Cashmere Capital Ltd v Carroll - [2009] NZSC 123

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IN THE SUPREME COURT OF NEW ZEALAND
SC 46/2009
[2009] NZSC 123
BETWEENCASHMERE CAPITAL LIMITED
Appellant

ANDPATRICK KEVIN CARROLL
First Respondent
ANDTHOMAS WILLIAM RAINEY
Second Respondent
ANDB V STRANGER
Third Respondent
ANDMARGARET MARY TERESA CUNNEEN
Fourth Respondent
ANDPATRICK KEITH BROWN
Fifth Respondent
ANDJUNE H PARSONS
Sixth Respondent
ANDMARY ELLA LORY
Seventh Respondent

Hearing:5 November 2009

Court:Elias CJ, Blanchard, Tipping, McGrath and Wilson JJ
Counsel:A C Hughes-Johnson QC and G A Hair for Appellant
N A Till QC for Respondents

Judgment:4 December 2009

JUDGMENT OF THE COURT

A The appeal is allowed.
B The judgment of the Court of Appeal is set aside.
CCosts are awarded to the appellant in the sum of $5,000, plus disbursements to be fixed if necessary by the Registrar, to be costs in the cause.

REASONS
(Given by McGrath J)
Introduction
[1]       This appeal raises an issue of priority between persons having competing interests in an unregistered retirement village. The appellant is the holder of a registered mortgage secured over property comprising part of the retirement village. The respondents occupy residential units in that part of the village. They have exclusive rights of occupancy for life under unregistered agreements which are accordingly leasehold interests. They entered into those agreements with a company which is the owner of the retirement village. It is also the mortgagor. The issues between the parties to the appeal have arisen because of irregular acts of the owner which appears now to be insolvent, although it has not at this point been put into liquidation.
[2]       Two issues in the appeal raise questions concerning the meaning of provisions of the Retirement Villages Act 2003, which was enacted to provide a regime for the protection of all residents of retirement villages. The third concerns whether the appellant mortgagee has consented to the residents’ interests in a manner that has caused it to lose the priority it would otherwise enjoy under the Land Transfer Act 1952.
Background
[3]       Since 1986 Crossdale Properties Ltd (Crossdale) has been registered as proprietor, under cross leasehold and freehold certificates of title, of eight residential units, in a complex comprising 22 former motel units, in Curlett’s Road, Christchurch.
[4]       Between 1998 and 2004 Crossdale entered into agreements with five of the respondents, Messrs Carroll, Rainey, Stranger and Brown and Ms Lory. These agreements gave each the right of occupancy of a particular unit during his or her lifetime. In return each respondent made an unsecured loan advance to Crossdale and became liable to pay a weekly charge for village services. Similar agreements were entered into by Crossdale with two other respondents, Ms Cunneen in November 2006 and Ms Parsons in 2007. The loans ranged between $24,950 and $54,950. They were repayable on death, when possession of the unit would revert to Crossdale.
[5]       The agreements between Crossdale and the respondents (the residents) were not registered against the certificates of title, nor did any of them lodge caveats against…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] NZSC 123
Decision Date: 4 December 2009

CaseChat Overview and Summary

This appeal concerns the priority between the interests of a mortgagee and the interests of residents in an unregistered retirement village. The appellant, Cashmere Capital Ltd, holds a registered mortgage over property comprising part of the retirement village. The respondents occupy residential units in that part of the village. They have exclusive rights of occupancy for life under unregistered agreements, which are accordingly leasehold interests. They entered into those agreements with the owner of the retirement village, which is also the mortgagor. The issues in the appeal have arisen because of irregular acts of the owner, who appears to be insolvent, although it has not yet been put into liquidation. The appeal raises questions concerning the meaning of provisions of the Retirement Villages Act 2003 and whether the appellant mortgagee has consented to the residents' interests in a manner that has caused it to lose the priority it would otherwise enjoy under the Land Transfer Act 1952. The Supreme Court allowed the appeal and dismissed the respondents' applications. It referred the proceeding back to the High Court for trial. The Court awarded costs to the appellant in the sum of $5,000, plus disbursements to be fixed if necessary by the Registrar.

Orders