Rokos v Campbell HC Auckland CIV 2010-404-3754

[2010] NZHC 1456

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-3754

UNDER  the Land Transfer Act 1952

IN THE MATTER OF     applications to sustain caveats

BETWEEN  PATRIK ROKOS Applicant

ANDCHRISTINE SHEILA CAMPBELL Respondent

CIV-2010-404-3756

AND BETWEEN            PATRIK ROKOS Applicant

ANDPIPPA JANE FLEMING AND DAVID NEIL MURRAY

Respondents

CIV-2010-404-3759

AND BETWEEN            PATRIK ROKOS Applicant

ANDMARGARET WONG AND ROBERT FOY WONG

Respondents

Hearing:         4 August 2010

ROKOS   V CAMPBELL HC AK CIV-2010-404-3754  6 August 2010

Appearances: G L Wilkin and A Stutt for Applicant

K J Crossland for Respondents Campbell and Wong
J Armstrong for Respondents Fleming and Murray

Judgment:      6 August 2010

JUDGMENT OF COOPER J

This judgment was delivered by Justice Cooper on 6August 2010 at 4 p.m., pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Nielsen Law, PO Box 1108, Hamilton

Stace Hammond, PO Box 19 101, Hamilton

Armstrong Murray, PO Box 33 1028, North Shore City 0740
Copy to:

G L Wilkin, PO Box 1394,Waikato Mail Centre, Hamilton 3240

2

Introduction

[1]      These three originating applications have been heard together.  In each case, the applicant seeks an order that a caveat not lapse, under s 145A(3) of the Land Transfer Act 1952.

[2]      The applicant asserts that he had an interest in the three properties that are the subject of the respective applications arising under the terms of agreements for sale and purchase which he says were entered into by him and the respondents on 9 and

10 August 2005.  The respondents in each application are the owners of the relevant properties.  Ms Campbell owned the property at 6 Dakota Avenue, Mrs Fleming and Mr Murray owned the land at 8 Dakota Avenue as trustees of the EMSA Trust, and Mr and Mrs Wong that at 10 Dakota Avenue.

[3]      The respondents deny that Mr Rokos has the interest that he claims.  They say that their contracts were with BRNO Developments Ltd, a company that was incorporated   on   27   April   2006,   which   it   is   said   ratified   the   agreements. Consequently, the agreements were enforceable by and against the company under s 182(3) of the Companies Act 1993 as if the company had been a party from the outset.

[4]      The actual terms of the agreements are not controversial.  The principal issue between the parties turns on who the purchaser was.

Backgrond

[5]      The properties in question are at 6, 8 and 10 Dakota Avenue, Beach Haven. It was proposed that the rear portions of each of those properties, which adjoin one another, was to be subdivided off and included in two new titles which would then be developed.

[6]      Under each of the agreements for sale and purchase it was provided that the purchaser would obtain the agreement of the owners of the other two properties and obtain the appropriate resource consent from the Council.   It was the purchaser’s obligation to subdivide the properties into two fee simple lots in the name of the vendors  of  all  three  adjacent  properties.    Thereafter,  it  was  envisaged  that  the vendors would approve a subdivisional plan delineating the proposed boundaries of the lots to be created.   All of the costs of the subdivision were to be met by the purchaser.

[7]      In the case of all three agreements, the purchaser was described as “BRNO Developments or Nominee”.  The agreement was signed by Mr Rokos in the place provided in the printed form for the “signature of purchaser(s)”.

Approach

[8]      Before turning to the issues raised by the parties, it will be appropriate to say something about the  approach that should be taken on applications such as the present.

[9]      The present applications are made, as required, as originating applications under Part 19 of the High Court Rules.  There has been no cross-examination.  It has generally been acknowledged that the procedures are inappropriate for the determination of disputed questions of fact.  In Sims v Lowe[1]  at 659-660, Somers J having set out s 143 of the Land Transfer Act, said:

[1] Sims v Lowe [1998] 1 NZLR 656.

