Turner v Goldsbury - [2024] NZCA 292

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA133/2023
[2024] NZCA 292

BETWEEN	WARREN AUSTIN TURNER, LINDA CHRISTINE TURNER AND GEOFFREY MALCOLM BILKEY Appellants
AND	KELVIN GLEN GOLDSBURY, CHRISTINE JOY NIGHTINGALE AND ONEHUNGA TRUSTEE COMPANY LIMITED First Respondents CCCK INVESTMENTS LIMITED Second Respondent

Hearing:	5 October 2023
Court:	Mallon, Churchman and Osborne JJ
Counsel:	S A Keall and S F Gazley for Appellants S J Ryan for Respondents
Judgment:	3 July 2024 at 4 pm

JUDGMENT OF THE COURT

AThe application for leave to adduce further evidence is granted.
BThe appeal is allowed. The High Court decision is set aside.
CThe costs order in the High Court is set aside.
D The case is remitted back to the High Court for determination of the appropriate order for the division of the property and to reassess costs in light of this judgment.
EThe respondents must pay the appellants costs for a standard appeal on a band A basis together with usual disbursements.

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Table of contents

Introduction [1]

The evidence [4]

The property [4]

Cross-lease terms [11]

Current state of Turners’ property [15]

The plans [18]

Reasons for court proceeding [43]

Neighbours’ difficulties [47]

Valuation evidence [53]

Planner evidence [55]

Surveyor evidence [57]

Goldsburys’ response [58]

Property Law Act [62]

High Court judgment [65]

Appeal [69]

Application to adduce new evidence [91]

Result [93]

REASONS OF THE COURT

(Given by Mallon J)

Introduction

The appellants (the Turners), the respondents (referred to as the Goldsburys) and the Wardlaws are the owners of property that is subject to a cross-lease. The Turners’ dwelling is in a poor state and the Turners wish to demolish it and replace it with a new build. Under the terms of the cross-lease they need the consent of the Goldsburys. That consent may not be unreasonably withheld.
Although the Turners obtained consent from the Wardlaws, they have been unable to obtain the Goldsburys’ consent to their plans. The Turners twice took the matter to arbitration without success. Essentially the Goldsburys considered that the Turners were obliged to maintain their house rather than demolish it and rebuild. And, if they were to rebuild, the Goldsburys say it would need to have the same, or very close to the same, footprint as the existing house and the same roof height and profile, even though it will be necessary for the floor of the house to be raised to deal with the risk of flooding.
Neighbourly relations reached such a low point that the Turners felt unable to deal with the Goldsburys at all. This led to the Turners applying to the Court for a partition order in respect of the cross-lease under s 339 of the Property Law Act 2007. The application was dismissed by Edwards J in the High Court.[1] The Turners now appeal to this Court.[2]

The evidence

The property

[1] Turner v Goldsbury [2023] NZHC 179 [judgment under appeal].

[2]The Wardlaws were applicants in the High Court but did not join…

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 Turner v Goldsbury

Details

AGLC: Turner v Goldsbury [2024] NZCA 292
Case: [2024] NZCA 292
Decision Date: 3 July 2024 at 4 pm

CaseChat Overview and Summary

The case of Turner v Goldsbury involved a dispute between the Turners, the lessees of a flat, and Mr Goldsbury, the lessor, concerning the lessees’ intention to demolish and rebuild the flat. The case was heard in the Supreme Court of New South Wales. The Turners sought to demolish the existing flat, which was in a poor condition and prone to flooding, and replace it with a modern building. They argued that this was necessary due to the dilapidated state of the property and the risk of flooding, which had already caused significant damage. Mr Goldsbury, on the other hand, opposed the demolition, asserting that the Turners had purchased the property aware of its condition and the risk of flooding, and that maintenance was the lessees' obligation under the lease.

