LI & ORS v GREEN LAND INVESTMENT LTD & ORS [2022] NZHC 1906

LI & ORS v GREEN LAND INVESTMENT LTD & ORS [2022] NZHC 1906 [4 August 2022]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2021-404-1511[2022] NZHC 1906BETWEEN JICAI LI and FANG YUFirst plaintiffsContinuedAND GREEN LAND INVESTMENT LIMITEDFirst defendantContinuedHearing: 21-23 March 2022Appearances: R O Parmenter for plaintiffsS M Lowery and J C Suyker for first defendantThird defendant in personM E Casey QC and A J Casey for eighth defendantDate of judgment: 4 August 2022JUDGMENT OF JAGOSE J[Liability]This judgment was delivered by me on 4 August 2022 at 2.45pm.Pursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarCounsel/Solicitors:M E Casey QC, AucklandR O Parmenter, Barrister, AucklandS M Lowery, Barrister, AucklandCarson Fox Bradley Ltd, AucklandCopy to:Third defendantPlaintiffs continuedYUN SHENGSecond PlaintiffWEN CHENThird plaintiffZHONG WEI ZHOUFourth plaintiffBO LINFifth plaintiffJIYUAN WUSixth plaintiffFANG YUSeventh plaintiffWMW TRUSTEE LIMITEDEighth plaintiffYANGXUAN WANG and MENGQUIWANGNinth plaintiffsXIN ZHAOTenth plaintiffZELIX TRADING LIMITEDEleventh plaintiffQIN XIN ZENG and AIXUAN GUOTwelfth plaintiffsJCM NZ LIMITEDThirteenth plaintiffYIKAI CHENFourteenth plaintiffCHEN FENGLIANG and DING MINGMINGFifteenth plaintiffsZHIREN ZHANGSixteenth plaintiffLOVE HOMES LIMITEDSeventeenth plaintiffER XIA CAO and ER SHENG CAO (astrustees of ZION TRUST) and ERSHENG CAO and ER XIA CAO (astrustees of CAO TRUST) together withJUN WUEighteenth plaintiffsJASVINDER SINGH and TINA SINGHNineteenth plaintiffsDefendants continuedREGISTRAR-GENERAL OF LANDSecond defendantZHONG XINGThird defendantLEQUN ZHAOFourth defendantXING ENTERPRISES LIMITEDFifth defendantTRINITY HOPE INVESTMENTLIMITEDSixth defendantFLATBUSH LAND LIMITEDSeventh defendantHIU CHING CHANEighth defendantContentsIntroduction [1]Background [7]The applicable law [35]Discussion—Mr Zhao's 'security' [37]—Green Land's 'default' [47]—duties of good faith [52]—Green Land's defences: waiver and s 119 privity [54]—Ms Chan's defences: bona fide purchaser without notice, and s 184 [58]Result on plaintiffs' claims [61]Green Land's counterclaims [62]Remedy [66]Costs [73]Interim injunction [74]Schedule: Green Land's second-stage subdivision land [Schedule]Introduction[1] The plaintiffs — predominantly builders, property developers and investorsand associated companies — have interests in 22 of 30 titles issued of subdivided landin a second stage of the first defendant's ("Green Land") 130-lot development of landat 411–431 Ormiston Road in Auckland's Flat Bush and intended to be settled on therespective plaintiff by 22 February 2021.1 The whole of the land was subject toa mortgage in favour of the ANZ Bank, to secure lending to Green Land.[2] In this proceeding, the plaintiffs allege Green Land 'schemed' to avoid settlingthe titles on the plaintiffs, first, by capitulating to caveats lodged over various of thetitles by a third party, Yutian Li; and second, by contriving mortgagee sales of the landto the third to fifth defendants and, through them, to the sixth to eighth defendants.The plaintiffs seek, in essence, specific performance of their agreements for sale andpurchase (or, in relation to the 18th plaintiffs, agreements to transfer land) withGreen Land or damages in lieu. Its causes of action rely on the validity of agreementsunderlying the mortgagee sales, and good faith in their relationship. A third cause ofaction, in conspiracy, was abandoned by the plaintiffs in closing.1 See the Schedule to this judgment.[3] In support of their claim, the plaintiffs obtained without notice interiminjunctions preventing the second defendant, the Registrar-General of Land, fromregistering transfers of any of the 30 titles consequent on the impugned mortgageesales,2 later varied to exclude the eight titles to which the plaintiffs had no claim.3[4] Denying the claim, Green Land counterclaims for losses incurred by theinterim injunction (a third counterclaim alleging breach of fiduciary duty was notpursued at trial), and otherwise for damages arising from some of the plaintiffs'trespass by building improvements on 'their' land. The now-unrepresented thirddefendant — Zhong Xing, principal of the fifth defendant ("Xing Enterprises") —also generally denies the claim. So too does the eighth defendant, Hiu Ching Chan,who affirmatively pleads to have acquired her property as a bona fide purchaserwithout notice and seeks registration accordingly. No defence was filed by any otherdefendant, the Registrar-General abiding my decision.[5] Except for the 18th plaintiffs (and then predominantly on the circumstances oftheir 'land swap'), no oral evidence was given by any other plaintiff, they preferringto rely on prior affidavits, the common bundle and Mr Xing's answers tointerrogatories.4 Neither was any evidence given by Green Land's directors or itscontended creditor, the fourth defendant, Lequn Zhao. Oral evidence was given at trialby the 18th plaintiffs' Er Xia Cao; Green Land's Hao Yuan Lu; and Mr Xing, allinterpreted from Chinese to English language as required.[6] I did not allow Ms Cao's evidence to be given in terms of her served English-language brief, conceded not to be "the personal statement of the maker",5 "in thewords of the witness".6 Mr Lu's oral evidence also was led, without reliance on anyserved brief. Given his unrepresented status, I took Mr Xing's served brief and written2 Li v Green Land Investment Ltd HC Auckland CIV-2021-404-1511, 28 July 2021.3 Li v Green Land Investment Ltd [2022] NZHC 187.4 Likely as a consequence, the common bundle(s) presented for trial diverged very substantiallyfrom its required compilation, without the court's apparent approval: High Court Rules 2016, r 9.4.The absence of a single, chronological and sequential bundle or index, particularly withoutcomprehensive narrative oral evidence, made trial and this judgment's preparation immeasurablymore laborious. In my preliminary view, costs on steps 33 and 33A should be disallowed: r 14.7.5 Evidence Act 2006, s 83(2)(a).6 High Court Rules, r 9.7(4)(b).submissions as read. By consent,7 given her personal circumstances, also in evidencewas Ms Chan's affidavit affirmed 8 November 2021.Background[7] Green Land was incorporated on 27 July 2012. On various dates between2 May 2013 and 4 August 2014, it or particular of its directors and shareholdersreceived foreign exchange transfers through Credit Investments Limited to the orderof one Junwei Tang (said to be the son and husband respectively of Green Landshareholders) in the amount of some RMB 30.139 million, converting on receipt toapproximately NZD 5.810 million.[8] On various dates between 2014 and 2020, each (except the 18th) plaintiffentered into an agreement with Green Land for sale and purchase of land inREINZ/ADLS standard form (ninth edition 2012 (2)). The agreements each weresubject to further terms of sale including the plaintiffs' acknowledgment "separatecertificates of title have not yet issued in respect of the lot(s) sold under thisagreement", to which end "[t]he agreement is conditional upon the issue of new titlesfor the lot(s) sold under the agreement". A 10 per cent deposit was payable "[o]n[a]cceptance", the balance "[b]y payment in cleared funds on the settlement date whichis 10 working days from title to be issued". The plaintiffs each were prohibited fromlodging caveats against Green Land's title "prior to the issue of separate certificates oftitle in respect of the lot(s)".