It is clear that this summary procedure for the removal of a caveat against dealings is wholly unsuitable for the determination of disputed questions of fact. From this it follows, and has been consistently held, that an order for the removal of such a caveat will not be made under s 143 unless it is patently clear that the caveat cannot be maintained either because there was no valid ground for lodging it or that such valid ground as then existed no longer does so. See eg Plimmer Bros v St Maur, Re Caveat No 2538 (1906)

26 NZLR 294, 296; Catchpole v Burke [1974] 1 NZLR 620, 623-624, 625 (a case under s 145); Mall Finance & Investment Co Ltd v Slater [1976] 2

NZLR 685, 686, 688. The patent clarity referred to will not exist where the caveator has a reasonably arguable case in support of the interest claimed.

Catchpole v Burke, New Zealand Limousin Cattle Breeders Society Inc v

Robertson [1984] 1 NZLR 41, 43 and Holt v Anchorage Management Ltd

[1987] 1 NZLR 108 show that the same test applies to both s 143 and s 145.

[10]     However, where an application is made under s 145A of the Act, the caveator has the onus of establishing a reasonably arguable case for the interest claimed.

[11]     The fact that the proceedings are dealt with on affidavit evidence does not mean that conclusions cannot be reached which are contrary to the interests of the caveator, or the party or parties who resist the application.  As with other kinds of case dealt with on affidavits, the evidence relied on must meet a “threshold of credibility” and there may be cases when the Court can conclude, after considering the affidavits, that the allegations made are without foundation.  The authorities to

that effect are well known and include Pemberton v Chappell[2] [1987] 1 NZLR 1, in

[2] Pemberton v Chappell [1987] 1 NZLR 1.

which Somers J quoted with approval the observations of Lord Diplock in Eng Mee

Yong v Letchumanan.[3]

[3] Eng Mee Yong v Letchumanan [1980] AC 331, 341.

Where the defence raises questions of fact upon which the outcome of the case may turn it will not often be right to enter summary judgment. There may however be cases in which the Court can be confident — that is to say, satisfied — that the defendant's statements as to matters of fact are baseless. The  need  to  scrutinise  affidavits,  to  see  that  they pass  the  threshold  of credibility, is referred to in Eng Mee Yong v Letchumanan [1980] AC 331,

341 and in the judgment of Greig J in Attorney-General v Rakiura Holdings

Ltd (Wellington, CP 23/86, 8 April 1986).

The applicant’s claim

[12]     In  his  affidavits  sworn  on  17 June  2010  in  support  of  the  applications, Mr Rokos asserts that BRNO Developments was his trading name, and has been used by him as such since 2001.  He conducts his business through that “entity” and has a bank account at the Birkenhead Branch of the National Bank, which records the account holder as “BRNO Developments”.  The trading name was known to the real estate agent who negotiated on his behalf.   His intention in relation to the

proposed subdivision was that the two new sites created would be developed for occupation respectively by his wife and him, and by his son and his family.

[13]     In pursuit of the subdivision proposal he had undertaken and paid for various works.  They included payment of an initial deposit on each property in the sum of

$3,000 on 21 December 2005.   Further deposits were also provided in respect of each property on 22 May 2007.  Those deposits, which were in the sum of $30,000 in each case, were paid by BRNO Developments Ltd, which company had by then been formed.   However, Mr Rokos deposed that his wife had made a subsequent payment of $59,591 to North Shore City Council for development contributions relating to the subdivision.  He and his wife had also made other payments from their private account relating to the subdivision, including a payment of $11,665 in respect of surveyors fees.

[14]     Mr Rokos acknowledged that a caveat had been registered on the title to each property in June 2008 asserting that BRNO Developments Ltd had an interest in each property.   However, he claimed that that was as a consequence of a mistake made by his solicitor at the time, Mr Norris.  He maintained that the company did not have an interest in the properties and that the interest was his personal interest as the purchaser under the agreements.  In order to protect his interest as such, he had later lodged caveats in his own name.  In the present proceedings, he seeks to sustain those caveats.

[15]     In the meantime the Council has issued a certificate under s 224C of the Resource Management Act 1991, the digital plan for the subdivision has been approved by the North Shore City Council and lodged at the office of Land Information New Zealand and all that needs to occur is an application to Land Information  New  Zealand  for  the issue of  new  titles.    Once titles  have issued, settlement of the purchase of the properties can proceed, something which Mr Rokos wishes to occur.

