| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA327/2019 [2020] NZCA 226 |
| BETWEEN | EPSOM WOODS LIMITED |
| AND | WAITAKERE FARMS LIMITED |
| Hearing: | 5 March 2020 |
Court: | Courtney, Ellis and Brewer JJ |
Counsel: | D Hayes for Appellant |
Judgment: | 10 June 2020 at 10 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BCosts are awarded to the respondent for a standard appeal on a band A basis plus usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Brewer J)
Introduction
Waitakere Farms Ltd (WFL) is the registered proprietor of a 51 ha forestry lot at 131–149 Anzac Valley Road, Waitakere (the land). WFL became the registered proprietor on 14 March 2017 having purchased it from a mortgagee exercising its power of sale.
The mortgagee from which WFL purchased the land was Nags Head Horse Hotel Ltd (Nags Head). Its mortgage was registered on 27 August 2010. The registered proprietor of the land changed subsequently on two occasions but Nags Head’s mortgage remained registered as the first mortgage.
Epsom Woods Ltd (EWL) sued WFL claiming ownership of trees on the land. It relied on an unregistered agreement to lease the land entered into in 2009 between the then registered proprietor (a Mr Vesey) and “North Kaipara Nominees Ltd as trustee of the Anzac Valley Forestry Trust”. EWL took an assignment of the agreement for $1 on 29 October 2018.
WFL applied for summary judgment against EWL. Associate Judge Bell granted WFL summary judgment on 17 June 2019.[1]
EWL now appeals this decision.[2]
The appeal
[2]EWL’s proceeding against WFL included a prayer for a declaration that the land is subject to a residential tenancy. Associate Judge Bell granted WFL summary judgment on that cause of action also. EWL appeals only the decision granting WFL summary judgment on the cause of action claiming ownership of trees and so we will say nothing further about the residential tenancy claim.
In its statement of claim, EWL pleaded that a Mr Buttling (who originally agreed to purchase the land from Nags Head as mortgagee but who nominated WFL as purchaser) was informed on or about 16 February 2017 in writing that the Anzac Valley Forestry Trust and/or its trustees had claimed rights to the trees.
The statement of claim went on to plead:
14.[WFL] is estopped from denying [EWL’s] ownership of the trees.
15.[WFL] holds the trees on the land in trust for [EWL].
The notice of appeal states the ground of the appeal as:
The Land Transfer Act 1952 sections 105 and 182 have no application in an in personam claim for a declaration as to ownership of the trees on the land. (para 28 of decision)
Paragraph [28] of the Associate Judge’s decision reads:
[28] In that context, mere knowledge of unregistered interests in the land can have no bearing on the ability of a purchaser to take a clean title…
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- Case
- [2020] NZCA 226
- Decision Date
CaseChat Overview and Summary
The Court of Appeal held that section 105 of the Land Transfer Act 1952 provided that upon the registration of any transfer executed by a mortgagee for the purpose of exercising a power of sale over any land, the estate or interest of the mortgagor therein expressed to be transferred shall pass to and vest in the purchaser, freed and discharged from all liability on account of the mortgage, or of any estate or interest except an estate or interest created by any instrument which has priority over the mortgage or which by reason of the consent of the mortgagee is binding on him. The agreement to lease was never registered against the title and there was no suggestion that the mortgagee had ever consented to be bound by it. Therefore, WFL took title to the land "freed and discharged from all liability" on account of the agreement to lease. The Court of Appeal found that there was no pleaded allegation of unconscionable conduct and no evidential basis for such a claim. All that was pleaded, and the evidence supported, was that the person who nominated WFL as purchaser had notice of the claimed agreement to lease. The Court of Appeal held that an in personam claim must have three elements, one of which is unconscionable conduct on the part of the current registered proprietor. In this case, there was no pleaded allegation of unconscionable conduct and no evidential basis for such a claim. Therefore, WFL was entitled to summary judgment.
Orders
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Background
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Evidence
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Decision
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