in the past, but the consents provided were time-limited, and depended on Green Land completing the development work on time. Mr Mao could not comply with his obligations under the Settlement Deed by obtaining and offering a time-limited consent from the defendants, who, on the face of it, were protected by their mortgages for any sums they might have advanced and had no clear interest in the date the work would be completed.
[98] Mr Mao’s obligation under the Settlement Deed was to obtain the consent of the mortgagees, and if the mortgagees refused or failed to provide that consent, his obligation was to do all acts or things necessary to remove the mortgages so that the Stage 2 subdivision could be completed in accordance with the resource consent. In circumstances where nothing was owed to the mortgagees, and no outstanding obligations remained to be performed by Mr Mao, the obvious “act or thing” to be done was to take an appropriate court proceeding to have the mortgages removed from the title. Mr Mao clearly had the right to issue such a proceeding, and I accept Mr
Illingworth’s submission that the power of attorney conferred the same right on Green Land by necessary implication.
[99] Mr Mao did raise in his notice of opposition an argument that the consent of mortgagees and chargeholders could not be required by Green Land before the works were completed, but the defendants themselves say that they had already given (time- limited) consents. Amicus Law also referred in their letter of 30 July 2019 to previous consents given by the mortgagees having “lapsed”. The defendants’ apparent view that Green Land could ask for their consent well in advance of the completion of the construction work is also consistent with the wording of clause 6 of the Settlement Deed, in which Mr Mao agreed that the mere production of the Settlement Deed to the mortgagees would operate as an authorisation and instruction from him to provide any consents sought by Green Land relating to the Stage 2 subdivision. The purported “lapsing” of their consents by the defendants effectively amounted to a refusal by them to provide consent, triggering Mr Mao’s obligation under the Settlement Deed to take action to have the mortgages removed.
[100] I conclude that the power of attorney given by Mr Mao to Green Land on 28 March 2017 did authorise Green Land to commence this proceeding in Mr Mao’s name.
Issue (5) – If the power of attorney given to Green Land on 28 March 2017 did not authorise it to commence the present proceeding by and on behalf of Mr Mao, is it clear that Green Land has standing to bring the present claim in its own right, as the equitable owner of the driveway land?
[101] In view of the conclusions I have reached on Issues 1-4, there is no need to answer this question.
Issue (6) – Is Green Land entitled to the relief sought?
[102] In my view, Green Land is entitled to the orders it seeks directing the defendants to specifically perform the implied terms in their respective mortgages, by doing all acts and executing all documents necessary to discharge their respective
mortgages. I find and declare that there is no outstanding money owing by Mr Mao under either mortgage, and neither the defendants nor Mr Mao have advanced any reason why the mortgages should remain on the title.
[103] In view of the difficulties currently being experienced as a result of the coronavirus, I will extend the time for the defendants to do such acts and execute such documents as may be necessary to discharge their respective mortgages, to 10 working days from the date of this judgment.
[104] If one or both of the mortgages has not been discharged within that period, I will either make the orders sought by the plaintiffs at paragraph (c) of the relief sought in the Claim, or make an order under s 111 of the PLA, which will have the same effect as the relief sought at paragraph (c). If the defendants have not both provided appropriate signed documents to effect the discharge of the two mortgage instruments within 10 working days, counsel is to file a memorandum advising of the failure to provide the necessary discharge document or documents, and addressing the issue of whether the order sought at paragraph (c) of the claim for relief in the Claim should be given effect to by a direction to the Registrar to sign, or by Court order under s 111 of the PLA.
Applications filed by Ms Jiawen Mao, including applications for the issue of witness summonses to Green Land’s legal advisers and to Mr Lu, and for an order adding Ms Mao as a party
[105] I record that, shortly before the hearing, Ms Jiawen Mao purported to file an application for orders disqualifying Green Land’s solicitors and counsel from representing the plaintiffs, and for an order disqualifying Mr Lu from giving evidence for the plaintiffs. She also filed a memorandum, purportedly on behalf of Mr Mao, asking for witness summonses to be issued to Green Land’s past and current legal advisers, including Mr Illingworth and Mr Liu.
