French v Dolbel
[2023] NZHC 91
•7 February 2023
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CIV-2022-463-10
[2023] NZHC 91
BETWEEN SALLY-KAE NOELENE FRENCH
Plaintiff
AND
LINDSAY GLENN DOLBEL
Defendant
Hearing: 16 November 2022 at 2:15pm Appearances:
Scott McKenna for the Plaintiff
Michelle Urquhart/Fraser Wood for the Defendant
Judgment:
7 February 2023
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[application for removal of caveat from title]
This judgment was delivered by me on 7 February 2023 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
………………………….
Registrar/Deputy Registrar
Solicitors:
McKenna King Dempster (Scott McKenna), Hamilton, for the Plaintiff Tompkins Wake (Fraser Wood/Michelle Urquhart), Rotorua, for the Defendant
FRENCH v DOLBEL [2023] NZHC 91 [7 February 2023]
Introduction
[1] These proceedings involve a claim by the plaintiff, Ms French, to enforce an agreement for sale and purchase of a property belonging to the defendant, Mr Dolbel.
[2] Ms French lodged a caveat on the title to the property on 26 July 2022 (Caveat 11771811.1) (the Caveat), lodged on the title to Lot 9 Deposited Plan South Auckland 11090, being the property at 5 Harakeke Road, Murupara (the Property).
[3] Mr Dolbel opposes the plaintiff’s claim and says that he did not sign the sale and purchase agreement.
[4] Ms French has now been charged by the Police with forgery relating to Mr Dolbel’s alleged signature on the sale and purchase agreement. These proceedings are to be stayed pending resolution of those criminal charges.
[5] Mr Dolbel has asked the Court to remove the Caveat from the title to the Property.
Background
[6] On 2 July 2022, Mr Dolbel applied for the Caveat on the title to the Property to lapse. On 26 July 2022, Ms French applied to the High Court to sustain the Caveat. Those proceedings are brought under CIV-2021-463-60 (the Caveat Proceedings).
[7] On 21 February 2022 Lang J released a minute in the Caveat Proceedings recording his view that, given the factual disputes involved in this matter, the most appropriate way forward was to make an order sustaining the Caveat on the terms that Ms French file proceedings seeking specific performance of the agreement for sale and purchase. On 22 February 2022, Lang J released a further minute making an order, by consent, sustaining the Caveat and directing that Ms French file proceedings for specific performance.
[8] On 8 March 2022, Ms French filed the application for specific performance thereby initiating these proceedings.
[9] On 17 June 2022, Mr Dolbel made an application for security for costs which was set down for a hearing on 7 October 2022. On 4 October 2022, in the interim, Ms French made an application for a stay of the proceedings. On 7 October 2022 a conference was held and counsel for Mr Dolbel did not oppose the stay these proceedings but requested that if the proceedings are stayed the Caveat on the Property be removed. At that hearing I indicated that the proceedings will be stayed pending the outcome of the criminal charges against Ms French, and directed that submissions be filed by each of counsel in relation to the Court’s jurisdiction to remove the Caveat, and if the Court has jurisdiction, whether the Caveat should be removed. Counsel for Mr Dolbel filed submissions dated 20 October 2022 and counsel or Ms French filed submissions in response dated 26 October 2022.
Mr Dolbel’s submissions
[10] Ms Urquhart, for Mr Dolbel, submits that there are two issues to be determined by the Court:
(a)In the event the Court orders the stay of these proceedings, does the Court have jurisdiction to order removal of the Caveat?
(b)If so, do the circumstances justify an order for removal of the Caveat?
[11] Ms Urquhart then summarises the statutory provisions set out in ss 142 and 143 of the Land Transfer Act 2017 (the Act). She then refers to the judgment of Winkelmann J in Philpott v Noble Investments Ltd1 setting out the principles that govern the application to sustain caveats.
1 Philpott v Noble Investments Ltd [2015] NZCA 342 at [26].
[12] Ms Urquhart then refers to two passages from Blanchard J’s judgment in Stewart v Kaipara Consultants Ltd,2 again setting out the criteria relating to sustaining a caveat.
[13] Ms Urquhart then makes a number of submissions regarding the availability of specific performance and refers to a number of authorities to support her submissions.
Does the Court have jurisdiction to remove the Caveat?
[14] Ms Urquhart submits that the Caveat Proceedings are still on foot. She submits the Caveat has not been removed as Land Information New Zealand (LINZ) has not received a final order from the Court under s 143(7) of the Act and Mr Dolbel’s application to LINZ to remove the Caveat remains unresolved. Ms Urquhart submits that Ms French’s submission that Mr Dolbel must make a further application to LINZ to lapse the Caveat ignores the fact that the Caveat Proceedings remain on foot, and a second application is not required.
[15] Ms Urquhart also rejects Ms French’s submission that Mr Dolbel must make an originating application under High Court Rules 19.2 on the same basis. She submits that the Caveat is already subject to the Caveat Proceedings which have not been decided or withdrawn and therefore remain on foot. She submits that because the Caveat Proceedings are extant and a final order under s 143(7) of the Act has not been given by the Court to LINZ, the Court retains the residual discretion to remove the Caveat as described in Philpott v Noble Investments Ltd.3 She submits therefore that the Court does have the jurisdiction to lapse the Caveat if it can be shown that it will not prejudice Ms French’s alleged interest in the Property.
