North Shore Aero Club Inc v Black River Trustees Limited

[2020] NZHC 3070

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001494

[2020] NZHC 3070

UNDER

the Land Transfer Act 2017

IN THE MATTER

of an application under section 143

BETWEEN

NORTH SHORE AERO CLUB INC

Applicant

AND

BLACK RIVER TRUSTEES LIMITED

Respondent

Hearing:

19 October 2020 (by AVL)

Further submissions by memoranda on 20, 22 October and 10 November 2020

Appearances:

W E Andrews for Applicant J G Donkin for Respondent

Judgment:

20 November 2020

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 20 November 2020 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

NORTH SHORE AERO CLUB INC v BLACK RIVER TRUSTEES LTD [2020] NZHC 3070 [20 November 2020]

The application

[1]    The North Shore Aero Club Inc (the Aero Club) applies for an order that a caveat lodged by it against land registered in the name of Black River Trustees Ltd (Black River) not lapse under s 143 Land Transfer Act 2017 (the Act).

[2]    The Aero Club asserts it has a caveatable interest in the land by virtue of an agreement of 4 December 2017 between it and Sunrise 9 Trustees Ltd (Sunrise). In the agreement Sunrise granted the Aero Club an equitable interest in the land, which it then owned, to secure amounts owed to the Aero Club in settlement of disputes between it and Sunrise.

[3]    It is not disputed the settlement agreement conferred upon the Aero Club an interest in the land that would support a caveat. However, the Aero Club did not lodge a caveat and the land was sold by Sunrise to Black River.

[4]    Black River says it has taken an indefeasible title. The Aero Club asserts that Black River cannot rely on its registered title because it acquired the property through fraud. The issue is whether the Aero Club has a prima facie case that its equitable interest survives because Black River acquired the land by fraud.

Background

[5]    At all relevant times the sole shareholder and director of Sunrise was John Hamilton.

[6]    Mr Hamilton is also the director of Black River. Black River is the trustee of the Riverview Trust which Mr Hamilton described as his trust used for the personal affairs of him and his wife.

[7]    The genesis of this proceeding is a residential development adjoining the Aero Club’s aerodrome. This was subject to a development agreement initially entered into between the Aero Club, Pauanui Developments Ltd and Redvale Lime Company Ltd. In around July 2013, Sunrise became the registered owner of the land. The

development agreement was assigned to Sunrise and it proceeded to undertake the development in accordance with the development agreement.

[8]    Disputes arose between Sunrise and the Aero Club which were resolved and the terms of settlement recorded in Deeds of Settlement. The first Deed of Settlement was dated 25 March 2015 but is not directly relevant to the issues that arise. On       4 December 2017, the parties entered into another Deed of Settlement (the settlement agreement).

[9]    The relevant provisions of the settlement agreement are clauses 1, 2 and 6 which provide as follows:

1.     On the issuance of a certificate for Stage 3A by the Auckland Council pursuant to section 224(c) of the Resource Management Act 1991 (s224 Certificate), Sunrise will, within 5 working days, pay to the Club,

$50,000 (including GST if any).

2.     Within 5 working days of the issue of titles for the 4 Lots in Stage 3A, Sunrise will pay to the Club a further $50,000 (including GST if any).

…

6. Sunrise hereby agrees that the Club has an equitable beneficial interest in Lot 85 DP 489589, Lot 86 DP 480346 and Lot 9 DP 324993 and any Lots created by virtue of this residential Development from those Lots to secure the payments referred to in clauses 1 and 2 above. Sunrise agrees that the Club can register a caveat over that land if Sunrise defaults on either payment in clause 1 or clause 2 of this Deed.

[10]   The land that is the subject of this application is now known as Lot 1 DP 530003 Identifier 862694 (Lot 1). It was one of the four lots formed as part of stage 3A of the development. Title to Lot 1 issued on 2 April 2019 and the registered interests brought down onto the title included a first registered mortgage to Spinnaker Capital Ltd (Spinnaker) and a second registered mortgage to Black River.

[11]   Spinnaker’s mortgage secured advances to Sunrise to undertake the development. Black River provided security and was a guarantor of Sunrise’s borrowings from Spinnaker. Both mortgages and their registrations pre-date the settlement agreement.

