Song v Chai HC Auckland CIV 2011-404-000422

[2011] NZHC 1563

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-000422

BETWEEN  NICOLE SONG, MARIA SONG AND DOUGLAS ANDREW BURGESS Plaintiffs

ANDJASON CHUN HON CHAI Defendant

Hearing:         27 June 2011

Appearances: PJK Spring for the Plaintiffs

R A Edwards for the Defendant

Judgment:      30 June 2011

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

30.06.11 at 4:30pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors/Counsel:

P Spring, Keegan Alexander, Auckland – [email protected]

R Edwards, Barrister, Auckland – [email protected]

NICOLE SONG, MARIA SONG AND DOUGLAS ANDREW BURGESS V JASON CHUN HON CHAI HC AK CIV 2011-404-000422 30 June 2011

[1]      This matter concerns a dispute between owners of a cross lease property.  The plaintiffs own Flat 3, and the defendant (Mr Chai) Flat 1.  They each own a third share in the fee simple and as well separately a leasehold interest in that land on which their residential homes are erected.

[2]      Flat 2, which is owned by another, is situated between the plaintiffs‟ and defendant‟s properties.   Access to the Flat properties is obtained by a common driveway which from the street proceeds around behind Flat 1 and past Flat 2 to the plaintiffs‟ Flat 3.

[3]      The plaintiffs have two issues concerning the ownership/occupation of Flat 1. Each concerns an alleged breach of their cross lease rights and obligations, namely:

(a)      That  the  occupiers  of  Flat  1  are  parking  their  vehicles  on  the leaseholders‟ common land when they have no right to park their cars there.

(b)Mr Chai has made structural alterations to his Flat without having first obtained the consent of the two other lessees.

[4]     The plaintiffs have applied for summary judgment seeking mandatory injunctions:

(a)      Requiring Mr Chai to remove the bedroom from and to reinstate the carport to Flat 1 within 30 days.

(b)Requiring Mr Chai to ensure that the tenants of Flat 1 immediately cease and desist from parking their vehicles on the common area adjacent to Flat 1 and to do all things necessary to ensure compliance by occupying tenants, including terminating the existing sub-leases of Flat 1 and entering into new sub-leases obliging the tenants not to so park.

(c)      Prohibiting Mr Chai, his family, servants and agents from parking their vehicles on the common area adjacent to Flat 1, in the event they were to reoccupy Flat 1.

[5]      As well the plaintiffs seek compensatory damages in the sum of $25,000.

[6]      It is apparent from the statement of defence and notice of opposition filed that the following issues require determination, as to whether:

(a)       Clause 11 of the cross lease, prohibits parking on common areas.

(b)Clause 9 of the cross lease required consent at all to be obtained for the structural alterations.

(c)      Mr Chai or his tenants have, in the parking of their cars, blocked access to and from the other flats, or otherwise have prevented the other lessees from using the common area.

(d)The plaintiffs are estopped in their complaints about the parking of cars preventing access, because:

(i)They have previously allowed tenants of previous owners to park up to four cars in the common area, without complaint.

(ii)Because they have orally and in correspondence indicated they would accept from one to three cars parked in the common area.

(e)      The conversion of the garage to a bedroom was done by Mr Chai, or by a previous owner in 2006, and whether the work undertaken was or was not in furtherance of an obligation to keep the exterior of the building in good repair.

(f)      If there was a breach of clause 9 because the consent of other lessees was not obtained, then the plaintiffs waived such breach because the

first named plaintiff (Mrs Song – who with her husband and child occupy Flat 3) failed to advise Mr Chai that such consent was necessary in terms of the cross lease when she acted as Mr Chai‟s solicitor when he purchased Flat 1.

(g)The overall justice of the case weighs against the grant of mandatory injunctions in terms sought.

Chronology

[7]      Cross lease proprietorship was created in February 1982.

[8]      Ms Song and her husband moved into Flat 3 in August 2008, and on 31

March 2010 Mr Chai purchased Flat 1.

[9]      On 15 April 2010 Mr Chai began renting out Flat 1.  That tenancy proceeded on the basis that the tenants were entitled to park their cars on the common area and they did so.

[10]     The plaintiffs claim that in the months of June and July 2010 the parking situation got worse and on occasions vehicular access to Flat 3 was blocked.   Ms Song complains that the tenants of Flat 1 began persistently parking up to four cars on the common area.

[11]     Attempts made at that time to resolve issues between the parties, failed.

[12]     The  plaintiffs  claim  that  they  became  aware  in  October  2010  that  the structure of Flat 1 had been altered without consent having been obtained.

[13]     The  plaintiffs  claim  that  from  December  2010  Mr  Chai‟s  tenants  began

regularly parking a large van and two other cars on the common area.

The cross lease

[14]     Clauses 9, 11 and 23 of the lease provide:

No structural alterations

9.(1)     The  lessee  shall  not  (without  the  consent  in  writing  of  the lessors or a majority of them for that purpose on every occasion first hand and obtained) make any structural alterations to the flat or to any partition walls therein or to any passageway or stairways leading thereto nor take any action which might constitute danger or risk to the said building.

Lessee‟s rights to exclusive occupation

11.     The lessee performing and observing all and singular the covenants and conditions on his part herein contained and implied shall quietly hold and enjoy the flat without any interruption by the lessors or any person claiming under them together with the use in common with the other lessees of flats in the said building of the drives, paths, and grounds  on  the  said  land  and  of  any  stairways,  balconies,  and verandahs in the said building for access only to and from such flats.

