ANZ National Bank Limited v Uruamo

[2012] NZHC 1914

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-4084 [2012] NZHC 1914

IN THE MATTER OF     Caveat No.9124150.1 and Caveat

No.9124150.2

BETWEEN  ANZ NATIONAL BANK LIMITED Applicant

AND  ERIAPA URUAMO Respondent

Hearing:         27 July 2012

Counsel:         L A O'Gorman for Applicant

D V Murray for Respondent

Judgment:      27 July 2012

ORALJUDGMENT (No.2) OF ASSOCIATE JUDGE R M BELL Stay application

Solicitors:

Buddle Findlay, P O Box 1433 Auckland 1140, for Applicant

Email:    [email protected]  /   [email protected]

Michael Kan, P O Box 105 228 Auckland 1143 for Respondent

Email:    [email protected]

Copy for:

Davina Murray, P O Box 1808 Auckland 1140 for Respondent

Email:    [email protected]

ANZ NATIONAL BANK LIMITED V URUAMO HC AK CIV-2012-404-4084 [27 July 2012]

[1]      On 26 July 2012 I heard the bank’s application under s 143 of the Land Transfer  Act  to  remove  two  caveats,  9124150.1  and  9124150.2  which  were registered  and  lodged  against  titles  to  properties  known as  “1331”  for  the  first caveat, and “Lot 4” for the second caveat.  I held that Mr Uruamo, the caveator, did not have a caveatable interest of the sort claimed in his caveat and that he did not otherwise have an interest in the land the subject of the caveat.  I also held that even if he had a caveatable interest, the position of the ANZ National Bank as mortgagee entitled to exercise a power of sale over both properties prevailed over Mr Uruamo’s interest.  In particular I made reference to s 105 of the Land Transfer Act.

[2]      At the end of my decision, Ms Murray indicated that Mr Uruamo would seek a stay pending appeal.   I directed that the stay application would  be heard this afternoon.  Both parties have filed written submissions.  Overnight, counsel for the bank has made enquiries of the Court of Appeal when an appeal could be heard. Happily, an early date of hearing in front of the Court of Appeal is available on

8 August  2012  for  one  day.    9 August  is  available  for  a  2-hour  fixture.    The availability of a prompt hearing in the Court of Appeal does make the decision on the stay application easier.

[3]      The parties have referred to the relevant approach as established by case law, in particular the factors established in Dymocks Franchise Systems (NSW) Pty Ltd v Bilgola Enterprises.[1]   There are seven factors.  It is conventional now also to record, following the decision of the Court of Appeal in Keung v GBR Investment Ltd,[2] that the apparent strength of an appeal may be considered as an additional factor.

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

[2] Keung v GBR Investment Ltd [2010] NZCA 396 at [11].

[4]      I am advised that other counsel is likely to be instructed for the appeal for Mr Uruamo.  The particular point likely to be pursued on appeal is whether interests in wāhi tapu and like sites of cultural importance can be protected by caveat.   In particular,  I  understand  that  arguments  will  be  directed  to  the  fact  that  tangata

whenua may have a relationship with the registered proprietor which goes towards

the recognition and protection of wāhi tapu and which may require recognition by

way of caveat if land were to be sold by a mortgagee to an unknown third party.

[5]      I note that that general ground of appeal seems to encompass two elements.

[6]      The first element is that rights in respect of wāhi tapu may go back into antiquity.    The  argument  seems  to  involve  a  claim  that  such  rights  and  other customary rights  recognised  under  tikanga  Māori would  survive  land  being  the subject of a relevant Crown grant that would otherwise relevantly extinguish former rights in land.  They would also survive the land being converted into general land in terms of the Māori land legislation and also coming under Land Transfer Act, in particular the indefeasibility provisions of that Act.

[7]      Ms Murray submits that that is a novel point, but also an important point in terms of the court’s current approach to the recognition and protection of Māori values.  There is a response that the case law has so far in New Zealand set its face determinedly against that, particularly in relation to the way that the indefeasibility provisions of the Land Transfer Act have been applied.