[12]   The sums payable by Sunrise to the Aero Club under the settlement agreement fell due for payment in or around March/April 2019. Mr Hamilton says Sunrise could not pay and was heavily indebted to Spinnaker. Due to a change in the Overseas Investment Act 2005 requirements a number of potential purchasers were prevented or deterred from purchasing the sections and the market for vacant sections had fallen.

[13]   There is in evidence correspondence between the parties’ lawyers concerning payment to the Aero Club. The Aero Club was aware Sunrise intended to sell the sections over which it had been granted an equitable charge and pay it from the sale proceeds. Despite that knowledge and Sunrise’s default under the settlement agreement, the Aero Club did not lodge caveats.

[14]   On 1 July 2019, the Aero Club’s lawyers, Vodanovich Law, emailed Sunrise’s lawyers, Haigh Lyon, demanding payment by 3 July 2019 and threatening the issue of a statutory demand if payment was not made.

[15]   On 3 July 2019, Haigh Lyon responded that none of the four lots had been sold and they would need to be sold before the debt could be paid. It was proposed that Sunrise grant the Aero Club an unregistered mortgage over one of the lots.

[16]   On 26 August 2019, Vodanovich Law emailed Haigh Lyon again. The Aero Club required payment by 4.00 pm 30 August 2019 or a statutory demand would issue.

[17]   On 26 August 2019, Haigh Lyon advised that Sunrise had two conditional agreements for sale in place. They said “Our client has advised that he will be in a position to settle the funds upon settlement. We will advise once the conditions have been satisfied.” I infer the “he” referred to is Mr Hamilton.

[18]   Mr Hamilton says that despite his initial confidence the sales did not proceed. It was only as a result of inquiry made by me of counsel that I have been advised of the following sales:

(a)Lot 3 – settled 5 November 2019 for $600,000;

(b)Lot 4 – settled 28 November 2019 for $650,000; and

(c)Lot 2 – settled on 20 December 2019 for $590,000.

[19]   Mr Donkin advises in a memorandum filed with the Court that the proceeds of sale of these lots was paid to Spinnaker to reduce Sunrise’s mortgage debt. While the Aero Club accepts those sales proceeded Ms Andrews advises it was not informed nor provided with details of the sales.

[20]   The next correspondence between the parties’ lawyers that is in evidence is a letter from Haigh Lyon to Vodanovich Law dated 20 May 2020. There must have been further correspondence not in evidence as Haigh Lyon refers to “our last email correspondence dated 22 January 2020 advising that the agreement for [the sale of] Lot 1 Aeropark Drive was at an end”.  The letter advised Lot 1 had been sold for

$724,372.90 and the entire proceeds used to pay Spinnaker. A repayment statement from Spinnaker accompanied the letter. Haigh Lyon advised that Sunrise did not have funds to pay the Aero Club as was originally anticipated. I set out the letter as follows:

Sunrise 9 Trustees Limited | North Shore Aero Club Incorporated

1We refer to our last email correspondence dated 22 January 2020 advising that the agreement for Lot 1 Aeropark Drive was at an end (the Prior Agreement).

2We advise that our client recently entered into an unconditional agreement for Lot 1 Aero Park Drive on 12 May 2020 (the Agreement) with settlement required two days later on 14 May 2020.

3The purchase price of the Agreement was $724,372.90 (including GST). Please note that the purchase price was significantly higher than the purchase price of $560,000 (including GST) that was previously offered and accepted under the Prior Agreement.

4Our client was required to pay the first mortgagee the entire proceeds in order to discharge the mortgage as per the attached repayment statement. Accordingly, our client does not currently have the funds to make the required payments to North Shore Aero Club Incorporated as was originally anticipated.

5We further understand that our client has a GST payment to be made to the Inland Revenue Department.

6Please contact the writer if you wish to discuss this further.

[21]   The reference in the letter to an agreement for the sale of Lot 1 dated 12 May 2020 is an error. The agreement was in fact dated 12 April 2020.

[22]   Mr Hamilton says when the prospective sale of Lot 1 fell over he considered the section was unlikely to sell to an independent party. He says the loans advanced by Spinnaker were in default and Lot 1 had already been extensively marketed by Mackys Real Estate Ltd and advertised on Trademe, the Real Estate New Zealand website and in the New Zealand Herald newspaper. He says he arranged for the purchase of Lot 1 by Black River so that at least the priority registered mortgage to Spinnaker could be discharged.