Right to sub-let

23.The lessee shall have the right to let the flat to a reputable tenant PROVIDED THAT the lessee shall ensure that such tenant shall be so bound as to protect all rights under this lease and the lessee shall take all reasonable steps to enforce such rights.

The defendant’s case

[15]     Typically, summary judgment cases are about the quality of a defendant‟s evidence or argument in opposition to the plaintiff‟s claim.  This case is not a typical one.  Although, as the evidence discloses, modern cross lease conditions prevent the parking of motor vehicles in common areas, the present case concerns cross lease conditions which are apparently no longer used.  The Court is invited to accept that modern cross lease provisions now directly prohibit the parking of vehicles in common  areas,  whereas  here  the  parties‟ lease  conditions  did  not  specifically prohibit the parking of cars.  The task for this Court is to consider whether the terms of the parties cross lease did prohibit the parking of cars in the common areas.  The plaintiffs can only succeed if it is not at least reasonably arguable that the parking of cars in the common area by a flat owner was not prohibited.  Further, in the context of the defences raised on behalf of Mr Chai, even if the parking of cars was prohibited, the plaintiffs cannot succeed if, on the facts of the case, issues of estoppel or waiver operated to suggest/show that because the plaintiffs have permitted the parking of private vehicles in the common area then, the plaintiffs have foregone their right to prohibit that activity in the future.

[16]     Of course this Court should not be concerned with resolving disputed issues of fact when those are better left to a trial court.  Therefore if a proper analysis of clause 11 shows that the parking of cars in the common areas is prohibited, then an arguable case for a defence may still survive if the Court believes there are critical questions of fact to be resolved which cannot be determined on the basis of affidavit evidence alone.

[17]     Likewise with the defence in relation to the clause 9 alterations to the garage. If that clause bound Mr Chai to obtain the consent of other flat owners (and in this case it is not dispute it that such was not obtained) then an arguable case for a defence may still exist if the plaintiffs were previously aware that alterations to Flat

1 had been undertaken to convert a garage into an additional bedroom.  In this case, added complications arise due to the fact that Ms Song acted as the Mr Chai‟s solicitor when he bought Flat 1.  Mr Chai argues that he received no advice at that time indicating that any consent would be required when he took over and, as it appears, did further works in connection with those alterations.

Factual overview

[18]     Lengthy affidavits have been filed on behalf of the parties.

[19]     Those from Ms Song identify her concerns regarding the use of the driveway. She says there is insufficient room within Flat 3‟s exclusive land area to turn her vehicle around before leaving the property, and she must reverse her vehicle from her own flat and out past Flats 2 and 1 in order to reverse into the „heel‟ of the driveway  before  proceeding  forward  down  the  driveway  onto  the  street.    It  is claimed by Ms Song that vehicles of the Flat 1 occupiers, parked on a cobblestoned area  between  the  home  and  the  driveway  at  the  inside  „heel‟ of  the  driveway, inhibited this manoeuvre.

[20]     Concerning the structural alterations issue,  Ms Song deposes that having arrived home on or about 8 October 2010 she could see that the garage door to Flat 1 had been removed.  She reports making enquiries of two builders onsite.  She says they had been asked to convert the existing garage into a room. The builders advised

her that Mr Chai‟s wife had informed them that the necessary building consents had

been obtained.  She then telephoned the City Council to pursue her enquiries.

[21]     She says before then she was not aware of any conversion of the garage area. [22]     Ms Song‟s  concern is for her daughter who suffers a condition that may

require urgent hospitalisation.  She recalled an incident on 14 November 2010 when she was unable to exit the property in order to take her child to Starship Hospital for care.  On other occasions the parking of Flat 1 tenants‟ cars have prevented or caused delays by preventing an immediate exit from the premises.

[23]     The evidence for Mr Chai was provided by his wife.   It is supported by evidence from tenants of Flat 1.

[24]     Ms Ellis was a tenant from November 2007 to February 2010.  She said that when she moved in the garage had already been converted into a bedroom although the garage door still remained on the outside of the house.   She and three fellow tenants parked their four cars on the cobblestoned area in and around Flat 1.  She said the tenants never had any issues at all with neighbours over car parking.

[25]     Ms Philson was a tenant at the time she swore her affidavit on 28 February

2011.  She said at that time only two of them owned cars and those were at all times parked on the cobblestoned area outside the flat.  She said they parked well away from the driveway and  that neighbours passed every day without difficulties or incident.   In her time as a tenant she received no complaints about the manner of tenants parking.

[26]     Ms Horgan‟s company owned Flat 1 from June 2006 until March 2010.  She recalls that at times all four tenants‟ cars were parked outside the flat: three on the cobblestoned area and one in front of the Flat 1 garage.  She said the tenants were asked to  make sure they stayed  within  the cobblestoned  area  and  off  the main driveway  access.    In  the  time  she  was  there  she  said  there  were  no  incidents regarding car parking brought to her attention.

[27]     Ms Horgan said that in 2006 a son of a friend was a builder and decided to put in a wall to fill in the internal cavity where the garage door was.   When her company sold the property to Mr Chai she informed him of the wall that had been put in the garage.  She did not know if Council consent was required for it.  She said there was a clause inserted in the agreement for sale to Mr Chai that no Council consent had been obtained for the wall on the garage, and the vendor was not obliged to obtain such.

[28]     Mr Rogo a builder, deposed that after Mr Chai purchased the flat he was contacted, in October 2010, to remove the external garage door and to install an exterior weatherboard cladding.

[29]     Mr Shin worked for Mr Rogo.  He recalls a conversation with Ms Song at the time the garage door was removed and the weatherboard cladding was installed.  He denied saying that Mr Chai had asked for the garage to be converted into a bedroom. He denies saying that Ms Chai had obtained all of the necessary consents from the Council.  He said that Ms Song was the one who had told them that the garage had been previously modified illegally and that she had complained to the Council about it.

