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Tisot v Selak

Tisot v Selak

Case [2024] NZHC 1300 24 May 2024

Statutory Interpretation

Equitable Estoppel

Contract Law

Property Law

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-000308

[2024] NZHC 1300

IN THE MATTER OF Covenant numbered D606543.7

BETWEEN

ANTHONY ZVONKO TISOT, JOANNE MARIE TISOT and TIMOTHY GRANT

LIVINGSTONE as trustees of the A & J TISOT FAMILY TRUST
First Plaintiffs

ANTHONY ZVONKO TISOT
Second Plaintiff

AND

DANNY SELAK

First Defendant

DANNY SELAK and MARIE POSA as

trustees of DAN’S FAMILY TRUST Second Defendants

Hearing: 22–24 and 26 April 2024

Appearances:

D Broadmore and Z Sinclair for the Plaintiffs A Barker KC and L Kemp for the Defendants

Judgment:

24 May 2024

JUDGMENT OF GORDON J

This judgment was delivered by me on 24 May 2024 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Buddle Findlay, Auckland
Kemp Barristers & Solicitors, Kumeu Counsel : A Barker KC, Auckland

TISOT v SELAK [2024] NZHC 1300 [24 May 2024]

TABLE OF CONTENTS

Background [13]

Creation of the covenant [13]

Tisot purchase of 16A Scott Road [22]
Changes to Scott Point area [25]

Mr Tisot’s attempts to remove covenant [29]

Mr Selak’s purchase of 16 Scott Road [31]

The Deed [36]
Settlement of purchase of 16 Scott Road [39]

Unconscionability – the defence [43]

Unconscionability: legal principles [48]

Was Mr Selak under a qualifying disadvantage? [54]

Did Mr Tisot have knowledge of Mr Selak’s disadvantage?  [72]
Did Mr Tisot take advantage of the disadvantage (active extraction or
passive acceptance of benefit)?  [79]
Approaches to the Smiths: by Mr Tisot and then Mr Selak on behalf of
Mr Tisot  [80]
Conversation between Mr Selak and Mr Tisot after Mr Selak’s approach to

the Smiths [98]
Meeting with Dail Jones [106]

Is it likely Mr Selak would have agreed to the removal of building

restrictions on 16A Scott Road? [112]

Mr Tisot’s explanations for Mr Selak’s agreement to sign the Deed [118]

The Deed [122]

Respective benefits [125]

Subsequent conduct [127]

What was said by Mr Tisot and what Mr Selak understood at that time [133] Conclusion on third element of unconscionability [140] Misrepresentation [146]

Misrepresentation [149]

Statements of law [152]

Inducement [153]

Cancellation [156]

Analysis ]157]

Section 317 Property Law Act [162]

The PLA and legal principles [164]

Removal of covenant due to changes – s 317(1)(a)(ii) and (iii) and (b) [169] Section 317(1)(a)(ii) and (iii) – changes to neighbourhood or other changes [169] Section 317(1)(b) – change in the extent of the impediment [174] Changes since the covenant was created [175] Should the covenant be extinguished or modified due to changes? [185] Whether to extinguish or modify [188]

Whether substantial injury – s 317(1)(d) [203]

Compensation [211]

Result/Orders [213]

Costs [218]

[1] The second plaintiff, Anthony Tisot, and the first defendant, Danny Selak, have known each other for over 50 years. Until recently they were close friends. As well as socialising together the two of them worked on various projects together in the past.

[2] In 2016 at Mr Tisot’s request, Mr Selak signed…

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.

Continue reading Tisot v Selak

Details

AGLC: Tisot v Selak [2024] NZHC 1300
Case: [2024] NZHC 1300
Decision Date: 24 May 2024

CaseChat Overview and Summary

In the High Court of New Zealand, Anthony Zvonko Tisot, Joanne Marie Tisot, and Timothy Grant Livingstone, as trustees of the A & J Tisot Family Trust, brought an action against Danny Selak and Marie Posa, as trustees of Dan’s Family Trust, seeking the removal of a restrictive covenant on a property owned by the TF Trust. The covenant, created in 2001, restricts the use of a portion of 16A Scott Road, Hobsonville, for building purposes. Selak, a long-time friend of Tisot, signed a Deed in 2016 agreeing to remove the covenant upon purchasing 16 Scott Road. The defendants counterclaimed that the Deed was unconscionable and sought either its cancellation or modification.

The court found that Selak had significant reading and comprehension difficulties, which Tisot was aware of, and that Tisot took advantage of this disadvantage by not ensuring Selak received proper legal advice and misleading him about the effect of the Deed. The court declared the Deed void and of no effect and ordered the covenant modified, rather than extinguished, to balance the interests of both parties. The court found the modification should limit building in certain areas of 16A Scott Road to protect Selak’s views and privacy while allowing reasonable development on the property. The court reserved costs pending further hearings on compensation.

Orders