[23]   Upon the transfer of Lot 1 to Black River, Spinnaker’s mortgage was discharged but Black River’s second registered mortgage was not. In explanation for this, Mr Hamilton says that from memory the mortgage was not discharged because it was unnecessary in order to effect the transfer to Black River.

[24]   Black River has filed an affidavit of Michael O’Connell, a registered valuer, who provided an assessment of the market value of Lot 1 as at 12 April 2020 of

$550,000 including GST. The Aero Club has not filed any valuation evidence. Mr O’Connell’s valuation is broadly consistent with Haigh Lyon’s letter of 20 May 2020 which refers to a sale price of $560,000 that had previously been accepted for the section.

[25]   On 22 July 2020, the Aero Club lodged its caveat. The Aero Club also took action to liquidate Sunrise. Rather than have liquidation ordered by the Court, Sunrise was put into liquidation by its shareholders on 8 September 2020. There appears to be no prospect that the Aero Club will be paid in the liquidation.

The caveat and legal principles

[26]   The relevant principles are set out in Philpott v Noble Investments Ltd, where the Court of Appeal noted the following:1

[26]    The applicable legal principles which governed the application to sustain the caveats, and which now govern this appeal, are as follows:

1      Philpott v Noble Investments Ltd [2015] NZCA 342 (footnotes omitted). See to similar effect Botany Land Development Ltd v Auckland Council [2014] NZCA 61, (2014) 14 NZCPR 813 at [24].

(a)   The onus is on the applicants to demonstrate that they hold an interest in the land that is sufficient to support the caveat, but they need not establish that definitively;

(b)   It is enough if the applicants put forward a reasonably arguable case to support the interest they claim;

(c)   The summary procedures involved in applications of this nature are not suited to the determination of disputed questions of fact. An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained — either because there is no valid ground for lodging it in the first place, or because such a ground no longer exists; and

(d)   When an applicant has discharged the burden upon it, the Court retains discretion to remove the caveat which it exercises on a cautious basis. Before it does so the Court must be satisfied that the caveator’s legitimate interest would not be prejudiced by removal.

[27]     However, in a case where the applicant alleges fraud the Court of Appeal has also said in Schmidt v Pepper New Zealand (Custodians) Ltd: 2

[15] Allegations of fraud or dishonesty are very serious. They must be pleaded with care and particularity. As the authors of Bullen & Leake & Jacobs Precedents of Pleadings emphasise, counsel must not draft any originating process or pleading containing an allegation of fraud unless they have reasonably credible material which, as it stands, establishes a prima facie case of fraud — that is, material of such a character which would lead to the conclusion that serious allegations could properly be based upon it. Fraud cannot be left to be inferred from the facts — fraudulent conduct must be distinctly alleged and as distinctly proved. General allegations, however strong the words may be appear to be, are insufficient to amount to a proper allegation of fraud.

[28]     In Kiwi Trustee Ltd v Lin, following Schmidt, Associate Judge Bell held that although in caveat applications the caveator generally has an onus of showing a reasonably arguable case for the interest claimed, where there are allegations of fraud or reprehensible conduct it is necessary to show a prima facie case of fraud.3 That is the approach I take in this case.

2      Schmidt v Pepper New Zealand (Custodians) Ltd [2012] NZCA 565 (footnotes omitted).

3      Kiwi Trustee Ltd v Lin [2016] NZHC 595 at [8] - [9] and Schmidt v Pepper New Zealand (Custodians) Ltd, above n 2.

Land Transfer Act fraud

[29]     Black River says its title to Lot 1 was taken free of the Aero Club’s equitable interest. Section 51 of the Act provides that on registration under the Act of a person as an owner of an estate or interest in land, the person obtains a title to the estate or interest that cannot be set aside. This is subject to exceptions, one of which is where the registered owner has acquired his or her title or interest by fraud.

[30]Section 52(1)(a) of the Act provides:

52 Exceptions and limitations

(1)The title of the registered owner to an estate or interest in land is subject to the following exceptions and limitations:

(a)      in a case where the title of the estate or interest of the registered owner is acquired through fraud on the part of the registered owner or the registered owner’s agent:

…

[31]The definition of fraud is contained in s 6 of the Act and relevantly provides:

6 Meaning of fraud

(1)For the purpose of this Act, other than subpart 3 of Part 2, fraud means forgery or other dishonest conduct by the registered owner or the registered owner’s agent in acquiring a registered estate or interest in land.