[30]     Ms Chai deposed that when her husband purchased the property a major concern had been the parking arrangements outside Flat 1.  She said Ms Horgan had told her that her tenants had parked up to four cars outside of the house and had never encountered any problems.  She then consulted Ms Song, who was Mr Chai‟s conveyancing lawyer at the time and who assured Ms Chai no issues arose from that situation.  According to Ms Chai, Ms Song advised her that tenants could not park cars in the common area and went on to say that if Mr and Ms Chai were “nice enough and brought cakes and cookies around for the neighbours” she was sure that the neighbours (including her) would agree to let the tenant park two cars outside of Flat 1.

[31]     In the course of further enquiry Ms Chai visited the property again and noticed that the neighbour at Flat 2 parked her car outside of her garage and along the common driveway.

[32]     Ms Chai exhibited a copy of an aerial photograph taken in December 2007 showing four cars parked on the common area in and around Flat 3.

[33]    Ms Chai recalls having a conversation with Ms Song about the garage conversion, on 2 March 2010, prior to Mr Chai signing the agreement for sale and purchase.  She said she mentioned that Ms Horgan had told her about the conversion of the garage to another room.  There was a discussion about a clause being inserted that would prevent the cancellation of the agreement for purchase if it was subsequently discovered that the conversion of the garage did not have Council approval.  Ms Chai said that Ms Song said nothing about the need for a consent for such a conversion under the cross lease.

[34]     Ms Chai refers to an issue arising post settlement which involved a complaint

to the Law Society about Ms Song‟s legal services to them.

[35]     Since December 2010 only two of the occupant tenants own cars and, Ms Chai says, they have been asked to ensure that they park in a way that does not block the driveway access.

[36]     Ms Chai exhibited photographs showing that the cobblestoned area on which cars were parked is physically distinct from the driveway.  She acknowledges that the cobblestoned area is common property.  She says she and her husband had never asserted any exclusive rights to that area at all; that the other Flat owners were free to park their cars there also.

[37]     Ms Chai denies a claim that the tenants had persistently parked up to four cars on the common area.  She says at various times Ms Song agreed that anywhere from one to three cars could park on the cobblestoned area.   Ms Chai exhibited a copy of the note left on one of the tenant‟s cars saying that only two cars were allowed to be parked in the area.  Separately she has implicitly agreed to proposals permitting a total of up to three cars parked in the area.

[38]     Ms Chai believes that the issues have arisen in the outcome of their complaint to Ms Song‟s employer and subsequently to the Law Society, about the Ms Song‟s legal services.

[39]     Ms Chai says she and her husband have always been prepared to negotiate to agree upon a limit on the number of cars that may be parked on the cobblestoned area.

[40]     Ms Chai asserts that it is apparent from aerial photographs that there is ample room for Ms Song to turn her vehicle on her own property in order to travel out forwards and to minimise the difficulties which she says she has suffered as a result of having to reverse out of the driveway.

[41]     Concerning the conversion works undertaken, Ms Chai reaffirms her claim that Mr Chai did not convert the garage to another room, this having been done under previous ownership.  Rather, she says, the works that have been done involved removing an old aluminium garage door and replacing it with weatherboards to match the rest of the flat, inserting a window, and generally ensuring that the wall was weathertight.  She says Ms Song cannot see the work that has been done except when she drives past it on her way along the driveway.  Also, she says, the work done enhances the look of the property.

[42]     Ms Chai deposes that until these proceedings were issued she was not aware of any concerns by the plaintiffs about the garage conversion.  Mr Chai did learn in September about an anonymous complaint with Council about that conversion.  Ms Chai suspects it was the complaint of Ms Song.  Since, Mr Chai has worked with Council  officers  to  obtain  the  necessary  approval.    Presently  the  Council  has indicated  it  will  issue  a  Certificate  of  Acceptance  for  the  garage  conversion following a further inspection.

[43]     Recently Ms Chai‟s  enquiries with the Council indicate that the exclusive area of Flat 1 could only be utilised to provide additional parking for one car.

[44]     In response to Ms Chai‟s affidavit Ms Song deposes that since the occupier of Flat 2 parks in her own exclusive area, she has since been obliged to reverse down the drive way to that area where outside Flat 1 she was able to reverse the direction of her car in order to proceed forward onto the street.

[45]     Ms Song also responds to complaints about the adequacy of legal advice given to the defendant at the time of the purchase of Flat 1.   She reports that the complaint to the Law Society was dismissed.

[46]     Ms Song rejects claims of her agreeing that cars may be permitted to park in the common area; and says that the concession made in the note was for the purpose of a temporary solution; and that other communications were made for the purposes of attempting a settlement of the parties‟ dispute.

[47]     Ms Song denies having been aware of the garage conversion before October

2010.   She says she had never been inside Flat 1 and prior to October 2010 it appeared to her from the outside that there was a garage there.  Only once the garage door was removed did it appear to her a bedroom had been put in its place.

Considerations

[48]     I will first address the issues affecting the alterations to convert the garage to a bedroom.  I will consider how clause 9 of the cross lease ought to be interpreted and then will consider the evidence about the extent of the work undertaken.  I will then   review   historical   factual   considerations   before   determining   whether   a mandatory injunction ought to issue.

[49]     Secondly, I will address the issues concerning the parties‟ parking dispute.  I will endeavour to interpret clause 11 of the cross lease and if I am of the view that clause prohibits the use of the common area for anything other than temporary parking then I will determine whether this is an appropriate case for the granting of a mandatory injunction.   In that context I will consider whether considerations of waiver of estoppel should have any bearing.

