Waiheke Island Airpark Resort Limited v Waiheke Aviation Services Limited
[2016] NZHC 2507
•20 October 2016
IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV 2016-404-001586
[2016] NZHC 2507
BETWEEN WAIHEKE ISLAND AIRPARK RESORT LIMITED
Plaintiff/Applicant
AND
WAIHEKE AVIATION SERVICES LIMITED
Defendant/Respondent
Hearing: 13 October 2016 Appearances:
J D Turner for the Plaintiff/Applicant
N J Scampion for the Defendant/Respondent
Judgment:
20 October 2016
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on
20.10.16 at 3:00pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
WAIHEKE ISLAND AIRPARK RESORT LIMITED v WAIHEKE AVIATION SERVICES LIMITED [2016] NZHC 2507 [20 October 2016]
The caveat
[1] The plaintiff, Waiheke Island Airpark Resort Limited (WIAR) is the registered proprietor of land at the address of 171 Carsons Road, Waiheke Island. The land comprises 8.9580 hectares. It is used in the plaintiff’s business as an airfield.
[2] On 24 March 2016 the defendant Waiheke Aviation Services Limited (WAS) registered a caveat against the title to the land claiming an estate or interest in the land. That interest was expressed as:
An equitable interest in an unidentified part of the land pursuant to an unregistered agreement agreed partly verbally, partly in writing, including by way of a development management agreement dated 5 September 2007 and by correspondence, and partly by conduct, and alternatively by way of estoppel, between the caveator and the registered proprietor and pursuant to which agreement the registered proprietor granted the caveator the option to elect to be paid for services to the registered proprietor by way of transfer of part of the land to the caveator.
The application
[3] WIAR has applied for a Court order to remove that caveat. Initially that application was filed on a without notice basis. The Court directed it be heard inter parties.
[4] Evidence in support of the application has been provided by Mr Greer a director of WIAR who swore an affidavit dated 3 July 2016 and in reply by an affidavit dated 30 August 2016.
The evidence in opposition to removal
[5] The evidence on behalf of WAS was provided by Mr Musson a director of WAS since its incorporation in 2004. Previously he had been a director of Waiheke Air Services (2002) Limited (WAS 2002) until that company was removed from the Companies Register in 2011.
[6] Mr Musson deposes also to having been a director of WIAR from its incorporation in May 2005 until 17 April 2009.
[7] He says Mr Greer and he cannot agree about relevant terms of the arrangement for the development of the land and for its management meanwhile.
[8] The land was part of a much larger parcel purchased by Mr Musson in 1983 and upon which in 1991 an airstrip was constructed. Adjacent to the airstrip Mr Musson also operated a vineyard development.
The transfer of the airfield from Mr Musson’s control
[9] In December 2003 ownership of the airfield was transferred to WAS 2002 and later to WAS. In 2005 ownership of the property was transferred to WAIR a company apparently in the control of Mr Greer. At the time Mr Musson says he had discussions with a Mr Guest who he said invited Mr Musson to head a group that would develop the airfield; that he wanted advice as to what the development could achieve. In the course of those discussions Mr Musson says it was agreed he would manage the consent application process.
[10] In his discussions with Mr Guest Mr Musson said it was agreed he would be paid $100 per hour for his contribution.
The Development Management Agreement
[11] In late 2005 or early 2006 a draft Development Management Agreement (DMA) was prepared by WAIR’s solicitors, McVeagh Fleming. That DMA provided that Mr Musson’s company, WAS 2002, would manage the design and obtain approvals for the development, liaise and negotiate with contractors for the purposes of implementing the development, and provide all necessary ancillary administrative services. Development was described as the subdivision of the land into residential units and aircraft hangers or such other development on the land as the parties may agree. A management fee was to be paid on an hourly rate.
[12] The DMA provided for the contemporaneous execution of a deed of lease by which WAS 2002 would operate the airfield as well. Mr Musson deposes that as anticipated by the DMA, day to day management of the airfield was kept separate from
the project management of the development. He said he understood his role in the development would come to an end when resource consent was achieved.
The deed of lease
[13] At around the same time as the draft DMA was prepared, Mr Greer’s lawyer prepared a draft lease for the airfield. The landlord was WIAR and the tenant was WAS 2002. According to the lease the rent would be calculated according to a clause which provided for the net profit of the airfield operation to be shared between landlord and tenant, with the landlord’s share being its rent. The draft lease referred to a management agreement that was to be entered into contemporaneously.
Pre execution of documents
[14] Mr Musson deposes to there being a degree of informality about the parties’ arrangements and that it was not something about which everything was documented.
[15] At a meeting on 13 January 2006, with Mr Greer and another, Mr Musson said there was discussion regarding development issues before Mr Musson said his company would bill for the development work later when there was more certainty the development could work. At that meeting he said there was also discussion regarding the possibility of him purchasing the managers cottage at the airfield that he and his wife were living in. He said Mr Greer was content with this in principle and the matter was subject of continued discussion from then until 2007.
[16] It is the managers cottage in which Mr Musson claims WAS (in whose name the DMA and lease documents were concluded) maintains an equitable interest, and in support of which it has filed the caveat which is the subject of the present application before this Court.
[17] Mr Musson deposes having worked on the development in a project management role between late 2005 and 2010 but that he did not provide invoices or reports for his management work because of what had been agreed on in 13 January 2006.
