ANZ Bank New Zealand Limited v Te Kooti

[2018] NZHC 90

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2017-404-000083

[2017] NZHC 90

UNDER

the Land Transfer Act 1952

IN THE MATTER OF

an application for the removal of caveat 10608360.1

BETWEEN

ANZ BANK NEW ZEALAND LIMITED

Applicant

AND

LESLIE CARON TE KOOTI

Defendant

Hearing:	7 February 2017
Appearances:	B M K Pamatatau for Applicant Respondent in Person
Judgment:	7 February 2017

JUDGMENT OF VENNING J

This judgment was delivered by me on 7 February 2017 at 4.45 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Gibson Sheat, Wellington

ANZ BANK NEW ZEALAND LIMITED v TE KOOTI [2017] NZHC 90 [7 February 2017]

Park Legal, Auckland

Copyto:            B M K Pamatatau, Auckland Respondent

Introduction

[1]                  The ANZ Bank New Zealand Limited (the Bank) seeks an order removing a caveat. Ms Te Kooti registered the caveat against a block of land at Okaka Road, Horeke, Kaikohe (the property). The Bank holds a first mortgage over the property, which is in the name of Tareha Richard Noakes (also known as Tareha Richard Noakes-Court). Mr Noakes fell into arrears under the mortgage. He was adjudicated bankrupt on 16 October 2016.

[2]                  On 19 October 2016 the Bank sold the property pursuant to its power of sale to Grahame Leslie for $215,000. Ms Te Kooti lodged her caveat against the property on 28 October 2016. The Bank seeks removal of the caveat to enable it to complete the sale to Mr Leslie. It proposes that the surplus proceeds be held on trust by the Bank’s solicitors until agreement whether they should be paid to the Official Assignee in Mr Noakes’ bankruptcy or to anyone else claiming an interest in the land.

Representation

[3]                  The application for removal was served at Ms Te Kooti’s address for service, c/- John Hall at Park Legal, Como Street, Takapuna, but Ms Te Kooti was not represented by counsel when the matter was called this morning.

[4]                  Instead a person calling himself Tane Rakau sought to address the Court on the principles of Te Ture Whenua Maori Act 1993. I declined to hear from him as he is not counsel. A Mr Geoff Smith who describes himself as a liquidator and creditor and equitable owner of the property also purported to appear on behalf of Ms Te Kooti. Mr Smith had prepared an unsworn affidavit which had been presented to the Court.

[5]                  In the absence of counsel I told Ms Kooti I would hear from her but not from anyone else purporting to address the Court on her behalf. Ms Te Kooti declined to address the Court. In dealing with the application I do however take account, to the

extent it is relevant at all, the issues raised in the material presented to the Court by Mr Smith.

Analysis

[6]                  The starting point is that as a registered mortgagee, the Bank has priority over subsequent registered and unregistered equitable interests. It also has priority over prior unregistered equitable interests provided the Bank has not acted fraudulently in respect of those prior interests. Such prior unregistered equitable interests are defeated by the operation of law: s 62 and 182 of the Land Transfer Act 1952.

[7]The interest Ms Te Kooti claims under the caveat is said to be:

as cest que trust, of which the registered proprietor [Mr Noakes] is a trustee and the Caveator is a beneficiary, in relation to a variation of deed of acknowledge of debt dated 28 May 2001 under which the register proprietor [Mr Noakes] is an equitable mortgagor and the Caveator is the assignee of creditor and holds an express right to Caveat the title.

I note that no copy of the purported trust deed has been put before the Court.

[8]                  There is no evidence of fraud on the part of the Bank. Indeed there is no evidence the Bank was aware of Ms Te Kooti’s claim at the time that it advanced moneys to the registered proprietor Mr Noakes, who granted the mortgage over the property on 8 March 2001, which was subsequently registered on 30 May 2001.

[9]                  Ms Alarcon, Bank Officer, deposes that there is nothing to suggest from the Bank’s lending file in 2001 that the Bank had any knowledge of the interest now claimed by Ms Te Kooti.

