Shaw v Dixon Homes Limited
[2023] NZHC 3395
•28 November 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-419-031
[2023] NZHC 3395
BETWEEN MARGARET EVELYN SHAW and MURRAY NELSON SHAW
Plaintiff
AND
DIXON HOMES LIMITED
Defendant
Hearing: 27 November 2023 Counsel:
No appearance for the Applicants M Talbot for the Respondent
Judgment:
28 November 2023
JUDGMENT OF ASSOCIATE JUDGE BRITTAIN
This judgment was delivered by me on 28 November 2023 at 11 am.
Pursuant to Rule 11.5 of the High Court Rules.
…………………..
Registrar/Deputy Registrar
Solicitors/Counsel
Braun Bond and Lomas, Hamilton Copy to M N Shaw
SHAW v DIXON HOMES LIMITED [2023] NZHC 3395 [28 November 2023]
Introduction
[1] In this proceeding, the applicants, Mr and Mrs Shaw, were successful in obtaining an order under s 143 of the Land Transfer Act 2017 (the Act) sustaining a caveat. The caveat, 10850077.1, was lodged by Mr and Mrs Shaw against Record of Title 846822 (the property), owned by the respondent, Dixon Homes Ltd.
[2] The order sustaining the caveat was granted by Associate Judge Andrew in his judgment dated 1 June 2022, on the following condition:1
…pending the determination of the substantive proceedings. The order is conditional on the Shaws continuing to take all reasonable steps to prosecute their substantive claims.
[3] Dixon Homes now applies for an order that the caveat be removed, which is in substance a final order that the caveat lapse under s 143(7) of the Act, on the ground that Mr and Mrs Shaw have not complied with the condition.
[4] Mr and Mrs Shaw filed written submissions opposing the application, but did not appear at the hearing. The written submissions amount to an unfounded attack on the jurisdiction of the Court.
Background
[5] The substantive proceeding, CIV 2022-419-126, was commenced by Mr and Mrs Shaw before Associate Judge Andrew’s judgment in this proceeding. The substantive proceeding was an application for specific performance of a deed of settlement between Mr and Mrs Shaw and Dixon Homes from 2017 (the 2017 deed). The background to the deed is set out in the judgment in this proceeding dated 1 June 2022.
[6] The 2017 deed provided for a land swap and specific performance in relation to a 2013 agreement for sale and purchase between the parties, transferring some of Mrs and Mrs Shaw’s land to Dixon Homes. The 2017 deed provided Mr and
1 Shaw v Dixon Homes [2022] NZHC 1271.
Mrs Shaw with an express right to caveat the property. The 2017 deed has been part performed.
[7] In this proceeding, Dixon Homes had argued that Mr and Mrs Shaw had repudiated the 2017 deed, claiming valid cancellation by Dixon Homes. Associate Judge Andrew held that it was arguable that the cancellation was invalid and the 2017 deed remained on foot.
[8] Associate Judge Andrew held that Mr and Mrs Shaw had established an ongoing beneficial interest in the property, and that Mr and Mrs Shaw had a right to maintain the caveat over the property until the 2017 deed is performed. The judge held that there was no basis to exercise his discretion to discharge the caveat, having found that there was an arguable interest to support the caveat.2
[9]The following statements were central to the judge’s reasoning:3
[52] I also reject the submission of DHL that I could confidently conclude at this stage that the overall conduct of the Shaws would debar them from access to the equitable remedy of specific performance. They have engaged new legal representation, filed proceedings for specific performance and have thus far, arguably taken steps necessary to achieve part-compliance with some of the obligations under the 2017 deed. It would be wholly inappropriate for me to determine at this summary stage that the Shaws have no prospect of succeeding with their substantive claim. On the material before me, there is a strong case for contending that the obvious solution is for the 2017 deed to be fully implemented and the protracted period of dispute between the parties brought to an end.
[54] I find that there is no basis for me to exercise my discretion and conclude that the caveat should be discharged. While delay may be a relevant factor in the Court’s exercise of discretion, DHL cannot clearly and unequivocally establish that any delay has been solely caused by the Shaws. Furthermore, DHL has not put forward any clear evidence of prejudice or a basis for concluding that there is an urgent need for the caveat to be discharged. This is a different case from Glanville v Medical Holdings Ltd, a case relied upon by DHL. The question of timing for any necessary subdivision consents is a matter best addressed at trial.
(footnotes omitted)
2 At [53] and [54].
3 At [52] and [54].
[10] Mr and Mrs Shaw failed to prosecute the substantive proceeding. Following a series of breaches of timetable orders by Mr and Mrs Shaw, I struck out the substantive proceeding on 16 June 2023.4
Principles
[11] In Raiser Developments Ltd v Trefoil Properties Ltd,5 the High Court order sustaining a caveat expressly reserved leave to the parties to have the matter further considered if there was a change of circumstances.
[12] The High Court subsequently ordered that the caveat be removed due to a change in circumstances, where the caveator had failed to post security for costs and to comply with timetabling orders in the substantive proceeding.
[13] The Court of Appeal held that the High Court was entitled to reconsider the extension of the caveat following a change in circumstances affecting the balance of convenience, notwithstanding that there was an arguable case for a caveatable interest in the subject property.6
Analysis
[14] In this case, the form of the order sustaining the caveat did not include an express reservation of the right for the parties to seek a review of the continuation of the order sustaining the caveat if circumstances changed.
[15] However, it is implicit in Associate Judge Andrew’s order that a further order of the Court is required for the order sustaining the caveat to continue after determination of the substantive proceeding.
[16] The order sustaining the caveat in this case was only effective “pending the determination of the substantive proceedings”. The substantive proceedings have been determined – the proceedings were struck out on 19 June 2023.
4 Shaw v Dixon Homes Ltd HC Auckland CIV-2022-419-126, 16 June 2023.
5 Raiser Developments Ltd v Trefoil Properties Ltd [2008] NZCA 73, (2008) 9 NZCPR 161.
6 At [49].
[17] The order sustaining the caveat was subject to a condition requiring Mr and Mrs Shaw to take all reasonable steps to prosecute the substantive proceeding. The substantive proceeding was struck out for a failure to comply with timetable orders, and ultimately an “unless” order. Mr and Mrs Shaw failed to comply with the condition to sustain their caveat.
[18] Accordingly, it is appropriate for the Court to now reconsider whether the order that the caveat not lapse should continue.
[19] There is no new evidence before the Court that would justify disturbing Associate Judge Andrew’s finding that Mr and Mrs Shaw have an arguable case to a beneficial interest in the property.
[20] However, the balance of convenience has shifted. Mr and Mrs Shaw failed to prosecute the substantive proceeding, and it is no longer appropriate for Dixon Homes to be hampered by a caveat in the development of its land, with no end in sight. The caveat should be removed.
[21] If Mr and Mrs Shaw are able to establish a breach of their legal rights in future litigation, then any remedy can sound in damages.
Costs
[22] Counsel for Dixon Homes requested an opportunity to make submissions on costs.
Orders
[23] Caveat 10850077.1 lodged by Mr and Mrs Shaw against Record of Title Identifier 846822 shall lapse.
[24]Dixon Homes may make written submissions on costs by 4 December 2023.
[25] Mr and Mrs shaw may reply with written submissions on costs by 11 December 2023.
[26]I will then make an order on the papers.
Associate Judge Brittain
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