[9] The 18th plaintiffs own 443 Ormiston Road abutting Green Land'sdevelopment. Green Land wished to 'assimilate' its driveway into the development.By agreement dated 2 April 2014, Green Land and the 18th plaintiffs agreed thedriveway would be transferred to Green Land in exchange for three lots in thecompleted development.[10] On 25 July 2017, ANZ Bank New Zealand Limited ("ANZ") increased aninitial loan facility to Green Land from NZD 0.125 million to NZD 8.075 million,varied to NZD 13.375 million on 12 December 2018 — to be secured by personal7 Evidence Act, s 83(1)(c)(ii).guarantees from Green Land's initial shareholders and directors and registered firstranking mortgage over the whole of Green Land's Flat Bush land, and general securityagreement over the whole of its property — to terminate on 30 August 2019 withamounts owing then being due and payable.[11] Green Land's borrowings on the ANZ facility were refinanced on 30 August2019, including with a NZD 3.000 million loan for nine months from PearlfisherTrustee Limited ("Pearlfisher"), secured by registered second-ranking mortgage(subordinated to ANZ's priority amount of NZD 11.000 million) and general andspecific security deeds over Green Land's property and guarantees from Green Land'scontinuing directors. On Green Land's subsequent failure to repay the Pearlfisher loan,by letter dated 5 June 2020, Pearlfisher gave Green Land notice of its unquantifiedbreach. (ANZ's mortgage was registered against the 30 lots in Green Land'sdevelopment on 25 September 2020.)[12] By agreement dated 18 September 2020, Green Land and the 18th plaintiffsagreed on the specific lots to be transferred under the 2 April 2014 agreement, to betransferred "one working day after 26 sections in the subdivision are settled and[ANZ] and [Pearlfisher] are fully repaid", as to be undertaken by Green Land'ssolicitors. The agreement continued "[i]f for whatever reason" the lots could not betransferred "27 working days after date the titles for the Lots are issued", the 18thplaintiffs may "caveat all of Green Land's remaining sections in the Development andforce Green Land to sell sufficient sections to repay Green Land's mortgages with[ANZ] and [Pearlfisher]" to enable release and transfer of the lots to the 18th plaintiffs.The parties also agreed Green Land would sell an additional lot to the 18th plaintiffs.[13] On 21 and 23 October and 18 November 2020 — now to the order of BinzhiOuyang, a Green Land director and shareholder — Green Land received furtherforeign exchange transfers through Credit Investments Limited totalling someRMB 18.500 million, converting to approximately NZD 4.014 million on receipt.A Chinese language document recorded (in translation):Today, the lender Zhao Lequn agrees to loan Greenland RMB$18,500,000.00with interest being the same standard interest rate that Greenland currentlyborrows at. The repayment is to be made once Greenland sells their land inNew Zealand repayment amount, principal + interest.Date of borrowing: 12/10/2020"[T]he lender Zhao Lequn" is the fourth defendant, Mr Zhao. The document is signedby both Mr Zhao and Green Land's directors, Binzhi Ouyang and Bingyan Zhou. Bypayments on 23 and 28 October, 20 November and 14 December 2020, Green Landrepaid Pearlfisher's loan.[14] Green Land's Hao Yuan Lu explained the two tranches of foreign exchangetransfers referred to at [7] and [13] above were loans from Mr Zhao, who initially hadnot required the borrowing formally to be documented "because that's how usuallypeople do business in China":[B]ut later on in 2020 we wanted to borrow more money from Mr Zhao torepay the second mortgage, because the second mortgage was in default andMr Zhao said "Okay I'm going to lend you more money, but you have first togive me some sort of formal document to show the previous lending first".[15] The two tranches further were documented in deeds of acknowledgement ofdebt respectively dated 15 September and 20 November 2020 (the "acknowledgingdeeds"), signed by Mr Zhao and Green Land and by its directors as guarantors, theirsignatures on the 20 November 2020 document witnessed in China. Mr Lu said hedrafted both documents, starting with acknowledgment of the RMB 18.500 millionloan at "12% per annum of interest until the Debt and interest is paid in full". After"Mr Zhao [said] I also want another one for the previous one, which is the 30 millionone", Mr Lu said he 'cut and pasted' from his RMB 18.500 million draft to createa draft acknowledgement for the RMB 30.000 million loan at "18% per annum ofinterest until the Debt and interest is paid in full". He said the acknowledging deedswere dated the dates they were signed.[16] The acknowledging deeds' narrations each specified (with original emphases):The Borrower has agreed that the lender has the right to lodge caveat over [thedevelopment's second stage] properties or other means to secure his interestbut such caveat must not be lodged before issue of new titles. Also the Lenderhas a legal right to Caveat all the Property/Properties owned byBorrowers. (The lender has legal right to lodge mortgage on the titles withthe consent from borrower)[;]in their definition of 'property' adding "Also the Lender has a legal right to Caveatall the Property/Properties owned by Borrowers"; and their respective clause 6,titled "CAVEAT", stating:The borrower agrees with for the lender to:6.1 Agreement to mortgage by Caveat: the guarantor by express rightby virtue of an agreement mortgage authorises the Lender to caveat theproperty at 411-431 Ormiston Road, (Second Stage), Flat Bush, Aucklandother means to secure his interest but such caveat must not be lodgedbefore issue of new titles. Also the Lender has a legal right to Caveat allthe Property/Properties owned by Borrowers. (The lender has legal rightto lodge mortgage on the titles with the consent from borrower)[.]Both deeds define 'Debt' to mean "the amount of RMB ¥ 18,500,000.00 ", and'Term of the debt' to mean "the date when Green Land Investment Limited's landdevelopment in Flat Bush is completed".[17] On 29 January 2021, titles issued for the lots in Green Land's second stagedevelopment, each recording ANZ's mortgage. On or about 5 February 2021,Green Land's solicitors confirmed its agreements with the plaintiffs then wereunconditional, for settlement on 22 February 2021. On 6 February 2021, Green Landwrote to Mr Zhao, recording (in translation) it had "promised that to repay the fundsimmediately after the titles issued for the investment projects", advising of titles' issueand repayment of his loans by 31 March 2021, and making "special request toMr Lequn Zhao for exemption of the previous default interest charge".[18] Also from about 5 February 2021 until 8 April 2021, a third party — Yutian Li,described as a businesswoman of China — lodged caveats against the titles of the lotsin Green Land's development. The caveats asserted her interest in the lots "persuant[sic] to a constructive trust of which the registered owner as trustee". Many of herattempts to lodge similar caveats were rejected, in part for reasons associated with herabsence from New Zealand. On 1 April 2021, she appointed Mr Xing her attorney toact in her absence. Mr Xing said he had known her "[s]ince around 2014".