Garage alterations

Chronology

[51]     Ms Horgan deposes that her company owned Flat 1 from June 2006 until it was sold to Mr Chai in March 2010.  The house was tenanted during that period. From the beginning the single car garage was used as a fourth bedroom.  A builder friend of the occupant of that bedroom put in a wall to fill in the internal cavity where the garage door was.  Carpet was also laid.  The garage door remained on the outside of the house.  It had been done without Ms Horgan‟s knowledge or consent.

[52]     Ms Horgan said that when the house was sold she disclosed to Mr and Ms Chai that the wall had been put in the garage.  Council consent was required for the alternations but she ensured there was a clause inserted (cl. 18) in the sale and purchase agreement that disclosed no Council consent had been obtained for the erection of the wall.

[53]     Ms Chai recalls speaking to Ms Song about the garage conversion on or about 2 March 2011 i.e. prior to Mr Chai signing the sale and purchase agreement. She deposes:

...  As  best  as  I  can  recall,  I  asked  Ms  Song  during  this  telephone conversation if she could email me the due diligence and finance clauses of the sale and purchase agreement.  She asked me why I needed them.  I said that I thought the due diligence clause would probably be the only way we could get out of the contract if we decided not to go ahead with the purchase. She asked me whether I knew whether the vendors would be inserting any clauses in the sale and purchase agreement.  It was at that point that I told her that Jane Horgan had told me that they had converted the garage to another room, but they had not got Council approval for it.  I told her that Jane  Horgan  would  be  inserting  a  clause  into  the  sale  and  purchase agreement to cover that.  I recall her asking me whether that was a problem for me.  I said it wouldn‟t be a problem because it suited us to have a fourth room rather than a garage.  She told me that the effect of any clause to be inserted in the agreement would be that we would not be able to cancel the agreement  if  it  was  subsequently  discovered  that  the  conversion  of  the garage did not have council approval after we had done our due diligence. She didn‟t say anything about needing her consent or Unit 2‟s  consent to such a conversion under the cross lease.

18.0The purchaser acknowledges that the wall in the garage has not been consented to by the council and will not require the vendor to take any further action relating thereto.

[55]     Ms Song responded:

Ms Chai maintains that I failed to advise her and her husband as their solicitor on the purchase of Unit 1 that they required the consent of the plaintiffs and the owners of Unit 2 to conversion of the garage under the Cross Lease.  In reply, I say that, at no stage did Ms Chai tell me that there had been an illegal conversion of the garage into a fourth bedroom in Unit 1. When I brought clause 18 to the attention of Ms Chai, she told me that she was not concerned by the fact that the wall did not have Council consent because she had already obtained a discount in the purchase price from the vendor on account of it.  She also said I did not need to be concerned with it as she has obtained independent legal advice on the LIM report prior to declaring the agreement unconditional.

[56]     Issues in connection with the alterations have arisen in the outcome of the parking dispute. Those parking issues arose within a few months of Mr Chai settling his purchase of Flat 1.  It is in that connection that Mr and Ms Chai laid a complaint with the Law Society.   It is not clear from the evidence when that complaint was made but the Law Society‟s  ruling upon it was conveyed by its letter dated 18

February 2011. That letter records there having been a dispute concerning parking in a common area on the property on a cross lease title.

[57]     Ms Chai noted in those first few months following settlement that Ms Song‟s suggestions for an agreed parking arrangement, appeared to constantly change.  Ms Chai said she felt Ms Song was creating an issue around car parking because she and Mr Chai had complained about her legal services to her employer and subsequently to the Law Society.   Ms Song deposes that she denies being aware of the garage conversion well before October 2010.   Prior to then it appeared to her from the outside to be a garage.  She said following the removal of the garage door and its replacement  with  weatherboards  to  match  the  rest  of  the  house,  including  the insertion of a window and ensuring the wall was weathertight, it appeared to her the garage had been removed and a bedroom put in its place.

[58]     Ms Song denies ever advising Mr and Ms Chai as their solicitor in relation to clause 18 of the agreement for sale and purchase.

[59]     Ms Chai reports that on 9 September 2010 she received a note which had been left under her door by a Council officer asking her to contact him.  When she did make that contact she said she was given advice about an anonymous complaint received that the garage had been converted into a bedroom without the necessary building consent.  Ms Chai suspects it was a complaint by Ms Song.  Ms Chai said no works were going on at the property at the time and the room continued to be used as it had been since 2006.

[60]     On 20 September 2010 Ms Chai met with the Council officer onsite.   She said she was advised to apply for a Certificate of Acceptance to ensure work was completed in compliance with relevant regulations.  After the work was begun she said the Council had contacted her to direct that those works should stop because of a complaint received.  Ms Chai said the Council allowed the works to recommence “once some confusion about the nature of the works being undertaken had been cleared up”.

[61]     About mid-September 2010 the plaintiffs applied to the District Court for an interim injunction in respect of the parking issues.  Ms Song filed four affidavits in that proceeding.  The application for an interim injunction was never heard.  Rather it went to a judicial settlement conference which was unsuccessful.  After that the proceeding was discontinued.   Ms Song‟s current solicitors advised a High Court proceeding be taken instead.  It appears that there was nothing pursued in the District Court proceedings concerning the garage alterations issue now taken up in the High Court proceedings.

[62]     Mr and Ms Chai claim to have made every effort to make proposals which will address Ms Song‟s stated concerns regarding car parking on the cobblestoned area within the common area.  I have previously endeavoured to describe where this cobblestoned area is.  The dimensions of that area abutting Flat 1, appear to allow the parking of three cars upon it without those protruding beyond the cobblestoned area.