[16]     BRNO Developments Ltd is in liquidation.   The liquidators claim that the company is properly to be regarded as the purchaser under the agreements for sale and purchase.   Although the company was not formed when the agreements were

entered into, the respondents effectively make common cause with the liquidators. They say that the agreements for sale and purchase were indeed with the company. They were pre-incorporation contracts made by Mr Rokos on behalf of the company before and in contemplation of its incorporation.

[17]     Mr Wilkin submitted that there could be no doubt that the agreements were entered into by Mr Rokos in his “trading name”, BRNO Developments.   The company was not incorporated until 2006.  He argued that the facts were not clear to establish that there had been ratification of the contract by the company.   He contended that there was clearly a dispute between the liquidators of the company on the one hand and Mr Rokos on the other as to who was entitled to the benefits under the agreements for sale and purchase.  Since the facts surrounding the dealings of the parties with the properties were not clear it was inappropriate for the Court to do other than preserve the status quo by sustaining Mr Rokos’s caveats.

[18]     He also submitted that there was insufficient evidence of a conscious and deliberate act amounting to ratification of the agreements for sale and purchase by BRNO Developments Ltd.   He referred to what was said by Quilliam J in Development Finance Corporation of New Zealand v McSherry Export Kilns Ltd (in

liquidation) (1987) 3 NZCLC 99,998 at 100,005:[4]

It is, I think, fundamental that there can be no ratification unless there is a conscious intention to ratify.  It is implicit in sec 42A that some deliberate act shall have been done for the purpose of confirming something which would be imperfect without that confirmation.

[4] Development Finance Corporation of New Zealand v McSherry Export Kilns Ltd (in liq) (1987) 3

NZCLC 99,908.

[19]     Mr Wilkin argued that matters relied on by the respondents to establish that there had been ratification were insufficient in terms of this rule.

The respondents’ response

[20]     The respondents rely on a number of documents to assert that the position adopted  by  Mr Rokos  cannot  be  reconciled  with  certain  key  facts  which  are undisputed.

[21]     First, there is the fact that having been incorporated on 27 April 2006, BRNO Developments Ltd paid the second deposit of $30,000 pursuant to each agreement. Further, on 19 June 2008 caveats in the name of the company were submitted by Mr Norris, who was then acting for it, to LINZ.  Next, on 18 July 2008 the company executed three deeds of nomination.  Those deeds were signed for the company by Mrs Rokossova, Mr Rokos’s partner, said to be the sole director of the company. The first recital in each of the deeds was in the following terms, (reference to “the Named Purchaser” being to BRNO Developments Ltd, and reference to the “Nominated Purchaser” being to Mr Rokos):

The Named Purchaser has entered into an Agreement for Sale and Purchase dated 9th August 2005 from [the vendors] to the Named Purchaser as purchaser of the land [legal description] (the property).

[22]     Under clause 1 it was agreed that “the Named Purchaser hereby nominates the Nominated Purchaser as the Purchaser of the property under the Agreement for Sale and Purchaser”.

[23]     Under  clause  2,  Mr Rokos  accepted  nomination  as  the  purchaser  and covenanted with the company, and also with the vendors, that he would observe all of the terms and conditions contained in the agreement for sale and purchase.

[24]     Plainly, these deeds of nomination would not have been necessary unless the company was in fact the purchaser under the agreements for sale and purchase.  Nor could  the  deeds  have  been  drafted  as  they  were  unless  that  was  the  case. Considering the deeds together with the payment by the company of the $30,000 deposits, and the registration of the caveats in the name of the company, I am satisfied that BRNO Developments Ltd must be taken to have ratified the agreements for sale and purchase.  Further, and in my view it is an insuperable difficulty that the applicant faces on the present applications, Mr Rokos would now be estopped from asserting, against the company, that the facts recorded in the recitals to the deed of

nomination were incorrect.  As is noted at paragraph 4.20 of Cross on Evidence:[5]

[5] Donald Mathieson (ed) Cross on Evidence (online looseleaf ed, LexisNexis) at [4.20].

At common law, “[a] party who executes a deed is estopped in a Court of law from saying that the facts stated in the deed are not truly stated.”...

Someone who executed a conveyance on the footing that he or she was seised of the legal estate was stopped from denying this fact. …

In Bowman v Taylor[6]the principle was applied to recitals in a deed so that the defendant, a licensee of patent rights, was estopped from denying that the plaintiff was the inventor, as he had executed a deed of licence which recited that this was the case.  The governing principle was said to be the same as that which underlies estoppels by statements contained in the body of the deed:   “If a party has by his deed directly asserted a specific fact, it is impossible to say that he shall not be precluded from disputing that fact.”[7]

[6] Bowman v Taylor (1834) 4 LJKB 58.