[18] Mr Musson deposes to there having been further discussion later in 2006 regarding billing arrangements for the work his company was doing in project managing the development. These discussions he said were not minuted in keeping with the informal way in which the arrangements had been made.
[19] Mr Musson estimates that through his companies he provided more than 2000 hours of project management services to WIAR. Between August 2005 and September 2007 he said he probably spent 20 hours per week on the development.
[20] In August 2007 WIAR’s lawyer Mr Cullen emailed Mr Greer noting no lease had ever been formalised for the airfield and nor had a draft management agreement been finalised or signed, and also noting Mr Musson’s companies had not been paid anything.
[21] Mr Greer responded (by email dated 5 September 2007) and requested Mr Cullen to update the draft DMA.
[22] In late 2007 Mr Musson and his wife travelled to Europe and took the opportunity to visit Mr Greer at his home in Dubai. At that time Mr Greer emailed Mr Cullen and advised that he and Mr Musson were discussing the lease and the draft development management agreement, and:
With regard to his WIAPR project management duties, for the sake of accounting please specify that Dennis will get paid $100 per hour for work associated with the airfield development.
As always, all we are looking for is a degree of formality and structure, pretty well everything will be arranged on a handshake or by mutual agreement.
[23] Mr Cullen responded that day with what he suggested would be the final version of a development management agreement and lease. That document provided that WIAR would pay WAS a management fee on $100 plus GST per hour and that penalty interest at 15 per cent per annum would be chargeable for late payments. The document provided that it was, with the lease, an entire agreement and that any variation of it had to be in writing.
[24]The document provided that development be defined as:
The development by way of subdivision of the land into residential units and aircraft hangers or such other development on the Land as the parties may agree.
[25] Mr Musson deposes that he anticipated there would be subsequent discussion and agreement as to the development that would be done, and there was such, he says.
[26] The agreement was signed with the modification to the name of the ‘manager’ company to WAS. At the same time Mr Musson said the airfield lease was signed and that provided for rent on the same basis as the draft lease and that the tenant would provide the landlord with a monthly statement of profit and loss and that the tenant would not “register a caveat in respect of the tenant’s interest hereunder”.
Events post document execution
[27] Soon after those documents were returned to Mr Cullen, Mr Musson said he and Mr Greer had a two day meeting in which it was agreed orally what Mr Musson’s company would receive, in respect of work already done and, of work to be done on the development. He said it was agreed at his election that WAS would be paid
$200,000 or WAS would receive the manager’s cottage (if that was permitted). Mr Musson said the agreement was that the achievement of the development consent would trigger WIAR’s obligation to make payment or agree to the transfer, and payment or the agreement would be made when consent for the development was obtained. At the time he said it was considered the managers cottage would likely be worth a similar amount to the lump sum due. There was he said no misconception about the reference to the “managers cottage” or that it was the property on the airfield that Mr Musson was living in and renting at the time.
[28] Mr Musson deposes that as between he and Mr Greer there was no misconception regarding what his role would be in the development or about the development to be undertaken. He was a director of WAS and Mr Greer controlled or was a principal of WIAR. No one else’s consent was needed and therefore he said he never thought there would be a need to formalise the arrangement.
[29] For these reasons Mr Musson said WAS did not render invoices for its management fees; those fees were not requested; and nor were any fees received.
[30] Mr Musson says WAS’ management services to WIAR included liaising with counsel, experts and lawyers; engagement and negotiations with contractors, consultants and advisors for the purpose of progressing the development; providing administrative services related to the development; and briefing Mr Greer and providing updates and recommendations.
[31] Mr Musson explains how, from his point of view, his personal financial circumstances had deteriorated in 2008 when his vineyard venture on the adjacent property failed and why therefore he left New Zealand in October 2008 and went to Australia to engage electrical contracts. He said it was always his intention to return to New Zealand. It was not, he said, a requirement of his provision of development management services to live permanently in New Zealand.
[32] Issues arose between Mr Greer and Mr Musson regarding use of the airfield during development. Mr Musson deposes that by an email to Mr Greer in December 2009 he reflected on those use issues noting that an initial agreement had provided him with a lease of the airfield and a fee agreement for his time for the development but that the lease was uneconomic as the airfield operations were to have a secondary role to the resource consent and future amenity value of development residences. He then wrote to Mr Greer:
While travelling through Dubai in August/September 07 I met with you where we had discussions mainly on the progress of the consent and we agreed that at the completion of the consent I would be given a flat fee rather than billing you for my time, as spent.
Even though the airfield lease was a loss making exercise, I saw my reward as what I would gain on the development-side, and stayed involved.
[33] Mr Musson deposes that in a meeting with Mr Greer in January 2010 he raised the issue about why WAS had not received any payment or compensation for its development work. He said Mr Greer denied there had been any such arrangement or that anything was owed. However, and later that day or the following day Mr Greer emailed Mr Musson on 21 January 2010:
Subject to a ‘profitable outcome’ of the development, where I net a ‘reasonable profit’ from either the sale of the villa units, partial or complete sale of the development or the whole airfield. I agree to pay you for your services a lump sum of NZ$200,000 or if you prefer in lieu of the lump sum, agree to give you the ‘managers house’ if it is not subject to restrictions defined by the conditions of consent”.
