GOODMORE INVESTMENTS (NEW ZEALAND) LTD v LAU [2023] NZHC 2214

GOODMORE INVESTMENTS (NEW ZEALAND) LTD v LAU [2023] NZHC 2214 [16 August 2023]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2023-404-1528[2023] NZHC 2214IN THE MATTER OF an application to remove notice of claimnumber 12791541.1 pursuant to s 142 of theLand Transfer Act 2017BETWEEN GOODMORE INVESTMENTS (NEWZEALAND) LIMITEDApplicantAND EE KUOH LAURespondentHearing: 16 August 2023Appearances: S C Gollin and H Jaques for ApplicantRespondent in personJudgment: 16 August 2023JUDGMENT OF LANG J[application to remove notice of claim]This judgment was delivered by Justice LangOn 16 August 2023 at 3.30 pmPursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarDate:Solicitors/counsel:MinterEllisonRuddWatts, AucklandCopy to:Mr E K Lau[1] Goodmore Investments (New Zealand) Ltd (Goodmore) holds a registeredmortgage over land situated at 27 Umbria Lane, Flat Bush. This is owned by acompany called LC1521319 Development Co Ltd (Devco). Ms Liyun Chen is thesole director of Devco and also the majority shareholder. The respondent, Mr Lau,was formerly Ms Chen's partner.[2] Devco defaulted in its obligations under a facility loan agreement that it enteredinto with Goodmore on 20 January 2021. Goodmore has entered into a contract to sellthe property using its power of sale under the mortgage. It is currently prevented fromdoing so because Mr Lau filed a notice of claim against the title to the property. Thispurports to protect an interest that Mr Lau asserts he has in the property as Ms Chen'sformer partner.[3] Goodmore now seeks an order under s 142 of the Land Transfer Act 2017 thatthe notice of claim be removed so it can complete the sale of the property. Settlementof the sale is now overdue.Background[4] Goodmore advanced $4.54 million to Devco under the loan agreement. Theinterest rate was to be 9.2 per cent per annum and the default interest rate was15 per cent on top of this. This meant Devco was required to pay interest at the rateof 24.2 per cent per annum following default. The loan was to be repaid on 21 January2022.[5] This is not the first occasion on which Mr Lau has attempted to preventGoodmore exercising its power of sale under the mortgage. On 27 July 2023van Bohemen J made an order removing a caveat Mr Lau had lodged against the titleon 6 July 2023 to the property.1 This purported to protect an interest Mr Lau claimedunder a long term pre-paid lease, as well as under an agreement for sale and purchaseunder which Mr Lau had agreed to purchase the property. Mr Lau also claimed hewas the beneficiary of a constructive trust under which Devco was trustee. Undeterredby this setback Mr Lau lodged the present notice of claim on 27 July 2023.1 Goodmore Investments (New Zealand) Ltd v Lau [2023] NZHC 1983.[6] Ms Chen has also attempted to derail the sale process. She applied for aninjunction to prevent the sale from taking place but Venning J dismissed herapplication on 24 July 2023.2Decision[7] As van Bohemen J noted, the relationship property agreement on whichMr Lau relies post-dated the loan agreement and registration of the mortgage toGoodmore by several months.3 This means any equitable interest Mr Lau may havein the property is subject to Goodmore's prior registered interest under the mortgage.Further, Goodmore never consented to the arrangement contained in the agreementand was not aware of it until Mr Lay sent a copy of the agreement to Goodmore'ssolicitors on 25 July 2023. The existence of the agreement cannot detract fromGoodmore's right to sell the property in exercise of its power of sale under themortgage.Result[8] I make an order under s 142 of the Land Transfer Act 2017 that, uponpresentation for registration of an instrument for transfer of title from the applicant tothe applicant's purchaser, notice of claim number 12791541.1 shall be removed fromthe land described in certificate of title 551438 (North Auckland Registry).Costs[9] Goodmore is entitled to costs against Mr Lau on a category 2B basis togetherwith disbursements as fixed by the Registrar.___________________________Lang J2 Chen v Goodmore Investments (New Zealand) Ltd [2023] NZHC 1942.3 Goodmore Investments (New Zealand) Ltd v Lau, above n 1, at [20].