Jackson v Bell HC Dunedin CIV 2010-412-607
[2010] NZHC 2135
•25 November 2010
IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY
CIV-2010-412-000607
UNDER Section 145A of the Land Transfer Act
1952
IN THE MATTER OF an application for order that caveat not lapse
BETWEEN LORNA MELANIE JACKSON Applicant
ANDROBIN WILLIAM BELL Respondent
Hearing: 22 November 2010
Appearances: W J Wright for the Applicant
G A Clarke for Respondent
Judgment: 25 November 2010 at 4:30 pm
JUDGMENT OF ASSOCIATE JUDGE BELL
This judgment was delivered by me on 25 November 2010 at 4:30 pm pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar
Date: ………………….
Solicitors:
Wilkinson Adams, PO Box 803, Dunedin
Checketts McKay Law Ltd, PO Box 41, Alexandra
L M JACKSON V R W BELL HC DUN CIV-2010-412-000607 25 November 2010
[1] Lorna Melanie Jackson has applied to sustain caveat 8352594.1 lodged against the title to the property at 80 Noema Terrace, Lake Hawea, identifier
0T4D/1209. The registered proprietor is her father, Robin Bell. The interest claimed in the caveat is:
By virtue of a verbal agreement made prior to 2001 between the registered proprietor and the caveator. The registered owner purchased the property as the caveator’s inheritance in lieu of leaving legacy to her in his will. The property should have been transferred to the caveator but never was. The caveator has paid all outgoings on the property since the registered proprietor took ownership. The registered owner’s step-children have made inquiries in New Zealand about selling the property, although they reside in the United Kingdom.
[2] Robin Bell lives in Chichester, West Sussex, England. He is a retired chartered accountant. His former wife was born in England but had migrated to New Zealand when she was young. She returned to live in England in her early 20s and married Mr Bell. Mrs Jackson is the only natural child of that marriage. Mr Bell and Mrs Jackson’s mother separated in 1975. Mrs Bell and her mother came to New Zealand in 1980 and settled in Dunedin. Mrs Jackson maintained contact with her father in England.
[3] He came to visit her in 2000. By then, she was married with three children. Mrs Jackson and her husband took Mr Bell on a tour around the southern part of the South Island. The trip included stops at Twizel and at Lake Hawea. She says that she and her husband had been looking to buy a property at Twizel as a holiday home, later to become a retirement home.
[4] Mrs Jackson says that at Hawea, her father announced that he wanted to buy a home for her and her family’s use. She says that she chose the house at 80 Noema Terrace and Mr Bell bought it saying it was for her. The purchase price was
$115,000. Mr Bell returned to England. There is no evidence that he made any return trips to New Zealand. She says that she and her family committed themselves in money, time and effort to the Hawea property by paying all outgoings, including rates, insurance premiums and power, furnishing the property, maintaining the property, including installing a shower, plumbing repairs, repainting the entire
house, and section maintenance. She says that only her family and friends have used the property since 2000.
[5] In about October 2009, Mr Bell gave instructions to a local land agent to arrange the sale of the property. Mrs Jackson claims that, as a result of everything she did for the property, she is entitled to have the property transferred to her. She lodged the caveat against the title.
[6] In submissions, the basis for Mrs Jackson’s claim to an interest in the property was stated to be proprietary estoppel. It was also said that an interest arose through constructive trust, unjust enrichment and imputed interest, but her submissions did not develop these aspects.
[7] The modern approach in New Zealand is to regard claims of estoppel by representation, promissory estoppel and proprietary estoppel as all subsumed under a unified doctrine of equitable estoppel based on the principal of unconscionability: see Equity & Trusts in New Zealand Butler (2nd ed) (2009) Wellington 19.13. At
19.2 that text records that the party alleging an equitable estoppel must show that:
a) A belief or expectation has been created or encouraged through some action, representation, or omission to act by the party against whom the estoppels is alleged;
b)The belief or expectation has been relied on by the party alleging the estoppel;
c) Detriment will be suffered if their belief or expectation is departed from; and
d)It would be unconscionable for the party against whom the estoppels is alleged to depart from the belief or expectation.