[34] The following day Mr Greer emailed Mr Musson which Mr Musson says provided a concession that there had been a “verbal discussion on reward” in Dubai 2007, but that Mr Greer sought to qualify it in saying:
Sorry if this sounds a bit blunt, but it is how I see it. I consider my last email regarding the lump sum is a very decent concession. I would argue that our verbal discussion in Dubai on reward was based on a much shorter time scale, a lot smaller financial input by me and a considerably larger potential profit, than what I am looking at now.
[35] Mr Musson claims he was astonished that Mr Greer was appearing to have forgotten or having admitted the agreement made in September 2007 [for the payment of $200,000 or in lieu to receive the manager’s cottage].
[36] Mr Musson responded by email asking Mr Greer to ‘honour his commitment in respect of the fee’.
[37] Mr Musson says the development consent was achieved in February 2010 and therefore that condition would trigger WIAR’s obligation to pay WAS or agree to the transfer of the managers cottage. Mr Musson says from that point WAS was entitled to payment and had an enforceable option on the managers cottage.
[38] Since, WAS has requested WIAR to pay it $200,000 plus accrued interest or alternatively to agree to transfer to it the managers cottage.
[39] On 27 August 2012 Mr Musson emailed Mr Greer. He said the meeting in Dubai in 2007 was “to reach agreement on account to-date, I should never have agreed to your offer of $200k or the house once consent was done.” He said Mr Greer did not reply.
The evidence supporting removal
[40] Mr Greer deposed that the development did not occur and nor was there any construction or completion of villas for the airfield or subsequent sale of such villas.
[41] Mr Greer says Mr Musson stopped providing management services and emigrated to reside in Australia in 2008. In 2010 Mr Greer said Mr Musson claimed Mr Greer owed him some money in relation to management fees under the DMA.
[42] He did not consider any debt was payable. There were he said some negotiations and communications of a “without prejudice” nature.
[43] Mr Greer deposes that WAS 2002 was removed from the Register at about the time Mr Musson was adjudicated bankrupt in September 2011. Mr Greer says he has not been contacted by the Official Assignee or the Insolvency Service in relation to Mr Musson.
[44] WAS was removed from the Register of Companies on 17 March 2015. It was subsequently restored to the Register.
[45] Mr Greer had not heard from Mr Musson for a long time when he received a letter from Mr Musson’s solicitors dated 24 April 2015. The letter referred to money owed for work done and alleged there was an agreed option to purchase the land. The letter made no mention of the DMA or the lease but referred to an alleged agreement in around September 2007 between him and Mr Musson. It was referred to in the lawyer’s letter as the “Dubai agreement”. Mr Greer is firm that apart from the DMA and the lease there was no other agreement.
[46] The lawyer’s letter then stated that in 2010 there were discussions to vary the Dubai agreement. Mr Greer’s solicitors responded to deny the allegations.
[47] Referring to the caveat lodged on 24 March 2016 Mr Greer deposes he did not understand the allegation of a claim of an equitable interest in the caveat. He said WIAR never granted WAS in writing or otherwise an “option to elect to be paid for services to the registered proprietor by way of transfer of part of the land to it”. The claim of an interest is he says just nonsense.
[48] Mr Greer wants the caveat removed to allow WIAR to sell or deal with the land.
[49] In reply to the affidavit of Mr Musson, Mr Greer states Mr Musson may have in 2005 suggested being paid at the rate of $100 per hour for his work. There were negotiations and from those there were drafts regarding a proposed management agreement in late 2005/early 2006. However Mr Greer says nothing was actually or formally agreed until the DMA and the lease were entered into. He agrees there was an arrangement proposed but that by mid-2006 he required a formal and structured agreement between the companies. He understands that the terms of the DMA and the lease replaced and superseded anything prior between the companies.
[50] As far as Mr Greer is aware there was no formal or express terms agreed between WIAR/Mr Guest and Mr Musson or his company “to manage the consent application process”. He notes that neither the draft agreement nor the subsequent DMA refer to any application for resource consent, or a requirement of WAS/Mr Musson’s management services or the grant of such a consent being treated as a ‘milestone’ event.
[51] Regarding the minute made by Mr Greer in or about 14 January 2006 and Mr Musson’s claim that it was incorrect, Mr Greer says that the minute states:
Denis suggested that he had no real desire to charge for his time, however to facilitate a formal agreement and to cover any sundry expenses, a fee of $100 per hour would be claimable at his request.
[52] Mr Greer says those minutes correctly recorded his understanding that Mr Musson was not going to charge for his time, particularly because there was nothing to charge for as at January 2006 and he was heavily involved in preparing and running his neighbouring vineyard “Ridgeview Estate”.
[53] Mr Greer says Mr Musson received a copy of those minutes and never responded to advise that they were wrong, or to correct them.
[54] Mr Greer says that Mr Musson overstated the work he claimed to have done up to September 2007, and for Mr Musson to claim he had undertaken 2000 hours of
work at a rate of $100 per hour “is simply ridiculous”. The “work” conducted was, he said, largely to forward third party emails and invoices to Mr Greer, generally at a rate of one or two a week. Mr Greer did not receive any invoices or claims for work undertaken or monies owing at any time prior to entering into the DMA.
