A Person or Persons Unknown v Tea Custodians (Bluestone) Ltd

[2010] NZCA 211

IN THE COURT OF APPEAL OF NEW ZEALAND

CA280/2010
[2010] NZCA 211

BETWEENA PERSON OR PERSONS UNKNOWN

First Appellant

ANDNGAI-TUPANGO-HAPU INC

Second Appellant

ANDTEA CUSTODIANS (BLUESTONE) LTD

Respondent

Court:O'Regan, Arnold and Ellen France JJ

Counsel:D J Bongard in person for Appellants

D A Wood for Respondent

Judgment:26 May 2010 at 10.30 am 

(on the papers)

JUDGMENT OF THE COURT

The application for a stay is declined.

REASONS OF THE COURT

(Given by Arnold J)

Introduction

[1]        This is an application for stay of a judgment of Associate Judge Christiansen in which he gave an order for vacant possession of a property at Takanini.[1]  The application is brought by persons known as Te-Awhina and Kingi-Kingi-Hori on behalf of the occupants of the property and Ngai-Tupango-Hapu Inc.

Background

[1]TEA Custodians (Bluestone) Ltd v A Person or Persons Unknown HC Auckland CIV-2010-404-86, 23 April 2010 [April decision].

[2]        The respondent, TEA Custodians (Bluestone) Ltd (TEA), is mortgagee of the property.  The mortgagor is a company, which has now been removed from the Register of Companies.

[3]        Following a default under the mortgage, TEA wished to exercise its rights as mortgagee. Persons unknown to TEA occupied the property, apparently with the acquiescence of the mortgagor.  TEA delivered a Property Law Act Notice[2] to the occupants on 8 May 2008.  On 12 June 2008 TEA received a letter (apparently on behalf the occupants) requesting further information to prove the requirement to repay the mortgage. The letter also asked TEA to show why the mortgage was not null and void by operation of Te Ture Whenua Māori Act 1993.

[2]Property Law Act 2007, s 119.

[4]         TEA did not respond to the letter.  A “Notice of Fault and Opportunity to Cure” was then delivered to TEA. The notice stated that there was evidence of a failure to provide the information requested to enable settlement of the issues and gave TEA an opportunity to “cure any alleged mistaken silence”. The notice was signed by “Jose Deborah Barnes, Queens appointed Justice of the Peace.”

[5]         When TEA did not respond to the notice, it received a “Certificate of Default and Protest and Stipulated Agreement”. In essence, this stated that the debt was forgiven due to TEA’s failure to respond. 

[6]        On 2 June 2009 the mortgagor company was struck off the Register of Companies.  The unknown occupants remained on the property.

Proceedings in the High Court

[7]        TEA filed a summary application for possession of land[3] so that the occupants would vacate the premises, the property could be sold and the mortgage could be redeemed.  The application was directed at the occupants of the property, who were described as “a person or persons unknown”, and was served on them on 23 February 2010. 

[3]High Court Rules, r 13.4.

[8]        The person known as Te-Awhina (the name on her birth certificate is Dianna Jane Bongard) appeared on behalf of the occupants.  She opposed the application, claiming that there was no jurisdiction and that in any event the dispute had already been settled through arbitration with a Justice of the Peace on 30 June 2008. 

[9]         In a decision dated 18 March 2010, Associate Judge Christiansen held that there was a proper evidential foundation for TEA’s application, and set aside the protest as to jurisdiction.[4]  He adjourned the matter until 22 April 2010 to enable Ms Bongard to file evidence of the arbitration.[5] 

[4]TEA Custodians (Bluestone) Ltd v A Person or Persons Unknown Occupying a Property at 15 Oakleigh Avenue, Takanini HC Auckland CIV-2010-404-86, 18 March 2010 at [13] [March decision].

[5]At [16].

[10]       Various documents were then filed, including a notice to answer interrogatories and an application for a stay of proceedings. The parties to the proceeding were also amended to include Ngai-Tupango-Hapu Inc as “third parties with real interest in the matter”. There is no record of that body’s incorporation.[6]  Ms Bongard acted on its behalf also.

[6]March decision at [9].