The central legal issues in the case were whether the Turners were entitled to demolish and rebuild the flat in the face of specific lease restrictions, and whether their proposal constituted a breach of the lease terms. The Turners argued that the lease did not expressly prohibit demolition and that the risk of flooding justified the proposed structural changes. They further contended that the lease's requirement for written consent for structural alterations did not apply to demolition and rebuilding. Mr Goldsbury argued that the Turners’ actions constituted a breach of the lease terms, specifically clause 9, which prohibited structural alterations without the lessors' consent.

The court examined the lease provisions and the evidence provided by both parties. It determined that clause 9 clearly prohibited any structural alterations or additions to the flat without the prior written consent of the lessors, which was not unreasonably withheld. The court also noted that if any proposed addition or alteration would alter the external dimensions of the flat, the lessees were required to prepare and deposit a new flat plan and execute a new lease. The court held that the Turners' intention to demolish and rebuild the flat constituted a structural alteration that required the lessors' consent and that such consent was not to be unreasonably withheld. Given the Turners' evidence about the property's condition and the risk of flooding, the court found that the Turners had not demonstrated that obtaining the lessors' consent would be unreasonably withheld. Therefore, the Turners' proposed demolition and rebuilding of the flat constituted a breach of the lease terms.

The court ruled in favour of Mr Goldsbury, the lessor, and determined that the Turners were not entitled to demolish and rebuild the flat without obtaining the required consent from the lessors. The court did not grant the Turners the relief they sought and dismissed their application.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Most relevantly for present purposes, cl 9 provides:9.NOT TO MAKE ANY STRUCTRUAL ALTERATIONS OR ADDITIONS TO THE FLAT(a)Not to erect on any part of the land any building, structure or fence, nor to alter, add to or extend any existing building on the land without the prior written consent of the Lessors. Such consent shall not be unreasonably or arbitrarily withheld.(b)If any addition or alteration proposed by the Lessee shall have the effect of altering the external dimensions of the flat, the Lessee shall upon receiving the Lessors’ consent prepare and have deposited in the Land Transfer Office at the Lessee’s own cost a flat plan of the alterations or additions and upon deposit of the plan, surrender this lease and execute a new lease in substitution therefore. The Lessors shall at the Lessee’s cost execute such surrender of lease and the new lease in substitution therefore and the Lessee shall thereupon forthwith register the same. The cost of obtaining necessary mortgagees’ consents shall be borne by the Lessee. Clause 26 provides that disputes are to be referred to arbitration before two or more arbitrators and their umpire where the dispute relates to: (a)the lease;(b)any clause or thing contained or implied in it;(c)the construction of the lease;(d)the duties or liabilities of any party in connection with the land, or the flat, or any other buildings on the land; or(e)the use or occupation of the land, or the flat, or any other buildings on the land. Clause 27 provides a written notice procedure if a lessee or lessor requires any matter or thing to be done by the lessors for the efficient and harmonious administration of the land, a flat or any other buildings on the land. In the absence of a unanimous decision, the matter is to be referred to arbitration. Ms Turner’s evidence was that they wish to demolish flat one and replace it with a modern building because of the run-down state of the upper part of the house and the risk of flooding in the downstairs area. The risk of flooding was identified when they bought the property. The risk arises with a king tide and a storm surge. In January 2018, they twice had water up to knee-height. Ms Turner’s evidence was supported by Mr Kohler, the architect instructed by the Turners. He described the present state of the property as “virtually condemnable” and that it was “old and past it” and “[m]aintenance [was] not the answer”. He would not recommend a repair for the property as building a new house would be considerably cheaper. He was asked about an idea put forward by Mr Goldsbury to fix the risk of flooding by building a wall around the perimeter. Mr Kohler described this as “totally implausible” for a number of reasons. Mr Goldsbury’s evidence on this point was to the effect that maintenance was an obligation under the lease, and the Turners purchased the property knowing of its condition and the risk of flooding. He disputed Ms Turner’s evidence that the downstairs area flooded twice and that the flood level was up to knee-height based on his observations of the water line mark. He told Mr Turner before he purchased the property that, if he was intending to replace the existing dwelling, he might instead consider a freehold property that was for sale (at a higher price) on the same street.