[55] By his email of 5 September 2007 to Mr Musson’s solicitors, he confirmed that Mr Musson was then (with him) in Dubai and that they had been over the issues. The email also stated that Mr Musson was to get paid $100 per hour “with regard to his WIAPR project management duties”.
[56] Mr Greer said WIAR wanted some degree of formality and structure and that “Mr Musson and I had finally agreed the terms of the DMA and the lease in Dubai, with an hourly charge rate of $100 for project management work…”. He said his follow up email of 6 September to the solicitor indicated that the documents had been modified and signed and were being sent back. Mr Greer says:
There is no way that I agreed to pay Mr Musson $200,000 or to transfer the cottage in lieu a day or so later in Dubai.
[57] Mr Greer’s evidence is that Mr Musson’s primary commitment was to his adjacent vineyard development.
[58] Mr Greer believes WIAR’s resource consent application was secondary to Mr Musson’s other matters, which included the decline in the adjacent vineyard development, which impacted on Mr Musson personally.
[59] Mr Greer says his relationship with Mr Musson soured by 2009 – largely because Mr Musson had left the country and before doing so had created antipathy with neighbors and other stakeholders with “his confrontational aggressive management style”. Regarding Mr Musson’s Dubai visit Mr Greer says they spent three or four hours in discussion over two days.
[60] Regarding Mr Musson’s claim that WIAR owed him a lot of money, Mr Greer says that is wrong. He says there were no invoices raised by WAS, nor demands from Mr Musson for money owing at all for a management fee either as at September 2007 or afterwards. Mr Greer says the agreement was for Mr Musson and his wife to live
at the cottage and to take the income from the airfield as payment for his project management duties; and that WIAR paid for the invoices received from third parties in relation to the resource consent process.
[61] While there were discussions and an exchange of emails about the time of the Dubai visit Mr Greer deposed any issues communicated between them were simply administrative or practical matters:
…which arise on a day to day basis, but the foundation was the terms of the agreements. It is important to note that there was no acknowledgement of any money owing to Mr Musson, WAS or WAS 2002 in the agreements, and there was no other formal documents agreed. There was a “goodwill” nature in the relationship, but as far as I was concerned all of the rights and obligations were formalized in the 2007 documents.
[62] Mr Musson deposes having not discussed the “entire agreement” clause [14.6] or variation clause [14.6] and had not asked that they be inserted. Mr Greer states this claim was “totally incorrect”. He said they agreed the “entire agreement” provision at clause [14.6] and that any variation to the DMA was to be in writing and agreed between the parties at clause [14.7] as a specific and express term. Further that they were also terms in the prior draft agreement Mr Musson referred to. Mr Greer says that given they were formalising matters that this was essential to WIAR.
[63] He agrees with Mr Musson that WAS agreed not to register a caveat in respect of its interest under the lease. He says WAS was also to provide WIAR with a monthly statement of profit and loss as well as having the right to obtain remuneration from operating the airport, which it received. Mr Greer says in the end WIAR paid for the rates of the land, in error, rather than WAS paying those rates under the lease.
[64] Mr Greer rejects claims there was an agreement that WAS would receive from him or WIAR “$200,000 or at his election the managers cottage (if that were permitted)”, and “in respect or work already done”. Such a claim is simply untrue says Mr Greer. The DMA, he says, provided for an hourly rate fee for project management services for a potential development of the airfield and that development never eventuated.
[65] Mr Greer rejects Mr Musson’s claim that the achievement of a development consent would trigger WIAR’s obligation to make payment (of the $200,000) or agree to the transfer of the manager’s cottage. Mr Greer says nothing of the sort was agreed and nothing was agreed to “trigger” any obligation on WIAR. Mr Greer says there was no fixed fee arrangement. He said Mr Musson received monies from running the airfield under the lease. The obtaining of resource consent was incidental, but not a stated objective of the DMA. He said Mr Musson’s services were “simply corralling” the various planners and technical experts, usually meeting them at the airfield to show them any issues or challenges, and later forwarding the invoices to him by email which WIAR duly paid. He said whilst Mr Musson may have sent emails and forwarded invoices to him he was not providing any development management service to WIAR at all. He said WAS was not involved in the development and nor did it engage contractors because the development was not taking place. He said Mr Musson’s email to him dated December 2009 was his first reference in writing to some alleged agreement regarding “a flat fee rather than billing you for our time as spent”.
[66] Mr Greer says there was no reference to a “reward” sum of $200,000 until later in 2009/early 2010 and after Mr Musson had left for Australia. He said not until 2010 when he was in Sydney was there a discussion concerning a development in the future
i.e. a new arrangement, which required a development of villas at the airfield to actually take place and following sales and receipts of funds and a profitable outcome; that only then would there be a payment of $200,000 or the cottage.
[67] Regarding his email of 21 January 2010 Mr Greer says the “proposal” therein was not a recognition of past service and nor did it say that WAS was owed or entitled in 2010 to the money or the cottage.
