Solan Heights Limited v Brown

[2015] NZHC 25

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-003241 [2015] NZHC 25

UNDER	Section 143 of the Land Transfer Act 1952
IN THE MATTER OF	an application for the removal of a caveat
BETWEEN	SOLAN HEIGHTS LIMITED Plaintiff
AND	ALAN BROWN Defendant

Hearing:	[On the Papers]
Appearances:	A R Laurenson for the Plaintiff A Brown (Self-represented Defendant) in Person
Judgment:	23 January 2015

JUDGMENT OF VENNING J [re Costs]

This judgment was delivered by Justice Venning on 23 January 2015 at 5.00 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Solicitors:    Govett Quilliam, New Plymouth

Copy To:     A Brown, Auckland

SOLAN HEIGHTS LTD v BROWN [2015] NZHC 25 [23 January 2015]

[1]      Mr Brown agreed to buy a building (referred to as a shed) and remove it from land owned by Solan Heights Limited (“Solan”). A dispute arose between the parties about Mr Brown’s obligations under the agreement.  Mr Brown lodged a caveat to improve his negotiating position.  On application by Solan, the caveat was removed. Solan now seeks indemnity costs, which Mr Brown opposes.

[2]      The  agreement  entered  between  the  parties  on  6  November  2014  noted

Mr Brown was to pay Solan the sum of $2,000 for the shed, and to pay a deposit of

$1,000 as a performance bond into Solan’s solicitors’ trust account, which was to be refunded, provided all conditions of the agreement were met.  The performance bond was paid, but there was a dispute as to other aspects of Mr Brown’s compliance.  As is  apparent  from  the  agreement,  the  principal  purpose  of  the  agreement  was Mr Brown was to remove the shed from Solan’s land.

[3]      There is no basis in the agreement to support any claim by Mr Brown to any interest in the land on which the shed was situated.  In asserting a right in the land and lodging a caveat, Mr Brown did so without any legal justification.

[4]      When Solan discovered the caveat had been lodged, its solicitors wrote to Mr Brown on 28 November 2014 requiring him to remove the caveat immediately. Mr Brown responded by email stating that:

I can provide you with a withdrawal of the caveat today provided I receive the sum of $3,000.

In  response,  Solan’s  solicitors  made  it  clear  that  Solan  would  not  be  paying

Mr Brown anything and stated:

We remind you of the repercussions of s 137 of the Land Transfer Act 1952. Our client has advised us in the strongest terms that it will be pursuing you for any losses it incurs due to your unlawful actions. We are sure that $3,000 will pale in comparison to any amounts claimed by [Solan].   We strongly suggest that you urgently get legal advice on this matter especially as it relates to making demands for money to release what we consider to be an unlawfully lodged caveat.

Mr Brown responded by email:

I’ll not debate the merits of the caveat with you.   Your client owes me

$3,000.  I am more than happy to provide a withdrawal of caveat as soon as the money is paid.

[5]      Before  issuing  proceedings  Solan’s  solicitors  wrote  again  on  1  and  3

December 2013.   They suggested the $3,000 be paid into their trust account.   Mr Brown’s response was to require the bond of $1,000 to be repaid to him and to set out terms on which he would agree for the matter to go to arbitration.   He also required the balance $2,000 to be held in his solicitor’s trust account.

[6]      As the shed had not been removed by 5.00 pm on 5 December 2013 in accordance with the agreement, the agreement itself was terminated on 5 December

2013. The proceedings were then issued on 11 December 2014.

[7]      A preliminary issue arises.   Mr Brown says he was not served with the proceedings.  While the documents emailed to him did not have the date of hearing recorded, the documents served at the address for service in the caveat contained the date of hearing. The process server has sworn an affidavit of service.

[8]      Mr Brown maintains the merits of his position.  He says that Solan should be responsible for its own costs.   He says he was prepared to take the matter to arbitration, and that Solan had the opportunity to issue a notice under the Land Transfer Act to have the caveat lapse.  He submits that any reasonable person with a reasonable amount of commonsense would take reasonable steps to negotiate the removal of the caveat.

[9]      Next, he notes there is a dispute between the parties in the North Shore

Disputes Tribunal, with a hearing set for 17 February 2015.

[10]     Finally, he submits that the plaintiff has acted unreasonably in its approach to him and the business dealings with him generally.  Mr Brown’s position is that the plaintiff has incurred the costs as a result of its own decisions and not due to any unreasonableness on his part.

[11]     Mr Brown is quite wrong.  The short point is that he lodged a caveat when he had no legal justification for doing so.   He was given notice that he had no legal

justification for doing so and was given the opportunity to remove the caveat.  He refused and improperly sought to use the presence of the caveat as a negotiating tool.

[12]     Part 14 of the High Court Rules applies, in particular r 14.6.   Rule 14.6(4) provides that indemnity costs may be directed if a party has acted vexatiously, frivolously improperly or unnecessarily in defending a proceeding or a step in the proceeding, or if some other reason exists which justifies the Court making an order for indemnity costs.

[13]     In the present case, while Mr Brown did not take any steps in opposition to the proceedings, the proceedings were only necessary because he had acted improperly and unreasonably in registering the caveat in the first place and then, in the face of a reasonable request to remove it, refusing to remove it.

[14]     I am satisfied that in this case, Mr Brown’s actions warrant an award of indemnity costs.  The merits or otherwise of the dispute that he may have with Solan about the agreement have nothing to do with whether he had a right to lodge a caveat.  He did not have such a right.  He chose not to take legal advice regarding the matter.   Solan was entitled to seek the urgent relief from the Court by making application to the Court, particularly given Mr Brown’s refusal to remove the caveat when requested to do so.  It has incurred the costs it seeks because of Mr Brown’s unreasonable actions.

Result

[15]     The plaintiff is to have costs on a reasonable solicitor-client basis against

Mr Brown in the sum of $16,519.75, together with disbursements in the sum of

$1,193.17.

Venning J