Cooper v Cooper
[2023] NZHC 1403
•7 June 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-1956 [2023] NZHC 1403
IN THE MATTER of an originating application for an order that caveat not lapse under s 143 of the Land Transfer Act 2017 BETWEEN
TALAMATAONE ELEANOR COOPER
Applicant
AND
TE KURA INGA TAU COOPER
First Respondent
EPHRAIM COOPER and RICHARD SHORTLAND COOPER
Second Respondents
Continued Overleaf
Hearing: 24 February 2023, further memoranda received 28 February 2023
and 2 March 2023
Counsel:
MG Locke and SK Hartley for the Applicant MH Donovan for the Respondents
Judgment:
7 June 2023
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 7 June 2023 at 12.30 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
TALAMATAONE ELEANOR COOPER v TEKURAINGATAU COOPER [2023] NZHC 1403 [7 June 2023]
CIV-2022-404-1938
IN THE MATTER of an application for a court order to remove a
caveat against dealings under ss 142 and 143(3)(a) and 148 of the Land Transfer Act 2017
BETWEEN THE TRUSTEES OF THE
TEKURAINGATAU COOPER FAMILY
TRUST and the GEORGE COOPER FAMILY TRUSTFirst Applicant
TEKURAINGATAU COOPER in her capacity as settlor, trustee and primary beneficiary of the Tekuraingatau Cooper Family Trust and trustee by survivorship and primary beneficiary of the George Cooper Family Trust
Second Applicant
RICHARD SHORTLAND COOPER in his
capacity as trustee of the Tekuraingatau Cooper Family Trust
Third Applicant
EPHRAIM COOPER in his capacity as trustee of the Tekuraingatau Cooper Family Trust and the George Cooper Family Trust
Fourth Applicant
AND TALAMATAONE ELEANOR COOPER
First Respondent
MORTLOCK McCORMACK LAW
Second Respondent
Solicitors/Counsel:
Mortlock McCormack Law, Christchurch James Gavin Donovan, Auckland
M Locke, Barrister, Auckland
Case Officer: Divya Ojha
Introduction [1]
Issues [13]
Legal principles—application that caveat not lapse [15]
Preliminary issue—admissibility of documents [20]
Factual background [24]
Is it reasonably arguable that an institutional constructive trust arises in this case? [35]
Has Eleanor made contributions direct or indirect to the Property in question?
[42]
Is it reasonably arguable that the applicant had an expectation of an interest in the Property? [53]
Is it reasonably arguable that Eleanor’s expectation was a reasonable one? [58]
Is it reasonably arguable that the respondent should expect to yield the interest tothe applicant? [70]
Conclusion on whether institutional constructive trust reasonably arguable [79] Is the description of the interest on the caveat sufficiently certain? [80] Should the caveat have identified the extent of the interest? [84]
Was the application for the caveat not to lapse filed in time? [86]
Factual Summary [91]
Relevant Provisions [94]
Filing fee waiver [108]
Discussion [111]
Further directions [113]
Result [115]
Costs [119]
Introduction
[1] Ms Talamataone Eleanor Cooper (Eleanor)1 has applied for an order that the caveat that she lodged against the title to a property in Lough Bourne Drive, Pukekohe (Property) not lapse.
[2] The registered proprietors of the Property have also filed an application that the same caveat lapse, together with an application for an order for compensation for lodging a caveat without reasonable cause, estimated as over $400,000, pursuant to s 148 of the Land Transfer Act 2017.
[3] These applications are essentially opposite sides of the same question and would not usually both be filed. It appears that part of the reason for the filing of the application by the registered proprietors is because of an issue with the timing of the filing of the application that the caveat not lapse. The registered proprietors consider the caveat had lapsed by the time Eleanor filed the application for the caveat not to lapse. Land Information New Zealand (LINZ) has allowed the caveat to remain on the title until the Court determines the question of timing.
[4] In this judgment to avoid confusion, I refer to Eleanor as the applicant and the registered proprietors as the respondents (although each occupy the opposite roles in respect of the registered proprietors’ application).
[5] For Eleanor’s application to succeed, she must establish that it is reasonably arguable that the interest in the Property claimed in the caveat currently exists and is an interest in land. If Eleanor succeeds in her application for the caveat not to lapse, the registered proprietors’ application must necessarily fail. I therefore consider Eleanor’s application first.
[6]Eleanor’s interest in the Property is described on the caveat as follows:
…a beneficial interest in the land contained in the above Certificate of Title as cestui que trust of which the registered proprietors … are Trustees.
1 I refer to the plaintiff and other parties involved by first names to avoid confusion given they mostly share the surname Cooper. I mean no disrespect in doing so.
[7] Eleanor’s counsel submits that it is reasonably arguable that a “reasonable expectations trust arises” and that this is a sufficient interest to sustain the caveat.
[8] It is settled law that an institutional constructive trust in respect of a property is a sufficient interest in land to sustain a caveat and that the four elements for such a trust are as described in Lankow v Rose:2
(a)the applicant has made contributions, direct or indirect, to the property in question;
(b)the applicant had an expectation of an interest in the property;
(c)that expectation was a reasonable one; and
(d)the respondent should reasonably expect to yield the interest to the applicant.
[9] The respondents do not accept that the applicant has an existing interest in the Property, instead submitting that any interest would only arise pursuant to a remedial constructive trust. Such a trust does not create a caveatable interest as a caveator must have a present, as distinct from a potential, interest in the land. The respondents submit that as a remedial constructive trust does not exist until it is created by order of the Court, a caveat cannot be lodged prior to the date of the Court’s order.3
[10] Furthermore, the respondents say the description of Eleanor’s interest on the caveat does not:
(a)provide details of how the interest claimed is derived from the registered owners; or
2 Lankow v Rose [1995] 1 NZLR 277 (CA) at 294 per Tipping J, as recently confirmed in Siddiqui v Siddiqui [2022] NZCA 324 at [26].
3 See Neil Campbell (ed) Hinde McMorland & Sim Land Law in New Zealand (online ed, LexisNexis) at [10.009(d)].
(b)identify the extent of the interest claimed by Eleanor in relation to each of the registered owners.
[11] In addition, the respondents oppose the application on the basis that the caveat had already lapsed by the time Eleanor’s application had been filed.
[12] In response to this latter ground, Eleanor has filed an application for leave to lodge a second caveat pursuant to s 146 of the LTA if the original caveat is found to have lapsed.
Issues
[13]The issues to be determined are therefore:
(a)Is it reasonably arguable that an institutional constructive trust arises in this case, requiring the following questions to be addressed:
(i)Is it reasonably arguable that the applicant has made contributions, direct or indirect, to the Property in question?
(ii)Is it reasonably arguable that the applicant had an expectation of an interest in the Property?
(iii)Is it reasonably arguable that the expectation was a reasonable one?
(iv)Is it reasonably arguable that the respondent should expect to yield the interest to the applicant?