[68] At the end of that email he invited Mr Musson to advise him “if this is broadly acceptable or if you want any modifications?” Mr Musson’s response by email started:
Hi Neil, this is in the main what I have understood to be how the PM was so have no problems in principle with what you have written…
[69] Mr Greer says he replied by email of 22 January with a copy of the lease. That reminded Mr Musson of rates invoices and that WIAR had incorrectly paid at least
$15,000 of rates since September 2007. In response he said Mr Musson stated he “assumed that the project would start shortly after any successful consent application or it would have closed down if there was an unsuccessful outcome”. Mr Greer said Mr Musson also admitted he would start paying WIAR back for the rates “but right now we are in the crap”.
[70] Mr Greer asserts Mr Musson was not interested in a new arrangement to replace the DMA.
[71] Mr Greer says that only the resource management process had been completed and at huge expense to WIAR. He says he reminded Mr Musson by his email to him of the reason for the lease, and their discussion in Dubai in 2007 that ultimately led to the DMA. Mr Musson replied advising he could no longer carry on with the lease and gave three months notice.
[72] Referring to their Sydney meeting he notes Mr Musson stated “you were not able to offer me anything going forward for the future and so to some extent this is understandable until marketing and development costs are in place”. There was Mr Greer says then a claim for a fee and that Mr Musson did not require the transfer of the managers cottage to him or refer to any interests in that land at all. He then responded to Mr Musson by email of 23 January 2010 indicating that things needed to be managed until the end of the lease. He also said he would honour the commitment “to your fee, presuming that I have the specified positive outcome”.
[73] Then in his affidavit Mr Greer refers to having found another email chain from himself to Mr Musson of 11 February 2011 and after they had discussed finalising their affairs regarding the lease and the project management under the DMA. He deposed:
[40] … I wrote to Mr Musson with 8 points, including two proposed payments of $1,200 to Christine Musson for running the airfield to February and to March 2010, and stated at point 8 all previous perceived and actual monies owing by either party are considered settled…
[74]In addition he also noted an obligation to pay:
… Denis a management fee as specified in his email of 21/01/2010 Resource Management PM fee.
[75]By email of 14 February 2011 Mr Musson replied stating:
Yes you have my agreement with the proposal as written, and I will leave it to Christine to carry out the paper work with you.
[76]That sum was duly paid to Mrs Musson. Mr Greer deposes that:
[42] … At no time was any (now) alleged agreement from Mr Musson to have the Cottage or to collect $200,000, referred to, and as far as I was concerned the DMA and the lease were at an end between our companies. Mr Musson had no interest in the Cottage whatsoever.
[77] Regarding Mr Musson’s claim of evidence Mr Greer had given before the Environment Court and in that outcome that an interim resource consent was obtained, Mr Greer says it is wrong that that consent was a “trigger” for payment of a sum or option to the transfer of the managers cottage to him. He repeats at no time was any right of purchase of the managers cottage given to Mr Musson; that there was no written sale and purchase agreement, nor the grant of any interest in its land at all to WAS. Rather the lease provided the opposite.
[78] Mr Greer says that although there were some discussions in 2010 about the potential to develop the land and build villas, any development had to occur and to have a financially profitable outcome; something which has not happened since. Whilst a consent has been obtained that was for the building of 26 villa townhouses, 14 visiting units, 11 small hangers, a reception and café etc, there has not, Mr Greer says ever been any development conducted using that consent.
Mr Musson’s response to Mr Greer’s reply
[79] Mr Musson has sworn an affidavit dated 6 October 2016 in reply to matters raised by Mr Greer’s reply affidavit and by WIAR in its submissions that are not, Mr Turner submits, responses to new matters raised by WAS’ notice of opposition or by Mr Musson’s first affidavit.
[80] Mr Turner for the plaintiff objects to the production of this second affidavit of Mr Musson and says WIAR did not have it when preparing its evidence by way of reply affidavit. Mr Turner submits the second affidavit is an attempt to reply to the reply affidavit.
[81] Mr Musson refers to the claim by Mr Greer that Mr Musson’s primary focus was the adjacent vineyard development and that is where his real energies and work were undertaken. Mr Musson does not accept that claim. He said there were three directors including his wife who was the winemaker. Another person had a managerial role, and Mr Musson’s daughter was the office manager.
[82] Mr Musson deposes to having had lots of experience in obtaining resource consents and provides brief details of this.
[83] Mr Musson rejects the claim on behalf of WIAR that the vineyard business flourished. He said this is not correct. Rather, it collapsed as a result of a combination of factors and the vineyard was placed into receivership in June 2008. He said his personal bankruptcy related to the collapse of the vineyard; that he had provided a personal guarantee for funds raised for the vineyard.
[84] Referring to Mr Greer’s evidence of his perception of what occurred in “late 2007” Mr Musson says Mr Greer misunderstands Mr Musson’s first affidavit. He deposes that by his email to Mr Greer in December 2009 he reminded him of the discussions they had in Dubai in September 2007 in which they “had discussions mainly on the progress of the consent and we agreed that at the completion of a consent I would be given a flat fee rather than billing [him] for my time…” He said Mr Greer did not respond to that email to deny it.
[85] Regarding claims on behalf of WIAR that by 2009 things had soured between them largely because Mr Musson had left the country and had fled to Australia and then that WIAR had no one to manage the airfield and the project and that WAS did not engage a project manager to take over the responsibilities, Mr Musson says none of these propositions is correct. He says he was not aware that Mr Greer thought that things had soured between them and when he came back to New Zealand for the
[resource consent] appeal hearings he was not aware of any change in attitude. He said when he left New Zealand he put Mr Jolon Marshall in place to look after the airfield, who lived in the managers cottage and he was a pilot and well familiar with the airfield.