[10]              The Bank assisted Mr Noakes with finance to purchase the property from Okaka Farms Limited.

[11]              At the relevant time Mr Noakes’ solicitors undertook to the Bank that the Bank’s mortgage would be registered as a first and only mortgage.

[12]              The solicitors also provided a certificate confirming that, after making all due inquiries, there was no other interest on the title to the property and that they had no knowledge of any interest yet to be registered on the Certificate of Title to the property.

[13]The solicitor who lodged the caveat on behalf of Ms Te Kooti stated:

The property was acquired by the current proprietor not through a standard terms agreement for sale and purchase of real estate but through a Deed of Acknowledgment of Debt between the proprietor and a party whose interests have been assigned to our client. ANZ in preparing to provide finance should have been aware of this document in conducting its due diligence. The consideration provided under that Deed was considerably less than the value of the property. A Trust Deed was signed on 7 June 2001 acknowledging the nature of ownership of the property as being in Trust. ANZ may not have been informed of this second Deed, however, ANZ should have been on notice to the likelihood of its existence because of the substantial difference between the amount loaned under the first Deed and the value of the property.

[14]              The letter acknowledges that the Bank may not have been informed of the purported claimed interest. It makes no suggestion of fraud. The Bank’s file and the evidence on behalf of the Bank is consistent with the Bank not having any notice of an interest by Ms Te Kooti personally.

[15]              Ms Te Kooti was a director of Mr Noakes’ vendor, Okaka Farms Limited. The company was removed from the Register of Companies in 2004. There is nothing to suggest that Okaka Farms Ltd or Ms Te Kooti had any remaining claim or interest in the land after the transfer to Mr Noakes.

[16]              I can deal briefly with the matters purported to be raised on behalf of Ms Te Kooti in Mr Smith’s papers.

[17]              First there is a challenge to the validity of the loan agreement and mortgage. The loan agreement is a record of Mr Noakes’ acceptance of the loan offer by the Bank. The mortgage is in a form prescribed by the Land Transfer Act 1952. The documents are valid.

[18]              Next, it is said the Property Law Act notices were not properly served. The Property Law Act notices were served in accordance with an order for substituted service obtained from the Court. Neither Mr Noakes nor the Official Assignee as

trustee in bankruptcy has taken any issue with service of the notice, nor indeed the subsequent steps taken by the Bank.

[19]              There is then a rather strange plea that in some way the default was resolved by the tender of a bill of exchange for $68,900. Mr Smith forwarded a cheque to the Bank with a letter dated 8 November 2016. As Ms Alarcon deposed the cheque referred to “being the sum certain of one New Zealand dollar” which was quite different to the figure of $68,900 referred to. It was reasonable for the Bank to query the legitimacy of such purported attempt to redeem the mortgage at that stage. In any event, the letter was sent after the Bank had agreed to sell the property and the equitable interest in it had transferred to the Bank’s purchaser.

[20]              There is then an even more fanciful claim. By reference to the Cestui Que Vie Act 1666 it is suggested that:

In accordance with the Cestui Que Vie Act 1666, section 11, 18 & 19 lives were lost at sea until returned to claim their account. Thereby the use of this account named TAREHA RICHARD NOAKES has been removed from the living man Tareha.

That submission makes no sense whatsoever. The Cestui Que Vie Act 1666 and the background to it is interesting but it is not in force in New Zealand: Imperial Laws Application Act 1988. Even if it was in force it does not have the extraordinary result the submission suggests.

[21]              Finally, at best, the claim that Ms Te Kooti raises is for a debt. In those circumstances there is no proper or reasoned basis to maintain the caveat given the Bank’s agreement that the caveat can be removed on the basis that if the caveat is removed any surplus proceeds of sale will be held on trust by the Bank’s solicitors until there is agreement whether they should be paid to the Official Assignee in Mr Noakes’ bankruptcy or to anyone else claiming any interest in the land.

Result

[22]              There will be an order in terms of the application removing the caveat described in the Bank’s application from the title.

[23]The Bank is to have costs against Ms Te Kooti on a 2B basis.

Venning J