[8]      In general, the Land Transfer Act and the indefeasibility provisions of that Act have had a role in the history of New Zealand of protecting the interests of settlers against claims by earlier indigenous owners.  That point was recognised by the Privy Council in Assets Company Ltd v Mere Roihi:[3]

Their Lordships are keenly alive to the necessity of vigilance to protect natives against unfair and oppressive dealings on the part of Europeans; but on the other hand it is equally important not to disturb registered titles of bona fide purchasers, especially when accompanied by long possession and large outlays.

[3] Assets Company  Ltd v Mere Roihi [1905] AC 176 (PC) at 211. The Orwellian “equally important” precedes Animal Farm.

[9]      Although that  statement  refers to  matters being  of equal importance, the balance of equality came down in favour of the settlers against the interests of the earlier owners.   That case, like many other cases decided in that period, involved Māori who had been in peaceable possession of land and had lost their land by the

unscrupulous  dealings  of  pakeha.    The  indefeasibility  provisions  of  the  Land

Transfer Act went to the protection of pakeha who had purchased interests in land without fraud.  To that extent, there is an established position in New Zealand land law against customary rights enduring after land has passed into the ownership of non-Māori.   In running an appeal against  that, Mr Uruamo  will be pursuing an appeal where there is a century of case law going against him.  Nevertheless that is not to say that his appeal is hopeless.  It is just that at the moment matters do look difficult for him.

[10]     Having made the decision myself on what I consider to be established case law, it is not for me to say that I was right and an appeal against my decision is bound to fail.  That would be arrogant on my part.  He has a right in statute to appeal to the Court of Appeal.  The question is how to achieve the right balance.

[11]     In stay applications, the ideal is that recognised by Buckley LJ in Minnesota

Mining & Manufacturing Co v Johnson & Johnson:[4]

The object, where it can be fairly achieved, must surely be so to arrange matters that, when an appeal comes to be heard the appellate court may be able to do justice between the parties, whatever the outcome of the appeal may be.

[4] Minnesota Mining & Manufacturing Co v Johnson & Johnson [1976] RPC 671 (CA) at 676.

[12]     The difficulty with matters such as caveats is that in a case like this, if the caveat is removed the registered proprietor (or in this case the mortgagee) may be able to dispose of land and the rights protected by the caveat will be lost.  To that extent, removal of a caveat before an appeal can be heard can be nugatory.

[13]     The decision of Associate Judge Osborne in Heeg v Heeg[5] shows that in stay applications in caveat cases the court looks not to whether the caveat itself can be protected but whether the underlying interests of the caveator can be protected.  To the extent that Mr Uruamo is relying on interests that go back into antiquity, and to the extent that he says they have survived the land being the subject of a Crown grant, the land being brought under the Land Transfer Act, and successive dealings

by registered proprietors under the Land Transfer Act, and that those interests have

survived until now, then they should also survive against any purchaser from the bank exercising its power of sale as mortgagee.

[5] Heeg v Heeg HC Nelson CIV-2011-442-129, 29 August 2011.

[14]     The second element is that Mr Uruamo is relying on rights which arise solely out of his dealings with the current registered proprietor.  His rights turn on dealings which are the subject of a caveat  lodged only in July 2012, after the bank had registered its interest in the land in October 2008 and after the bank had already begun enforcement proceedings by way of exercising its rights under s 119 of the Property Law Act with the current registered proprietor.   On that point, there is a strong line of case law that the bank’s interests take priority over Mr Uruamo’s. Again, on that point, Mr Uruamo is taking an appeal where there is a strong body of case law against him.  Admittedly most of that law has been decided at first instance in this court rather than on appeal.

[15]     The bank entered into an agreement to sell the Lot 4 block.  That agreement was to settle on 25 June 2012.  Ms O’Gorman advised that the agreement for sale and  purchase  contains  particular  provisions  to  deal  with  impediments  to  sale. Clearly the caveat lodged against the title to Lot 4 is an impediment to sale.  The provisions of the agreement for sale and purchase give the bank an option either to cancel the contract or to elect to pursue the removal of the impediment.  The contract provisions provide that so long as the bank pursues the removal of the impediment, then the purchaser  is not  able to  cancel the contract  by reason of the vendor’s inability to settle before the legal removal of the impediment.