(b)Is the description of the interest on the caveat stated with sufficient certainty?
(c)Should the caveat have identified the extent of the interest?
(d)Was Eleanor’s application for the caveat not to lapse filed in time?
(e)If not, should leave be granted for the lodging of a second caveat?
[14] I begin by setting out the legal principles in relation to applications that a caveat not lapse before considering the factual background and the issues listed above.
Legal principles—application that caveat not lapse
[15] The right to lodge a caveat is provided by s 138 of the Land Transfer Act 2017 (LTA), with the interest claimed required to fall within the interests described in that section. These include that the person has a beneficial estate or interest in the land under an express, implied, resulting or constructive trust.4
[16] As s 138(1)(a) makes clear, the interest does not have to be a registerable interest, but a personal or contractual right is not enough. The caveator must show a current entitlement to a beneficial interest in the land under the caveat.5
[17] Section 138(3) requires the caveat to contain the prescribed information. This is set out in schedule 2 of the Land Transfer Regulations 2018. The caveat must, relevantly, include:
A description of the nature of the estate or interest claimed by the caveator (which must be stated with sufficient certainty) …
Details of how the estate or interest claimed is derived from the registered owner.
[18] The legal principles relating to sustaining a caveat are well settled and were recently summarised by the Court of Appeal in Green & McCahill Holdings Ltd v Ara Weiti Development Ltd:6
[80]The core principles covering applications to sustain caveats under s 143 of the LTA are those set out in this Court’s decision in Philpott v Noble Investments Ltd (drawing in turn on our earlier decision in Sims v Lowe): 7
4 Land Transfer Act 2017, s 138(1)(b).
5 Guardian Trust & Executors New Zealand Ltd v Hall (No 2) [1938] NZLR 1020 (CA) at 1025;
Philpott v NZI Bank Ltd (1990) ANZ ConvR 242 (CA) at 246.
6 Green & McCahill Holdings Ltd v Ara Weiti Development Ltd [2022] NZCA 218.
7 Philpott v Noble Investments Ltd [2015] NZCA 342 at [26]; Sims v Lowe [1988] 1 NZLR 656 (CA) at 659–660. Philpott was referred to with approval by the Supreme Court in Melco Property Holdings (NZ) 2012 Ltd v Hall [2022] NZSC 60, [2022] 1 NZLR 59 at [56].
(a)The onus is on the applicants to demonstrate that they hold an interest in the land that is sufficient to support the caveat, but they need not establish that definitively;
(b)It is enough if the applicants put forward a reasonably arguable case to support the interest they claim;
(c)The summary procedures involved in applications of this nature are not suited to the determination of disputed questions of fact. An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained — either because there is no valid ground for lodging it in the first place, or because such a ground no longer exists; and
(d)Where an applicant has discharged the burden upon it, the Court retains discretion to remove the caveat which it exercises on a cautious basis. Before it does so the Court must be satisfied that the caveator’s legitimate interest would not be prejudiced by removal.
…
[83] Although summary process does not permit close engagement with contested facts, the court must still assess the arguability of the asserted case of a proprietary right realistically and interrogate the documentary record. As the Privy Council said in Eng Mee Yong v Letchumanan, a court is not required:8
… to accept uncritically, as raising a dispute of fact which calls for further investigation, every statement in an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself it may be.
[19]The Court of Appeal set out the following further matters for consideration:9
[84]Four further points might usefully be noted here. First, balance of convenience considerations do not ordinarily enter the picture with caveats, save that the court has a residual discretion not to uphold a caveat where it could serve no useful purpose or alternative protection is available. We return to that subject later in the judgment.
[85]Secondly, nor is there any requirement for an undertaking as to damages. Rather, s 148 of the LTA provides a statutory basis for a claim for compensation where a caveat has been imposed “without reasonable cause”. It does not follow that a failed application to sustain will result in a right to compensation: s 148 requires the claimant to prove a lack of honest belief, based on reasonable grounds, in a proprietary right.
[86]Thirdly, a s 143 order sustaining a caveat may be made subject to conditions as to the caveator initiating and prosecuting with diligence substantive proceedings to sustain its alleged proprietary rights to the land concerned...
[87]Fourthly, although the normal course is that costs in an originating application to sustain a caveat are resolved according to success or failure in that proceeding, costs remain discretionary. Where the caveat is sustained only on condition that the claimed proprietary right
8 Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 335–337.
9 Green & McCahill Holdings Ltd v Ara Weiti Development Ltd, above n 6 (footnotes omitted).
must be the subject of resolution by substantive proceedings, the s 143 court may instead order costs be reserved to be resolved when the substantive proceeding itself is determined. …
Preliminary issue—admissibility of documents
[20] A preliminary issue arises in relation to the evidence filed. The respondents originally acted for themselves and attached documents to their application rather than annexing them to affidavits. Some of these documents were later annexed to affidavits. However a supplementary bundle was provided at the hearing by the respondents which included documents which had not been annexed to any affidavits. In addition, the supplementary bundle filed by the respondents contained an unsworn version of a joint affidavit by the respondents. Counsel for Eleanor raised a concern that Eleanor had not had an opportunity to respond to the unsworn affidavit or those documents not later annexed to a sworn affidavit. It was agreed that following the hearing the parties could each file memoranda addressing these issues.
[21] A memorandum was filed on behalf of Eleanor objecting to the admissibility of the unsworn joint affidavit and a number of further documents. As set out in the respondents’ memorandum, it appears however that the joint affidavit was sworn before a Deputy Registrar on 17 October 2022 but that no copy of the sworn version was retained by the respondents and only an unsworn version had been served on the applicant.
[22] Applications for caveats not to lapse do not determine final rights. As the Court of Appeal held in Green v McCahill referred to at [18], an order for removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained.10 The material filed in this case is substantial and is not straight forward, partly as a result of the respondents initially acting for themselves. In the circumstances of this case, as discussed in more detail below, I do not consider it is necessary to make formal rulings as to the admissibility of the documents filed.
[23] Counsel for the applicant makes submissions in their memorandum filed after the hearing in respect of the content of the joint affidavit in case the Court treats the
10 Green & McCahill Holdings Ltd v Ara Weiti Development Ltd, above n 6, at [80].
affidavit as admissible. I have taken the joint affidavit of the respondents and the submissions made on behalf of the applicant into consideration but on the basis that the applicant has not had a proper opportunity to reply by sworn affidavit.
Factual background
[24] The Property over which the caveat is lodged is owned in half shares by two mirror trusts:
(a)the George Benny Cooper Family Trust (GBC Trust); and
(b)the Tekuraingatau Cooper Family Trust (TKC Trust).
[25] Mr George Benny Cooper (George) and Mrs Te Kura Inga Tau Cooper (Tekura) were married and were parents to 10 children.
[26] One of their children, Mosiah Cooper, suffered severe spinal injuries in a diving accident in 1990 at age 13 and was a quadriplegic from that time until his death on 4 October 2019. He remained severely disabled and was dependent on the daily care of family members and various care agencies throughout his life.