(2)For the purposes of subsection (1), the fraud must be against ---

…

(b)      the owner of an unregistered interest, if the registered owner or registered owner’s agent, ---

(i)in acquiring the estate or interest had actual knowledge of, or was wilfully blind to, the existence of the unregistered interest; and

(ii)intended at the time of registration of the estate or interest that the registration would defeat the unregistered interest.

…

(4)The equitable doctrine of constructive notice does not apply for the purposes of deciding whether conduct is fraudulent.

[32]     Fraud under the Act is broader than the concepts of deceit and misrepresentation but narrower than constructive or equitable fraud.4 Fraud involves dishonesty which must be brought home to the person whose title is challenged or to his or her agent. Whether the conduct amounts to fraud is a question of fact to be resolved from the particular circumstances.5 Its essence is intentional dishonesty.

[33]     In Waimiha Sawmilling Co Ltd (In Liq) v Waione Timber Co Ltd Lord Buckmaster said:6

If the designed object of a transfer [is] to cheat a man of a known existing right, that is fraudulent, and so also fraud may be established by a deliberate and dishonest trick causing an interest not to be registered and thus fraudulently keeping the register clear. It is not, however, necessary or wise to give abstract illustrations of what may constitute fraud in hypothetical conditions, for each case must depend upon its own circumstances. The act must be dishonest, and dishonesty must not be assumed solely by reason of knowledge of an unregistered interest.

[34]     Dishonesty will not be assumed solely by reason of knowledge of an unregistered instrument. Where the alleged fraud is against the owner of an unregistered interest s 6(2) of the Act requires it must be established that the registered owner or the registered owner’s agent:

(a)in acquiring the estate or interest had actual knowledge of, or was wilfully blind to, the existence of the unregistered interest; and

(b)intended at the time of registration of the estate or interest that the registration would defeat the unregistered interest.

[35]     In Lombard Finance & Investments Ltd v Albert Street Ltd, Keane J noted that where the boundary lies between honestly taking a registered interest, knowing of an inconsistent unregistered interest, and dishonestly taking a registered interest to the prejudice of an unregistered interest can often be “a matter of degree, even slight degree”.7

4      Sutton v O’Kane [1973] 2 NZLR 304 (CA) at 321.

5      At 303.

6      Waimiha Sawmilling Co Ltd (In Liq) v Waione Timber Co Ltd [1926] AC 101 (PC) at 106–107.

7      Lombard Finance & Investments Ltd v Albert  Street  Ltd  HC Auckland  CIV-2004-404-2120, 14 October 2004 at [27].

The parties’ submissions

The Aero Club

[36]     Relying  on  the  Court  of  Appeal’s   decision   in   Waimiha  Sawmilling, Ms Andrews argues that notice of an adverse interest and the existence of an intention not to recognise that interest are concepts that are inexorably linked and that taking a registered estate or interest in land with actual knowledge of an adverse interest will generally amount to fraud.8

[37]     Here, Ms Andrews submits, a combination of factors is sufficient to infer that Black River is guilty of fraud. Dishonesty on its part, she says, can be inferred from:

(a)the fact Sunrise and Black River were related parties;

(b)the speed with which the sale was executed and settled;

(c)Black River’s knowledge, through Mr Hamilton, of the terms of the settlement agreement and that registration of a transfer of Lot 1 to Black River would defeat the Aero Club’s interest;

(d)Black River’s intention not to recognise the Aero Club’s interest after registration.

[38]In the course of argument further factors were relied upon which were:

(a)that up until Haigh Lyon’s letter of 20 May 2020 was received there had been regular and transparent communications between Sunrise and the Aero Club through their respective solicitors regarding the proposed sale of Lot 1 to satisfy the debt;

(b)the sale price was the exact amount required to satisfy Spinnaker’s first mortgage debt;

8      Waimiha Sawmilling Co Ltd (In Liq) v Waione Timber Co Ltd [1923] NZLR 1137 at 1174.

(c)how Spinnaker’ debt was made up is not explained;

(d)that Black River’s second registered mortgage was not discharged upon the sale of Lot 1 and remains registered on the title; and

(e)Mr Hamilton’s motivation was seeded in bitterness expressed towards the Aero Club in his affidavit.