Do the circumstances justify the Court exercising its discretion to remove the Caveat?
[16] Ms Urquhart submits that Ms French will not be prejudiced by removal of the Caveat if she is ultimately successful in these proceedings as she can be alternatively compensated by damages. Ms Urquhart submits that there are no sentimental reasons
2 Stewart v Kaipara Consultants Ltd [2000] 3 NZLR 55 at [22].
3 Above n 1.
why specific performance is the only remedy that can address Ms French’s interest in the Property, as she no longer lives in Murupara and is happily settled in Te Awamutu with her fiancé. Ms Urquhart submits that Ms French has no emotional ties to the Property through family ownership, whakapapa, or other emotional links and the belongings she left at the Property have been there since 2018 and she has not returned to collect them. Ms Urquhart submits that should Ms French succeed in enforcing the disputed sale and purchase agreement, she is highly unlikely to return to the Property and would therefore not enjoy any specific aspect of the Property itself. Accordingly, Ms Urquhart submits that this means that Ms French’s election of specific performance is not the only remedy available and damages, in this case, would be an appropriate remedy if she succeeded in her claim.
[17] Ms Urquhart submits that there are several factors which count against Ms French obtaining specific performance:
(a)There would be no difficulty in deciding a value for compensatory damages. Any competent valuer could establish what the Property was worth at the time of the disputed sale and purchase agreement or at any point in the future.
(b)There would be no issue with enforcing a judgment for damages against the defendant as he has other properties. In contrast, enforcing the disputed sale and purchase agreement would be difficult given there is an undisputed sale and purchase agreement on the Property with a third party, complicating any transfer to Ms French.
(c)The conduct of Ms French herself does not support her application for specific performance. She took several years to raise this matter while failing to mention it in any previous proceedings in relation to the Property. She has already been convicted of crimes in relation to her conduct towards Mr Dolbel and has now been charged with fraud in relation to the sale and purchase agreement at issue in these proceedings.
[18] Ms Urquhart also submits that Ms French’s claim has little merit for the following reasons:
(a)Ms French has now been charged with fraud in relation to the signing by Mr Dolbel of the alleged sale and purchase agreement.
(b)The Court has already indicated it views her case as having “significant credibility issues” – Lang J’s minute of 24 March 2022 at [4].
(c)Ms French is unable to provide any credible documentary evidence of her claims.
(d)The sale and purchase agreement was not mentioned in any of her Tenancy Tribunal hearings against Mr Dolbel.
(e)Ms French appears to be relying solely on alleged witness evidence but one of these witnesses (Ms Cross) has given contradictory evidence of her involvement.
[19] Ms Urquhart submits that Mr Dolbel will be unfairly prejudiced if the Caveat is not removed and cites the following reasons:
(a)Mr Dolbel is unable to deal with the Property whilst the Caveat remains and whilst the Property is one of three he owns, he lives in one, his daughter lives in the other, and the Property does not have a permanent dwelling on it. It is also the subject of a sale and purchase agreement which is currently being delayed because of Ms French’s ongoing refusal to remove the Caveat. Mr Dolbel wishes to realise the value of the Property to supplement his Government pension and release some of his capital.
(b)Mr Dolbel is the victim of many of Ms French’s dishonesty convictions and this has had a significant impact on him, both financially and emotionally.
[20] Weighing all these factors, it is submitted by Ms Urquhart that Ms French will not be prejudiced by the removal of the Caveat as she will be able to be compensated by way of damages should she be ultimately successful. Conversely, Mr Dolbel will be unfairly prejudiced by the sustaining of the Caveat as he cannot deal with this Property for an unknown period of time pending completion of the criminal proceedings against Ms French.
[21] Finally, Ms Urquhart submits that if the Court was minded to remove the Caveat but require a sum to be lodge as an alternative protection for Ms French, then counsel proposes that if the Caveat is removed the Property could be sold and following deduction of the costs of subdivision, preparation, marketing and sale of the Property, the net proceeds of sale could be lodged with the Court until the proceedings are resolved.
Ms French’s submissions
[22] Scott McKenna, for Ms French, submits that it is not clear what legal basis Mr Dolbel is relying on to remove the Caveat. He submits that removal of the Caveat and lapse of the Caveat are two separate distinct matters and each occur pursuant to a separate and distinct statutory provision.
[23] Mr McKenna submits that the two statutory provisions by which a caveat can be removed from a title are:
(a)An application for removal of a caveat, pursuant to s 142 of the Act 2017;
(b)The lapse procedure as provided for in s 143 of the Act;
Removal of the Caveat
[24] Mr McKenna submits that to remove the Caveat under s 142, an originating application under r 19.2 of the High Court Rules must be made. In this instance, Mr Dolbel has not made any originating application, therefore the power conferred on the Court under s 142 cannot be exercised by the Court in these proceedings.