[27] The purchase of the Property was arranged in 2004 through a solicitor, Mr Edward Johnston. Eleanor states that Mr Johnston was her parents-in-laws’ solicitor. His firm prepared the family trusts dated 24 June 2004 that were to own the Property and prepared wills for George and Tekura dated 24 June 2004.
[28] The trustees of the GBC and TKC were originally George, Tekura and Ed Johnson & Co Trustees Ltd. The beneficiaries of both trusts were George, Tekura, Mosiah and his wife Eleanor (the applicant) and Mosiah and Eleanor’s children and grandchildren plus any person or class of persons nominated.
[29] The home on the Property was completed in 2005 and George, Tekura, Mosiah and Eleanor moved there upon its completion. The home was built so as to contain two self-contained homes, separated by garages, one home being larger and the other
smaller. Mosiah and Eleanor subsequently occupied the smaller of the two homes, and Mosiah’s parents, George and Tekura, occupied the larger.
[30] Mr Johnston was struck off as a lawyer for unrelated reasons and was removed as a trustee in 2015.
[31] Following the deaths of Mosiah on 4 October 2019 and George on 18 April 2022, Tekura and Eleanor continued to live at the Property. Tekura is now aged 81 years old and Eleanor is 47 years old.
[32] Eleanor lodged a caveat on the title of the Property on 14 June 2022 with the interest described as a “cestui que trust of which the registered proprietors … are Trustees”.
[33] The respondents say that in July 2022, Tekura appointed one of her sons, Mr Ephraim Cooper (Ephraim), as a replacement trustee for George of the GBC Trust, and Ephraim and another son, Mr Richard Cooper (Richard), to be trustees of the TKC Trust. Tekura, Ephraim and Richard are the respondents in these proceedings.
[34] Following their appointments, the respondents purported to remove Eleanor as a beneficiary of the GBC and TKC Trusts. Eleanor deposes that she understands that Ephraim has recently been made a beneficiary. Neither Ephraim nor Tekura address whether Ephraim or any other person has been made a beneficiary of either trust in their affidavits filed following Eleanor’s affidavit.
Is it reasonably arguable that an institutional constructive trust arises in this case?
[35] Eleanor relies on a “reasonable expectations trust”, rather than an express trust for her interest in the Property. A “reasonable expectations trust” is a type of constructive trust. Constructive trusts are of two types: institutional and remedial. As set out in the introduction, an interest under an institutional constructive trust can be the basis of a caveatable interest but an interest under a remedial constructive trust cannot because a remedial constructive trust “depends for its very existence on the
Order of the Court; such order being creative rather than simply confirmatory.”11 For an interest to be caveatable, it must be a current rather than potential interest.
[36] In Almond v Read, the Court of Appeal referred to the descriptions of the more common forms of institutional constructive trust by the learned authors of Equity and Trusts in New Zealand and the authors’ conclusion that a common factor in institutional constructive trusts is the unconscionability of the respondent denying the applicant an equitable interest in the relevant Property because of a previous understanding, whether subjectively agreed upon between the parties or deemed by the law to be appropriate in the circumstances.12
[37]The Court of Appeal held in Almond v Read:13
One common category of constructive trusts is where contribution has been made to the acquisition, improvement or maintenance of property, or its value by a party other than the registered proprietor.
[38] The Court approved the following passage from Lankow v Rose describing the essential requirements of that type of constructive trust:14
…that the plaintiff contributed in more than a minor way to the acquisition, preservation or enhancement of the defendant’s assets, whether directly or indirectly; and that in all the circumstances the parties must be taken reasonably to have expected that the plaintiff would share in them as a result.
[39] Tipping J summarised the four elements that need to be established for equity to regard it as unconscionable for a defendant to deny a claimant’s interest, as set out in [8] above.
[40] In the context of an application for a caveat not to lapse, the applicant needs to establish that it is reasonably arguable that the four elements set out in Lankow v Rose are met in the circumstances of the case. I therefore go through each of these elements below.
11 Fortex Group Ltd (in rec and liq) v MacIntosh [1998] 3 NZLR 171 (CA) at 172–173.
12 Almond v Read [2019] NZCA 26 at [65].
13 At [66] (footnote omitted).
14 At [67] referring to Lankow v Rose, above n 2.
[41] Before doing so I record that counsel for the applicant at times in their submissions purported to rely on a remedial constructive trust. The respondents relied on this to submit that the nature of the trust was not clear and that therefore the caveat ought not to be sustained. It was clear however, in my view, that the Trust being relied on was a trust based on reasonable expectations which is a type of institutional constructive trust. The memorandum filed by the respondents after the hearing confirmed that they had understood the applicant’s submissions and the hearing to proceed on the basis of an institutional constructive trust. No difficulty therefore arises in respect of these references.
Has Eleanor made contributions direct or indirect to the Property in question?
[42] In Lankow v Rose, Hardie Boys J held that contributions which are “adequately compensated by the benefits the relationship itself confers” will not suffice to support a constructive trust and that the contributions “must manifestly exceed the benefits” received.15 His Honour further explained that contributions need not be in money and “may be in services or in any other respect” but “there must be a causal relationship between the contributions and the acquisition, preservation or enhancement” of the property in issue.16
[43] Eleanor describes the arrangements when the Property was purchased including as follows:
14. Shortly after Mosiah and I married, in about 2002, George, Kura, Mosiah and myself decided to purchase a home together, one that would be suitable as a permanent home for us all. We needed a mortgage loan from the bank, Westpac, to purchase the property, and we agreed that we would all meet the costs of the property such as upkeep, insurance, rates and mortgage payments.
…
18.George and Kura explained to Mosiah and me at the time the section was purchased that George and Kura would be the legal owners of the property, and that two family trusts had been set up and that we were both beneficiaries of the trusts. George and Kura were our elders (we both called them 'Mum' and 'Dad') and we trusted them to make the best arrangements with Mr Johnston's help.
15 Lankow v Rose, above n 2, at 282 per Hardie Boys J.
16 At 282 per Hardie Boys J.
…
24.It was clearly understood from the time the section was purchased from discussions between George, Kura, Mosiah, and myself, that although George and Kura were the registered owners, the property would, in effect, be communally- owned by Mosiah, his parents, and myself. The family discussions were always that the ownership of the property would pass to the survivors of us as any of if us [sic] died. The proportion of the property that Mosiah and I were understood to own was always agreed to be 30% of the total, which approximately equated to the area of the dwelling we occupied.
…
27.At the time the section was purchased, I remember attending a solicitor's office (I presume Ed Johnston's) and signing documentation. I did not receive any copies of any documentation at the time, and I have been unable to obtain any records from Ed Johnston's firm. Mr Johnston was struck off as a lawyer in August 2013 for dishonesty offending in relation to sales and purchases and trusts he was involved with and was convicted of several criminal offences in relation to this in September 2016. …
28.I have since contacted Westpac to request copies of any documentation but they have not yet been able to provide anything. The fact that no probate has been granted in relation to either Mosiah's or (so far as I am aware) George's estates has made this process more difficult.
