James v Newton

[2017] NZHC 3103

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2017-409-000847 [2017] NZHC 3103

UNDER

Section 145A of the Land Transfer Act

1952

IN THE MATTER

of Caveat number 7301641.1

BETWEEN

NOEL DAVID JAMES Applicant

AND

JUDITH ANNE NEWTON AND STEPHEN ANDREW JEFFERY AS EXECUTORS OF THE ESTATE OF SANDRA GARDINER, NEE PARSONS Respondents

Hearing:	13 December 2017 (Determined on the papers)
Counsel:	A V Foote for Applicant R J Hopkins and B G Frowein for Respondents
Judgment:	13 December 2017

COSTS JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1]      The respondents, Ms Newton and Mr Jeffery, are the executors in the Estate of the late Sandra Gardiner.  On 16 March 2007 Mr James lodged a caveat against a property owned by Ms Gardiner claiming “a beneficial interest in the land contained in the above Certificate of Title cestui que trust of which the proprietor Sandra Marie

PARSONS is Trustee”.

JAMES v NEWTON & JEFFERY AS EXECUTORS OF THE ESTATE OF SANDRA GARDINER Costs Judgment [2017] NZHC 3103 [13 December 2017]

[2]      The interest claimed by Mr James arose from the alleged defalcation of monies from Mr James’ business by Ms Gardiner applied, he maintains, to mortgage payments and improvements in relation to the property.

[3]      Mr James did not, it seems, pursue a claim for recompense in relation to

Ms Gardiner’s actions before she died.   After she died her executors invoked the procedure in the Land Transfer Act for the lapsing of a caveat.  This was met by an application by Mr James filed on 24 October 2017, for an order that the caveat not lapse. The application was resolved by a consent order to that effect, with a collateral order that if proceedings were not filed and served by 18 April 2018 bringing Mr James’ claim before the court, the caveat would lapse.  No order was made in relation to costs.

[4]      These consent orders followed open correspondence between the solicitors for Mr James and the Estate.  The last correspondence in this sequence, which proposes an order in the terms set out in the order actually made by the Court, suggests that costs be reserved.

[5]      Mr James applies for costs.  He says that prior to his becoming aware of the executors invoking the lapsing procedure by receipt of a notice from LINZ, he was unaware that the executors were challenging his claim to an interest in the land. Given the time constraints he had no alternative but to apply to the Court for an order that the caveat not lapse.  Negotiations in relation to how matters should proceed from there then took place.  He says that in effect the trustees have conceded that he has an arguable case, and he seeks costs on a 2B basis in respect of his application which has, in large measure, succeeded.

[6]      The trustees oppose an order.  They say that the decision to agree to a consent order was a pragmatic one and is not in any way a concession that Mr James’ case has any strength at all.  They point out that the events on which he appears to rely for his caveat must have occurred well before 2006, at least 11 years ago. Any proceeding in tort will be statute barred under the Limitation Act 1950, and any proceeding based on fraud would similarly be statute barred because the caveat itself indicates that by 2007

Mr James was aware of the events on which he relies for his claim to an interest. The

trustees also say that it is clear that Mr James does not have much, if any, evidence to support his claim. Their position is that it is unlikely that Mr James will in fact pursue the claim by the deadline in the court order, or at all.

[7]      Mr James has succeeded in obtaining the order he seeks so, prima facie, should be entitled to costs on the principle that costs follow the event.   Had the trustees approached Mr James before invoking the lapsing procedure in the Land Transfer Act the expenses incurred by both sides in relation to this case may well have been avoided.  I accept that Mr James had little alternative but to file an application given the tight time constraints for such a step to be taken.

[8]      On the other hand Mr James asserts rights that go back a number of years, and for the last decade he has encumbered the property with a caveat without apparently taking any step to have his claim resolved.  On the face of it there certainly appear to be real difficulties standing in his way of now doing so including possible limitation defences, as referred to by counsel, not to mention laches if a claim is asserted on an equitable basis (as asserted in the caveat) given the lapse of time and the death of

Ms Gardiner.

[9]      It is not the role of the Court on this application, however, to prejudge the outcome of any claim Mr James might assert.  Balancing all the factors to which I have referred I have come to the view that Mr James is entitled to an award of costs on this application.  The application is at an end.  Mr James has succeeded, and the procedure could have been avoided had the trustees discussed the position with

Mr Gardiner before invoking the lapsing procedure in the Act which, given the tight time constraints relating to that procedure, was almost inevitably going to involve the filing of an application.

[10]     I direct that the trustees will pay costs to Mr James on a 2B basis together with disbursements fixed by the Registrar.

J G Matthews

Associate Judge

Solicitors:

Duncan Cotterill, Christchurch

Lane Neave, Christchurch