[8] This dictum from the Court of Appeal in Krukziener v Hanover Finance
(2008) 19 PRNZ 162 at [38] is helpful:
Following the decisions of the High Court of Australia in Waltons Stores (Inter State) Ltd v Maher (1988) 164 CLR 287 and The Commonwealth of Australia v Verwayen (1990) 170 CLR 394, promissory estoppel is no longer confined to promises affecting pre-existing rights. However, the departure from a voluntary promise is not unconscionable in itself, even if a detriment results. Rather, equity responds to the defendant creating or encouraging an assumption in the plaintiff, and its knowledge that the plaintiff relied on the assumption to its detriment. The plaintiff must have been led to believe that the promise would affect or result in legal relations; thus a promise made in negotiations that are subject to contract will not lead to an estoppel: Waltons Stores at 406 and 422. Lastly, equity does not intervene to satisfy the promise, but to avoid the detriment. These requirements and the current authorities, as the High Court recognised, are seen as necessary to preserve the law of contract as the principal mechanism for the enforcement of promise.
[9] Mrs Jackson’s case is that her father led her to believe that the Hawea property would be hers. She acted on that expectation through her commitment to the property. She claims detriment in two ways. First, because of wasted effort in maintaining the property. Second, she passed up the opportunity to buy a property in Twizel when the market was favourable. She says that it would now be unconscionable for her father to refuse her the interest in the property which he had held out to her.
[10] The principles on which applications to sustain caveats are heard are well recognised. The caveator must justify the continued existence of the caveat. The caveator will do this if he or she can show that he or she has a reasonably arguable case for the interest claimed. The proceedings on such an application are unsuitable to determine disputed questions of fact. The extension of the caveat will be refused only where it is plain that the caveator has no prospect of supporting the interest claimed. On such applications, the courts will not resolve conflicts on the evidence.
[11] Mr Bell’s objections raises these matters for consideration:
a) The caveat does not state with sufficient certainty the nature of the land or estate or interest claimed;
b)He bought the property at Noema Terrace in his own name and kept it in his own name for Mrs Jackson use on her paying the outgoings;
c) Mrs Jackson is not entitled to have any gift perfected;
d)Mrs Jackson could not reasonably believe that she would have a greater interest in the property than use of the land while meeting the outgoings;
e) Other than indicating that he would buy the property for her to use, Mr Bell did not give her any further encouragement;
f) Given the benefits she has received from the use of the property, Mrs Jackson has not suffered such detriment as would entitle her to any claim based on equitable estoppel;
g) In the circumstances, it is not unconscionable for him to retain his interest in the property and to prevent her using it further.
Terms of caveat
[12] Section 137 of the Land Transfer Act 1952 says:
137 Caveat against dealings with land under Act
(1) Any person may lodge with the Registrar a caveat in the prescribed form against dealings in any land or estate or interest under this Act if the person—
(a)claims to be entitled to, or to be beneficially interested in, the land or estate or interest by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise; or
(b) is transferring the land or estate or interest to any other person to be held in trust.
(2)A caveat under this section must contain the following information: (a) the name of the caveator; and
(b) the nature of the land or estate or interest claimed by the caveator, which must be stated with sufficient certainty; and
(c)how the land or estate or interest claimed is derived from the registered proprietor; and
(d) whether or not it is intended to forbid the making of all entries that would be prevented by section 141 or a specified subset of them; and
(e) the land subject to the claim, which must be stated with sufficient certainty; and
(f) an address for service for the caveator.
(3)Caveats under this section must be executed by the caveator or the caveator's attorney or agent.
(4)Caveats under this section must be entered on the register as of the day and hour of their receipt by the Registrar.