[39]     Ms Andrews argues the evidence of Mr O’Connell of Lot 1’s market value is irrelevant as Black River “was the market” for Lot 1. The section was worth more to Black River, she submits, because Mr Hamilton had a personal interest to repay Spinnaker and transfer ownership to Black River. Mr Hamilton, she contends, simply chose to ensure Spinnaker was paid and not the Aero Club.

Black River

[40]     Black River submits there is no arguable case of fraud and no basis to maintain the caveat. Even if the Court considered fraud was reasonably arguable, it should exercise its residual discretion to nonetheless remove the caveat which serves no useful purpose.

[41]     Black River contends the Aero Club offers no direct evidence of fraud and an inference from the circumstances that Black River must be guilty of fraud is not sufficient.

[42]     In any event, Black River argues, there was no fraud because it never intended to defeat the Aero Club’s equitable interest. As security for payment of the debt owing to Sunrise, Lot 1 was worthless because it ranked behind a substantial registered mortgage to Spinnaker and there was no equity left in the property after Spinnaker was paid. In those circumstances the Aero Club’s interest in Lot 1 had already been defeated.

[43]     Black River also argues the Court should remove the caveat in the exercise of its residual discretion. There is, it says, no practical advantage in maintaining the caveat. The Aero Club does not have any realistic prospect of recovering the debt,

given the liquidation of Sunrise and in the absence of a substantive claim against Black River. The only reason for sustaining the caveat could be to cause inconvenience to Black River. If the caveat is sustained it will prevent Black River from freely dealing with the property but does nothing to protect or improve the Aero Club’s ability to seek repayment of the debt.

Discussion

[44]     For the reasons that follow the Aero Club has failed to show a prima facie case that Black River acted dishonestly intending that its registration would defeat the Aero Club’s unregistered interest.

[45]     I accept that Black River, through its director Mr Hamilton, had actual knowledge of the existence of the Aero Club’s equitable interest in Lot 1. Black River does not argue otherwise.

[46]     All of the following is not in dispute. Sunrise’s business was the development and sale of sections for residential use. Under the settlement agreement, the interest conferred upon the Aero Club in the sections forming Stage 3A was an equitable charge to secure payment of the debt owed by Sunrise. The Aero Club was entitled to lodge caveats against the sections if Sunrise defaulted in the payment of the debt. The Aero Club’s equitable interest in the sections was subordinate to, amongst other things, the registered first mortgage of Spinnaker. When Sunrise defaulted in payment of the debt the Aero Club did not lodge caveats to protect its interest. It failed to do so when it knew Sunrise was selling the sections. It did not lodge caveats as it expected to be paid from the sale proceeds of the sections. All four sections were subsequently sold by Sunrise. It is only the sale of Lot 1 the Aero Club seeks to impugn on the grounds of fraud.

[47]It must follow that the Aero Club can have no complaint that Sunrise sold Lot

1. It knew the section was being sold. The Aero Club neither objected to the sale nor took steps to protect its interest by lodging a caveat. Its complaint as to what has occurred can only be that Black River acquired Lot 1 on a basis or on terms that

defeated an entitlement it would otherwise have enjoyed to payment from the proceeds of sale. I can see no basis for such a view.

[48]     Lot 1 had been marketed for sale and, initially, an agreement for sale was entered into at a price significantly less than what it was ultimately sold for to Black River. When that agreement failed, Sunrise accepted that it was unlikely to be able to sell the property to a third party and resolved to sell the section to Black River, so that at least the first mortgage to Spinnaker could be discharged. Both Spinnaker and Black River had a legitimate interest in ensuring Spinnaker was paid. Black River paid Sunrise $724,372.90 for Lot 1, being an amount sufficient to pay Spinnaker. The correlation between the sale price and what was owed to Spinnaker is not surprising in those circumstances and if, as Black River contends, the sale price was significantly above market value, it cannot possibly be evidence of fraud.

