A family friend for over fifty years, Anthony Tisot was in court seeking to enforce removal of building restrictions affecting development of his West Auckland property, a removal supposedly agreed with neighbour Danny Selak back in 2016. This agreement was set aside by the High Court; Mr Tisot took advantage of his friend’s learning difficulties when having him sign.
If enforced, the agreement would have resulted in a $3.1 million benefit to Mr Tisot’s family trust, with no compensation for the Selaks.
At issue were legal rights attached to neighbouring properties at Scott Point in Hobsonville. Formerly zoned rural, the area is now intensively subdivided.
In 2001, the Tisot Family Trust purchased a 2.3 hectare Scott Road property burdened by a restrictive covenant prohibiting building on over half of the land. This covenant protected sea views from a house on the neighbouring site.
The Selak Family Trust purchased this neighbouring property in 2016. The 2.3 hectares next door remained bare land.
The High Court was told of discussions between Mr Tisot and Mr Selak at time of the Selak purchase. What was agreed later became subject to detailed cross-examination in the High Court.
Mr Selak said his understanding was that Mr Tisot was seeking neighbourly approval to support Mr Tisot’s removal of redundant Auckland City consent conditions requiring removal of any noxious vegetation and building materials on the site. The document he signed was a in fact a deed agreeing to deletion from the title its existing building restriction covenant, allowing the entire 2.3 hectares to be built on.
Justice Gordon cancelled the deed. Mr Tisot had taken advantage of Mr Selak to engineer an unconscionable bargain, she ruled.
Rules regarding unconscionable bargains are intended to protect those with a disability where one party takes advantage of that disability. The rules do not apply to those merely regretting their agreement to a foolish transaction.
Evidence was given of Mr Selak’s lifetime learning difficulties. Poor hearing meant that at school he never learnt properly to read or to write.
This did not hamper his very successful business career running several retail businesses together with a landscaping business, but he relied on others to read and explain important documents.
Mr Selak’s former lawyer gave evidence of having to call Mr Selak into his office for explanations on proposed legal transactions; any letter sent to his client was followed by a phone call asking for a detailed explanation of its contents.
Evidence was also given of circumstances surrounding witnessing of the disputed deed. Mr Selak’s signature was witnessed by a car salesman at a meeting arranged by Mr Tisot. The primary reason for the meeting was Mr Selak’s purchase of a car, a purchase Mr Tisot was intimately involved in as he was assisting his friend in reading and understanding the paperwork.
Without a proper explanation of the deed he signed removing building restrictions, Mr Selak was not able to assess his best interests, Justice Gordon said. Mr Tisot was aware of his friend’s difficulties with reading comprehension, she said.
At the very least Mr Tisot was careless in putting the document in front of his friend for signature without full explanation of its contents, she said. The fact Mr Tisot actively discouraged Mr Selak from getting independent legal advice for a transaction which would reduce the value of Mr Selak’s property while increasing the value of Mr Tisot’s by some $3.1 million was further evidence of an unconscionable bargain, Justice Gordon said.
Separately, Mr Tisot made a Property Law Act application to the High Court for amendment to terms of the building restriction covenant. Justice Gordon ruled some amendment is appropriate, given changes over the last two decades to Hobsonville zoning regulations.
Mr Selak told the court he was amenable to some alterations. The two families were given the opportunity to consider what changes might be agreed and the extent of any compensation payable to the Selaks.
Tisot v. Selak – High Court (24.05.24)
24.135