[19] By email dated 10 February 2021, Ms Li emailed Mr Lu and Mr Zhao (intranslation):8Regarding the removal of mine and Mr Lin's caveats from Mr Mao's lands,both me and Mr Lin wanted to oppose this action however, because of thepandemic we have been unable to.Greenland has caused us a millions of dollars in losses. What you have paid isno where near our initial investment/cost[.]Without prejudiceWe require all the purchasers to pay an extra $50,000.00. In accordance withyour agreements with them, you have the ability to cancel the agreement citingpandemic, increasing costs and other such unexpected circumstances.If the purchasers don't agree within 48 hours, then cancel their agreementsand give the rights of the agreement to us, that way we can recover our costs.In the worst case, we give $50,000.00 to the purchasers to encourage them toback out of the agreement, or you do so within your rights in the agreement.Once we have caveated the titles, they won't be able to settle as you won't beable to give them clear title.We hope you can consider our proposal, it doesn't matter how you approachthis situation whether to increase the purchase price on the purchasers or tocancel the agreement, excess money must be paid to us to cover our costs.The $600,000.00 Mr Mao paid us is not even close to enough to cover ourinvestment cost of $2,000,000.00.We hope you can consider our proposal and we look forward to hearing fromyou soon.Thank you.[20] Ms Li's caveats registered against Green Land's titles have considerablehistory.9 They derive from her contention she was interested in land owned by LiansenMao at 387 Ormiston Road. Mr Mao, similarly to the 18th plaintiffs' position, wasparty to a Landowner Agreement dated 1 April 2015 with Green Land, by which landforming his property's driveway was to be transferred to Green Land, for vesting inAuckland Council as a road (as was a condition of the subdivision's consent). But the8 Mr Xing's Court interpreter confirmed the translation generally as accurate, except he translatedMs Li's requirement "to pay an extra $50,000" as "to pay a minimum of an extra $50,000". Healso translated Ms Li's penultimate sentence as "Hopefully you could consider. My email addresshas not changed. Hopefully we could hear from you".9 No evidence was led as to "Mr Lin's" interest.foundation for Ms Li's caveats registered against Green Land's titles, that she had acaveatable interest in Mr Mao's land, comprehensively was dismissed by this Court.10(Green Land subsequently settled contentions raised by Mr Mao, including by consentorders terminating proceedings in this Court.11)[21] On or about 19 February 2021, Green Land's solicitors wrote to each of theplaintiffs' solicitors in respect of the forthcoming settlements:WITHOUT PREJUDICEWe refer to the above matter.Whilst our client is preparing for settlement on Monday 22nd February, aperson unrelated to our client, by the name of Yutian LI, has lodged a caveatover our client's titles including the Lot to be sold to your client.Our client believes that the caveator has no caveatable interest over our client'sproperties, however it is likely to take at least two to three months to removethe caveats by legal proceedings. In our experience even once the caveat isremoved, it is possible for an unreasonable caveator to further caveats tocontinue causing trouble even though these maybe fabricated.Our client hopes to resolve this matter in a commercial matter and havedecided to put forward the proposal made by Yutian Li. They have proposedthat the caveats will be withdrawn if either:1. Your client accepts an increase of the purchase price by $50,000 (inclusiveof GST if any); or2. Yutian Li pays your client $50,000 (inclusive of GST if any) to purchasethe Lot from your client and to take over the contact with Green Land.Any onsell agreements entered into by your client with another personwill need to be cancelled.You would appreciate that our client is extremely dissatisfied and frustratedwith this proposal, but in the interest of getting settlement finalised, our clientwould appreciate if your client could consider the proposal.If your client chooses not to accept either of the proposals above, then ourclient will try to remove the caveat by Yutian Li and obtain a clear title to10 Li v Green Land Investment Ltd [2019] NZHC 2991 at [55]–[57]. On 19 May 2021, this Courtinjuncted Ms Li from lodging further caveats against Green Land's titles (Love Homes Ltd v Li[2021] NZHC 1339). On 21 October 2021, Ms Li discontinued her NZD 8.718 million damagesclaim against Green Land on terms including Green Land would be liable to her for $5.853million: if, and only if, all mortgagee sales and transfers challenged in [this proceeding] (whethernow or at a later date) are held to be void, invalid or are otherwise struck down or reversedin [this proceeding].I am not asked to consider if such terms may be unlawful, if conferring on Ms Li an illegitimateinterest in this proceeding. Ms Li earlier had discontinued her proceeding against its otherdefendants, who are the plaintiffs in the present proceeding.11 Li v Green Land Investment Ltd HC Auckland CIV-2021-404-1511, 29 July 2021.transfer to your client, however our client is unsure how long this may take,and the period may extend if there are further lodgement of caveat. Out clientwould like to ask that your client waives any late settlement penalties for thedelay in settlement, which may be payable in accordance with the agreementfor sale and purchase.Furthermore, our client's loan with its mortgagee, ANZ bank is due to expiryat the end of March, and because of the delays with the development themortgagee had previously indicated that it may not grant any furtherextension. There is a risk that the mortgagee may exercise its power of sale,to cancel all pre-sale contracts and to resell the sections at a higher currentmarket price, in accordance with section 178 of the Property Law Act 2007. Ifthe mortgagee elects this action, then your client's agreement will becancelled.Our client requests that your client considers Yutian Li's proposals with acommercial approach, This is not a situation which our client desires and ourclient is acting under coercion. Our client would appreciate your client'sunderstanding and support.Please confirm whether your client agrees to any of the above proposals by4pm Monday 22 February 2021. We look forward to hearing from you.In the event, only three intending purchasers accepted Ms Li's offer (whether to payor receive $50,000 is unclear), and transfer of their relevant lots was settled.[22] On 15 March 2021, Mr Zhao sought to register mortgages against all 30 ofGreen Land's second stage development titles, in reliance on the acknowledgingdeeds. The Registrar requisitioned all the proposed dealings on a variety of grounds— including the acknowledging deeds were required to be verified by statutorydeclarations from a signatory, and registrations required caveators' consent — and onmultiple occasions, ultimately to grant registration of a mortgage in relation to thetitles of five lots only: lots 93–96 and 132. (Notably, registration did not expressly relyon either of the acknowledging deeds, but on a standard form all obligations mortgageinstrument executed for Green Land under contended powers of attorney by Mr Luand Xirong Zhou on 13 April 2021.)[23] Undeterred, on 12 April 2021, Aimee Yang of Auckland's JC Legal — asMr Zhao's "solicitor and duly authorised agent" — gave Green Land notice of defaultunder memoranda of mortgages contended for all 22 lots now claimed by the plaintiffs.The notice, expressed to be made under "section 19 of the Property Law Act 2007",asserted Green Land's failure to pay some NZD 11.037 million, plus interest runningat a daily rate of NZD 7,559.70 and costs, contended due on 31 March 2021 under theacknowledging deeds. The notice required Green Land's payment of those sums "onor before 4 May 2021", or "the mortgagee will have the right to mortgage sales theland described in the Mortgage or enter into possession of that Land".