Chao v Li [2014] NZHC 248 (21 February 2014)

Last Updated: 26 February 2014

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-004500 [2014] NZHC 248

UNDER Section 145A of the Land Transfer Act

1952

IN THE MATTER of an application for an order that Caveat

No 927789.1 not lapse

BETWEEN CATHERINE CHAO and ZHONGJIAN (TOM) PENG Applicants

AND XIAOXI (RICHARD) LI and

YUAN CHEN Respondents

Hearing: 21 February 2014

Appearances: M A Karem for the Applicants

C R Andrews and E L Moore for the Respondents

Judgment: 21 February 2014

_{[ORAL] JUDGMENT OF WYLIE J}

CHAO & ANOR v LI & ANOR [2014] NZHC 248 [21 February 2014]

[1] This is an originating application for an order that caveat no 927789.1 not lapse.

[2] The caveat has been lodged over a property in Epsom owned by the respondents, Mr Li and Ms Chen. They own the property as joint tenants.

[3] The wording of the caveat is as follows:

The abovenamed Caveator claims a beneficial interest in the land contained in the above certificate of title as cestui que trust of which the registered proprietors, Xiao Xi Li and Yuan Chen, are trustees.

[4] The factual background is disputed. Ms Chao and Mr Peng assert that they were parties to a joint venture agreement involving Mr Li. They claim that they advanced monies to Mr Li pursuant to that agreement, and that as part of that agreement, he was to make available the property in Epsom in pursuance of the joint venture. Mr Li denies this. He accepts that he obtained money from Ms Chao and Mr Peng, but says this was to repay him for monies he had advanced in an earlier joint venture investment which failed.

[5] As noted, the caveat asserts that Ms Chen is a trustee of the constructive trust relied on. However, the statement of claim in the substantive proceedings, CIV

2013-404-004367, is solely against Mr Li. The affidavits which have been filed in relation to the present application make it clear that Ms Chao and Mr Peng had no dealings with Ms Chen. Nor is there any assertion that Mr Li had any authority to act as agent for Ms Chen.

[6] Mr Karem, appearing for Ms Chao and Mr Peng, responsibly accepted that the caveat is inappropriately worded and that his clients cannot seek to maintain the caveat against Ms Chen’s interest in the Epsom property. He accepted that the originating application must be dismissed.

[7] Mr Karem wishes to make application that a second caveat can be registered by his clients in respect of Mr Li’s interest in the property. Mr Andrews, appearing on behalf of Mr Li and Ms Chen, has indicated that that application will be opposed.

[8] The following orders are made by consent:

(a) The originating application for an order that the caveat not lapse is dismissed. This order is to lie in Court until the application to be made by Ms Chao and Mr Peng under s 148 of the Land Transfer Act

1952 has been disposed of;

(b) On or before Friday, 28 February 2014, Ms Chao and Mr Peng are to file and serve an application under s 148 of the Act, together with any supporting affidavits;

(c) On or before 7 March 2014, Mr Li and Ms Chen are to file and serve a notice of opposition, together with any supporting affidavits;

(d) Any affidavits in reply are to be filed and served on or before 5.00 pm on Wednesday, 12 March 2014;

(e) Submissions are to be exchanged contemporaneously on or before

5.00 pm on Friday, 14 March 2014;

(f) The applicants, Ms Chao and Mr Peng, are to prepare a common bundle of the documents which will be required by the Court, and file and serve the same, on or before 5.00 pm on Monday, 17 March 2014;

(g) The matter is to proceed to hearing, estimated time half a day, at

10.00 am on Tuesday, 18 March 2014.

[9] I record that counsel have advised that it is unlikely that any further affidavits will be required, and that the common bundle which was prepared in anticipation of today’s hearing, can be used in relation to the s 148 application. For the avoidance of doubt, I record that those documents may be referred to when the s 148 application is heard.

[10] The only matter in respect of which the parties are not agreed relates to costs. Mr Andrews seeks costs in relation to the dismissal of the present originating application. Mr Karem opposes that application.

[11] In my view, it is appropriate to award costs on a 2B basis at this stage. I note the following:

(a) Rule 14.8 requires that costs on interlocutory applications be fixed as at the time the interlocutory application is disposed of, unless there are special reasons to the contrary. The present interlocutory application for an order that the caveat not lapse has been disposed of today. There are no special reasons why costs should not be dealt with;

(b) The position of the applicants was brought about because of the terms of the caveat which they lodged;

(c) Costs can be dealt with discretely. They do not depend on the disposal of the s 148 application, or any further applications which may be necessary in the event that a second caveat is lodged.

[12] Accordingly, I direct that the respondents, Mr Li and Ms Chen, are entitled to their costs on a 2B basis, with a hearing time of quarter of a day. They are entitled to costs for one counsel only. They are also entitled to their reasonable disbursements. In the event that there is disagreement in respect of disbursements, the same is to be

_{referred to the Registrar.}

Wylie J