29.I remember clearly that after we had moved into the property George told me often they would not have been able to buy and build this property without my income, although no doubt George and Kura also contributed funds to the section purchase and the building of the home; it would not all have been able to be funded by the bank mortgage.
30.I was the only person in employment at the time. I was a borrower under the bank loan for the purchase of the section. I do not know what the original mortgage amount was, but George and Mosiah mentioned a figure of $80,000 that it had come down to after a period of some years.
[44] Eleanor’s evidence is that she worked in fulltime employment from 2001 to mid-2010 and was the only one of the four members of the household who did. During this period, Eleanor describes the financial arrangements within the household as “somewhat communal in nature”. Eleanor explains that George, with Mosiah’s help, took care of all matters relating to the house and family outgoings, including payment of utilities. While Eleanor was working, George told Mosiah and Eleanor how much he needed from Mosiah and Eleanor each week and Eleanor paid it to him with there
usually being enough left over from Eleanor’s pay for Mosiah and Eleanor’s personal needs.
[45] Eleanor explains that from mid-2010 she left work, initially caring for Mosiah with assistance from others but later taking on this role to a large extent herself. From that point on, the financial arrangements changed so that the ACC caregiver payments that they all earned were paid to George’s bank account and George then paid Mosiah and Eleanor for their needs.
[46] Eleanor’s evidence is that after Mosiah died in October 2019, Eleanor needed to go back to full-time study to be able to re-enter the workforce and earn a reasonable income. Eleanor says the need for this was further increased by George's death in 2022. From mid-2020 Eleanor was on a student allowance while doing her studies and reduced her contribution to $100 per week until her studies were completed. These payments continued to be made to George and Tekura's joint bank account.
[47] Eleanor’s mother, Ms Susana Hukui, moved into the smaller dwelling with Eleanor on 22 September 2021. Between 22 September 2021 and 27 September 2022, Eleanor and her mother have been paying $720 per fortnight or $360.00 per week.
[48] Eleanor says it came as a considerable surprise and source of concern that the Westpac bank statements for the mortgage account show that loan payments to the mortgage account have failed due to insufficient funds since (at least) 13 September 2022. The bank statements show that the fortnightly mortgage payment is $700.00, or
$350 a week.
[49] Following receipt of this information from the Trustees, Eleanor and her mother are now making the payments of $360.00 per week directly to the bank.
[50] Eleanor includes a table in her second affidavit comparing her financial contributions to the Property costs and utilities with the total costs for the past year as shown below:
Eleanor’s weekly payments relative to the total property expenses
and relative share
Total weekly
expenses for property
My share Mortgage payments 350.00 105.00 (30%) Council rates 84.07 25.22 (30%) Property insurance 35.36 10.60 (30%) Household contents insurance 7.48 3.74 (50%) Totals $476.91 $144.56 Amount paid by my mother and me $360.00 $360.00 Proportion of total expenses paid 75% 167%
[51] It appears to be accepted by the respondents that Eleanor has made contributions although they say the contributions are no more than rent and board with Tekura deposing in her affidavit that she and George continued to pay all utility bills. However, Tekura says that she is attaching to her 11 November 2022 affidavit “a comprehensive summary of expenses of the utility bills consumed by [Eleanor] and her mother” which she and George paid for, however the annexure is blank. Furthermore, Tekura does not directly challenge Eleanor’s evidence about the discussions that George, Tekura, Mosiah and Eleanor had prior to the purchase of the Property or that Eleanor signed documents at the time that the mortgage over the Property was entered into. In fact, Tekura accepts in her evidence that at one time it was intended that Eleanor would inherit 30 per cent of the Property.
[52] It is not possible in the context of this summary application to determine the extent of Eleanor’s contributions but I consider that it is clearly reasonably arguable that Eleanor has made contributions to the Property which manifestly exceed the
benefits as Hardie Boys J said are required in Lankow v Rose.17 I therefore move on to the second element.
Is it reasonably arguable that the applicant had an expectation of an interest in the Property?
[53] In Almond v Read the Court of Appeal held that where a contribution is made on the basis of a pre-existing common intention that the contribution will result in a proprietary interest, there will be no difficulty in establishing a reasonable expectation.18
[54] In an earlier decision of the Court of Appeal, Gormack v Scott, Cooke P expanded on the principles applying to institutional constructive trusts:19
First,…Where there has been an express common intention applicable to the circumstances that have arisen, it is unnecessary to fall back on reasonable expectations.
Secondly, if (…) the common intention was too vaguely expressed … the evidence bearing on common intention may still be relevant in considering the reasonable expectations of the parties.
Thirdly, in considering reasonable expectations attention is not to be confined to the inception of the relationship or the time when any property in question was purchased. The inquiry extends to the whole circumstances and history of the relationship…
[55] After referring to the above passage from Gormack v Scott, the Court of Appeal in Almond v Read went on to say that what is sometimes referred to as a “common intention constructive trust” simply describes one type of situation in which a reasonable expectation will be found to exist.20
[56] Eleanor’s evidence is that it was clearly understood from the time the Property was purchased from discussions between George, Tekura, Mosiah and herself that although George and Tekura were the registered owners, the Property would be communally owned by Mosiah, his parents and her. Eleanor continues:
17 Lankow v Rose, above n 2.
18 Almond v Read, above n 12, at [69].
19 Gormack v Scott [1995] NZFLR 289 (CA) at 293.
20 Almond v Read, above n 12, at [71].
31. Whenever the ownership of the property was discussed over the years Mosiah and I were told by George and Kura that although the whole property including the smaller dwelling, was their asset legally speaking, Mosiah’s and my unofficial ownership as a proportion of the property was 30% of the total, that each of the four of us would continue to occupy the property if any of us passed away, and that Mosiah and I (or the survivor of us if one of us died) had an actual 30% share in the property that was our asset.
[57] The respondents suggest that Eleanor seized upon the 30 per cent share when she came across a purported will signed in 2010 supporting this share (discussed in further detail below). However there is no contemporaneous documentary evidence upon which Eleanor’s evidence can be discounted. Furthermore, a common intention for Eleanor to have an interest in the Property is consistent with the extent of the contributions made from when the Property was purchased, the fact that Eleanor remembers signing documents at the time, the 2010 Will and the offers made by the respondents as discussed further below. I therefore consider it is reasonably arguable that Eleanor had an expectation of an interest in the Property and that the second element is met.
Is it reasonably arguable that Eleanor’s expectation was a reasonable one?
[58] Cooke P held in Gormack v Scott that the enquiry as to whether the expectation was reasonable needs to extend to the whole circumstances and history of the relationship:21
For example, developments may occur which were outside the scope of the original reasonable expectations. Reasonable persons in the shoes of the parties might then expect these developments to be dealt with in a different way.