[24] In mid-May 2021, through Mr Xing, Xing Enterprises entered into agreementsto sell Green Land's lots 95 and 118 to Ms Chan, for settlement on 4 June 2021.I apprehend Xing Enterprises entered similar agreements with the sixth and seventhdefendants at about the same time. (By undated agreement for settlement on24 May 2021, Mr Zhao entered into an agreement to sell Green Land's lot 131 to oneKelly Chen. By deed dated 16 July 2021, Mr Zhao nominated Mr Xing become thevendor of that and lots 107 and 137 (although the deed's narration proposes Mr Xingbecome the purchaser).)[25] On 21 May 2021, Mr Zhao through Ms Yang gave Green Land a second noticeof default under memoranda of mortgages contended for some 29 lots (including theprevious 22). This second notice, now expressed to be made under "section 119 of theProperty Law Act 2007", again asserted Green Land's failure to pay under theacknowledging deeds. It also required Green Land's payment of those sums "on orbefore 4 May 2021", but identified the mortgagee's "right to mortgage sales the landdescribed in the Mortgage or enter into possession of that Land" would be triggeredby Green Land's non-payment "on or before 28 May 2021 (being 5 working days afterthe service of this notice)".12[26] Notwithstanding title to their lots had yet to issue to the plaintiffs, Green Landbecame aware a number of the plaintiffs had entered their respective lots to conductbuilding and construction works. On 11 June 2021, Green Land's solicitors wrote tothe plaintiffs' solicitors requiring works cease and the plaintiffs vacate the land. On20 January 2022, Green Land's solicitors noted to the plaintiffs' solicitors and counselconstruction nonetheless appeared to have continued, to the point "some of thedwellings are also occupied". Formal warning to leave and stay off the land was given.12 Mr Xing personally issued a third notice dated 11 March 2022 in relation to the 29 lots —"corrected" at some indeterminate date, asserting Green Land's failure to pay some $16.5 million— for payment by 7 May 2022.[27] Green Land did not pay the sums claimed by Mr Zhao. By deed dated14 June 2021, Mr Zhao purported to assign his "right, title and interest" in anundefined "Loan Agreement" to Zhong Xing. The deed's narration identifies theacknowledging deeds, which Mr Xing "has agreed to take over from [Mr Zhao] andperform the mortgage sale". The 14 June 2021 document identified all 30 lots as"subject to the mortgage". It is not signed by Mr Xing.[28] On or about 24 June 2021, Mr Xing appears to have issued a proceedingagainst Green Land. By consent, judgment was sealed in Mr Xing's favour in theamount of NZD 13.846 million, "subject to any set-off, counterclaim or other claimthat the defendant any [sic] have in relation to the mortgagee sale".[29] By document dated 15 July 2021, Green Land's directors gave Mr Xing noticeGreen Land was "unable to repay the following loans to you on time". The loans aresaid to be a "[ANZ] loan around [NZD 6.500 million]" and the sums the subject of theacknowledging deeds. The document added "Green Land agrees for you tomortgagee sales the properties under the company's name immediately, without anydelay to save costs and interest for the company".[30] By agreement dated 15 July 2021, Mr Xing purportedly sold one ofGreen Land's 30 lots to Xing Enterprises. By deed also dated 15 July 2021, XingEnterprises agreed to hold 22 lots, including that purportedly acquired from Mr Xing,"on trust" for Mr Zhao. The deed is not signed by Mr Zhao.[31] By deed dated 16 July 2021 between ANZ, Mr Xing as purchaser, Green Landas borrower, and Green Land's directors and Mr Zhao as sureties or secured parties,ANZ novated to Mr Xing its interest in Green Land's debt, such that the debt then waspayable to Mr Xing, who was "entitled to exercise all of ANZ's rights, powers andprivileges in respect of the Debt". The deed identified all 30 lots as "subject to themortgages".[32] On 27 July 2021, transfer of ANZ's mortgage over 28 of Green Land's lots toMr Xing was lodged with the Registrar-General of Lands. Also lodged that day, inreliance on the second notice of default, was Mr Xing's sale of the 22 lots at issue inthis proceeding to Xing Enterprises, and Xing Enterprises' sale of 11 of those lots tothe sixth, seventh and eighth defendants, the last being Ms Chan, each at a $50,000 ormore premium over the original purchase price. No pre-sale valuations were obtainedby Mr Xing or Xing Enterprises; the sixth and seventh defendants were known toMr Xing's donor, Ms Li, and Mr Xing described Ms Chan as "the daughter of myparents' friends", as Ms Chan confirmed. Mr Xing used the NZD 6.8 million proceedsfrom Xing Enterprises' sales (including a loan from either or both the sixth or seventhdefendants in the amount of GST on their transactions) to settle ANZ'sNZD 6.5 million transfer price. Settlement of the other 11 lots were said to be pending.[33] By deed dated 4 October 2021 executed by Green Land, Mr Zhao, Mr Xingand Green Land's directors, together defined as "Parties", Green Land settled itscontended liability to Mr Zhao under the acknowledging deeds by agreeing its liabilityto him in the amount of some NZD 13.846 million, plus daily interest accruing at someNZD 12,000: until all amounts owed by Green Land to Mr Xing under [theacknowledging deeds] are fully discharged subject to an as-yetunquantified deduction for any set-off, counterclaim or claim Green Land mayhave in relation to the mortgagee sale undertaken by Mr Xing.The deed provides it is "in full and final settlement of all claims or potential claimsany Party has or may have against any other Party under [the acknowledging deeds]".Mr Lu comprehended payment of Green Land's debt to Mr Zhao only was achievableby mortgagee sale of the lots.[34] After Davison J excluded the eight lots from the interlocutory injunction inmid-February 2022,13 the 18th plaintiffs lodged caveats on those lots under their18 September 2020 agreement with Green Land.The applicable law[35] In circumstances of a mortgagor's default under a mortgage, a mortgagee maysell mortgaged land only in compliance with s 119 of the Property Law Act 2007.14Section 119 — and, materially, ss 120, 121 and 123 — provide:13 See [3] above.14 Burgess v TSB Bank Ltd [2015] NZCA 361, (2015) 16 NZCPR 728 at [55].119 Notice must be given to current mortgagor of mortgaged land ofexercise of powers, etc(1) No amounts secured by a mortgage over land are payable by any personunder an acceleration clause, and no mortgagee or receiver may exercisea power specified in subsection (2), by reason of a default, unless—(a) a notice complying with section 120 has been served (whether by themortgagee or receiver) on the person who, at the date of the service ofthe notice, is the current mortgagor; and(b) on the expiry of the period specified in the notice, the default has notbeen remedied.(2) The powers are—(a) the mortgagee's power to enter into possession of mortgaged land:(b) the receiver's power to manage mortgaged land or demand andrecover income from mortgaged land:(c) the mortgagee's or receiver's power to sell mortgaged land.(3) Subsection (1) is subject to sections 125 and 126.