[63]     In  an initial proposal provided for consent to construct an exclusive use carpark within the exclusive use area of Flat 1, Ms Chai says they also offered to address Ms Song‟s other concerns when raised with them e.g. concerning trimming of trees and bushes along the driveway and contributing to the cost of putting in lighting.

[64]     More recently the Chais have on 16 June 2011 sent another proposal pursuant to clause 20 of the cross lease to the plaintiffs and to the owners of Flat 2.  Clause 20 provides for the consent of co owners to approve changes to their leasehold covenants.

[65]     The  proposal  provided  for  the  creation  of  a  single  carpark  within  the exclusive land area of Flat 1; to allow a maximum of two cars to be parked on the cobblestoned area on a non-exclusive basis; and to consent to the garage conversion if such consent was or is required.

[66]     The plaintiffs and the owner of Flat 2 have both responded by declining the proposal.

Clause 9

[67]     Clause 9 provides for the consent of other lessees for the making of structural alterations to a flat or to the taking of any action which might constitute danger or risk to the building.

[68]     The plaintiffs‟ position is that the conversion involved a structural alteration for which consent was required but none was obtained.  Also it is clear from the rejection of the recent clause 20 proposal that no consent will be forthcoming (albeit that view was indicated in the context of a solution proposed to deal with parking issues also).

[69]     Mr Spring submits that this Court should not in effect give its consent to the alteration works when in due course the Council may not provide its own.

[70]     I think in that submission the functions of the Court and of the Council are misunderstood.  Council is involved with issues of work standard compliance.  This Court‟s issue is whether there was a structural alteration of a kind for which consent was required in terms of the parties‟ lease, such not having been obtained.

[71]     Both counsel accept as a starting point that this case concerns whether or not what has been done amounts to „structural alterations‟.  If the plaintiffs‟ case for a mandatory injunction is to succeed then it must show that Mr Chai does not have an arguable defence to the proposition that the alterations were of a „structural‟ kind for which  consent  was  required.     In  this  respect  counsel  have  addressed  their

submissions to the judgments of Fisher J in Smallfield & Anor v Brown [1] and Potter J

in Estate of Ferguson & Anor v Walsh [2].

[1] Smallfield & Anor v Brown (1992) 2 NZ Conv C 191, 110.

[2] Estate of Ferguson & Anor v Walsh (1999) 4 NZ Conv C 193, 032.

[72]     The Smallfield case concerned the construction of a deck and access to the deck through French doors facing the other Flat property.

[73]     The  learned  Judge  held  that  the  clause  requiring  the  co-lessees‟ consent before structural alterations could be made applied, even though the two dwellings were detached from each other.  Such a provision was relevant because both lessees retained an interest in the reversion of the whole of the property.  Further, the owners of one detached dwelling could have an interest in the structural alterations of a neighbouring dwelling because alterations could affect light and air, view and appearance, all of which could affect the enjoyment of the neighbouring property.

[74]     The  Court  held  that  the  deck  was  a  structure  erected  on  the  land  and constituted a structural alteration.

[75]     His Honour went on:

It seems to me that “structural alteration” in this context was intended to involve an alteration to any part of a building which had significantly contributed to the strength of the building as distinct from something superficial such as non load-bearing cladding, decoration etc which did not make any significant contribution to holding up the building or maintaining its inherent shape, strength and integrity.

... I mentioned also that in cases of doubt one would in this context be more inclined to classify it as a structural alteration if it could conceivably have some affect on the neighbour.   In that respect I think that to increase an opening in a house facing towards a close neighbour in this situation could be expected to impact in a minor way upon the enjoyment and privacy of the neighbouring property.

[76]     His Honour was concerned about the potential for the deck and the French doors to it to impact upon the lifestyle in the other Flat and the disappointment that may result.  He concluded:

The plaintiff‟s rights have been invaded and prima facie they are entitled to have them enforced.

[77]     He also said:

Many  structural  alterations  will  be  of  negligible  consequence  to  the neighbour but these are catered for by the proviso that any consent to the alterations is not to be unreasonably withheld.   In the situation where one lessee wishes to carry out a structural alteration inside his house or on a wall facing  away  from  the  consenting  lessee,  it  should  be  a  mere  formality because   the   consenting   lessee   could   have   no   possible   grounds   for withholding consent.

[78]     In the case of Estate of Ferguson, the defendant obtained a building consent and carried out alterations to the basement that created living accommodation, consisting of a bedroom, living room, bathroom and kitchenette.   The alterations included the replacement of existing windows, the replacement of a roller door with sliding doors, the replacement of vent blocks with a window, the building of internal walls, provision of a toilet and hand basin, upgrading an existing shower, provision of a sink, bench and pantry in the kitchenette area, and plumbing, electrical and sewerage connections.  None of those alterations affected the load bearing structures of the flat.

[79]     Potter J suggested that in determining whether alterations were structural, guidelines should apply.

[80]     In Potter J‟s assessment, the building of internal partitions involved non-load- bearing work which was of no concern to other lessees and there could no ground for withholding consent to those changes.

[81]     The learned Judge also held that the remaining alterations were structural alterations for although they did not have an impact on the shape or strength of the building and did not cause a direct physical intrusion into the privacy of the other flat, overall their affect was to create a separate unit suitable for living accommodation and that this affected the overall integrity of the building and had the potential to intrude on the privacy of the other Flat owners.  In that case the learned Judge held that consent of the other lessees was required for the alterations.

