Nik Consultants (NZ) Limited v Graves - [2024] NZHC 784

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1359

[2024] NZHC 784

BETWEEN
NIK CONSULTANTS (NZ) LIMITED

Plaintiff

AND

JOANNE GRAVES

Defendant

Hearing: 22 November 2023

Appearances:

LT Meys for the Plaintiff M Taylor for the Defendant

Judgment:

18 April 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 18 April 2024 at 12 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Neilsons Lawyers, Auckland

NIK CONSULTANTS (NZ) LIMITED v GRAVES [2024] NZHC 784 [18 April 2024]

Introduction

[1] The plaintiff and defendant own conjoined dwellings on a property in Mount Roskill, Auckland subject to a cross lease (Property). The plaintiff wishes to build a stand‑alone dwelling on its share of the Property and has applied for an order partitioning the Property into two freehold titles of approximately equal land area, pursuant to s 339 of the Property Law Act 2007 (PLA).

[2] The plaintiff seeks summary judgment of its claim as it says there is no arguable defence. The plaintiff accepts that summary judgment is not usually available for applications under s 339 of the PLA but says that it is appropriate in the circumstances of this case. The plaintiff relies particularly on the parties having allegedly reached an agreement in principle and that the parties’ relationship is now in a state of deadlock.

[3] The defendant opposes summary judgment, denying any agreement was reached or that there is a deadlock.

[4] The question is whether this is an appropriate case to exercise the s 339 discretion to convert the Property into freehold titles on a summary basis. To answer this, I am required to consider the factors in s 342 of the PLA.

Background

[5] On 16 December 1993, the defendant, Ms Joanne Graves, became the registered proprietor of Flat 1 of the Property at 95 Melrose Road, Mt Roskill, Auckland (95). Ms Graves and her four children moved into 95 and it has been their family home ever since.

[6] In 2010, Ambrish and Kiran Gupta (the Guptas) purchased Flat 2 of the Property, 95A Melrose Road (95A).

[7] On or around 23 October 2012, the Guptas transferred 95A to the plaintiff, NIK Consultants Limited (NIK). The Guptas are the sole shareholders of NIK. The Guptas

live in 93B Melrose Road which is owned by a company whose ultimate shareholders, like NIK, are the Guptas.

[8] In early 2020, the Guptas’ son, Ruchinav1, and his wife, Ankita, raised for the first time with Ms Graves the potential redevelopment of 95A, by demolishing the structurally attached dwelling and building a new, separate dwelling on 95A’s exclusive use area.

[9] Ms Graves agrees that she was open to considering the proposed development but that at that stage there were no drawings so the discussions were theoretical. Ruchinav says they provided plans to Ms Graves on the strength of those discussions, annexing a copy of those plans to his affidavit.

[10]…

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.

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Details

Case: [2024] NZHC 784
Decision Date: 18 April 2024

CaseChat Overview and Summary

Nik Consultants (NZ) Limited sought an order partitioning the property into two freehold titles of approximately equal land area, pursuant to section 339 of the Property Law Act 2007 (PLA). The defendant, Joanne Graves, opposed summary judgment, denying any agreement was reached or that there is a deadlock. The issue for the court was whether this was an appropriate case to exercise the s 339 discretion to convert the property into freehold titles on a summary basis. To answer this, the court was required to consider the factors in section 342 of the PLA. After considering the factors set out in s 342, the court found that it was reasonably arguable that no agreement was reached and that the parties were not in a state of irretrievable deadlock. The court concluded that consideration of the factors in s 342 did not support an order being made under s 339 on a summary judgment basis. The application by NIK Consultants (NZ) Limited for summary judgment of their claim for orders pursuant to s 339 of the PLA was declined. The usual position in unsuccessful summary judgment applications is that costs are reserved in accordance with the principle in NZI Bank v Philpott. However, it may be appropriate in this case to award costs now, potentially on an increased basis, as the plaintiff approached the application on the basis that it had a legal right to convert the cross lease to a freehold on as close to an equal split of the land as possible when this is not the position under s 339 of the PLA. Furthermore, it ought to have been clear to it that this case was inappropriate for summary judgment because of the complexities of the Property, including conjoined dwellings and a shared driveway and because Ms Graves had not been provided with architectural plans for the proposed new dwelling.

Orders