[59] I have set out above Eleanor’s evidence in relation to the circumstances and referred to the fact that this is not directly challenged by Tekura in her evidence. Tekura deposes in her 11 November 2022 affidavit that:
There was a time when my late husband and I had intended that Elly would get 30% inheritance of our property, but it was never intended that this would occur before I died. It was always meant to be after I died and not before.
[60] However, Eleanor relies on what is referred to as the “2010 Will”, a document signed by George and Tekura on 1 October 2010, as supporting her evidence regarding
21 Gormack v Scott, above n 19, at 293.
their intentions for Eleanor to receive the 30 per cent share prior to Tekura’s death. The document is only witnessed by one witness and so does not meet the requirements for a valid Will. The document however records that if George should pass away and Tekura remain living, then the estate is to be inherited by Tekura but subject to the following:
2.1The property asset containing the house and lot at the physical address at 31 Lough Bourne Drive, Pukekohe, New Zealand, shall be divided into two separate and independent properties for the purpose of ensuring that one portion is inherited by Mrs Tekuraingatau Manu Cooper separately, and the remaining portion of the property shall be inherited by our son and his wife jointly, Mr. Mosiah Lester Cooper and Mrs Talamataone Eleanor Cooper.
2.2In principal, the calculation for determining the separation of the property into two independent portions shall be based upon the site and building area intended for use by each party separately. As a guide, the percentage separation of the property should be of the order of 70/30 or near enough as deemed appropriate and shall consist of portions of the land, the house and garage accordingly.
2.3The larger portion of the property shall be inherited by Mrs Tekura Cooper with full independent and rightful ownership, and the remaining portion of the property shall be inherited by our son Mosiah and his wife Eleanor jointly also with full independent and rightful ownership subject to the condition outlined in the following clause 2.4.
2.4If the property is to be sold at any time, it must first be offered to Mrs Tekura Cooper for purchase at a fair and reasonable price if she so desires it. If not then the same opportunity to purchase given to any of our other nine children, and if not then the same given to our any of our grandchildren. When this sequence has been fully implemented and no family member has been able to successfully purchase the property, only then can other external buyers be considered for purchasing the property.
[61] The 2010 Will continues that in the event that both George and Tekura pass away then the estate is to be divided equally among the 10 children if living at the time, but again subject to the same approximate 70/30 division referred to above, giving Mosiah and Eleanor the right to occupy or sell their portion of the Property subject to the conditions outlined, including giving Mosiah “power of attorney” over the remaining approximately 70 per cent if he continues to live there and options to purchase at a fair and reasonable price.
[62] Finally the 2010 Will goes on to expressly provide for the situation where George and Mosiah both pass away, stating that the approximate 30 per cent share should remain as the legal property of Eleanor subject to certain conditions, including, if Eleanor chooses to sell, that any sale must be at a fair and reasonable price with the first opportunity given to Tekura to purchase it and then to the other nine children and then grandchildren before external buyers can be considered.
[63] The terms of the 2010 Will, which is signed by both George and Tekura, show that at least at that time it was intended that Mosiah and Eleanor or Eleanor (after Mosiah’s death) would receive their 30 per cent share prior to Tekura’s death. Eleanor’s evidence of a common intention or reasonable expectation of a 30 per cent share prior to Tekura’s death cannot therefore be discounted despite Tekura’s evidence that it was never intended that Eleanor would receive 30 per cent prior to Tekura’s death.
[64] The 2010 Will appears to proceed on the basis that the Property is an asset of George and Tekura rather than an asset of the Trusts but it still evidences an intention and is signed by George and Tekura so this supports that the expectation was reasonable.
[65] Counsel for Eleanor submits that the 2010 Will is of particular relevance because it preceded the deaths of Mosiah and George and the present dispute arising.
[66] In addition to the 2010 Will, Ephraim sent an email to George and Tekura’s solicitors, Rice Craig, on 19 March 2022, before George’s death, that supports Eleanor’s position for an entitlement to a 30 per cent share. The email asks for a quote, including for creating new wills for George and Tekura and winding up the current family trusts. The email incorrectly records that the Property is not in the trusts but is in George and Tekura’s personal joint names but then states that in terms of their will, George and Tekura want the Property or assets to automatically be transferred to the other if either passes away and then when both pass away, all assets to be sold at market rates and for the balance, after expenses are paid, to be divided amongst the 10 children as follows: “30% shall go to Mosiah’s wife, [Eleanor], and the balance 70% should be spread equally amongst the other 9 children”.
[67] The proposed arrangements in the email differ to those in the 2010 Will as Eleanor only receives her 30 per cent share following both George and Tekura’s deaths. However the email supports the position that Eleanor has a reasonable expectation of a 30 per cent share. The timing of the receipt of the 30 per cent share appears to be in issue but that again is not a matter that can be determined in the context of this caveat application.
[68] The respondents say that the court needs to take notice of the fact that a copy of this email, the 2010 Will and other documents were taken by Eleanor without permission. However, a copy of the 2010 Will at least would have to have been provided on discovery in the substantive claim together with the June email from Ephraim to Eleanor discussed below.
[69] Whether the 2010 Will was taken with permission or not, it does not detract from the fact that it is reasonably arguable that Eleanor’s expectation of a 30 per cent share is a reasonable expectation.
Is it reasonably arguable that the respondent should expect to yield the interest to the applicant?
[70] The respondents challenge Eleanor’s evidence that her understanding was always that she and Mosiah had a 30 per cent interest in the Property. Despite this, the respondents appear to accept it was George’s wish that Mosiah and Eleanor were to inherit 30 per cent of the Property.
[71] The respondents say in their submissions that regardless of the legal effect (or not) of the documents relied on by Eleanor, including the 2010 Will, the “Trustees of the trusts and the wider Cooper family have been and remain prepared to honour the wishes of their late father, George, and to undertake to distribute a 30% share of the Lough Bourne Property to [Eleanor], on the basis of his commitment”.
[72] The respondents refer to an email from Ephraim to Eleanor on 9 June 2022. The email records that in addition to Eleanor receiving “your 30% inheritance but only after mum passes away”, Eleanor would receive $600 per week for two years towards the rent of the place she has chosen to move to. The email says: “[t]here is no one
obligation for us to do this but it is offered out of love from mum to you. No one else in the family or anywhere else is getting this kind of financial support but only you”. The email records that Eleanor had expressed that she feels that she is entitled to get her 30 per cent of the house now when it sells but Ephraim says this is based on the unofficial 2010 Will, which Ephraim says:
…is completely invalid, non-legal or binding, and most importantly, it does not outline the current wishes of mum and our late-dad. I met with mum and dad together several times during my last visit prior to dad’s passing, which was only a couple of months ago now which is very fresh in my mind today, to review all Wills & Trusts. They determined then that all assets to remain 100% in mum’s ownership, and you, me and all other siblings shall only receive their inheritance AFTER mum passes away and not before. Therefore, as far as we are concerned, the unofficial Will dated 01 October 2010 shall remain unofficial and non-legal; therefore, it is non-existent to us and will NOT be acted upon.