[86] Mr Musson deposes that the claims now by Mr Greer that in 2010 he made a proposal “with respect to a proposed development in the future and not then commenced (and still not) and subject to a profitable outcome resulting, which then could apply to an arguable right to a transfer of the cottage (but not the whole of the land)” that this is a new argument from WIAR and is not correct.
[87] Mr Musson says Mr Greer’s proposal was not a proposal relating to a new venture but rather Mr Greer looking to introduce a new term or qualification into their existing agreement. He says Mr Greer’s proposal was largely consistent with their discussions in Dubai as to the $200,000 or the manager’s cottage, and was how Mr Musson understood the position, save for Mr Greer’s reference to his new “profitable outcome” suggestions. He says Mr Greer is trying to re characterise the exchange but that claim is inconsistent with his contemporaneous email in which he said he was “not able to offer me anything going forward for the future”. At that time he said he expected the development to shortly turn a profit and that WAS would be getting paid for the work that he had done; that there was no benefit to him by the Sydney proposal and he would be getting less from that offer than he was already entitled to.
[88] Mr Musson refers to WIAR’s submissions that in 2010 WAS settled any claim it had with WIAR by Mr Musson’s email of 14 February 2010 to Mr Greer. Mr Musson says Mr Greer suggests they came to an agreement in respect of “all previous perceived and actual monies owing by either party…”. Mr Musson says the agreement in February 2010 was made in respect of the termination of the lease and that each of the items 1 to 8 of Mr Greer’s 11 February 2010 email to him related to obligations under the lease, and at the end of his email – underlining the fact that the project management reward issue remained a separate issue – he repeated the obligation to pay a “management fee as specified in Mr Greer’s email of 21/01/2010. He says Mr Greer’s reference to a payment of $1,200 relates to an amount of money he owed WAS for the repairs on septic pump at the airfield.
[89] Mr Musson’s second affidavit also reports on his enquiries regarding the prospective sale of the airfield by WIAR.
[90] When issues were raised during the hearing regarding the admissibility of Mr Musson’s second affidavit the Court ruled that it would not adjourn the hearing but would in due course consider what if anything at all might be admissible of Mr Musson’s second affidavit.
[91] To the extent the Court considers that new material ought to be referred to, then reference to that material shall be made later in this judgment.
[92] Mr Greer’s reply affidavit had provided his assessment of reasons not supporting Mr Musson’s claims of a contractual commitment. Those included claiming the vineyard development was successful but that Mr Musson had fled the country and had immigrated to Australia and, by inference, he remained in Sydney to avoid connection or responsibilities in New Zealand.
[93] In the Court’s view it was appropriate to provide Mr Musson with an opportunity to respond and to identify email evidence supporting his response to those claims of Mr Greer.
Overview and conclusions
[94] Mr Musson’s evidence is that shortly after the documents were signed at the Dubai meeting an oral agreement was also reached in which he was to receive a lump sum or the managers cottage in lieu of the invoice payments prescribed by the DMA; and that his email to Mr Greer in December 2009 provides confirmation of that, when Mr Greer wrote that Mr Musson would be given a flat fee rather than billing for time spent.
[95] Mr Greer denies the Dubai post-document execution claims noting the documents provided the parties’ clear agreement, and that the DMA provided recourse to invoiced payments.
[96] Mr Musson said there was a discussion in January 2010 about why he had not been paid. He recalls Mr Greer denying anything was due, but shortly after Mr Greer wrote saying that subject to their being a profitable outcome Mr Musson would receive
$200,000 or the managers cottage – that latter subject to consent conditions permitting that. Then the following day Mr Greer emailed Mr Musson stating that their “verbal discussion in Dubai on award” was based on, inter alia, a small development.
[97] Mr Musson says he obtained his caveatable interest in the property from the time development consent was obtained in February 2010.
[98] Mr Musson’s position is that notwithstanding the executed document he and Mr Greer within days of execution of those documents agreed that instead of Mr Musson invoicing his services at $100 per hour that he would instead be paid a lump sum of $200,000 or in lieu, he would receive the managers cottage.
[99] Mr Musson says that payment was due for work undertaken to the stage when development consent was granted. He estimates he spent about 2000 hours doing the work required of him. That number of hours equates to the $200,000 Mr Musson says was agreed would be paid to him.
[100] Mr Greer rejects claims of oral agreements. The DMA provided for payment at a prescribed rate and for payment of be effected from WAIR’s share of the income received from the airfield operations.
[101] Mr Greer denies claims suggesting that there was oral agreement which varied the written documents completed within days beforehand.
[102] There is a lack of any record to confirm Mr Musson’s account. There was a brief email exchange in December 2009/January 2010 shortly after which the development consent was granted. That exchange referred to an agreement at the time of the Dubai meeting that a flat fee payment would be made rather than the rendering of invoices. Mr Musson places significance upon Mr Greer’s response by an email on 21 January 2010 which referred to a lump sum/managers house payment if there was a profitable outcome of the development.
