Holloway v Andrew HC WN CIV 2008-485-1091

[2008] NZHC 2403

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV 2008-485-1091

IN THE MATTER OF     Section 145 of the Land Transfer Act 1952

ANDIN THE MATTER OF  Caveats 7706739.1 and 7706739.2 (Wellington Registry)

BETWEEN  GEORGE DOUGLAS JAMES GRANT HOLLOWAY

Plaintiff

ANDGRAHAM JOHN ANDREW AND MAHIA HATHAWAY FARLEY Defendants

Hearing:         7 July 2008

Appearances: GDJG Holloway - Plaintiff in person

No appearance - Defendants

Judgment:      7 July 2008

ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           Doug Holloway, Solicitor, 40 Oroua Street, Eastbourne

Buddle Findlay, Solicitors, PO Box 2694, Wellington

GDJG HOLLOWAY V GJ ANDREW AND MH FARLEY HC WN CIV 2008-485-1091  7 July 2008

[1]      Before the Court is an application by the plaintiff for an order that Caveat No.

7706739.2 registered against the title to 4 Hollard Grove, Avalon, Lower Hutt not lapse.  Originally the application from the plaintiff related to a further Caveat No.

7706739.1 registered over a property at 17 Cottle Street, Avalon, Lower Hutt but this application was withdrawn earlier by the plaintiff.

[2]      Turning to Caveat No. 7706739.2 the  caveatable  interest  claimed  by the plaintiff relates to an agreement to mortgage entered into between the defendants as registered proprietors of the property in question and the plaintiff as mortgagee.  This agreement dated 28 January 2008 records the agreement to mortgage and goes on in paragraph 4 to state:

“4.Doug   Holloway   may   caveat   the   two   properties   described   in paragraph 3 above to protect his interests under the said agreements dated 9 January 2007 and under this agreement.”

[3]      The  agreement  to  mortgage  relates  to  fees  which  were  incurred  by  the defendants with the plaintiff as their solicitor and for which it appears as at 28

January 2008 the sum of $21,913.51 was outstanding.

[4]      In a judgment I gave in this matter on 30 June 2008 I made an interim order that Caveat No. 7706739.2 not lapse pending further order of this Court.  My interim order included the following proviso:

“Provided that this order shall not prevent removal of the registration of Caveat 7706739.2 (in relation to the property at 4 Hollard Grove, Avalon, Lower Hutt as contained in certificate of title WN21A/669) upon the registration of a transfer in exercise of the power of sale by Bank of New Zealand under its first registered mortgage in respect of the relevant property.”

[5]      Also in that 30 June 2008 oral judgment, I had made a prior order granting leave to the Bank of New Zealand as first mortgagee over the property to intervene in this proceeding.

[6]      As I have noted above the plaintiff now seeks a permanent order sustaining the Caveat in question in terms of ss 145 and 145A Land Transfer Act 1952.

[7]      The proceeding has been served upon the defendants.  There is no appearance for the defendants today nor has any opposition to the plaintiff’s application been filed.

[8]      In Sims v Lowe [1988] 1 NZLR 656 the Court of Appeal at pages 659-660 stated that:

“It is clear that this summary procedure for the removal of a caveat against dealings is wholly unsuitable for the determination of disputed questions of fact.  From this it follows, and has been consistently held, that an order for the removal of such a caveat will not be made under s 143 unless it is patently clear that the caveat cannot be maintained either because there was no valid ground for lodging it or that such valid ground as then existed no longer does so … The patent clarity referred to will not exist where the caveator has a reasonably arguable case in support of the interest claimed.”

[9]     Further the Court of Appeal in Pacific Homes Ltd (In Receivership) v Consolidated Joineries Ltd [1996] 2NZLR 652 noted that “…if an arguable case for the caveatable interest can be shown it would not be appropriate to order removal of the caveat”.

[10]     Here the caveatable interest claimed is pursuant to a signed Agreement to Mortgage.  This Agreement to Mortgage has been signed by each of the defendants as registered proprietors of the property.  Further, the Agreement to Mortgage itself, as I have noted in paragraph [2] above, goes on to acknowledge that the plaintiff may caveat the property in question to protect his interest under the agreement.  That is what has occurred here.

[11]     As I have already noted, the Agreement to Mortgage secures payment of legal fees which have been outstanding, as I understand it, for some time to the plaintiff.   It also purports to cover any future fees and disbursements rendered in respect of work undertaken for the defendants by the plaintiffs.

[12]     There is nothing before the Court to indicate that the defendants questioned the lodging of the caveat by the plaintiff until it appears matters came to a head when a possible sale of the property was imminent.

[13]     As I understand the position, the Bank of New Zealand is proceeding with a mortgagee sale over the property at 4 Hollard Grove, Avalon, Lower Hutt.  It is said, however, that this process has some way to go until completion.   It also appears unclear at this stage as to whether there may be funds available to the plaintiff as caveator when the mortgagee sale process is concluded.

[14]     Under all the circumstances prevailing in this case, I am satisfied that the plaintiff has shown an arguable case for the caveatable interest he claims and further that it is not appropriate in this case to order removal of the caveat.  It is clear to me that the plaintiff’s position will be significantly prejudiced if an order for removal of this caveat was made now.   The caveat secures payment under the Agreement to Mortgage of what appears to be an undisputed debt.  The plaintiff has also indicated that the debt in question includes a fee liability to a barrister, which the plaintiff has incurred on behalf of the defendants.

[15]     Finally, with the continued proviso noted at paragraph [4] above, which was included in the Interim Order I made in this matter on 30 June 2008, I am satisfied that the position of the Bank of New Zealand as mortgagee will not be prejudiced by the continuance of the caveat.   Mr  Gordon for the Bank of New  Zealand who appeared on 30 June 2008 (although he does not appear today) indicated that the bank was happy for the caveat to continue subject to that proviso.

[16]     In conclusion then it will be apparent that the plaintiff’s application under ss

145 and 145A Land Transfer Act 1952 succeeds.

[17]     A final order is now made that Caveat 7706739.2 registered against the title to 4 Hollard Grove, Avalon, Lower Hutt being certificate of title WN21A/669 shall not lapse.

[18]     The plaintiff has been successful in this application and I see no reason why he should not be entitled to an order for costs against the defendant in the usual way. Costs are therefore awarded against the defendants on a Category 2B basis together with disbursements as fixed by the Registrar.

‘Associate Judge D.I. Gendall’