TURRALL and BUTLER v JACKSON [2018] NZHC 381

TURRALL and BUTLER v JACKSON [2018] NZHC 381

The covenant implied by s98 of the Land Transfer Act 1952 was preserved for the lease (an instrument in operation before repeal) by s367(5) of the Property Law Act 2007, and, consistent with common law authority, that covenant gives the assignees (first to fourth defendants) a right to indemnity from subsequent...

Source-derived case information.

Citation
[2018] NZHC 381
Parties
Plaintiffs: John Graham Turrall and Peter William Butler; First Defendant: Bryan Lee Jackson; Second Defendant: Karen Letica; Third Defendant: Maegan Jane Fox; Fourth Defendant: Donald Andrew Fox; Third Parties: Brian Graham Bluett and Todd Graham Bruce Bluett
Court
High Court
Jurisdiction
New Zealand
Judgment Date
12 March 2018
Procedural Posture
Civil Property/lease (indemnity Claim Under Assigned Lease) / Formal Proof Hearing (22 February 2018)
Outcome
Judgment for the first to fourth defendants: they are entitled to an indemnity from the third parties; judgment entered against the third parties for specified defence costs; third parties ordered to secure/pay amounts due to plaintiffs when indebtedness ascertained; costs on indemnity basis awarded.
Legal Topics
Implied Covenant of Indemnity on Assignment, Assignment of Lease, Continuity of Statutory Covenants After Repeal, Default Judgment, Costs on Indemnity Basis
Property Law Contract Law Land Transfer Civil Procedure Implied Covenant of Indemnity on Assignment Assignment of Lease Continuity of Statutory Covenants After Repeal Default Judgment +1 more

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Parties

John Graham Turrall and Peter William Butler

Plaintiffs

Bryan Lee Jackson

First Defendant

Karen Letica

Second Defendant

Maegan Jane Fox

Third Defendant

Donald Andrew Fox

Fourth Defendant

Brian Graham Bluett and Todd Graham Bruce Bluett

Third Parties

Procedural Posture

Civil Property/lease (indemnity Claim Under Assigned Lease) / Formal Proof Hearing (22 February 2018)

Legal Issues

  1. 1 Whether assignees (first to fourth defendants) are entitled to full indemnity from subsequent assignees (third parties) under the covenant implied by s98 LTA and common law
  2. 2 Whether the s98 LTA covenant continues to apply to instruments executed before the repeal by virtue of s367(5) of the Property Law Act 2007
  3. 3 Whether the third parties' failure to file a defence admits the liability claimed by the first to fourth defendants under HCR 4.17

Ratio Decidendi

The covenant implied by s98 of the Land Transfer Act 1952 was preserved for the lease (an instrument in operation before repeal) by s367(5) of the Property Law Act 2007, and, consistent with common law authority, that covenant gives the assignees (first to fourth defendants) a right to indemnity from subsequent assignees (the third parties) for liabilities, damages and expenses arising from breaches; the third parties' failure to defend admitted liability and judgment was properly entered for the claimed defence costs and indemnity, with costs on an indemnity basis.

Court Disposition

Judgment for the first to fourth defendants: they are entitled to an indemnity from the third parties; judgment entered against the third parties for specified defence costs; third parties ordered to secure/pay amounts due to plaintiffs when indebtedness ascertained; costs on indemnity basis awarded.

Orders

  • First to fourth defendants are entitled to an indemnity from the third parties in respect of the plaintiffs' claims under the registered lease (C872767.1) and related expenses incurred.
  • Third parties are to pay or secure any amounts due to the plaintiffs when the amount of indebtedness (if any) of the first to the fourth defendants has been ascertained.