[13] Mr Bell says that the interest alleged in the caveat is said to derive from a verbal agreement. The case presented now is founded on equitable estoppel, not contract, and the caveator cannot seek protection for an interest not claimed in the caveat.
[14] It is appropriate to consider both s 137(2)(b) and (c). Section (b) requires that the nature of the land or estate or interest claimed be stated with sufficient certainty. Section (c) requires that the caveat state how the land or estate or interest claimed is derived from the registered proprietors.
[15] As regards (b), the trend today is to prefer the approach taken by Casey J in
Buddle v Russell [1984] 1 NZLR 537 at 539 in preferring a liberal approach:
I see no reason to require anything further, and with respect I see a danger in following the line adopted by the Australian Courts, that we will lose the simplicity and speedy protection afforded by this procedure, which would be contrary to the whole philosophy of the Act.
[16] Ellen France J followed this approach in Norrie v Registrar General of Land
CIV-2004-405-2153, 1 March 2005 at [26]–[40].
[17] The interest that Mrs Jackson is claiming in her caveat is to be registered proprietor. The words “the property should have been transferred to the caveator but never was” make this claim with sufficient certainty.
[18] As to derivation of the interest claimed, Mrs Jackson has referred to a verbal agreement with the registered proprietor and to having paid all the outgoings on the property since the registered proprietor took ownership. While the caveat does not refer to doctrines such as equitable estoppel, the caveat does set out the factual matters said to give rise to the interest derived from the registered proprietor. In many respects, it is more helpful to spell out the factual elements of the derivation than simply to invoke legal doctrines without more. There is adequate information as to derivation. The caveat meets the requirements of s 137(2).
Merits of Mrs Jackson’s claim
[19] Mr Bell has joined issue with Mrs Jackson on some factual matters. Where there is conflict between accounts given by her and witnesses supporting her and what he says, I assume that her version of events may be upheld at a defended hearing. What she says is not implausible and cannot be rejected as lacking all credibility.
[20] Mr Bell has also put before the Court documents such as correspondence from solicitors at the time of purchase, which the Mrs Jackson has not taken issue with. I see no reason not to accept that uncontradicted evidence.
[21] According to Mrs Jackson, Mr Bell said words to the effect that he was buying the property for her. Different meanings are possible. Mr Bell says that he bought the property in his own name, intending it to be for the use of Mrs Jackson and her family. She understood him to mean that she was to become owner of the property. Resolving that uncertainty is a trial matter, not a matter to be determined on an application to extend a caveat.
[22] Assuming that Mr Bell did say that he was buying the property for Mrs Jackson in the sense that he would transfer ownership to her, that by itself is not enough to give her an interest in the property. In terms of the Court of Appeal’s statement in Krukziener v Hanover Finance, that is simply a voluntary promise and it is not unconscionable in itself not to deliver on that promise. Mrs Jackson did not
give any consideration for the promise to transfer the property. Equity does not assist a volunteer. Equity does not perfect an imperfect gift.
[23] Mr Bell makes the point that Mrs Jackson knew from the outset that he had bought the property in his own name. She received correspondence from the lawyers who acted on the purchase. That correspondence recorded that Mr Bell owned the property. Rates demands, showing him as owner, were sent to Mrs Jackson.
[24] Mr Bell makes the point that the only representations in evidence were made before the purchase. There is no evidence of continuing encouragement or representation after he returned to England.
[25] These points were raised to suggest that as Mrs Jackson knew that her father, not she, owned the property, then she must have known the true legal position and was simply acting at her own peril. The fact that Mr Bell took ownership in his own name rather than in her name does not necessarily count against Mrs Jackson. There is an argument for her that Mr Bell may have taken ownership with a view to transferring the property to her later, perhaps after taking advice how that transaction could be arranged to minimise tax liabilities under both New Zealand and British law.
[26] It is clear that Mr Bell intended that Mrs Jackson should pay the outgoings and attend to the maintenance of the property. There is no evidence that he made any arrangements to meet these costs himself. The arrangements for the rates demands to go to Mrs Jackson were consistent with this.