[7] Bowman v Taylor (1834) 4 LJKB 58 per Lord Denman CJ.

[25]     Similarly, in Helmich and Taylor v Thorp and Strathdee[8], Fisher J said:

[8] Helmich and Taylor v Thorp and Strathdee [1997] 3 NZLR 86

At common law parties to a deed are prima facie estopped from seeking to assert that the facts do not accord with those recited in a deed: see Laws NZ, Estoppel  paras  63  —  71  especially  at  para  64;  16  Halsbury’s  Laws  of England  (4th  ed)  paras  1018  —  1037  especially  at  para  1019;  Spencer Bower and Turner, Estoppel by Representation: (3rd ed, 1977) pp 157 —

177 especially at pp 171 — 177. There are exceptions to the common law rule in the case of fraud or illegality (see in that regard Greer v Kettle [1937]

4 All ER 396 at p 404) but it is not suggested that either applies in the

present case.

[26]     It may be that such an estoppel only arises between the parties to the deed, and BRNO Developments Ltd is not a party to the present proceedings.  However if, in proceedings against the company, Mr Rokos could not assert that he was entitled to the benefit of the agreements for sale and purchase, there would be little point in failing to recognise the implications of that for these applications.  As I understood it, when I put the estoppel to him in argument Mr Wilkin did not feel able to assert that  it  would  not  apply.    The  result  is  that  Mr Rokos  could  not  challenge  the statement in the recitals to the deeds of nomination that it was the company that had entered into the agreement for sale and purchase.   Nor did Mr Wilkin rely on the deeds of nomination as being effective to substitute Mr Rokos as the contracting party, probably in recognition of the liquidator’s rights under s 294 of the Companies Act 1993.  Rather, the argument presented on behalf of Mr Rokos was that he was and remained the original purchaser under the agreements for sale and purchase.  For the reasons already given I consider that those assertions are untenable, but there were additional matters on which Mr Crossland relied to which I now refer.

[27]     First, on 8 April 2009, the deeds of nomination, dated 18 July 2008, were forwarded by Mr Norris’s firm to a solicitor acting for the respondents, with no attempt  to  disavow  their  contents.     Then,  in  June  2009  Mr Rokos  and  Mrs Rokossova consulted Brookfields and on 10 June 2009 Brookfields sent a facsimile letter to the solicitors acting for the liquidators.   The letter was headed “Brno Developments Ltd (in Liquidation) (‘BRNO’)”, and stated, amongst other things:

At the time the Order placing BRNO into liquidation was made, BRNO had agreements to purchase the Warkworth Lots and agreements to purchase the rear portion of three lots located at 6, 8 and 10 Dakota Avenue, Beach Haven (“Dakota Property”).  The Dakota Property was being purchased by BRNO as part of a subdivision, which would have created two new lots from the Dakota Property.  We understand from speaking to the Shareholder that a substantive amount of work had been undertaken towards the completion of the Dakota subdivision.  Once BRNO was placed into Liquidation, that work ceased.

The  Company nominated Patrik Rokos  to  complete  the  purchase  of  the

Dakota Property.  We enclose copies of Deeds of Nomination dated 18 July

2008.  The nomination was prior to the date that the application to place the

Company into Liquidation was made, and prior to the date that the Order appointing you as Liquidator was sealed.

There is a caveat registered against each of the titles to the Dakota Property. The caveat was registered by BRNO claiming its interest as purchaser under the Sale and Purchase Agreements for the Dakota Property.  The completion of the sub-division, and subsequent sale of the two resulting freehold lots to Mr Rokos cannot be completed without the withdrawal of the caveats by BRNO, and the co-operation of the Company in the sale.

In order to facilitate the sub-division an ultimate purchase by Mr Rokos as nominee of BRNO, and to give effect to the forms (sic) of Deed of Nomination, we request that the Agreements for Sale and Purchase of the Dakota Property be assigned absolutely to Mr Rokos, and the caveat be withdrawn.