[82]     Potter J‟s guidelines include three which are focussed upon by counsel in this case. Those were:

(i)        Alterations will not be structural if they are cosmetic, decorative, or superficial and do not make a significant contribution to supporting the building or maintaining its inherent shape, strength and integrity.

(ii)       Alterations may be structural but non-load bearing and of no or minimal concern or interest to lessees other than the owner involved in the alteration.  Examples are moving internal partitions or doors, or altering an exterior wall distant from or otherwise not having an impact on other lessees.  Consent from other lessees will be required under cl. 10 or a similar provision, but there would be no possible grounds for other lessees reasonably to withhold consent.

(iii)      Alterations which affect load bearing and have an impact on the strength and support of the building are structural.   Examples or alterations which involve moving or replacing load-bearing beams. The consent of other lessees will be required under cl. 10 or a similar provision.

[83]     Ms Edwards submits that the first guideline is appropriate in this case.  Mr Spring submits it is not and that even though the alterations do not affect load bearing or cause a loss of privacy, consent should be required because of the flow on impact to the parking issue i.e. because the loss of the garage would cause tenants to park illegally on the common area.

[84]     In response to Mr Spring‟s submission it seems to me the parking issue is, although  linked,  in  this  case  subject  of  separate  consideration  and  the  garage alteration issue will not influence the Court‟s decision about whether or not parking on the common area is prohibited.

[85]     Counsel have also referred me to the decision of Perry J in Wood v Elrick [3].

[3] Perry J in Wood v Elrick (1978) 1 NZCPR 19.

[86]     That case also concerned parking issues involving two lessees in a block of three flats.   The defendants made alterations to their carport which the Court considered had the affect of seriously impairing the plaintiff‟s  enjoyment of their flat.  The alterations had been done without any written consent although since, the third flat owner had consented to the alterations that had been carried out.

[87]     Mr Spring urges upon me the similarities between that case and this.   He opines that the lease terms were probably the same or similar.

[88]     In that case Perry J held that:

The plaintiffs had shown “that grave damage will occur to them in the future in that their privacy will continue to be affected and they will continue to suffer from the noise caused through the use of the carport as a living area. It is sufficiently grave for them to abandon the use of part of their flat for sleeping purposes.

[89]     I do not think there is that similarity that Mr Spring contends for.

[90]     Ms Song has said there is no loss of privacy.  She complains about a loss of aesthetics but provides no particulars about this.  The cladding installed in place of the garage door apparently matched that elsewhere on the property.

Conclusion

[91]    To consider, on a summary judgment application, granting a mandatory injunction the Court has to be satisfied there is no arguable defence to a claim that the alterations were of a structural kind for which the consent of other lessees was required.   The guidelines of Potter J  in the  Estate of  Ferguson  are helpful but obviously not determinative in this case.   In the cases of Estate of Ferguson and Smallfield, the Court granted mandatory injunctions in the outcome of a trial and following consideration of all of the evidence.  Those cases were not concerned with

a summary judgment application.

[92]     On the basis of the affidavit evidence the Court cannot conclude that this is a case for which consent must have been required, and if it was required, whether considerations of consent being unreasonably withheld were apposite.

[93]     Although  it  appears there is  no  provision  in  the parties‟ lease about  the qualification of consent being „unreasonably withheld‟ there is at least an arguable case that such a qualification may be implied.

[94]     Even if this Court could conclude consent was required and had not been unreasonably withheld, the application for a mandatory injunction would have been refused.

[95]     Likely the Court could benefit also from hearing evidence about the parties‟ solicitor/client relationship and whether professional obligations were involved in connection with the insertion of clause 18 in the agreement for sale and purchase. Although the Law Society complaint was dismissed, that complaint focussed upon the car parking issue and not in relation to the garage conversion issue.

Car parking issue

Chronology

[96]     From Mr Chai‟s viewpoint the chronology begins at least from the time of Ms Horgan‟s company‟s ownership in 2006.  The evidence indicates the parking of two to four cars by occupants of Flat 1 has endured since that time.  There is no evidence of any car parking issue arising until those few months after Mr Chai purchased Flat

1.  Ms Ellis said all four tenants had cars and these were parked on the cobblestoned area in and around Flat 1.  She said there were no issues with neighbours ever car parking; cars would get up and down the driveway without any problem.

[97]     Ms Horgan stated that at any one time her company had up to four tenants‟ cars parked outside Flat 1, three on the cobblestoned area and one in front of the garage.    She  said  the  tenants  were  asked  to  make  sure  they stayed  within  the

cobblestoned area and off the main driveway access.   She was not aware of any

incidences regarding car parking in the time of her company‟s ownership.

[98]     Since Mr Chai purchased the property Ms Philson and “three other girls” had been living there from about early December 2010.  She stated she could recall one night only when there were three cars parked outside on the cobblestoned area: at all other times only two cars have been parked on the cobblestoned area.

[99]     Ms Chai maintains, as I have previously noted, that Ms Song has indicated that anywhere from one to three cars could park on the common area.   Ms Chai relied upon Ms Song‟s statement to her prior to the purchase of the flat that two cars could park on the common area; and Ms Song‟s „note‟ stated that only two cars were allowed to be parked on the common area.  Also there is the statement made by Ms Song in an email on 26 August 2010 that she would agree to one car per flat being parked in the common area.

[100]   Ms Song‟s position is that she never agreed that two cars could park in the common  area  and  that  the  conversation  referred  to  in  the  „note‟ was  purely  a temporary solution.   Ms Song says that communications referred to were sent pursuant to an attempt to settle the proceeding and therefore are inadmissible.