(4) A notice required by this section may be given in the same document as anotice under section 118.120 Form of notice under section 119(1) The notice required by section 119 must be in the prescribed form andmust adequately inform the current mortgagor of—(a) the nature and extent of the default; and(b) the action required to remedy the default (if it can be remedied); and(c) the period within which the current mortgagor must remedy thedefault or cause it to be remedied, being not shorter than 20 workingdays after the date of service of the notice, or any longer period forthe remedying of the default specified by any term that is expressedor implied in any instrument; and(d) the consequence that if, at the expiry of the period specified underparagraph (c), the default has not been, or cannot be, remedied,—(i) the amounts secured by the mortgage and specified in the noticewill become payable; or(ii) the amounts secured by the mortgage and specified in the noticemay be called up as becoming payable; or(iii) the powers of the mortgagee or receiver specified in the noticewill become exercisable; or(iv) more than 1 of those things will occur.(2) A notice required by section 119 may specify that the action required toremedy the default includes the payment (whether to the mortgagee orreceiver) of a specified amount, being the reasonable costs anddisbursements (whether of the mortgagee or receiver) in preparing andserving the notice.121 Copy of notice under section 119 must be served on former mortgagor,covenantor, subsequent mortgagee, and caveator(1) A copy of the notice served under section 119 must, as soon as possible,be served (whether by the mortgagee or receiver) on the following personsif either the mortgagee or receiver has actual notice of the name andaddress of the person:(a) any former mortgagor:(b) any covenantor:(c) any mortgagee under a subsequent mortgage, and any holder of anyother subsequent encumbrance, over the mortgaged land if—(i) the subsequent mortgage or other subsequent encumbrance isregistered; or(ii) the subsequent mortgage or other subsequent encumbrance isunregistered, but either the mortgagee or receiver has actualnotice of it; and(d) any person who has lodged a caveat under section 138 of the LandTransfer Act 2017, or a notice under section 42 of the Property(Relationships) Act 1976 having the effect of a caveat, against the titleto the mortgaged land or any part of it.(2) A failure to comply with this section does not prevent—(a) any amounts secured by the mortgage from becoming payable; or(b) the exercise of the mortgagee's power to enter into possession of themortgaged land; or(c) the exercise of the receiver's power to manage the mortgaged land ordemand and recover income from it; or(d) the exercise of the mortgagee's or receiver's power to sell themortgaged land.(3) However, if there is a failure to comply with this section, the mortgageeis liable in damages for any loss arising from that failure.123 Instruments have no effect so far as they conflict with section 119, 120,121, or 122A term has no effect if it—(a) is expressed or implied in an instrument; and(b) conflicts with section 119, 120, 121, or 122.[36] And s 4 relevantly provides:default means—(a) a failure—(i) to pay on the due date any amounts secured by an instrument; or(ii) to perform or observe any other express or implied covenant in aninstrument; or(b) any other event (other than the arrival of the due date) on the occurrenceof which any amounts secured by an instrument become payable, or maybe called up as becoming payable, under any express or implied term inthe instrumentinstrument—(a) means any use of words, figures, or symbols (for example, an agreement,contract, deed, grant, or memorandum, or some other document that iscertified, executed, or otherwise approved by or on behalf of a party orparties, or a judgment, order, or process of a court) that—(i) creates, evidences, modifies, or extinguishes legal or equitable rights,interests, or liabilities (without being lodged, filed, or registered underan enactment, or after being so lodged, filed, or registered, or both);and(ii) is in a visible and tangible form and medium (for example, inhandwriting, print, or both), or is in an electronic form in accordancewith Part 4 of the Contract and Commercial Law Act 2017 or the LandTransfer Act 2017; and(b) [Repealed](c) includes any covenant expressed or implied (under this or any otherenactment) in, and any variation of, any instrument as defined inparagraph (a) or (b); but(d) does not include an enactment (though it may be in a form prescribed byone, or have covenants or terms implied in it under one, or both)[.]Discussion—Mr Zhao's 'security'[37] I am not satisfied the evidence adequately establishes Green Land gavesecurity over all the plaintiffs' lots for any borrowing from Mr Zhao.[38] Pointedly, no evidence is given by Mr Zhao or Green Land's directors. Rather,evidence is given on Green Land's behalf only by its project manager, Mr Lu, whoexpressly "[didn't] have any knowledge" of the initial tranche of funds in 2013–2014referred to at [7] above. The best he can evidence is the foreign currency transactionrecords, which do not identify funds coming from Mr Zhao. Mr Lu explained theborrowing was addressed "in person" between Mr Zhao and Green Land's directors inChina.[39] Instead, only in documentation of the second tranche of funds in 2020 is therereference to "the same standard interest rate that Greenland currently borrows at",15 atleast allowing inference of some prior borrowing by Green Land from Mr Zhao.Mr Lu's account of Mr Zhao's request for formalisation is only for formaldocumentation of the prior borrowing;16 a further inference is the agreement to lendsuffices formally to document the subsequent borrowing. That agreement to lendspecifies the date of the borrowing as 12 October 2020, which may or may not be the'today' of the agreement. But the second tranche funds were made available toGreen Land in RMB 5.000 million sums on 21 and 23 October 2020, and theRMB 8.500 million balance on 18 November 2020.[40] Further, the dates of the acknowledging deeds — which Mr Lu, despite notbeing present for their execution, purported to confirm were the dates on which theywere signed — suggest at least the amount of the second tranche sum must have beenknown before 15 September 2020, being the date of the deed referring to the firsttranche, as copied and pasted from Mr Lu's preparation of the deed referring to thesecond tranche. But there is no evidence how Mr Lu's prior knowledge arose,particularly given the 12 October 2020 "borrowing", except for his subsequentrationalisation of the amount by reference to the unquantified Pearlfisher debt.And then it is peculiar the second acknowledgment was not given until20 November 2020, well after the funds had been received and largely disbursed.[41] Other than the agreement to lend, there was no contemporary documentaryrecord of the terms of any lending. If that culturally is to be expected, as Mr Lucontends,17 then I required expert evidence both of the practice and how commitmentsthen may be established as binding, if not by oral evidence from the participants.18Mr Lu was not present at Green Land's 'in person' discussions with Mr Zhao.