Sanli Homes Limited v Jung - [2019] NZHC 1861

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-1783

[2019] NZHC 1861

UNDER Section 145A of the Land Transfer Act 1952

IN THE MATTER

of a caveat against dealings registered against NA66A/205

BETWEEN

SANLI HOMES LIMITED and SANLI GROUP LIMITED

Applicants

AND

JIN KUK JUNG, CHENG ZHANG and PILL SOON SO

Respondents

Hearing: 13 May 2019

Appearances:

Ms J Boparoy for the Applicants

Mr R M Dillon and Ms T A Hwang for the Respondents Mr M J Fisher for Northwest Developments Ltd

Judgment:

2 August 2019

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 2 August 2019 at 3.00pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:
Shieff Angland, Auckland Queen City Law, Auckland Castle Brown, Auckland M Fisher, Auckland
K Ng, Auckland

SANLI HOMES LTD v JUNG [2019] NZHC 1861 [2 August 2019]

Introduction

[1] The applicants, Sanli Homes Limited and Sanli Group Limited (collectively, Sanli), seek an award of costs against the respondents, Jin Jung, Cheng Zhang and Pill So (the Jung interests) following a successful application by Sanli to sustain a caveat. The Jung interests in turn apply for an award of costs against a non-party, Northwest Developments Limited (Northwest).

Background

[2] On 6 May 2016 Sanli agreed to purchase a property at 77 Nobilo Road, Auckland (the Nobilo property) from the Jung interests. On 12 May 2016 Sanli lodged a caveat numbered 10427926.1 over the Nobilo property (the caveat) in order to protect their equitable interest in the Nobilo property until the date of settlement.

[3] The Nobilo property is situated in an area referred to as the Huapai Triangle. Unbeknown to Sanli, on or about 23 June 2015, the Jung interests had entered into an arrangement with neighbouring property owners to share in the costs of an application for a variation of the district plan to enable the Huapai Triangle land to be subdivided (the Five Party Agreement). The Five Party Agreement required each party to allow access across or use of its land if that was required to enable infrastructure to service another party's land, and each party agreed to grant and register easements to recognise such access rights. The parties further agreed that if the Council required any land or other infrastructure to be vested or dedicated in it as a condition of subdivision consent, or under the requirements of the plan change, the party whose land or infrastructure was required would do all things reasonably necessary to enable such vesting or dedication to occur.

[4] Northwest acquired land adjacent to the Nobilo property (the Northwest land) from parties who had been signatories to the Five Party Agreement, and it became entitled to enforce the Five Party Agreement against the original parties to the Five Party Agreement, including the Jung interests.

[5] Auckland Council approved the plan variation in November 2015, and in April 2016 the Jung interests consented to subdivisional and…

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: [2019] NZHC 1861
Decision Date: 2 August 2019

CaseChat Overview and Summary

This case involved a dispute between Sanli Homes Limited and Sanli Group Limited (collectively, Sanli) and Jin Jung, Cheng Zhang, and Pill Soon So (the Jung interests) over a property at 77 Nobilo Road, Auckland. The dispute arose from an agreement between Sanli and the Jung interests to purchase the Nobilo property, with Sanli lodging a caveat to protect their interest. The case centred on the parties' obligations under a Five Party Agreement, which required the Jung interests to obtain Sanli's consent for the survey plan for the property. The Jung interests applied for the caveat to be removed, leading to a costs dispute between the parties.

The court was required to decide whether costs should be awarded against a non-party, Northwest Developments Ltd (Northwest), and whether Sanli was entitled to costs against the Jung interests. The Jung interests sought non-party costs against Northwest, arguing that Northwest compelled them to make the s 145A application to remove the caveat, which led to the costs dispute. Northwest opposed the claim, arguing that it should not be liable for the costs as it was not the real party interested in the outcome of the caveat application. Sanli, on the other hand, did not make submissions on the non-party costs issue but opposed Northwest's contention that it should not be regarded as the successful party on the caveat application.

The court found that Northwest had a clear interest in the outcome of the Jung interests' attempts to have the caveat removed and stood to benefit from a successful defence of any application Sanli might file to sustain the caveat. However, the court was not satisfied that there was "something extra" about Northwest's conduct that, in the interests of justice, should make it responsible for the costs of Sanli and/or the Jung interests on the caveat application. The court dismissed the Jung interests' application for non-party costs against Northwest but awarded costs to Northwest on the unsuccessful claim for non-party costs against the Jung interests.

Regarding Sanli's claim for costs, the court found that Sanli was entitled to costs as the successful party in the caveat application. The court held that Sanli effectively had no option but to apply to sustain the caveat, and the caveat was sustained. The court found that there was nothing to displace Sanli's ordinary entitlement to costs as the successful party and ordered the Jung interests to pay $9,656.04 to Sanli as agreed. The court also noted that Sanli may be entitled to further costs for its attendance on the costs issue after 29 October 2018, but any such claim would be modest, reflecting the reduced involvement and the modest sums involved.

Orders