[101]   Mr Chai‟s position is that the facts and issues concerning the car parking are heavily contested – as to the number of cars parked; whether any car parking issues at all have arisen since about the time of the Chai‟s professional services complaint about Ms Song; whether there has been any parking in a manner which has inhibited the use of the driveway by Ms Song for access and egress.  This issue of disputed facts is at the forefront of defence claims of estoppel and waiver i.e. that Ms Song is estopped from preventing continued use of the common area for parking, and moreover has by her actions in agreeing to certain numbers of cars being parked there, waived any claim to enforcement of rights she may hold pursuant to her lease.

[102]   I shall examine those propositions after my consideration of the meaning of clause 11.

Clause 11

[103]   It provides for an uninterrupted enjoyment of the flat property together with the shared use “in the said ... drives, paths, and grounds on the [property] and of any stairways, balconies, and verandahs in the said buildings for access only to and from such flats.

[104]   Ms Edwards submits that the plain meaning of clause 11 is that car parking is not prohibited on the cobblestoned area.  She submits that even the plaintiffs‟ own evidence suggests that cars parked on the cobblestoned area do not restrict access or use by other owners.   Rather,  if  an  access  issue has  arisen  it  has  been  due to behaviour atypical of the courtesy and care usually demonstrated by car owners.

[105]   Ms Edwards submits that rather than containing prescriptive words clause 11 contains permissive language i.e. words referring to entitling conduct rather than saying what could or could not be done.

[106]   In her submission the clause means that the use of the common area by one lessee cannot impinge on the use of that area by another.  Further and because there is a dispute between the parties regarding the extent of the use that Ms Song claims, this case is not appropriate for summary judgment by reason of that dispute.   It follows, I think, that the defendant asserts that a breach of clause 11 shall occur not by the fact of parking within the common area but rather there shall be a breach if that parking by one flat user impinges on the right of the use by another flat owner to that same part of the common area.

[107]   Of course that is not what the clause says expressly.  The court is invited then to consider it may be implied.  To that end Ms Edwards urges the Court to accept that clause 11 confirms the rights of all lessees to use in common the “drives, paths and grounds” on the said land.  She submits the “access only” restriction applies to the use of “stairways, balconies and verandahs”; that there is a physical distinction between the categories of common property; because “drives, paths and grounds” refers to that which is around and outside the building areas whereas “stairways, balconies and verandahs” are connected to or form part of the building.

[108]   Ms Edwards submits the distinction is also drawn in a grammatical sense by the use of the word “and”.  She states there would be no need for the word “and” if it had been intended that all common property was to fall within the same category and be subject to the same “access” restriction.  In that case she said the clause would have read “... use in common with other lessees of flats in the said building of the drives, paths, grounds, stairways, balconies, and verandahs in the said building for access only to and from such flats”.  She submits the use and positioning of the word “and” indicates a difference between driveways, paths and grounds on the one hand, and stairways, balconies and verandahs on the other.

[109]   Ms Edwards submits that reference in the clause to the term „ground‟ makes it clear that the common area does not alone serve as the requirement for access for the grounds include areas including trees and bushes where no vehicles would park or pass upon.

[110]   Therefore Ms Edwards submits that the use of the common area by one is not to prevent the use of the same by another and does not permit a use by the one except in consultation with the same right of use by another.  Therefore there would be nothing to stop Ms Song parking on the cobblestoned area.  Rather all flat users would be entitled to park on that area but not in a manner to create a nuisance or to infringe on the rights of other flat users.

[111]   I adopt a different view of clause 11 to that proposed by Ms Edwards.  The clause interposes rights of exclusive occupation with rights for use of areas (the common areas) with others.  It was not intended to convey an advantage to one flat owner/user of an area which abutted their Flat between their Flat and the common driveway.

[112]   Clause 11 refers to the use in common with others of various areas on the land and in connection with the buildings for access to those buildings.  It did not refer to access into buildings so much as to them.  It was not I think the purpose of clause 11 to encourage lessees to resolve among themselves issues in relation to the use by one, as opposed to the other, of certain parts of the common area.  It would be hoping for too much I think to expect those matters to be settled according to reason

and accord.   In that result I conclude that  parking within the common area on anything  other  than  a  short  temporary basis  –  for  the  purpose  of  arrival  to  or departure from the common area – is a prohibited activity notwithstanding the absence of words directly saying so.   It follows from that finding that the Court considers the defendant can assert no claim to a right of parking its tenants‟ cars within the common area.

[113]   The issue then is whether the Court should grant a mandatory injunction in terms  sought  by  the  plaintiffs  namely  to  ensure  that  all  tenants  of  Flat  1 “immediately cease  and  desist  from  parking  their vehicles  in  the common  area adjacent to Flat 1 and to do all things necessary to ensure compliance by tenants of that flat including the termination of the existing tenancies for purpose of entering into new subleases obliging the tenants not to so park.

[114]   It  is  in  the  context  of  this  purpose  in  the  plaintiffs‟ summary judgment application that the Court should consider the appropriateness of a mandatory injunction.

Conclusion

[115]   There are a number of reasons why I consider the grant of an order for mandatory injunction should be resisted.  In part those arise in the submissions of an argument of estoppel or waiver even though in my view those claims cannot with any certainly succeed.   In part, they arise from the circumstances of the parties‟ professional relationship, and in part they arise from a sense of caution about the making of orders for mandatory injunction upon a summary judgment application. Although in that outcome there may be some uncertainty about the future course of process, I think that is to be preferred to the harsh consequences of an immediate injunction in circumstances where the Court considers some caution is appropriate.