[Emphasis added]

[28]     By return e-mail on 10 June 2009 the liquidators’ solicitors agreed to the proposal  that  had  been  made  by  Brookfields  that  the  liquidators  assign  the agreements  for  sale  and  purchase  in  respect  of  the  respondents’  properties  to Mr Rokos for the sum  of $130,680.   On 2 July there was a further letter from Brookfields addressed to the liquidator’s solicitors.  They proposed that Mr Rokos would approach his bankers with a view to obtaining mortgage finance secured over the Dakota Avenue properties, that he would take the further steps necessary to obtain  the  issue  of  new  titles  and  that,  on  the  issue  of  new  titles,  BRNO

Developments Ltd would assign the relevant agreements for sale and purchase to Mr Rokos.   He would draw down on the loan facility, and pay the balance of the purchase price to the vendors under the agreements.   In consideration of the assignment of the agreements he would pay an amount to the company which was equal to its liability to creditors and costs in the liquidation to date.  It was proposed that the liquidator would then apply to the Court for the liquidation to be terminated. If the overall arrangements proposed were acceptable then the parties should enter into a deed of arrangement.

[29]     In view of these proposals the liquidators refrained from proceeding to the examination of Mr Rokos and Mrs Rokossova under s 261 of the Companies Act, thereby allowing  Mr Rokos  time  to  obtain  the  finance  he  needed  to  prepare  to implement the proposed arrangements.  Then, on 12 August 2009, Brookfields wrote to  the  liquidators’  solicitors  advising  that  Mr Rokos  had  secured  the  necessary finance.   Their letter said that the agreement between Mr Rokos and the company should now be prepared so as to provide for the assignment of the agreements for sale  and  purchase  to  Mr Rokos.    A  draft  deed  was  forwarded  to  Mr Rokos’s solicitors  on  11 September  2009.     On  receipt  of  the  document,  Brookfields forwarded it on to Mr Rokos “for approval”.  On 14September Brookfields sent an e- mail to the liquidators’ solicitors which said:

We are happy with your draft.  Please forward to the Vendor’s solicitor for approval.

That e-mail was copied to Mr Rokos and Mrs Rokossova.

[30]     The deed of arrangement that had been provided contained the following statements (“BRNO being defined as “BRNO DEVEOPMENTS LIMITED (IN Liquidation”):

ABRNO entered into an Agreement for Sale & Purchase with Campbell to purchase part of 6 Dakota Avenue, Beach Haven... on or about 9 August 2005 ….

BBRNO entered into an Agreement for Sale & Purchase with with Fleming and Murray to purchase a part of 8 Dakota Avenue, Beach Haven... on or about 10 August 2005 ….

CBRNO entered into an Agreement for Sale & Purchase with Wong to purchase part of a property at 10 Dakota Avenue. Beach Haven … on or about 10 August 2005 ….

…

E        BRNO has been subsequently being placed into liquidation.

F        Rokos wants to complete the subdivision and purchase the

Properties.

…

3.1      BRNO will hold the titles for Properties on trust for the Vendors pending completion of Rokos’s obligations under this Deed.

…

4.1BRNO agrees to assign the Agreements to Rokos upon the latter of:

(a)payment of an amount equal to the current liabilities of BRNO to its creditors, and the costs of liquidation as notified by BRNO;

(b)      issue  of  the  new  Certificates  of  Title  for  the

Properties;  and

(c)a satisfactory undertaking from Rokos to complete the purchase under the Agreements.

4.2Rokos shall pay the sum referred to in clause 4.1(a) by way of cleared funds to BRNO or its nominated account of or for the settlement date.

…

5.1On the Settlement Date Rokos shall pay the balance of the purchase prices due to the Vendors under the Agreements to the Vendors’ solicitors in cleared funds or as otherwise directed by each Vendor.

5.2The  Vendors   hereby   authorise   BRNO   to   transfer   the Certificates of Titles to the Properties to Rokos upon receipt of satisfactory confirmation by BRNO that the balance of the purchase prices have been paid to the Vendors.

5.3the Vendors will obtain discharges of all mortgages and any other encumbrances over the titles to the Properties (if any) and will provide all such discharges to Rokos upon payment in accordance with clause 5.1.

5.4      Upon confirmation that all payments have been made to the

Vendors and to BRNO as required in clauses 4.1(a) and 5.1

and BRNO will complete a transfer of the Certificates of

Title to the Properties to Rokos.