[25] He submits that s 142 provides the Court with a discretion as to whether to remove the caveat, but that discretion can only be exercised if the required originating application has been made.
Lapse of the Caveat
[26] Mr McKenna submits that the procedure for lapse of a caveat is set out in s 143 and, in accordance with that procedure, the Court is empowered to make an order that the caveat not lapse (s 143(4)) or make an order that the caveat lapse (s 143(5)).
[27] Mr McKenna submits that the application that a caveat does not lapse must be made by originating application under r 19.2. An originating application under that section has been made by Mr Dolbel, however not in these proceedings but in the Caveat Proceedings. In response to that application, Lang J made an order on 22 February 2022 that, by consent, the Caveat not lapse. Mr McKenna submits it is unclear from the wording of Lang J’s minute whether the order was intended to be interim or final. If the order is interim then it could be revisited pursuant to s 143(7) although this is not relevant in the present proceedings as any appeal to the Court’s powers under s 143(7) would need to be made in the Caveat Proceedings.
[28] Finally on this point, Mr McKenna submits that it would be inappropriate for the Court to issue an order removing the Caveat in the present proceedings when the removal should be properly dealt with under the Caveat Proceedings.
Residual discretion to remove the Caveat
[29] Mr McKenna submits that as neither of the statutory powers by which the Court may remove a caveat (ss 142 and 143 of the Act) are available to the Court in these proceedings, the issue is whether or not the Court is empowered to remove a caveat in the absence of a statutory provision empowering it to do so, pursuant to the Court’s “residual discretion”. Mr McKenna submits that the Court does not have power under the “residual discretion” to remove the Caveat and he submits that the cases of Philpott v Noble Investments Ltd and Stewart v Kaipara Consultants Ltd¸4
4 Above n 1 and n 2.
relied upon by Mr Dolbel are not authority for the proposition the Court has jurisdiction to remove the Caveat. He submits that the Philpott decision was an appeal of a decision by the High Court, sustaining a caveat pursuant to s 143, and Stewart v Kaipara Consultants Ltd involved an application to remove a caveat under s 142. He submits that any discussion of a discretion in those cases refers to discretion granted by those sections and the cases do not provide authority to establish the Court has a discretion to remove the Caveat other than in accordance with one of those sections.
[30] Mr McKenna submits that a caveat is a creature of statute, and a caveat can only be registered pursuant to the provisions of the At and therefore an inherent jurisdiction cannot be relied on to deal with matters that only exist as a consequence of a statutory scheme. He submits the Court is given a discretion to remove the caveat under those sections 142 and 143 of the Act, and that discretion is placed within statutorily imposed bounds so as to limit the extent to which the discretion risks creating uncertainty. He submits that Mr Dolbel is asking the Court to set aside the statute and free that discretion from the bounds placed on it by the relevant sections of the Act. He submits the Court is not empowered to do this.
[31] Finally, Mr McKenna submits that if any order is to be made to remove the Caveat, that this must be made under an application made under the Caveat Proceedings. It is not appropriate for the Court to consider the Caveat in these proceedings as there are other extant proceedings on foot relating to the identical issue.
Analysis
[32] The issues to be decided in this judgment, as correctly framed by Ms Urquhart, are:
(a)Does the Court have jurisdiction to order the removal of the Caveat?
(b)If so, do the circumstances justify an order to remove the Caveat?
[33] In my view, Mr McKenna’s submission that the Court does not have jurisdiction in these proceedings to remove the Caveat is correct. The Caveat
Proceedings are separate proceedings and the application to remove the caveat is should have properly been brought in the Caveat Proceedings.
[34] In my view Mr McKenna’s submissions are correct, that the Caveat is a creation of the Act and the discretions to remove or sustain the Caveat under s 142 and s 143 of the Act can only be exercised in accordance with applications in relation to those sections made as originating applications under r 19.2 of the High Court Rules. I do not accept Ms Urquhart’s submission that the Court has a residual discretion to remove the Caveat and the authorities relied on in her submissions (Philpott v Noble Investments Ltd and Stewart v Kaipara Consultants Ltd) are not authority for the proposition that the Court has a residual discretion under ss 142 and 143 of the Act.
[35] Accordingly, I am of the view that the Court does not have jurisdiction to order removal of the Caveat under these proceedings. It is open to Mr Dolbel to make an application under the Caveat Proceedings to have the Caveat removed or lapsed.
If so, do the circumstances justify an order to remove the Caveat?
[36] Due to the conclusion I have reached at [35], the Court does not have jurisdiction to remove the Caveat under these Proceedings. Consequently it is not necessary for me to express a view on whether these circumstances would justify an order to remove the Caveat if the Court had jurisdiction. I leave this issue to be determined should Mr Dolbel make an application in the Caveat Proceedings.
Orders
[37]I make the following orders:
(a)The proceedings are stayed until the outcome of the criminal proceedings against Ms French are determined.
(b)The Caveat registered against the Property is sustained until a further order of the Court is made in the Caveat Proceedings.
(c)Costs are reserved.
…………………………….. Associate Judge Taylor