[42] Only the acknowledging deeds suggest provision of any funds may carry someobligation for security, which reference wholly is omitted in the agreement to lend,where it more naturally would accompany reference to 'the same standard interest'.15 See [13] above.16 See [14] above.17 See [14] above.18 Donglin Deng v Lu Zheng [2022] NZSC 76 at [79(d)].Green Land's 6 February 2021 correspondence with Mr Zhao, advising of its delayedrepayment, similarly makes no reference to any security. Instead, there only isa request he waive default interest,19 which plainly refers to the comprehended 'delay',at odds with the acknowledging deeds' specification for later repayment, as Mr Luaffirmed in evidence.20 But the acknowledging deeds' provenance also inadequately isestablished. The acknowledging deeds — both in English language, defining the firsttranche's 'debt' in the amount of the second tranche (despite the narration'sidentification of the larger borrowing), and ungrammatical in their references tosecurity — appear to have been finalised without the benefit of legal advice.21[43] The acknowledging deeds' references to security, in particular, are circular:recital D's reference to Mr Zhao's right to caveat Green Land's property is followedby the parenthetical comment "(The lender has legal right to lodge mortgage on thetitles with the consent from borrower)." Clause 6.1 is sub-headed "Agreement tomortgage by Caveat". There, the parenthetical comment again follows Mr Zhao'spurported agreement "with for" Green Land, "the guarantor [ie, the directors] byexpress right by virtue of an agreement mortgage authorises the Lender to caveat"Green Land's second stage properties (emphasis added). Unclear is if exercise of thelegal right is contingent on the borrower's forthcoming consent, or what the'agreement mortgage' may be. If the parenthetical comments are to be construed asreferring to the acknowledging deeds' clause 7.2's abstruse 'special term':If in any case the mortgagee sales process to the securities provided, the lenderhas legal right to mortgagee sales the properties with serving borrower with 5working days by way of consent to save costs.that 'special' term's short notice period alone is enough to render the term of "noeffect" as conflicting with s 120(1)(c). On their face, the acknowledging deeds suggestamendment of a relatively orthodox acknowledgement of debt for caveat to refer toa mortgage. Mr Lu, in drafting the deeds, could not identify the source of anymortgage.19 See [17] above. The later deed also specifies a 12 per cent non-default interest rate, which withoutexplanation transmogrifies into an 18 per cent interest rate in the earlier deed, despite thedocumented loan agreement specifying "the same standard interest rate that Greenland currentlyborrows at".20 See [48] below.21 See [16] above.[44] The existing source of Mr Zhao's vested mortgage interest in Green Land'sland is entirely unclear. I apprehend the deeds' bold-emphasised narrative andoperative wording generally reflects Mr Lu's lay insertions into a document ofundetermined creation intended only to acknowledge debt for caveat. I do not knowif Mr Zhao's and Green Land's directors' attention was drawn to that amplification,their prior and subsequent Chinese language correspondence making no reference tosuch security at all.22[45] I suspect (although given the paucity of contemporary evidence, not toa balance of probabilities) the draft acknowledging deeds were amended to includereference to mortgage security after Green Land's intended settlements were put atrisk by Ms Li's caveats.23 Mr Zhao's reliance on them in support of his attempt toregister the mortgages on 15 March 2021, rather than on their purported execution inSeptember and November 2020 or even once titles issued on 29 January 2021, maymake the later timing more likely. So too does the absence of any reference to them inGreen Land's September 2020 arrangements with the 18th plaintiffs, despite expressreference to the ANZ and Pearlfisher facilities as required first to be settled.24[46] Nonetheless, I cannot go so far as to say Mr Zhao's registered mortgage overthe five lots therefore fails. To the contrary, that registration is supported byGreen Land's newly-executed and stand-alone standard form all obligations mortgageinstrument in relation to those five lots.25 But that is not the mortgage instrument onwhich Mr Zhao's Property Law Act notices rely.—Green Land's 'default'[47] Recalling a mortgagee may not exercise a power of sale except on compliantnotice — and such notice must specify, among other things, 'the nature and extent ofthe default' — Mr Zhao's first notice contended for Green Land's failure under theacknowledgement deeds to pay "The Principal sum of the loan due on 31 March 2021"and interest thereafter, for remedy initially within 15 working days. His subsequent22 See [13] and [17] above.23 See [18]–[19] above.24 See [12] above.25 See [22] above.notice contended for Green Land's default in payment by "21 May 2021" (being thedate of the notice), then for remedy within five working days. Both being termsconflicting with s 120(1)(c)'s requirement for at least a 20 working day period forremedy, they have "no effect".[48] In any event, any amount payable under the acknowledging deeds expresslyonly is to be repaid "on or before the end of the term of debt", the 'term' being definedas "the date when Green Land Investments Limited's land development in Flat Bushis completed". Mr Lu was clear on examination in chief such meant "after we finishedsubdivision and sold all the sections subdivided and sold"; under cross examinationhe accepted that meant "after [Green Land] had settled all the sales".[49] For Green Land, Sam Lowery submitted such interpretation would render theintended security unenforceable, no lots then remaining for mortgagee sale. That maywell be the case (and I already have noted some of the acknowledging deeds' uncertainutility),26 but it is no basis on which alternatively to specify an arbitrary date forrepayment, which "31 March 2021" was not in any event.[50] Mr Lu's acknowledgement of a 31 March 2021 date for repayment arose fromGreen Land's 6 February 2021 voluntary notice to Mr Zhao.27 The acknowledgingdeeds entitled Green Land to repay early, that is on one month's written notice toMr Zhao (as Green Land's 6 February 2021 notice may be), then only effective torelieve Green Land of payment also of interest from the date of repayment.Any uncrystallised liability Green Land had to Mr Zhao on 31 March 2021 is notenough to specify 'the end of the term of the debt'. This was not debt repayable ondemand, but on 'default': relevantly, "a failure to pay on the due date".28Green Land's 15 July 2021 notice to Mr Zhao of its inability to repay debt is equivocalas to when that was repayable.29[51] Even if due notice had been given to remedy any default, there is no default.Without default, a mortgagee may not exercise any power to sell mortgaged land.26 See [43] above.27 See [17] above.28 See [36] above.29 See [29] above.Mr Zhao had no power to sell any of Green Land's land. And, without default, there isno basis for Mr Xing to claim Green Land's consequent default under the ANZ facility,in respect of which no s 119 notice was in any event in evidence.—duties of good faith[52] The purchasing plaintiffs (that is, except the 18th plaintiffs) alternatively pleadbreach of duties of good faith owed them by Green Land, Mr Xing and XingEnterprises. The focus here is protection of these plaintiffs' interest in Green Land'sequity of redemption on assignment between Mr Zhao and Mr Xing. For theseplaintiffs, Ray Parmenter argues good faith requires those defendants to be "bound bythe purchasing plaintiffs' interests". But the question instead is if the defendants canbe said to be acting contrary to Mr Zhao's interests to preserve any security and obtainretainment of any secured debt. Power undertaken for that purpose may effectcollateral advantage. The threshold for bad faith is inconsistency with actions taken torealise the security and repay the mortgagee, which is not to promote other interestsabove that "predominant purpose".30 Any failure to protect the purchasing plaintiffs'interests is not inconsistent with actions taken to realise the security to repay Mr Zhao.