[49]     Had Lot 1 been sold to another purchaser without notice of the Aero Club’s interest the result of the sale would have been the same as far as the Aero Club is concerned. The purchaser would almost certainly have paid less than Black River for the section and as the Aero Club had not lodged a caveat, the sale would have been completed and there would have been insufficient proceeds available to satisfy the debt after Spinnaker was paid. The position of the Aero Club would not have been improved had it lodged a caveat. Black River would almost certainly have been entitled to an order removing its caveat under the Court’s residual discretion in circumstances where Spinnaker’s superior ranking interest accounted for the whole of the value of the land.9

[50]     Nothing leads me to doubt Mr O’Connell’s assessment that Lot 1’s market value was $550,000. Ms Andrews argues that Mr O’Connell’s evidence is irrelevant as Black River was the market for Lot 1. I do not understand this submission. Black River was not the only prospective purchaser of Lot 1. The property had been marketed to the public and an agreement for its sale entered into, albeit that sale did not proceed. The evidence satisfies me no other purchaser was likely to pay more for

9      Pacific Homes Ltd v Consolidated Joineries Ltd [1996] 2 NZLR 652 at 656 (CA).

it than Black River paid. On the evidence, the sale of Lot 1 to Black River was at well above market value.

[51]     The Aero Club argues that Black River did not need to acquire Lot 1 and could simply have discharged the mortgage. On this view, Black River should have sacrificed its interests for those of the Aero Club. That is entirely unrealistic in a commercial sense. It also overlooks the possibility of Black River being subrogated to Spinnaker’s security or taking an assignment of it upon discharging Sunrise’s indebtedness. In such a case the Aero Club’s position would not have been improved.

[52]     Ms Andrews asks me to infer dishonesty on the part of Black River from the speed with which the sale of Lot 1 was executed and settled and the lack of transparency concerning the proposed sale of Lot 1. Her argument concerning the speed of the sale was based on an incorrect understanding as to the date of the agreement for sale. As to the alleged lack of transparency, the communications between the solicitors for Sunrise and the Aero Club appear to have been sporadic to an extent that the Aero Club now says it was not provided with any detail of the sale of the first three sections sold.

[53]     The Aero Club says it has not been given details of the loan arrangements between Sunrise and Spinnaker particularly how the sum said to have been owing to Spinnaker was made up. There is no evidence that the Aero Club has requested this information. Importantly, there is no allegation, or basis to believe, that the proceeds of sale of Lot 1 were not paid to Spinnaker in satisfaction of sums secured by its mortgage. Mr Hamilton has deposed that the amount paid by Black River was paid in full to discharge the mortgage. Mr Punshon, on behalf of the Aero Club, accepts the loan by Spinnaker to Sunrise had priority over the Aero Club’s debt.

[54]     Mr Hamilton’s explanation for why Black River’s second mortgage was not discharged appears odd but the Aero Club has not advanced any argument that suggests this was part of a fraudulent scheme on the part of Black River. Furthermore, if Black River considered there was some advantage to it in retaining its registered mortgage, there is nothing to suggest that was detrimental to the Aero Club.

[55]     I also reject the submission that Mr Hamilton was motivated by bitterness as it is simply not made out on the evidence.

[56]     There was a clear commercial justification for the sale by Sunrise to Black River. Both Sunrise and Black River had a liability to Spinnaker. The sale of Lot 1 to Black River was made at above market value to ensure Spinnaker was paid in full. The Aero Club knew Sunrise was selling the section. The terms of sale to Black River did not prejudice the Aero Club. It would have done no better if the section had been sold to an independent party. There is no evidence of conduct from which it can be inferred Black River acted dishonestly intending to cheat the Aero Club out of its equitable interest in Lot 1. The Aero Club has failed to establish a prima facie case (or even an arguable case) that Black River’s registered title can be impeached for fraud.

[57]     I am advised by counsel that following the hearing Black River entered into an agreement for the sale of Lot 1 for $610,000. The agreement is not in evidence and it has not been necessary to rely on it in reaching my decision.

[58]     It is not necessary either for me to consider Black River’s alternative submission that the application should be dismissed in the exercise of the Court’s discretion.

Result

[59]     The Aero Club’s application is dismissed. I make an order for the removal of the Aero Club’s caveat which shall take effect 14 days from the date of issue of this judgment.

[60]     I do not know of any reason why costs should not follow the event on the usual basis but counsel did not make submissions on costs. If it is necessary for the Court to make a determination on costs any party seeking costs shall file submissions within 14 days with seven days for any reply.

O G Paulsen Associate Judge

Solicitors:

Vodanovich Law Limited, Auckland for Applicant

Counsel: W E Andrews,Blackstone Chambers, Auckland email: [email protected] N T C Batts, Haigh Lyon, Auckland for Respondent

Counsel: J G Donkin, Quay Chambers, Auckland email: [email protected]