Profico Development Limited v 26 Clinton Avenue Limited - [2022] NZHC 466

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1269

[2022] NZHC 466

UNDER the Land Transfer Act 2017

IN THE MATTER OF

Caveat no. 12016410.1 and Caveat no. 12178065.1

BETWEEN

PROFICO DEVELOPMENT LIMITED

Applicant

AND

26 CLINTON AVENUE LIMITED

Respondent

CIV-2021-404-1834

BETWEEN

I AM DEVELOPER LIMITED
Applicant

AND

8 WALMER LIMITED

First Respondent

PROFICO DEVELOPMENT LIMITED

Second Respondent

Hearing: 21 February 2022

Appearances:

K F Gould for Profico Development Ltd and 8 Walmer Ltd D J Pine for 26 Clinton Avenue Ltd

Judgment:

16 March 2022

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 16 March 2022 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

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

PROFICO DEVELOPMENT LIMITED v 26 CLINTON AVENUE LIMITED [2022] NZHC 466 [16 March
2022]

Introduction

[1] These two proceedings relate to two caveats registered against two properties. First, Profico Developments Ltd ("Profico") applies for an order sustaining caveat number 12016410.1 (“Clinton Avenue caveat”) in proceeding CIV 2021-404-1269.

[2]The respondent in this first proceeding is 26 Clinton Ave Ltd.

[3] Secondly, I Am Developer Ltd ("IAD") applies for an order sustaining caveat number 12178065.1 (“Walmer Road caveat”) in proceeding CIV 2021-404-1834.

[4] The first respondent in this second proceeding is 8 Walmer Ltd, and the second respondent is Profico.

[5] Both caveats and subsequent proceedings arise largely from the same set of facts, and the proceedings were consolidated in an order from Venning J on 5 October 2021.

Background

CIV 2021-404-1269 proceedings

[6] In 2019, Mr Grigori Koulanov approached Mr Thomas Ward and Mrs Jessica Ward for the purpose of engaging in a property development venture. Mrs Ward had acquired property at 21 Waione Avenue, Te Atatu Peninsula (the “Waione property”) in November 2019. It was proposed that the development of the Waione property would be carried out through a joint venture to be set up by the parties. The Waione property was transferred to a company set up specifically for the development — IAP 21 Waione Avenue Ltd. Mr and Mrs Ward invited Mr Koulanov to work together on the development of that particular property. Mr Koulanov’s involvement was through his company, Profico.

[7] The parties agreed that they would enter into a joint venture agreement (“JVA”). The JVA was unsigned, although on 23 September 2020 Mr and Mrs Ward expressed a willingness to sign the JVA conditional on there being no objections to amended confidentiality clauses. There is dispute over whether the agreement was complete, with Mrs Ward deposing in her affidavit that no agreement was reached.1

[8] Despite the JVA remaining unsigned, parties entered into the Waione property development project together. This development project was completed.

[9] In February 2020, there was discussion between the parties about working together on another property at 26 Clinton Avenue ("Clinton property"). There is dispute over whether the terms for this development had been agreed upon, with counsel for the applicant submitting that parties had…

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: [2022] NZHC 466
Decision Date: 16 March 2022

CaseChat Overview and Summary

The High Court of New Zealand considered two proceedings relating to two caveats registered against two properties. In the first proceeding, Profico Development Ltd applied for an order sustaining caveat number 12016410.1 ("Clinton Avenue caveat") against the title of the property at 26 Clinton Avenue. In the second proceeding, I Am Developer Ltd applied for an order sustaining caveat number 12178065.1 ("Walmer Road caveat") against the title of the property at 8 Walmer Road. The proceedings were consolidated in an order from Venning J on 5 October 2021.

The court considered whether there was a joint venture arrangement in place between the parties in relation to the Clinton property. The court found that there was no concluded joint venture agreement between Profico and the respondent in relation to the Clinton property. The draft JVA which was prepared for the Waione property was restricted to the Waione property and was not intended to apply to future property development between the parties.

The court also considered whether, if such a joint venture arrangement was in place, this would give rise to a caveatable interest in Profico in the Clinton property. The court found that it would not. Under the applicant's argument, if a joint venture arrangement did exist in relation to the Clinton property, it would be on terms similar to the Waione property JVA. While not signed, they are largely recorded in the draft JVA. In the Waione property joint venture, it is clear in cls 4.1 and 4.2 of the draft JVA that the property is owned by the joint venture company. Each of the parties held shares in that company, rather than any direct interest in the land.

The court also considered whether, if there is a joint venture arrangement in place and Profico has a caveatable interest in the Clinton property, I Am Developer Ltd has a caveatable interest in the Walmer property. The court found that this question did not arise because of the previous findings.

The court made the following orders: (a) That the paragraphs of the Ward affidavit set out in the schedule to the interlocutory application filed by the applicant in proceeding 1269 shall not be read except for the first sentence of [29] and the first sentence of [30]; (b) caveat no.12016410.1 registered in respect of the Clinton property shall lapse; and (c) caveat no.12178065.1 registered in respect of the Walmer property shall lapse.

The court also made orders regarding costs. In relation to proceeding CIV-2021-404-1269, costs are awarded to the respondent on a 2B basis, and costs in respect of the applicant's interlocutory application relating to the Ward affidavit are awarded to the applicant on a 2B basis. In relation to proceeding CIV-2021-404-1834, costs are awarded to the first and second respondents on a 2B basis.

Orders