[53] But the 14 June 2021 assignment deed between Mr Zhao and Mr Xing is solacking in specificity as almost to be meaningless.31 Its operative provisions refer toundefined "Assignment Documents", "Debt", "Effective Date", "Loan Agreement"and "Novated Property". It contends from the 'Effective Date': Mr Xing "has the samerights against, and owes the same obligations to" Green Land in connection with the'Loan Agreement'; "all references in the Assignment Documents" to Mr Zhao will beconstrued as references to Mr Xing; andthe Debt shall be payable to [Mr Xing] and Mr [Xing] shall be entitled toexercise all of [Mr Zhao]'s rights, power and privileges, to the extent they areexercisable, under the Assignment Documents or otherwise in respect of theDebt[;]30 Fatupaito v Harris [2018] NZCA 497, [2019] NZAR 192 at [50]–[54], citing Coltart v Lepionka& Co Investments Ltd [2016] NZCA 102, [2016] 3 NZLR 36 at [63]–[66].31 See [27] above.while Mr Zhao "will have no obligations or liabilities to [Green Land] under theAssignment Documents". But Green Land is not a party.32 If on the most charitableconstruction, the 'Assignment Documents' are the acknowledging deeds, what is the'Loan Agreement' and vice versa? And what in either case is the 'Debt'? Regardless,to the extent the assignment purports to substitute Mr Xing for Mr Zhao in theacknowledging deeds, Mr Xing obtained no greater power to sell any of Green Land'sland than was had by Mr Zhao.33—Green Land's defences: waiver and s 119 privity[54] However, as the June 2021 sealed judgment and October 2021 settlement deedaffirm,34 Green Land acknowledged its debt to Mr Xing or Mr Zhao. Mr Loweryargues it was open to Green Land to waive reliance on Mr Zhao's or Mr Xing'sperformance of their s 119 duties in respect of the May 2021 notices. Further, he arguess 119 only is material as between mortgagee and mortgagor, and the plaintiffs' remedylies under s 121 (which he says on "common ground" was not met in relation to noticeto any plaintiffs as caveators).[55] Although the form of the s 119 notice "must adequately inform the currentmortgagor" of its required content, the importance of that content has broaderapplication to "other persons [who] need to know what steps they might need to taketo protect their own position" including as caveators on service of a copy of the noticeunder s 121:35We start by considering the evident purpose of a notice under s 119 of the Act.The relevant purpose that may be inferred from its terms is to prevent theexercise of a power of sale "by reason of a default" unless a notice has beenserved that specifies the default and advises the current mortgagor that if thedefault remains unremedied after expiry of the period specified in the notice,power of sale will become exercisable. Until that occurs, the provisions in themortgage authorising entry into possession and sale of the mortgaged landcannot be exercised "by reason of a default". Section 123 ensures that therequirements of ss 119 and 120 override anything to the contrary in theinstrument under which the default has occurred.32 Savvy Vineyards 3552 Ltd v Kakara Estate Ltd [2014] NZSC 121, [2015] 1 NZLR 281 at [85].33 No argument was made if Mr Xing's multiple roles as Ms Li's attorney (see [18] above), Mr Zhao'sassignee (see [27] above) and trustee (see [30] above) and ANZ's novatee (see [31] above) aredisqualifyingly conflictual.34 See [28] and [33] above.35 Burgess v TSB Bank Ltd, above n 14, at [39] and [55].[56] Cases decided under s 119's predecessor, such as those relied on byMr Lowery,36 only were concerned with a copy of the notice to subsequentmortgagees.37 Section 119 has a broader audience. The plaintiffs — whether or notlodging caveats, and recalling they were prohibited from caveating Green Land'stitle38 — are precisely within the scope of s 119's purpose, 'to protect their ownpositions'. Section 121 only provides, if they themselves were entitled to notice,breach of that requirement alone would not substantively affect the security. The lattersection does not limit those entitled to copies of s 119 notices to remedies in damages,but only to damages for breach of that entitlement. Such breadth is affirmed by s 123'sassertion of instrument terms' 'no effect', beyond the s 119 notice to the currentmortgagor, to capture any document affecting legal or equitable interests.39[57] In any event, the test for waiver is if there was "unambiguous representation[Green Land] did not intend to pursue its rights".40 But Green Land's representationsare to reserve "any set-off, counterclaim or other claim [Green Land may] have inrelation to the mortgagee sale".41 That is far from 'unambiguous'. Green Land's15 July 2021 notice to Mr Xing "to mortgagee sales the properties under thecompany's name immediately" takes the matter no further forward.42—Ms Chan's defences: bona fide purchaser without notice, and s 184[58] I turn to address the position raised for Ms Chan in equity against the interestsof the fourth and tenth plaintiffs, as "a bona fide purchaser for value without notice".43I have my doubts Ms Chan justifiably may be characterised as a 'bona fide purchaser',given her unexplored links to Mr Xing,44 but the parties' failure to challenge herevidence means that may be taken established at least on the balance of probabilities.4536 Bank of New Zealand v Adsett [2000] 3 NZLR 446 (CA) at [16]; and Savil v Damesh HoldingsLtd [2004] 2 NZLR 289 (CA) at [37].37 Property Law Act 1952, s 92(4).38 See [8] above.39 See [36] above.40 Tea Custodians (Bluestone) Ltd v Barnett HC Wellington CIV-2011-485-17, 6 October 2011 at[29], citing Blakeley v Teal Investments Ltd (1980) 1 NZCPR 257 (HC) at 259.41 See [28] and [33] above.42 See [29] above.43 See [24] above.44 See [32] above.45 See [5] above.By 'without notice' is meant without actual or constructive notice of defects in the titleshe would contend equitably to have acquired in good faith.46[59] Ms Chan had actual notice lots 95 and 118 she sought to acquire fromXing Enterprises were not owned by it. She acquired the properties subject to thatknowledge, and bore the risk Xing Enterprises could not make good, as has transpired.The absence of any basis on which Ms Chan could have known, or possibly wouldhave been put on inquiry to discover, the fourth and tenth plaintiffs' interests in thelots is not at issue. As between Ms Chan and the fourth or tenth plaintiffs, both havean equal equitable interest springing from their respective sale and purchaseagreements, in which the fourth and tenth plaintiffs take priority in time.47 Their failureto have lodged caveats does not defer their interests.48[60] For Ms Chan, Matthew Casey QC also argues she is entitled to the benefit ofs 184 of the Property Law Act. But that protects her from liability for the purchasemoney paid only if she directly or indirectly purchased mortgaged property from themortgagee. And she did not, but from Xing Enterprises, at a date prior even toMr Xing's accession to the acknowledging deeds, if that is what the 14 June 2021assignment document was to achieve.49 Much better evidence would be required toconclude the purchase expressly was in contemplation of such mortgage being given,assigned and transferred to achieve the purchase's end. No one is claiming moneyfrom Ms Chan. If anything, it may be Ms Chan has a claim against Xing Enterprises.Result on plaintiffs' claims[61] Not being satisfied either Green Land gave Mr Zhao security over all theplaintiffs' lots, or Mr Zhao (or Mr Xing) gave compliant notice of default to46 Australian Mutual Provident Society Ltd v