[27] There is no evidence that, despite the parties’ continued contact after the purchase, he made any inquiries as to the upkeep of the property. He left it entirely to her.
[28] So her actions in paying the rates, arranging insurance and paying premiums, maintaining the property, are arguably reasonable, given that he had left the management of the property to her.
[29] Mrs Jackson also claims detriment because she says that but for Mr Bell’s purchase of the Lake Hawea property, she would have gone ahead with plans to buy a property in Twizel. Her evidence does not identify any particular property. Her husband’s relatives lived in Twizel. She says that she and her husband were considering buying a property in Twizel because the purchase of a property there would have been manageable, it offered good recreation opportunities and a better climate than Dunedin. They would use it as a holiday home with a view to retiring there. She says that she has missed out on an increase in the value of a property in Twizel that she would otherwise have bought in about 2000.
[30] Her detriment claim is in the alternative. Mrs Jackson cannot claim both the wasted effort of maintaining the Lake Hawea property and also the missed opportunity of not having bought a property in Twizel. If Mrs Jackson and her husband had bought a property in Twizel, they would have faced a greater commitment than they had with the Lake Hawea property. Twizel is more distant. There would have been similar commitments with paying outgoings and upkeep. There would also have been a greater capital commitment for a purchase. The detriment Mrs Jackson claims for wasted effort on the Lake Hawea property is in place of the efforts she would have applied to an alternative property in Twizel.
[31] For Mrs Jackson to succeed in a claim for detriment, she must show that any detriment exceeds any benefits received. There must be a net detriment.
[32] Mrs Jackson and her family had the use of the Lake Hawea property. It was not unmitigated hard slog. Mrs Jackson and her family had their holiday home in an attractive setting. They also had it on cheaper terms than if they had laid out on the purchase of a property in Twizel.
[33] Overall, there was a general equation of the benefits of use of the property with the costs of outgoings and upkeep. The matter does not need to be weighed nicely. Most New Zealanders would count it as a fair exchange to have the use of a property in return for paying the outgoings and looking after the property. Mrs Jackson would have it that because she believed that she was going to own the property, she and her family applied themselves more than if they only had the
temporary use of the property. At a hearing she may be able to establish that, but the difference is not so significant to hold that she has an arguable case for a net overall detriment. Similarly, if her detriment is taken as the foregone opportunity to buy in Twizel, the missed chance to establish a home there is met by the greater commitment required in terms of financial outlay as well as longer travel time in accessing that property.
[34] As Mrs Jackson has not shown an arguable case for net detriment, it does not become unconscionable for Mr Bell now to sell the property. Mrs Jackson has looked after the property and paid the outgoings since 2000 but at the same time she has been able to use it. Conversely, Mr Bell has been saved the cost of upkeep, but has not received any benefits from owning the property. While Mrs Jackson may be disappointed that her expectation that she would own the property will not be fulfilled, that by itself does not give grounds to require the property to be made over to her. It is not inequitable or unconscionable to allow Mr Bell to bring the present arrangement to an end.
[35] I add that if I had found that Mrs Jackson had an arguable case for net detriment, any interest she might have claimed from the house will be limited to the extent of the detriment. The law is only required to redress detriment, not to enforce promises. An arguable claim of net detriment might have given rise to an equitable charge or lien, as in Re Whitehead, Whitehead v Whitehead [1948] NZLR 1066, but not to transfer of the entire interest in the property.
[36] Accordingly, the caveat will lapse.
[37] It is possible that Mrs Jackson may wish to challenge this decision by appeal. Accordingly, the order that the caveat lapse will take effect on 17 December 2010, so as to give her time to apply for a further order extending the caveat pending appeal, if she does wish to take that course.
[38] Mr Bell is entitled to costs on a 2B basis, plus disbursements as fixed by the
Registrar.
R M Bell
Associate Judge
0
2
1