[103] Mr Greer’s evidence is that this offer was for work to be done in relation to the development once the consent had been obtained. Mr Musson’s clear opinion is that the offer was in respect of work already done. Regardless, it seems clear any payment was subject to their being a “profitable outcome from the sale of units and the partial or complete sale of the development or the whole airfield”.
[104] The evidence is there has been no development, nor any sales. Mr Musson’s view remains that the email of Mr Greer confirms an earlier arrangement agreed orally in 2007.
[105] Regarding Mr Greer’s offer by his email of 21 January 2010 Mr Greer noted that by his offer he invited Mr Musson to advise him if that was acceptable. Mr Musson’s response was to agree. Despite this, Mr Musson rejected this new arrangement to replace the DMA. A final payment of $1,200 was made in February 2011 in the terms both parties agreed.
[106] It was not until 24 April 2015 that Mr Musson’s solicitors wrote to Mr Greer with a claim that it was agreed in 2005 that Mr Musson would be paid $100 per hour and that in September 2007 at the Dubai meeting it was agreed he would be paid
$200,000 for work he had done and for work he was going to do, or Mr Musson could elect instead to receive the managers cottage. He asserted that in 2010 in Sydney Mr Greer wanted to vary the Dubai agreement by which Mr Musson would receive, for work already done, $200,000 or some lesser sum to be agreed, or the managers cottage but only if a receivable profit was achieved from the development. It was asserted no benefit was offered to Mr Musson for these variations of an original agreement.
[107] Mr Musson’s lawyer’s letter initially only demanded payment of $200,000 plus estimated expenses of $25,000. Thereafter when the caveat had been lodged Mr Musson’s solicitors asserted by letter dated 20 May 2016 that WAS had a caveatable interest in the land because WIAR would not pay the $200,000 requested or agree to transfer the managers cottage to him. Therefore it was claimed WAS had an option over the managers cottage and that option to purchase conferred an equitable interest in the land which was caveatable and whilst that interest was only in part of the land, that would not prevent the caveat being registered against the title as a whole.
Considerations
[108] WAS bears the onus of proof to show there is a reasonably arguable case that it has an interest in the property that entitles it to the protection of the caveat. The caveat will be removed if it is “patently clear” that the caveat cannot be maintained either because there was no valid ground for lodging it, or that such valid ground as then existed no longer does.1
[109] Upon applications to remove the caveat a Court does not usually attempt to resolve conflicts in evidence given by affidavit. However, the Court is also entitled to look at the credibility of that evidence. The Court needs consider whether the caveator has a reasonably arguable case, but is not bound to accept statements of fact which lack precision or are inconsistent with contemporary documents or other statements, or are inherently improbably.2
[110] A caveat must contain the nature of the interest claimed and how the interest claimed was derived from the registered proprietor, and that claim must be stated with sufficient certainty.
[111] In this case, and in the absence of any familiarity with matters in dispute between the parties, the Court considers the caveat as described would stretch objective reasoning to understand what indeed was the nature of the caveatable interest claimed. Reference is made to an unregistered agreement. Indeed it relies upon an agreement that was not produced in writing at the time claimed to have been made.
[112] The caveat refers to the agreement being dated 5 September 2007 “and by correspondence”, and “partly by conduct”, and “alternatively by way of estoppel”.
[113] However described, the clear evidence is at best there was a claim of a promise to pay Mr Musson for his services for assisting with certain duties in connection with a subdivision development. The evidence is clear that assistance was provided to the
1 Sims v Lowe [1988] 1 NZLR 656 (CA).
2 Eng v Mee Yong v Letchumanan [1980] AC 331 (PC).
stage of the resource consent being granted i.e. before any development works were undertaken.
[114] The claim ignores provisions of two agreements recorded in writing which prescribed the basis for WAS’ claims for payment, and permitted Mr Musson’s continued occupation of the managers cottage following the transfer of the land to WIAR.
[115] Instead the evidence is that the formal basis of an agreement to pay a lump sum and/or to provide the managers cottage in lieu is claimed to arise from discussions which occurred within days of written agreements being signed, the development management agreement of those having been expressed as an “entire agreement”, and the deed of lease containing a promise not to caveat the title to the land in question.
[116] Mr Turner submits the claim of an estate or interest in the land in the caveat was imprecise. This Court agrees with that assessment. There appears a lack of sufficient certainty about how the land or the estate or interest claimed is derived from WIAR. The Court agrees with Mr Turner’s submission that the caveat in question contains a mixture of concepts of an alleged equitable interest in an unidentified part of the land under an unregistered agreement agreed in part verbally and in writing (including the “complete” DMA) and in part by correspondence, in part by conduct and alternatively by way of estoppel.
[117] It is clear the respondent was granted no interest under the DMA or the lease. The estate or interest claimed is alleged to be in respect of only part of the land, namely the managers cottage on the airfield.
[118] These observations notwithstanding, the Court can understand the nature of the interest claimed and the basis of that claim. Also WAS wishes to protect its claim of a proprietary interest in the face of WIAR’s present intention, it seems, to sell the land. Of course, however, the land intended to be sold comprises a much greater area than the managers cottage, and includes an airfield.