(capitalisation as in original)
[73] The email then states, under the heading “Confidentiality”, the importance of keeping the email strictly confidential with Ephraim stressing that Eleanor is not to discuss these matters with any of his siblings and certainly not with Tekura.
[74]It was after this email that Eleanor lodged the caveat over the Property.
[75] Following the lodging of the caveat on 14 June 2022, Tekura appointed Ephraim as a trustee to the GBC Trust and Ephraim and Richard as additional trustees to the TKC Trust. Eleanor was then removed as a beneficiary of both trusts and Eleanor understands Ephraim is now a beneficiary of the trusts having not been previously.
[76] Counsel for the respondents referred me to clause 5.1 of the 2004 Trust Deeds as evidencing an intention from the beginning that the trust fund was to be shared equally between the children. Clause 5.1 records:
Subject to that, the Trust Fund shall be held on trust for the Settlor’s children in equal shares absolutely.
[77] Clause 5.1 must be subject to the preceding clauses in the Deeds given the opening words. These clauses define the beneficiaries as including the settlor George and his spouse, Tekura (or Tekura and her spouse), Mosiah and Eleanor and Mosiah
and Eleanor’s children and grandchildren. No other children of George and Tekura are named as beneficiaries. The beneficiary clause allows further persons to be added after nomination by the settlor but only once such nomination is accepted in writing by the Trustees. There is no evidence that other parties have been nominated. The powers of the Trustees in respect of trust income and trust capital are confined to paying or applying them for the benefit of beneficiaries (other than perhaps the power to transfer trust property to a new settlement). Clause 5.1 does not therefore advance the respondent’s position in my view.
[78] From the circumstances, especially including the recent correspondence, it is reasonably arguable that the respondents expect to yield the interest claimed to the applicant (although perhaps not willingly) satisfying the fourth element in Lankow v Rose. The fact that Ephraim is offering to help out with rent in addition to Eleanor receiving her 30 per cent share suggests that Ephraim would otherwise expect to yield that share.
Conclusion on whether institutional constructive trust reasonably arguable
[79] I have found that it is reasonably arguable that each of the four elements for an institutional constructive trust will be able to be established by Eleanor, therefore satisfying the first question of whether it is reasonably arguable that there is a caveatable interest in the Property.
Is the description of the interest on the caveat sufficiently certain?
[80] Whether a description on a caveat is sufficiently certain is described by the authors of Land Law as follows:22
The essence of the matter is that it is a question of fact for the court in each individual case whether the registered proprietor could understand the nature of the interest being claimed and the basis on which it arises.
[81] In Buddle v Russell, Casey J held that a liberal approach was preferred as by following a strict line “we will lose the simplicity and speedy protection afforded by
22 John Burrows (ed) Land Law (online ed, Thomson Reuters) at [CV3.04], see also Jian Hua Property Ltd v Cheng HC Auckland CIV-2006-404-3606, 27 September 2006.
this procedure, which would be contrary to the whole philosophy of the Act”. 23 In
Zhong v Wang the Court of Appeal approved this approach and held: 24
[53] … What is important is that the registered proprietor and the Court understand the nature of the interest claimed and the basis of that claim.
...
[58] The purpose of the caveat procedure is to enable those with proper claims to proprietary interests to protect themselves against loss by forbidding dealing with the land pending resolution of substantive claims. The underlying purpose of the caveat regime could be undermined if too strict an approach were taken to the detail required to describe the interest claimed and its derivation from the registered proprietor.
[82] The description on the caveat in Zhong v Wang was in almost identical terms to the description in this case, the caveator claiming a “beneficial interest in the land
…. as cestui que trust of which the registered proprietor, Jia Yi Wang, is trustee.” The Court of Appeal noted that it might have been preferable for the caveat to refer expressly to a resulting or constructive trust but the Court concluded that the interest was stated with sufficient certainty because the registered proprietor understood the nature of the interest claimed and the basis for that claim.
[83] I consider that the same can be said here. The caveat was lodged by Eleanor following correspondence and meetings between the parties. Although the type of trust was not identified, there is sufficient certainty for the registered proprietors to respond to the caveat.
Should the caveat have identified the extent of the interest?
[84] In addition, the respondents say that the caveat is defective because it was not confined to a 30 per cent share in the Property which is the extent of Eleanor’s claim.
[85] In Hinde McMorland & Sim, when discussing the need to limit caveats in this way, the decisions referred to appear to involve subdivisions in which the caveator only has a claim in respect of a single lot.25 I do not consider that the caveat can be
23 Buddle v Russell [1984] 1 NZLR 537 at 539.
24 Zhong v Wang (2006) 5 NZ ConvC 194,308 (CA).
25 Campbell, above n 3, citing Howard v Resort Developments Ltd (2007) 8 NZCPR 505 (HC) and Lu Trustee Ltd and Ho No 2 Trustees Ltd v Parklane Infrastruct Ltd [2020] NZCA 682, (2020) 21 NZCPR 740.
considered defective here where the caveat is in respect of one residential property which may or may not be subdivisible.
Was the application for the caveat not to lapse filed in time?
[86] The respondents submit that the notice to lapse was served on 15 September 2022, rather than 16 September, and so automatically lapsed prior to the filing of the application not to lapse on 3 October 2022. Considerable material has been filed in respect of this issue, including four affidavits from the applicant’s solicitors and further affidavits by the respondents.
[87] The applicant submits that the authorities are clear that the 10 working day period runs from the date that the caveator actually receives a notice from LINZ, provided that this is within “the normal course of post”, referring to Teece v Veint.26 The applicant submits that the term “the normal course of post” is not defined in the LTA and is to be determined by the Court on the evidence in the particular case.
[88] If the above submission is not accepted, the applicant says the application for permission to lodge a second caveat ought to be granted because of the clear caveatable interest claimed by the applicant. In the applicant’s submission, any material default in the timing of steps to oppose the removal of the current caveat are technical in nature, will be the responsibility of the applicant’s legal advisors and there is no prejudice evident to the respondents by a second caveat being permitted.
[89] The respondents submit that due to the strict timeframes for responding to any notice to lapse a caveat, LINZ now ensures that the date of receipt can be determined precisely by having all such notices delivered by tracked courier delivery and by signed receipt at the nominated address for service, referring to the LINZ guidelines which record that service by courier to a PO Box is not service by post, thereby distinguishing Teece v Veint.27 The respondents instead rely on the following passage in the LINZ online guidelines:
26 Teece v Veint [2021] NZHC 409, (2021) 22 NZCPR 87.
27 Teece v Veint, above n 26.
Once the statutory process has begun, the caveatable notice of claim will lapse by operation of law unless the caveator/claimant takes action to sustain the caveat or notice of claim within the prescribed timeframes.