[11]       By the hearing date on 22 April 2010, Ms Bongard had not filed any evidence to show that arbitration had occurred. Rather, her argument was essentially that Jose Deborah Barnes had ordered that the debt was forgiven due to the silence of TEA when it was asked for information.  Ms Bongard confirmed that Jose Deborah Barnes was a duly appointed Justice of the Peace, and requested that the proceeding be stayed to allow for a full hearing of the dispute. 

[12]       TEA submitted that it had no knowledge of the alleged arbitration, and referred the Associate Judge to the fact that on 15 February 2010 Ms Bongard and Jose Deborah Barnes lodged a caveat on the certificate of title.

[13]       In his decision delivered on 23 April 2010, the Associate Judge noted that the issues raised by the appellant were irrelevant to the matter of the alleged arbitration, which was the sole reason for the adjourned hearing.  He made the order for vacant possession in the terms sought by TEA[7] and dismissed Ms Bongard’s requests for the issue of interrogatories and a stay of proceedings.  The Asssociate Judge found:[8] 

(a)         There was no arbitration;

(b)There was no evidence to contradict TEA’s right to vacant possession;

(c)Jose Deborah Barnes, even if a Justice of the Peace, did not have authority to determine the dispute; and

(d)The appellant wrongly claimed to be outside the authority of the Court.

[7]April decision at [16].

[8]At [17]-[18].

The present appeal

[14]       The occupants and Ngai-Tupango-Hapu Inc appeal to this Court against the judgments of Associate Judge Christiansen, and seek to have the order for vacant possession set aside.  In addition, the parties seek a stay of the execution of the order until disposition of the appeal.[9]  

[9]Court of Appeal (Civil) Rules 2005, r 12.

[15]       In deciding whether to stay proceedings, the Court must “weigh all of the factors in the balance between the right of a successful litigant to have the fruits of a judgment and the need to preserve the position in case the appeal is successful.”[10] Non-exhaustive factors to be taken into account in balancing the competing interests are:[11]

(a)         Whether the appeal may be rendered nugatory by the lack of a stay;

(b)         The bona fides of the applicant as to the prosecution of the appeal;

(c)          Whether the successful party will be injuriously affected by the stay;

(d)         The effect on third parties;

(e)         The novelty and importance of questions involved;

(f)          The public interest in the proceeding; and

(g)         The overall balance of convenience.

[10]Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.

[11]Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises Ltd (1999) 13 PRNZ 48 (CA) at [9].

While the apparent strength of the appeal is not one of the listed factors, Heath J treated it as an additional factor in Body Corporate No 188529 v North Shore City Council (No 6).[12]

[12]Body Corporate No 188529 v North Shore City Council (No 6) HC Auckland CIV-2004-404-3230, 11 February 2009.

[16]        In the present case, the refusal of a stay may render the appeal nugatory because TEA may sell the property before the appeal is heard (we are unsure what the present position is in relation to the caveat).  However, neither the occupants nor Ngai-Tupango-Hapu Inc have demonstrated that they have a valid interest in the property, with the result that this factor has much less force than otherwise it might.

[17] In any event, this factor is not determinative,[13] and there are other considerations which support the refusal of the application. In particular, there is no public interest in the proceeding and there are no known third parties affected by it. Moreover, to the extent that it is based on the notion that an alternative legal regime applies to the property in question and to its occupants, the appeal has no prospect of success.

[13]Cousins v Heslop [2007] NZCA 377 at [10].

[18]       In the application for a stay, the appellant again claims that the dispute has been resolved through arbitration.  There was no evidence before the High Court to support that contention, and there is no evidence before this Court which casts doubt on the validity of the finding that no arbitration occurred.  

[19]        The appellant also submits that the judgments violated the principles of equity, which prevail by reason of s 99 of the Judicature Act 1908. That section provides:

Generally in all matters in which there is any conflict or variance between the rules of equity and the rules of the common law with reference to the same matter the rules of equity shall prevail.

The short answer to this submission is that the order for vacant possession was lawfully made.  The rules of equity do not “trump” statute law. 

[20]       In these circumstances, TEA is entitled to the fruits of its judgment. Accordingly the application for a stay is declined.

Solicitors:

Sanderson Weir, Auckland for Respondent