[106] Ms Jiawen Mao had no standing to apply for those orders, and I dismissed the application for orders disqualifying the plaintiffs’ solicitors and counsel and for an order rejecting Mr Lu’s evidence, at the hearing on 20 March 2020. Nor did Ms Jiawen Mao have standing to apply for orders requiring Green Land’s legal advisers to attend
to give evidence in the case. There appeared in any event to be no proper basis for the issue of witness summonses for the hearing of the summary judgment application. Evidence on summary judgment applications is almost invariably provided by affidavit, and even if the request had been properly made by Mr Mao I would have seen no basis to depart from that usual procedure. The request by Ms Mao for the issue of witness summonses is refused.
[107] I am not prepared to entertain Ms Jiawen Mao’s personal application, made after the hearing, to be added as a party to the proceeding.
[108] The application was made on the basis that Mr Mao retired as trustee of the Trillion Brillion & Others Family Trust on 8 May 2018, and was then replaced by Ms Jiawen Mao as sole trustee.
[109] First, any application by Ms Jiawen Mao to intervene in the proceeding should have been made well in advance of the summary judgment hearing. Secondly, the issue of whether Mr Mao was still entitled to call on the defendants to discharge their mortgages could have been raised by Mr Mao in his notice of opposition, but he did not do so. Thirdly, I am satisfied that Mr Mao must have remained an “owner” of 387 Ormiston Road for the purposes of s 95 and cl 18 of Part 1 of Schedule 2 to the PLA, after he apparently retired as a trustee of the Trust. He remained the registered proprietor of 387 Ormiston Road, and at very least he would have remained a bare trustee of the land for the Trust and its beneficiaries. In my view, such a trustee must be able to enforce the implied term at cl 18 of Part 1 of Schedule 2, if only to enable the trustee to convey the land to the appropriate beneficiary unencumbered by mortgages which should not be on the title. Fourthly, it is not at all clear that 387 Ormiston Road is affected in any event by Mr Mao’s retirement as trustee of the Trust. The relevant Deed of Retirement of Trustee produced by Ms Jiawen Mao recorded that the properties then affected by the retirement were three named properties in Wellsford. 387 Ormiston Road, Flat Bush, was not listed as one of the properties affected by Mr Mao’s retirement as trustee.
[110] Finally, I cannot see how the Trillion Brillion & Others Family Trust could conceivably be adversely affected by orders removing the mortgages from the title to 387 Ormiston Road. If that property is an asset of the Trillion Brillion & Others Family Trust, the Trust could only be in a better position if its asset is no longer encumbered by the mortgages registered on the title.
Result of the Summary Judgment application
[111]Judgment is entered for the plaintiffs as follows:
(1)The first defendant is ordered to do all acts and execute all documents necessary to discharge mortgage instrument 10838561.1 presently registered on the title to the property at 387 Ormiston Road (Title Identifier 482726, North Auckland Land Registration District) – “the land”, within 10 working days of the date of this judgment.
(2)The second defendant is ordered to do all acts and execute all documents necessary to discharge mortgage instrument 10838561.2 registered on the title to the land, within 10 working days of the date of this judgment
(3)In the event of the failure or refusal by the first and/or second defendants to discharge mortgage instruments 10838561.1 and/or 10838561.2 within 10 working days of the date of this judgment, counsel is to file a memorandum advising of the failure or refusal and addressing the issue of whether the order sought at paragraph (c) of the relief sought in the Claim should be given effect to by a direction to the Registrar to take the necessary steps, or by Court order under s 111 of the PLA. I will then issue such further judgment as may be appropriate to have the mortgages removed from the title to the land.
(4)I make an order directing that personal service of these orders on the first and second defendants, and on Mr Mao and Ms Jiawen Mao, is not required. These orders may be served on the first and second defendants by email sent to the email addresses
[email protected] and [email protected], and by email to [email protected]. A copy of these orders is also to be sent to the first plaintiff and Ms Jiawen Mao, at the email address
(5)The second plaintiff is entitled to costs. A memorandum addressing the quantum of costs, and the party or parties liable for those costs, is to be filed and served by the second plaintiff within 15 working days after delivery of this judgment. Service of the second plaintiff’s memorandum may be effected in the same manner as these orders are to be served on the defendants, the first plaintiff, and Ms Jiawen Mao.
Associate Judge Smith
2
1
1