[90] There were a number of emails between the applicant and LINZ in relation to whether the caveat had already lapsed.
Factual Summary
[91]It appears from the evidence that:
(a)The applicant nominated her solicitors’ PO Box as her address for service on the caveat.
(b)LINZ’s notice of intended lapse dated 12 September 2022 was delivered by courier to an employee of NZ Post at the post office where the solicitors’ PO Box was situated on 15 September, who signed for the delivery.
(c)It is not clear whether the notice was ever placed in the applicant’s solicitors’ PO Box.
(d)The applicant’s solicitors’ evidence (comprising affidavits from four members of the firm) is that the document was delivered by Courier Post to the applicant’s solicitors’ offices on 16 September 2022.
(e)The applicant, and her legal advisors, have proceeded in the belief that the 10-working days ran from 16 September 2022.
(f)LINZ have advised that they tend towards the view that the 10-working day period ran from the date that their courier delivered the notice to the NZ Post counter but have indicated that they do not intend to remove the caveat pending the determination of the matter by the Court.
(g)For completeness, it is noted that the public holiday commemorating the Queen’s death fell within the 10-working day period and is expressly excluded from computation as a working day.28
[92] LINZ’s final position is recorded in correspondence with the applicant’s solicitors as follows:
We have tried to obtain further information from NZ Post about the delivery of the notice. NZ Post has confirmed that they hold GPS data which shows the notice was at the Box Lobby on 15 September when it was scanned as delivered to your firm's PO Box. They have been unable to provide us with any information about what may have happened after the notice is showing as scanned.
We did not instruct NZ Post to deliver the notice to your offices and I note your advice below that Mortlock McCormack did not either.
Given we have conflicting evidence as to the date of delivery of the notice and whose agent delivered the notice to your firm's address, we are unable to determine with certainty as to whether the notice has lapsed under s143(3)(a) Land Transfer Act 2017. It is appropriate that the matter be dealt with by the High Court and I'll advise the respondents of this today also.
[93] I work through the statutory process for service of a notice to lapse below in terms of the facts in this case.
Relevant Provisions
[94]Section 143 of the LTA sets out the process for the lapse of a caveat as follows:
143 Lapse of caveat against dealings
(1)The following persons may apply to the Registrar for the lapse of a caveat against dealings affecting an estate or interest in land:
(a)a person who wishes to register an instrument affecting the estate or interest protected by the caveat; or
(b)the registered owner or a person acting for or on behalf of the registered owner of the estate or interest affected by the caveat.
(2)The Registrar must give notice of an application under subsection (1) to the caveator.
(3)A caveat to which an application relates lapses unless,—
28 Queen Elizabeth II Memorial Day Act 2022, s 8.
(a)within 10 working days after the date on which the Registrar gives notice of an application under subsection (1) to the caveator, the caveator gives notice to the Registrar that an application has been made to the court for an order that the caveat not lapse; and
(b)within 20 working days after the date on which the caveator gives a notice to the Registrar under paragraph (a) (the relevant period), an order of the kind referred to in subsection
(4) is served on the Registrar.
(4)The orders are—
(a)an order that the caveat not lapse:
(b)an interim order that the caveat not lapse:
(c)an order adjourning the application.
(5)The caveat lapses if the court makes an order to that effect before the close of the relevant period.
(6)If the court makes an order under subsection (4)(b) or (c), the caveat will not lapse if, after the close of the relevant period,—
(a)the court makes a final order that the caveat not lapse; and
(b)the order is served on the Registrar.
(7)If the court makes an order under subsection (4)(b) or (c), the caveat will lapse if, after the close of the relevant period,—
(a)the court makes a final order that the caveat lapse; and
(b)the order is served on the Registrar.
(8)An application under subsection (1) for the lapse of a caveat may be withdrawn—
(a)with the leave of the court only, if the caveator has applied to the court for an order that the caveat not lapse:
(b)without the need for leave of the court if—
(i)the Registrar has not yet given notice to the caveator under subsection (2); or
(ii)the Registrar has given notice to the caveator under subsection (2), but the caveator has not yet applied to the court for an order that the caveat not lapse.
[95] The period for filing an application for the caveat not to lapse set out in s 143(3) therefore runs from service on the applicant caveator of the Registrar’s notice of intention to lapse the caveat.
[96] Section 221 of the LTA provides for the giving of notices to persons other than the Registrar under the LTA:
221 Giving of notice to persons other than Registrar
(1)A notice required or permitted by this Act to be given by the Registrar or any other person (the sender) to another person (the recipient) may be given by—
(a)delivering it to the recipient; or
(b)delivering it to the recipient’s usual home or business address; or
(c)posting it to the recipient at the recipient’s usual home or business address; or
(d)if the recipient has given the sender a fax number for the purpose of receiving notices by fax, faxing it to that number; or
(e)if the recipient has given the sender an email address for the purpose of receiving notices by email, emailing it to that address; or
(f)if an instrument to which a notice relates was generated at an electronic workspace facility, sending or directing it to that facility; or
(g)any other prescribed method.
(2)Subsection (1) applies unless a provision of this Act requires the notice to be given in a particular way.
(3)In this section, recipient includes the authorised agent of a person.
(4)In relation to a notice that is required or permitted by this Act to be given to a company, section 388 of the Companies Act 1993 applies.
[97] Section 223 then provides for when a notice will be understood to be given as follows:
223 When notices given
(1)For the purposes of this Act, a notice is given,—
(a)if sent by post, at the time when the notice would in the ordinary course of post be delivered:
(b)if sent by fax, at the time shown on the record of transmission:
(c)if sent by email, at the time a record of transmission shows that it was received in the electronic communications system:
(d)if sent to or from an electronic workspace facility, at the time a record of transmission shows that it was received in the electronic communications system:
(e)in the case of any prescribed method, at the time prescribed.
(2)Subsection (1) does not apply if a person shows that through no fault on the person’s part, the notice was not received within the time specified in subsection (1).
(3)For the purposes of subsection (1)(a), it is sufficient to prove that the notice was properly addressed and posted.
(4)For the purposes of subsection (1)(c) and (d),—
electronic communications system means,—
(a)in the case of an email system, the electronic communications system for sending and receiving email; and
(b)in the case of an electronic workspace facility, the electronic communications system by which users of the facility can send and receive communications
record of transmission includes—
(a)an acknowledgement from an electronic communications system; or
(b)the absence of notification that a transmission has not been received into or processed by an electronic communications system.
[98] In my view, sending the notice of lapse to the applicants by PO Box, whether by courier or otherwise, is service by post falling within s 221(1)(c) of the LTA. Section 221(1) clearly distinguishes between delivering it to the recipient, delivering it to the recipient’s usual home or business address, or posting it to the recipient at the recipient’s usual home or business address.