[119] If there is a reasonably arguable interest then the right to have one’s claim tested ought to be preserved. Claims of an interest however ought to be subject to critical examination when in particular a claim relies not upon written terms providing a contrary viewpoint, but upon recollections provided long after that time it says the right to a caveatable interest arose. In this case and not before receipt of a solicitors letter in 2015 was the claim of a caveatable interest advanced at all as the basis for the claim said to have been provided by oral discussion in late 2005, and by oral discussion about two years later at the Dubai meeting. Issues regarding a debt owing for unpaid services arose in late 2009 shortly prior to the grant of the resource consent. It is in that context of matters Mr Greer offered, by email, a lump sum payment or the managers house “if not subject to restrictions defined by the conditions of consent”.
[120] WAS places reliance upon that email as providing an endorsement to a commitment it is said was agreed verbally two years earlier. Mr Greer says it was an offer in relation to the provision of services in the future that is following the resource consent being granted when development was to occur.
[121] What is quite apparent is that both parties had a different view regarding the offer of a lump sum payment. For Mr Musson it was for work already done. For Mr Greer it was about work still to be done. Regardless, in issue was Mr Musson’s claim of not having been paid for work (estimated by him to be up to 2000 hours).
[122] The court usually prefers the evidence of the caveator over the caveatee and does not try to resolve a legitimate dispute. In this case assertions are made by Mr Musson which is apparently contradicted by unequivocal contemporary documentation.
[123] Mr Scampion submits, appropriately, that equitable estoppel will support a caveat and the courts will not allow a party to rely upon the defence of a lack of proof of writing in a property transaction where there is an equitable estoppel. Mr Musson says he was given an assurance which gave rise to his expectation of an interest in the land, that he did the work required in reliance upon that expectation, and therefore that it would be unconscionable for Mr Greer to depart from the assurances given.
[124] That account of reasons giving rise to an expectation and upon which claims of equitable estoppel are based relies upon unverified and disputed claims of a promise made in 2007 within days of it being agreed in writing exactly how it was agreed he would be paid.
[125] In the face of difficulties provided by the ss 24 and 25 of the Property Law Act 2006 (requiring dispositions of land to be in writing and signed by the person making disposition) Mr Scampion responds that part performance [per s 26 Property Law Act] of an agreement will not prevent the claim of an interest even if the parties’ agreement is not in writing.
[126] Mr Scampion submits WAS’s part performance consisted of it performing services pursuant to the DMA – being essentially the payment of a deposit or payment on account of the purchase price.
[127] Mr Scampion submits further that although the lease contained an agreement not to caveat, that agreement only related to WAS’s interest arising out of the lease and that WAS’s caveat does not arise out of the lease but instead out of the performance obligations under the DMA.
[128] In the Court’s view Mr Musson’s claims of a caveatable interest must fail. The nearest the parties came to reach an agreement providing the managers cottage in lieu of a lump sum payment occurred in January and February 2010. Then, by his email of 11 February 2010 Mr Greer wrote that in order to resolve the various issues of leases, management agreement, utility bills and invoices, he proposed certain things being done including the payment of $1,200 “to cover the costs of running the airfield until the end of March or lease end…”. The email contained eight points the final one of which noted:
All previous perceived and actual monies owing by either party are considered settled, specifically trenching, airfield maintenance, sceptic pumps, rates and insurance.
[129]The email concluded:
Please advise me if you are in agreement with the above and I will instruct my accountant to pay Christine $1,200 on receipt of invoice.
[130]By email dated 14 February 2010 in response, Mr Musson wrote:
Yes you have my agreement with the proposal as written and I will leave Christine to carry out the paperwork with you.
[131] Shortly after Mr Musson emailed Mr Greer and advised he would not proceed with that arrangement. He also confirmed the lease was at an end.
[132] Both parties have been somewhat selective regarding the value each places on email evidence. Explanations for those differences are, in the Court’s view offered in good faith. The differences only serve to highlight what is clearly a lack of an agreement or understanding regarding claims of a purported transfer of a caveatable interest.
[133] The only document which both has signed does not help Mr Musson’s position requiring sufficient evidence for the claim of a caveatable interest.
[134] It was not until shortly before this proceeding issued that a solicitor’s letter identified the claim of a caveatable interest. As noted this occurred nearly six years after Mr Greer’s email provided for the first time in writing any suggestion of a basis for the transfer of the managers cottage. Further, at that time it is Mr Musson’s view that comprised a promise in relation to work already undertaken. The clear evidence from Mr Greer is that it was a promise in relation to work continuing to be done and would continue until development work had been completed.
[135]There is no agreed basis for the promise claimed to have been made.
[136] The caveat needs to be removed to preserve and protect the rights of and the benefit accorded to WIAR having the registered estate in the land. It should be removed because WAS has no reasonable expectation of obtaining a benefit for the continuance of the caveat in the form of an order for specific performance.
[137] This is a matter where WAS may have a remedy in damages if any for the claim of $200,000 allegedly owing.
[138] The issues between the parties focus on what amount ought to have been paid for the work done until about April 2010. There clearly has been no agreement about the extent of the payment. There is no basis therefore for a claim that anything else is due for which the claim of a caveatable interest ought to be preserved. Mr Musson’s claims of sums due can be pursued by other means. Regardless of the quality of the claim of a caveatable interest this Court considers the caveat ought to be set aside.
Judgment
[139]There is an order that the defendant’s caveat 10373172.1 be removed.
[140]Costs are awarded to the plaintiff on a 2B basis.
Associate Judge Christiansen
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