[16]     No doubt the bank is under a duty to use best efforts to pursue the removal of the impediment to sale.  I cannot help thinking that if a vendor delayed excessively, a purchaser might lose heart and walk away from the sale.   The bank might face difficulties in enforcing the agreement against him in the light of delays.   In other words, the bank still has a very real interest in getting an early determination of whether Mr Uruamo does have a valid caveatable interest in the land.

[17]     Ms O’Gorman also makes the point that delay in determination does affect the bank in that it will be longer out of money.  The loss to the bank is likely to be relatively minor if the appeal is heard promptly.  I am told that the sale price of Lot 4

is somewhere about  $800,000.   With the  low cost  to  banks of raising  funds at present, the loss to the bank in the time for the removal of the caveat being deferred pending hearing of a Court of Appeal hearing is likely to be relatively small.

[18]     The relevant effect on third parties in this case is the effect on the registered proprietor because interest will continue running on his liabilities to the bank.  There is also the effect on the purchaser, but again these matters can be addressed by a prompt hearing of the appeal.

[19]     The matter is different for the Lot 1331 block.  The registered proprietor lives on that land.  There is a summary judgment application against him.  That summary judgment application is to be heard on 15 October 2012.   The relief the bank is seeking against the registered proprietor includes an order for vacant possession of the land.  It seems to me that the bank is unlikely to exercise any power of sale over that property, requiring it to give vacant possession of the land, before the determination  of  the  summary  judgment  application.    So  far  as  Lot  1331  is concerned, it seems to me there is no prejudice to the bank if the caveat appeal can be heard before 15 October 2012.

[20]     Accordingly,  to  allow  Mr  Uruamo  to  exercise  his  right  of  appeal  in  an effective way, I will grant a limited stay of the orders for removal of the caveats.

[21]     I order a stay of the removal of the caveats until Friday, 10 August 2012. That stay will apply pending further order of this court or of the Court o f Appeal. I expect the appellant to make arrangements for the appeal to be heard in the Court of Appeal on either 8 or 9 August 2012.   If any stay beyond 10 August 2012 is required, I expect Mr Uruamo to apply to the Court of Appeal for further extension. That might be necessary because of the Court of Appeal’s allocation of its workload.

[22]     The bank has also asked that Mr Uruamo give an undertaking as to damages as a condition of the stay.     Ms O’Gorman has referred  me to the decision of Venning J in Guilford v Gateway Management Ltd.[6]   In that case, Venning J made an

undertaking as to damages a condition of a stay pending appeal.  I am not inclined to

order an undertaking in the circumstances of this case.  That is because the appeal can be heard promptly and if the appeal is heard promptly the costs to the bank will be minimal.   In money terms, it  is likely to be relatively light.   Proceedings to enforce an undertaking are unlikely to be cost effective.  That does not mean that the matter cannot be re-visited if an extension of the stay is sought.

[6] Guilford v Gateway Management Ltd HC Auckland CIV-2003-404-1008, 3 July 2003.

[23]     To allow the appeal to be heard promptly, I give these directions:

(a)       Mr Uruamo is to file and serve his notice of appeal in the Court of

Appeal by Wednesday 1 August 2012.

(b)      By Friday 3 August 2012, he is to file with the Court of Appeal his security for costs.  He is to file and serve his case on appeal together with his submissions and authorities by Friday 3 August 2012.   By Friday 3 August 2012 he is to undertake all steps necessary to have the case ready for hearing.

(c)      The respondent is to file and serve its submissions in response by close of 6 August 2012.

Costs

[24]     The bank also proposes that Mr Uruamo pay costs on the caveat removal application as a condition for the stay.  The bank is entitled to an order for costs on the removal application regardless.  The bank’s calculation of costs on the removal application seems to be in order.  I fix those costs at $7,860.50 plus disbursements of

$683.94, a total of $8,544.44.  The bank requires that to be paid as a condition of the stay.  I do not regard that as necessary.  The bank will be able to enforce that order for costs against Mr Uruamo regardless.

[25]     Mr Uruamo needs to appreciate that in pursuing this appeal an order for costs has been made against him.  He needs to bear in mind that if he fails on the appeal he will then have a further order for costs made against him in the Court of Appeal.

Those are matters which must be taken into account in considering whether to pursue this litigation further.  That is a matter for his consideration after taking advice.

............................................

R M Bell

Associate Judge