Wila Developments (Ormiston) LP v Lu - [2021] NZHC 3068

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-2069

[2021] NZHC 3068

BETWEEN WILA DEVELOPMENTS (ORMISTON) LP
Applicant

AND

HAO YUAN LU

Respondent

Hearing: 12 November 2021 (by telephone)

Appearances:

T Mullins and S Humphrey for Applicant Respondent in Person

Judgment:

12 November 2021

JUDGMENT OF VENNING J

This judgment was delivered by me on 12 November 2021 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Lee Salmon Long, Auckland Copy to: Respondent

WILA DEVELOPMENTS (ORMISTON) LP v LU [2021] NZHC 3068 [12 November 2021]

Introduction

[1] Hao Lu has lodged a caveat over five titles to properties at 88 Argento Avenue, Flat Bush. The properties are identified by records of title, 962487, 962488, 962489, 962490, and 962493. Mr Lu claims a beneficial interest in the properties “pursuant to a constructive trust”.

[2]The caveat is the third caveat that Mr Lu has lodged against the properties.

[3] Wila Developments (Ormiston) LP (Wila) applies to the Court for removal of the caveat from all properties. The application is supported by an affidavit of Mr Li, the director of Wila.

[4]The application was made on a without notice but Pickwick basis.

[5] Unfortunately although the application was filed on 2 November 2021 it was not processed within the Registry and referred to me as duty Judge until this morning. I convened a telephone conference and heard from Mr Mullins and Mr Humphrey for the applicant, Wila, and Mr Lu this afternoon.

[6] Mr Lu sought an adjournment of the application to enable him to file a notice of opposition. Having considered the material before the Court and particularly the judgment of Associate Judge Bell1 I declined Mr Lu’s application for adjournment and made orders in terms of the application and a further order preventing Mr Lu from lodging any other caveat against the properties. These are the reasons.

Background

[7] The background to the matter is set out in a judgment of Associate Judge Bell delivered on 18 October 2021:

[10] Wila Development (Ormiston) LP has carried out a residential subdivision at Argento Avenue, Flat Bush, Auckland. Its general partner is Wila Ormiston Ltd. Mr Guoxiong Li (also known as Kenny Li), is the director of Wila Ormiston Ltd. In July 2019, it entered into the five agreements in this case to sell lots in the subdivision. At the time of the agreements, title for the

1 Lu v Wila Development (Ormiston) LP [2021] NZHC 2772.

lots had still to issue. It had obtained land use and subdivision consents subject to conditions and had started work to meet those conditions.

[11] Wila had standard agreements for sale of its lots. It used the REINZ/ADLS Agreement for the Sale and Purchase of Real Estate, Ninth Edition 2012 (8) with added terms. The added terms are those typically used by developers carrying out a subdivision where titles have still to issue. Under each agreement,…

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 Wila Developments (Ormiston) LP v Lu

Details

AGLC: Wila Developments (Ormiston) LP v Lu [2021] NZHC 3068
Case: [2021] NZHC 3068
Decision Date: 12 November 2021

CaseChat Overview and Summary

The applicant, Wila Developments (Ormiston) LP, sought the removal of a third caveat lodged by Hao Yuan Lu over five properties at 88 Argento Avenue, Flat Bush. The properties are identified by records of title 962487, 962488, 962489, 962490, and 962493. Mr Lu claimed a beneficial interest in the properties "pursuant to a constructive trust". The application was made on a without notice but Pickwick basis. The primary legal issues for the court were whether the caveat was valid and if it should be removed. The court considered whether Mr Lu had a caveatable equitable interest in the properties, and if so, whether the caveat was justified. The court also had to consider whether the caveat was an abuse of process.

The court held that Mr Lu had a caveatable equitable interest only in lot 11 (962488) but not in the other lots. The court found that Mr Lu was not a purchaser of the other lots and could not lodge a caveat claiming to be a purchaser of those lots. Furthermore, Wila was entitled to cancel the agreement for sale and purchase with Mr Lu in relation to lot 11 because he had breached clause 28.1 of the agreement by lodging the caveat. The court found that even if Mr Lu had established a caveatable interest, it would have exercised its discretion to remove the caveats. The court held that the present caveat does not claim a lien. The basis for the caveat claimed is a constructive trust, but there is no basis for a constructive trust given Mr Lu’s statement that he seeks a lien for the deposit. The caveat cannot be supported on the ground claimed. The court granted Wila Developments (Ormiston) LP’s application and made the following orders: (a) caveat 12280558.1 is to be removed from the titles of the properties referred to above; (b) Mr Lu is not to lodge any further caveat against the said properties; (c) Wila is to have costs against Mr Lu. Wila is to file and serve submissions on costs by Friday, 26 November 2021; (d) Mr Lu is to file and serve memoranda in relation to costs by 3 December 2021; and (e) the court will then fix costs on the basis of the memoranda filed.

Orders