[116]   There is a long history of use of the common area for parking by tenants‟ of Flat 1.  The evidence suggests no exception was taken to this until that time, post Mr Chai‟s purchase, when  issues challenging Ms Song‟s professional integrity were raised.  The Law Society dismissed the Chai‟s complaint.  The Law Society directly

considered the Chai‟s concern regarding a dispute over parking issues.  The Chais complained that Ms Song had failed to advise them of the correct legal entitlements in regards to parking in the common area.   In coming to the conclusion that there was no evidence to support this issue the Law Society considered and relied upon a file note made by Ms Song which recorded that the vendor had made it sound like the owner of Flat 1 had exclusive parking rights.

[117]   Also  the  Law  Society  noted  Ms  Chai‟s own  comments  in  her  letter  of complaint that recorded the advice of Ms Song that the area concerned was common area and that no one was allowed to park there.

[118]   The Law Society Committee was satisfied that that advice regarding the prohibition on car parking in the common area was correct.   But, it is not clear whether  the  Law  Society  Committee  had  particular  regard  to  clause  11  when drawing their conclusion.

[119]   Meanwhile the Chai‟s adopted position of a right to car parking within the common  area  is  as  a  result  of  current  legal  advice  received.    Also  it  was  an impression taken from the wavering position of Ms Song about what she was and was not prepared to accept as a solution to car parking concerns.

[120]   I accept the submission of Mr Spring that no issue of estoppel arises because of Ms Song‟s actions.  Rather, there were concessions made or solutions offered to achieve some settlement but which did not otherwise compromise Ms Song‟s entitlement to assert a case for a „parking free‟ zone within the common area.

[121]   The plaintiffs‟ mandatory injunction application contains a package which includes an order requiring Mr Chai to terminate existing leases and to substitute others – “immediately”.

[122]   It is not for this Court to sort out upon a summary judgment application, what conditions or otherwise of a mandatory injunction are proper in the circumstances.

[123]   The plaintiffs‟ case has been hoisted on a petard that if there is a breach then the plaintiffs are entitled for it to be enforced forthwith.   Rather the Court thinks there is proper reason to refuse the mandatory injunction application and for that issue to be deferred for trial for consideration along with the plaintiffs‟ claim for compensation.  Quite clearly at the summary judgment stage it is inappropriate for the Court to award compensatory damages claimed in the sum of $25,000 upon a pleading that the actions of Mr Chai “have occasioned the plaintiffs considerable pain, suffering and mental distress”.  There is insufficient evidence of those which, even if accepted, could give rise to a claim of any significance at all.

Summary

[124]   When interested in purchasing Flat 1 at 8 Monteith Crescent, Remuera Mr Chai and his wife inspected the property and spoke to Ms Song there.  She was the owner/occupier of another of the three flat units on the property.  Evidence suggests that to that time tenants of Flat 1 regularly parked their cars on the common area.

[125]   Mr and Ms Chai engaged the services of the plaintiff to act as their solicitor in the purchase of the flat upon that same property the plaintiff owned an interest in.

[126]   Within a few months of the settlement of the Chai‟s purchase issues arose regarding the extent of parking space taken upon the common area by Mr Chai‟s tenants.   Discussion and correspondence flowed wherein Ms Song indicated what she was prepared to accept as parking by Mr Chai‟s tenants.  The cordiality between the parties receded.  The Chais complained to the Law Society about what, the Court infers, was the Chais perception of a loss of their tenants‟ parking rights.  It is to be inferred that the Chais recognised the imposition of significant limitations upon those parking rights.   Hence, their cause for complaint about the actions of their solicitor and neighbour.

[127]   From that time the plaintiffs have insisted on what they perceive and have been advised are their rights to prohibit parking at all upon the common area.

[128]   The Chais response has been to assert that a proper interpretation of the exclusive rights clause in the cross lease did not prohibit parking rights but rather to suggest an interpretation of clause 11 permitted the rights of parking to be shared and if there was disagreement about that for compromise to be encouraged. At the end of the day the cross lease preserved a right of reference to arbitration.

[129]   Although  this  Court  is  of  the  view  that  the  plaintiffs‟ evidence  was insufficient to prevent an arguable case being raised in defence of a claim that structural alterations to the garage had been made in contravention to the provisions of the cross lease, the Court accepts in relation to the car parking issues that the relevant cross lease clause does indeed prohibit the parking of vehicles other than for expedient and very temporary purposes.

[130]   Whilst considerations of past parking practice  and representations by the plaintiff as to what might be accepted for the future were relevant to the exercise of the Court‟s discretion about whether or not to grant a mandatory injunction, the Court is of the view those considerations do not give rise to defences of estoppel or waiver.  There is no evidence of reliance upon those statements by the plaintiffs, nor of an alteration of position because of them.  Rather, the Court accepts those were made in a conciliation context; and no commitment was made by them.

[131]   The making of orders for mandatory injunction involves the balancing of competing considerations.  In this case there is no one way street to that answer.  I hope my reasons for reaching that conclusion have been adequately identified.  I am firmly of the view that the orders sought by the plaintiffs are inappropriate.  In brief, Mr Chai does not deserve those consequences without an opportunity to further explore avenues to challenge how that outcome has occurred for them.

[132]   Because that process will also involve a review of the plaintiffs‟ claim for compensatory damages, it seems to this Court that it is appropriate that this matter be referred for trial.  For that purpose the Registrar is to have this proceeding listed for call in the chambers list at 2:15pm on 29 July 2011.

Judgment

[133]   Accordingly the applications for mandatory injunction are dismissed.

[134]   This is not an appropriate case to fix costs until all issues between the parties are resolved.

Associate Judge Christiansen