Back Home 5 News 5 A complex caveat row

A complex caveat row

24 Mar 2023

| Author: Andrea Hilton

Successful application for caveat not to lapse. Land Transfer Act 2017 (LTA)-ss 138, 141-143 interpretation of LTA sections -caveat- caveatable interest-application to lapse caveat-application for caveat not to lapse- a contract can create an equitable interest or caveatable interest- difference between equitable charge and equitable mortgage-contract interpretation-procedure- jurisdiction.

Jiang v Highrise Apartments Ltd [2022] NZHC 249 (Gardiner AJ)

A joint venture between Jiang and Gaos was partly funded by a loan from Jiang to Gaos. The loan agreement was not drafted by lawyers but stated that it was a loan and security agreement and used terms such as ‘mortgage’.

It gave Jiang the right to sell the secured property if the loan was not repaid and to lodge a caveat. It required the Gaos to obtain Jiang’s consent before selling the properties. Jiang lodged caveats over the properties. Over the period of the development, the agreement was amended three times to record different amounts and different properties as security.

Some repayments were made by the Gaos. The properties over which the caveats were lodged were properties that had been substituted for the original properties by the last amendment to the agreement.

The properties subject to the caveats were owned by bare trustees for the Gaos. The Gaos sold the properties without Jiang’s consent to Highrise Apartments Ltd and GL Group Ltd, companies owned by the Gaos.

Jiang and the Gaos disagreed about the amount owing to Jiang. Jiang refused to withdraw the caveats, Gaos applied to lapse the caveats via Highrise and GL under s143(1) (a). Jiang applied for an order that the caveats not lapse under s143(3)(a).

Applicable principles-is it reasonably arguable that the applicant has a caveatable interest in the land-do the respondents have standing under s143(1) (a)- should the court use its residual discretion to remove the caveats- application to sustain determined on summary basis- only need reasonably arguable interest in land to sustain-order for lapse can only be made if clear interest cannot be determined-either no ground to lodge or ground expired-conflict in affidavit evidence usually resolved in caveator’s favour-court must still consider affidavit evidence critically-caveat can be lapsed even if caveator has reasonably arguable interest, provided court satisfied that removal will not prejudice caveator’s interest- s 143 gives purchasers under sale and purchased agreement standing-breach of contract term does not affect s 143 standing-contract term gives right to lodge caveat but not necessarily an interest under s 138-effect and intent in contract establish an interest in land-contract name and terms such as security and mortgage with right to sell secured property support an interest in land-equitable charge different to equitable mortgage-equitable charge gives caveatable interest but not power to compel debtor to execute a registerable mortgage-equitable charge only gives standing to sue for debt-court not required to determine amount of loan owing to decide status of caveat-arguable total loan not repaid therefore arguable interest- caveat must still give lender a practical advantage -if removal of caveat puts lender in weaker position then caveat does have practical advantage-movement of burden of proof to caveator disadvantages caveator.

Held: Caveats 11698599.1 and 11698572.1 do not lapse; preliminary view for costs in favour of Jiang.

Jiang v Highrise Apartments Ltd

Subscribe to


The weekly online publication is full of journalistic articles written for those in the legal profession. With interviews, thought pieces, case notes and analysis of current legal events, LawNews is a key source of news and insights for anyone working within or alongside the legal field.

Sign in or
become a Member
to join the discussion.


Submit a Comment

Your email address will not be published. Required fields are marked *

Latest Articles