Bridgemans Art Deco Ltd [1996] 2 NZLR 263 (CA) at269 and 277 (not affected on appeal: Melanesian Mission Trust Board v Australian MutualProvident Society [1997] 1 NZLR 391 (PC) at 397), citing National Provincial Bank Ltd vAinsworth [1965] AC 1175 (HL) at 1238.47 Australian Guarantee Corporation (NZ) Ltd v CFC Commercial Finance Ltd [1995] 1 NZLR 129(CA) at 135, citing Butler v Fairclough (1917) 23 CLR 78 at 91(approved in Abigail v Lapin(1934) AC 491 (PC) at 502) and Heid v Reliance Finance Corporation Pty Ltd (1983) 154 CLR326 at 333 and 341 (approved in Green v Meltzer (1993) 6 NZCLC 68393 at 68396 and 68409).48 See J D Heydon Meagher, Gummow and Lehane's Equity Doctrines & Remedies (5th ed,LexisNexis Butterworths, Chatswood) at [8-090(a)], explaining Butler v Fairclough, above n 47,and Abigail v Lapin, above n 47.49 See [27] above.Green Land, I hold the mortgagee sales of each of the plaintiffs' lots to be void, of noeffect. Green Land remains liable on its agreements with the plaintiffs.Green Land's counterclaims[62] The plaintiffs obtained interlocutory injunctive relief, necessarily on terms oftheir undertaking they "will comply with any order for the payment of damages tocompensate the other party for any damage sustained through the injunction".Green Land claims damages from the plaintiffs for the July 2021 to February 2022period they were injuncted from registering dealings with the additional eight lots inGreen Land's second stage subdivision, in the amount of the interest payable toMr Zhao by reference to the value of those lots as sold.[63] Such counterclaim necessarily rests on the proposition Green Land "couldreasonably have expected to [not pay that interest], having been deprived by theinjunction of the ability to do so".50 But there is no evidence before me of anyprospective purchasers of the eight lots, and in any event the significant difficulty anymortgagee sale is of no effect. Accordingly Green Land's contended 'loss' is not'sustained through the injunction'. I dismiss this counterclaim.[64] Green Land also counterclaims, but now against only the 18th plaintiffs inrespect of their caveats,51 for the same saving in respect of the interest on the eight lotsafter mid-February 2022. I understand there are separate proceedings betweenGreen Land and the 18th plaintiffs relating to the lapse or maintenance of thesecaveats, which seem the more natural forum for their resolution. On that basis, I alsodismiss this counterclaim. Otherwise I should have to give some meaning toGreen Land's agreement with the 18th plaintiffs for such caveats,52 whether or notlegally sustainable, such as would vitiate Green Land's claim here for damages.My grounds for dismissal of the first counterclaim may apply here too.[65] Last, on Green Land's claim for trespass damages, necessarily founded onGreen Land's continued possession of the lots, the parties have agreed an annual50 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] NZSC 5, [2010] 2 NZLR 444 at [113].51 See [34] above.52 See [12] above.$19,500 rate per lot. Mr Lowery has specified the periods for which such rates shouldapply to the trespassed lots; Mr Parmenter said in closing he accepted thosecalculations. I would award damages on this third counterclaim accordingly.Remedy[66] Absent indefeasibility of title conferred by registration, the appropriate remedystarts with rescission of the offending transactions.53 That is consistent with theessentially restitutionary nature of the relief sought here, "to correct normativelydefective transfers of value, usually by restoring parties to their pre-transferpositions".54 Given neither Mr Zhao nor Xing Enterprises filed any defence, I mightinfer they accept it would be manifestly unjust for Xing Enterprises to remainregistered owner of the titles at issue.55 I heard no substantial argument on how anyremedy might be ordered.[67] My inclination is to order Green Land's specific performance of the plaintiffs'agreements, and the trespassing plaintiffs pay the agreed damages to Green Land.[68] The former further is complicated by the absence of evidence from any of theplaintiffs if they are ready, willing and able to settle, and possibly bedevilled byapplication of proceeds of sale to the sixth, seventh and eighth defendants to reimburseMr Xing for his discharge of the amount of ANZ's mortgage.[69] On the latter, under cross-examination, Mr Xing agreed he "paid off all of thedebt owing to ANZ Bank" when he "received the money from Xing Enterprises inrespect of the lots sold to [the sixth, seventh and eighth defendants]" on 27 July 2021.The precise calculation of those numbers was contested in cross-examination byMr Parmenter and Mr Lowery, if the ANZ debt was fully repaid (or, at least, ifMr Xing was made whole for meeting it, to the extent repayment included the sixthand seventh defendants' loans to him).5653 Stuart Bridge, Elizabeth Cooke and Martin Dixon Megarry & Wade: The Law of Real Property(9th ed, Sweet & Maxwell, London, 2019) at [25-135].54 Investment Trust Companies v Revenue and Customs Commissioners [2017] UKSC 29, [2018]AC 275 at [42].55 Land Transfer Act 2007, s 55(1).56 See [32] above.[70] In closing, Mr Parmenter proposed: it would be reasonable to order that the total sum required to discharge thenovated mortgage, on the basis that the moneys paid into the mortgage arerefundable (somehow), would be (say) $4m over the 19 lots where paymentsare to be made on settlement".I cannot possibly assess that from the state of the evidence. And I am unclear of thebasis on which such may be ordered in relief in this proceeding, in which no claim israised between Green Land and Mr Xing, or between Xing Enterprises and the sixthto eighth defendants. But the ANZ mortgage novated to Mr Xing remains on the titles.[71] Instead, I direct counsel jointly to draft orders for relief reflecting mydeterminations at [61] and [65] above, taking into account the issues identified at [66]and [68] above and including provision for costs. If such orders are agreed, the draftand any explanatory memorandum is to be filed within 20 working days of the date ofthis judgment for my approval for sealing.[72] If such orders are not agreed, the plaintiffs' proposal and any explanatorymemorandum instead is to be filed and served within 20 working days of the date ofthis judgment, responses (to include counter-proposal(s)) and reply respectively to befiled and served within 10 working days after service. The Registry then is to fix a dateconvenient to counsel for argument before me on relief. From what I presently knowof my calendar, that is unlikely to be later this or early next year.Costs[73] I reserve costs pending my ultimate determination of this proceeding.Interim injunction[74] To avoid doubt, I continue the varied interim injunction pending my ultimatedetermination of this proceeding.57—Jagose J57 See [3] above.Schedule: Green Land's second-stage subdivision landInterestedplaintiffTitle identifier Lot no Interesteddefendant1. 1st 812198 1192. 2nd 812168 313. 3rd 812169 32 7th4. 4th 812180 64 7th5. 4th 812181 65 7th6. 4th 812188 95 8th7. 5th 812186 938. 6th 812187 949. 7th 812189 96 6th10. 8th 812192 113 6th11. 9th 812194 11512. 10th 812197 118 8th13. 11th 812205 126 6th14. 12th 812207 128 7th15. 13th 812211 132 6th16. 14th 812178 6217. 15th 812206 12718. 16th 812179 63 6th19. 17th 812191 11220. 18th 871065 13421. 18th 871066 13522. 18th 871067 13623. N/a 871068 137 N/a24. N/a 690646 50 N/a25. N/a 690695 107 N/a26. N/a 812209 130 N/a27. N/a 812210 131 N/a28. N/a 812190 111 N/a29. N/a 812195 116 N/a30. N/a 812193 114 N/a