[99] Section 223 then provides that if sent by post, the notice is given “at the time when the notice would in the ordinary course of post be delivered”.
[100]The LINZ online guidelines state:
If the address for service given by a caveator is a physical or postal address, we use NZ Post’s Courier Post service to give notice. This is not delivery by post for the purposes of s 233 (sic) LTA (see s 2(2A) of the Postal Services Act 1988), but physical delivery by NZ Post’s Courier Post Service on our behalf.
[101] Section 2(1) of the Postal Services Act 1988 defines certain terms “[i]n this Act, unless the context otherwise requires.” Section 2(2A) then provides “[h]owever, an article to be conveyed or delivered by courier service is not an article that has been posted”. In my view this does not mean that for the purposes of a different Act, the LTA, delivery of a notice by courier to a PO Box is not delivery by post.
[102] The relevant sections in the LTA must be interpreted in light of their purpose, which is to bring the notice to the attention of the recipient. Section 223(2) reinforces this for those methods that do not involve physical delivery to the person or to their home or business address, by allowing a party to show the notice was not received within the deemed time period and adjusting the date accordingly.
[103] It is concerning that even when LINZ had not been able to establish whether the notice was placed in the PO Box itself, that it continued to consider that service had occurred on 15 September 2022. In addition, the LINZ correspondence refers to the notice having been delivered in any event within the ordinary course of post, because the letter was apparently sent on 12 September and arrived on 15 September 2022 which “is consistent with the approach taken in the Teece case (i.e. ordinary course of the post is 3 working days)”.
[104] In Teece v Veint, Associate Judge Paulsen expressly rejected any deeming of time periods by LINZ as being inconsistent with the Act.29 Associate Judge Paulsen instead found that it was a question of fact as to what the ordinary course of post is in any particular case.30 The approach of LINZ in this case unfortunately appears directly contrary to the discussion in Teece. I agree with Associate Judge Paulsen that the time period for the ordinary course of post is a question of fact. I accept that this may cause issues with certainty of timing of delivery but it is not a solution for LINZ to essentially “deem” delivery by courier to be physical rather than postal delivery.
[105] The LINZ online guidelines themselves (as quoted above at [100]) refer to couriers being used for both “physical or postal addresses” and then say “this is not delivery by post”. But where a notice is sent to a PO Box rather than to a physical
29 Teece v Veint, above n 26 at [51] to [53].
30 At [54].
address it is delivery by post and there is a logical reason for the time periods being different. Post Office boxes are usually only cleared once a day so that if delivery is after the usual pick up time (as it was in this case) then it will not be brought to the attention of the intended recipient until the following day. The approach of LINZ and the guidelines need to be reconsidered urgently as it does not appear to be consistent with the LTA.
[106] If LINZ wish to bring more certainty to delivery of notices, then they could perhaps require parties to provide a physical address rather than a PO Box for the service of notices. In that case, the timing of the delivery by courier may be able to be relied on.
[107] In the circumstances of this case, however, I have no difficulty finding that the notice was given on 16 September 2022, and not 15 September 2022, as submitted by the respondents.
Filing fee waiver
[108] The second issue in relation to timing arises because at the time Eleanor filed the application for the caveat not to lapse, it was not accompanied by either a filing fee or a fee waiver form. Instead, Eleanor’s counsel gave a promise to file a fee waiver form.
[109] It appears that the Registrar agreed to accept the document for filing on the basis of the promise given. The case officer later confirmed to counsel that the applicant’s solicitor’s promise to file the fee waiver form was understood to be an undertaking and filing was therefore held to have taken place on the date the application was filed, 3 October 2022.
[110] The respondents say that the application for the caveat not to lapse was not “filed” until the fee waiver form was filed and that was not until 10 October 2022. Counsel refer to r 5.1B(2) of the High Court Rules and submit that this only allows documents to be accepted for filing where an irrevocable undertaking is given to pay the fee within three working days and they do so. In this case, the filing of the waiver form, which the respondents say is equivalent to the payment of the fee, did not occur
until 10 October 2022. Counsel for the respondents submits that while r 1.19 of the High Court Rules may provide a discretion to extend time, the Court ought not to do so in this case because “there appears no basis other than the want of attention for the deadlines involved”.
Discussion
[111] Rule 1.19 provides a broad discretion which must be interpreted consistently with the purpose of the rules to ensure the just, speedy and inexpensive determination of any proceeding.
[112] I have had little difficulty in holding that it is reasonably arguable that Eleanor has a caveatable interest in the Property. If an extension is not granted in respect of the filing of this application, the caveat will lapse but I would grant leave to lodge a second caveat pursuant to s 146 of the LTA. This is because of the strength of the applicant’s case for the claimed interest, the explanation for the failure to exercise the caveator’s rights in time and because there would be no prejudice suffered by those acting in reliance on the register.31 Instead I extend the time for the filing of the fee waiver form so the application for the caveat not to lapse is confirmed to have been validly filed on 3 October 2022. This removes the need for leave to be granted for a second caveat and is in accordance with the purpose of the High Court Rules, being to secure the just, speedy and inexpensive determination of a proceeding.
Further directions
[113] I have concluded that Eleanor’s application for the caveat not to lapse ought to be granted. Ordinarily, such orders are conditional on proceedings being filed to determine the applicant’s interest. It is appropriate for the application to be granted on the basis of such a condition here but I allow a slightly longer period of time than usual as in my view this dispute ought to be able to be resolved between the parties. The respondents appear to accept that Eleanor ought to receive a 30 per cent share in the Property, the only issue is whether that is now or after Tekura passes away.
31 Lowther v Kim [2003] 1 NZLR 327 (HC) at [18] to [19].
[114] I am concerned that if Eleanor’s receipt of a 30 percent interest awaits Tekura’s death, there may not be sufficient funds to pay Eleanor’s share. It would be in all parties’ interests to resolve this now to avoid further legal costs and the prospect of further adverse costs awards.
Result
[115] Eleanor’s application for caveat 12484121.1 not to lapse is granted on condition that proceedings are filed and served within 40 working days to establish her interest and are progressed diligently.
[116] The respondents’ application for caveat 12484121.1 to lapse is declined. The application for compensation pursuant to s 148 was not addressed in the hearing but given the result reached is declined in any event.
[117] The application for leave to lodge a second caveat is unnecessary because I have held the original caveat is not to lapse and so is dismissed.
[118] A copy of this judgment and the sealed order is to be provided to the Registrar General of Lands.
Costs
[119] Eleanor has succeeded in all applications and is entitled to costs. The approach of the trustees appears likely to have increased Eleanor’s costs because of the failure to file documents in compliant form (including complete attachments) or to serve sworn copies of affidavits and so forth. I ask the parties to confer and try to agree costs with memoranda to be filed only if that is not possible, on behalf of the applicant in 35 working days and the respondent in 45 working days. This is a longer time period than usual to allow the parties to attempt to reach resolution.
Associate Judge Sussock
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