…

6.1The parties agree that any Deeds of Nomination purported to exist between BRNO and Rokos are void.

…

8.1Following the Settlement Date, the liquidators of BRNO will apply the payment received by BRNO to satisfy BRNO’s creditors and costs of liquidation, and will then apply to the High Court for an Order that the liquidation be terminated and control of BRNO returned to its Director and Shareholder.

[31]     The terms of the proposed deed (although ultimately not signed), approved by Brookfields on the instructions of Mr Rokos, clearly assumed that BRNO Developments Ltd was the purchaser under the agreements for sale and purchase. Collectively, the matters relied on by Mr Crossland (and Mr Armstrong adopted his submissions  for  Ms  Fleming  and  Mr  Murray)  show  that  the  consistent  stance adopted by Mr Rokos and his solicitors was that the company and not he, was the contracting  party  under  the  agreements  for  sale  and  purchase.    It  was  only on

15 December 2009 that he lodged a caveat purporting to protect a personal interest in the Dakota Avenue properties.

[32]     In  the  affidavits  that  he  originally  provided  in  support  of  the  present applications he made no reference to any of the history on which the respondents rely save for his mention of the lodgement of the caveats in the name of BRNO Developments Ltd, which he attributed to a mistake made by his then solicitor, Mr Norris.    The  matters  to  which  I was  referred  by Mr Crossland  were  put  in evidence by the respondents.  That in itself has a significance and inevitably affects the Court’s assessment of the credibility of Mr Rokos and the weight that can be given to issues that he has raised in affidavits filed in reply.

[33]     In paragraphs 63 to 67 of his affidavit of 15 July 2010 Mr Rokos asserted that about two weeks before the deeds of nomination were drafted he went to the Land Information New Zealand office to obtain search copies of the titles for the Dakota Avenue  properties.    His  purpose  in  doing  so  was  to  assist  him  in  obtaining  a

valuation which he needed for funding purposes.  He claimed that it was at that point that he realised that Mr Norris had made a mistake with respect to the caveats.  He continued:

65.      Mr Norris prepared a Deed of Nomination because I wanted to stop the confusion between Brno Develoments and the company and put the properties in my name as Patrik Rokos.   This was because the land was bought privately for private purposes and we did not want to have it attached in any way with the Company.  The Company had nothing to do with Dakota Avenue, Beachhaven.  However the point that needs to be made is that there was no assignment from me to the Company in the first place.   The only thing that had occurred was an incorrect caveat had been registered against the 3 Dakota Avenue, Beachhaven properties.  I was still the purchaser.

[34]     He stated that he and his wife were asked to come to Mr Norris’s offices to sign the documents and did so.  They had not paid a lot of attention, because they understood there was no issue.  What was important was to have the titles under his name.   He asserted that Mr Norris had suggested that the deeds of nomination be entered into to correct the mistake that Mr Norris had made in lodging caveats in the company’s name.

[35]     Having regard to the matters that I have previously discussed I do not regard these assertions as credible.  If Mr Norris had confessed back in July 2008 when the deeds were executed that they were necessary to correct a mistake, it is inexplicable that Brookfields, who later acted for Mr Rokos, corresponded with the respondents and liquidators on the basis that BRNO Developments was the party entitled to the benefit of the agreements for sale and purchase.   If Mr Rokos was properly to be regarded as the purchaser that would surely have been asserted far earlier than it was. Further, the chosen method to correct the alleged mistake is implausible;  the deeds assumed that the true position was that the company was the purchaser.  Nor has Mr Rokos raised any other issues in his reply affidavit that would counter the conclusion that I have already expressed that it was BRNO Developments that should be regarded as the contracting party, and not Mr Rokos personally.

[36]     There were additional issues raised particular to the application commenced against Mrs Fleming and Mr Murray arising out of the fact that the agreement for sale and purchase in relation to the property at 8 Dakota Avenue had not been signed by them as the registered proprietors on the title, but by Mrs Voerman who was the

beneficiary under the trust.  It is unnecessary for me to deal with those issues since the conclusions already expressed mean that all three of the applications must fail.

Result

[37]     The applications are dismissed.

[38]     The respondents are  entitled to their  costs  calculated in  accordance  with

Category 2 band B.