LUND V THE TANIWHA FAMILY TRUST HC AK CIV 2005-404-007157

LUND V THE TANIWHA FAMILY TRUST HC AK CIV 2005-404-007157 25 October 2007IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2005-404-007157IN THE MATTER OF the Land Transfer Act, section 143 BETWEEN TREVOR RICHARD LUND Applicant AND COLIN CHARLES MCKAY AND ROBERT GORDON FOSTER AS TRUSTEES OF THE TANIWHA FAMILY TRUST RespondentCIV 2006-404-002200AND BETWEEN COLIN CHARLES MCKAY AND BARRY ARTHUR SAPWELL AS TRUSTEES OF THE TANIWHA FAMILY TRUST Plaintiff AND COLLINS PAPER HAULAGE LIMITED FORMERLY KNOWN AS CASTLEROCK PROPERTY HOLDINGS LIMITED Defendant Hearing: 25 October 2007 Counsel: S Bryers for applicant in Civ 2005-404-7157 C Godinet for respondent in Civ 2005-404-7157 and plaintiff in Civ 2006-404-2200 A Swan for defendant in Civ 2006-404-2200 Judgment: 25 October 2007 at 1240(ORAL) JUDGMENT OF ASSOCIATE JUDGE ROBINSON [on applications: (a) to remove caveat; and (b) to join a second defendant]Solicitors: Fisher Lamberg, PO Box 9074, Newmarket for applicant in Civ 2005-404-7157 John Ropati, PO Box 37 396, Parnell for respondent in Civ 2005-404-7157 and Plaintiff in Civ 2006-404-2200 Ross & Whitney, PO Box 1822, Newmarket for defendant in Civ 2006-404-2200[1] The applicant, Mr Trevor Richard Lund, is the registered proprietor of a property at Unit Q, 5-9 Dryden Place, Ellerslie. He applies to remove a caveat lodged against the title to that property by the respondent, who is the Taniwha Family Trust. The Taniwha Family Trust claim an interest in the property pursuant to an agreement for sale and purchase with a company, Collins Paper Haulage Limited, that company being formerly known as Castlerock Property Holdings Limited. [2] There is an agreement for sale and purchase between Mr Lund and Castlerock Property Holdings Limited whereby Mr Lund has agreed to sell the property to Castlerock Property Holdings Limited for $185,000. [3] The proceedings were brought by the Trust to enforce its agreement with Collins Paper Haulage Limited. This proceeding came on for hearing before Asher J in December 2006. On 20 December 2006 Asher J made an interim order declaring:that the agreement for sale and purchase between the trust and Collins Paper Haulage Limited of September 2001 valid and enforceable in these termsand an order directing that the decision was an interim decision and at that time the Court decided not to make an order for specific performance. [4] In coming to that conclusion Asher J at [58] of his decision stated:The parties are agreed that given the present situation, my Judgment should be in the form of a declaration, and that it would be premature to order specific performance. I also consider, in the circumstances, that I should express t his Judgment to be an interim Judgment, to give the parties the opportunity to seek further relief if they are unable to agree on a final resolution of all matters. I record that if Mr Lund had been a party to the proceedings, given the presence of the caveat of the Trustees, and subject to any submissions that Mr Lund or Mr Bolla might make, I would have been inclined to have ordered specific performance.[5] At that time Mr Lund had entered into an agreement to sell the property to Mr Bolla. I am now informed that the agreement to sell to Mr Bolla did not proceed. [6] Since the decision of Asher J Mr Lund has called upon Collins Paper Haulage Limited to settle the agreement he has for the sale of the property to that company.The settlement notice was issued by Mr Fisher, who had been instructed to act for Mr Lund, by notice dated 21 March 2007. Because Collins Paper Haulage Limited did not comply with that notice, the contract of the sale to that company has now been cancelled. [7] Following cancellation of the contract Mr Lund brings this application to remove the trustee's caveat on the basis that although the trustees have a binding and enforceable contract with Collins Paper Haulage Limited that contract can no longer maintain the caveat because the contract between Collins Paper Haulage Limited and Mr Lund has now been cancelled. [8] In opposing the application the trustees claim that the arrangements to cancel the contract between Mr Lund and Collins Paper Haulage Limited is really fraudulent and deliberately entered into with a view to getting around the results of the decision of Asher J. [9] There is no evidence that the trustees were advised of the issue of the settlement notice, or given any opportunity to take action to preserve their rights which were going to be substantially affected by the cancellation of the contract. [10] In those circumstances I have concluded that it would be completely inappropriate for this Court to remove the caveat lodged by the trustees and that the proper course is to direct the application to remove the caveat be referred to Asher J. To grant such an application at this stage is likely to result in a situation where Asher J's powers will be prejudiced and that Mr Lund could proceed to a sale to an innocent third party. Such a sale must seriously affect the ability of Asher J to make an order of specific performance against Mr Lund. Part of the allegation of fraud involves the evidence relating to Mr Lund's proceeding between the Taniwha Family Trust and Collins Paper Haulage Limited. It is far more appropriate that Asher J hears the evidence and determines the outcome of this proceeding before this Court removes the caveat. [11] In these circumstances I will make the following orders:a) That, pending further order of this Court, the caveat referred to in the application shall not be removed; and that b) the application to remove the caveat shall come on for hearing before Asher J at the same time he deals with further orders arising out of his interim decision delivered on 20 December 2006. [12] The Taniwha Family Trust also applies for an order joining Trevor Richard Lund as a defendant to the proceeding heard by Asher J in 2006. The draft statement of claim lodged with that application alleges fraud on the part of Mr Lund. [13] In opposing the application counsel for Collins Paper Haulage Limited points out that there has been substantial delay, that the applicant should have joined Mr Lund prior to the hearing of this proceeding in December 2006 and that there is significant doubt as to the merits of the claim by the Taniwha Family Trust against Mr Lund. [14] I accept that there has been substantial delay. Some of that delay could very well have been caused by counsel for the Taniwha Family Trust believing that the matter would settle. There is reference in Asher J's decision to the likelihood of the parties being able to settle outstanding matters following the issue of his interim judgment. [15] In view of the serious allegation of fraud I have concluded that, notwithstanding the delay, leave should be granted. The fraud arises out of the decision of Asher J delivered in December 2006. In view of the fact that the settlement notice was not issued until March of this year, the delay in bringing this application, which was filed in September of this year is not very great. [16] In the circumstances, therefore: a) I will grant the application to join Trevor Richard Lund as a second defendant and to file the draft statement of claim lodged with the application;b) there will be the standard directions with regard to the filing of defences and other interlocutory matters; c) I direct a further telephone conference before me at 9.30am on 14 February 2008; d) The Registry shall be informed of the need to set aside two days before Asher J for the hearing of this matter. _____________________ MD Robinson Associate Judge