JO-ANNE PAMELA AMREIN-PALAIRET and JOHN HAMILTON PALAIRET s AND DORIS NEUBAUER and TE ATARANGI SAYERS s

[2024] NZHC 2329

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2024-470-24

[2024] NZHC 2329

UNDER

The Property Law Act 2007 and the Land Transfer Act 2017

IN THE MATTER OF

An application for an order for sale and an application for removal of a caveat against dealing

BETWEEN

JO-ANNE PAMELA AMREIN-PALAIRET and JOHN HAMILTON PALAIRET

Applicants

AND

DORIS NEUBAUER and TE ATARANGI SAYERS

Respondents

Hearing:

13 August 2024

Counsel:

M Keall for the Applicants

P J Napier/ P J Shanahan-Pinker for the Respondents

Judgment:

20 August 2024

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 20 August 2024 at 12 Midday.

Pursuant to Rule 11.5 of the High Court Rules.

…………………..

Registrar/Deputy Registrar

Solicitors/Counsel:

Duncan King Law, Auckland Michael Keall, Auckland

K3 Legal, Auckland

AMREIN-PALAIRET v NEUBAUER [2024] NZHC 2329 [20 August 2024]

Introduction

[1]    The applicants in this proceeding, Jo-Anne Amrein-Palairet and John Palairet (Jo-Anne  and  John)  are  the  registered  owners  of  a  property  near  Tauranga (the property). Jo-Anne and John acknowledge that the respondents, Doris Neubauer and Te Atarangi Sayers (Doris & Te Atarangi) are beneficial co-owners of the property. The relationship between the parties broke down in January 2022.

[2]    In respect of the purchase, Toner Law acted for Jo-Anne and John at times, and for all co-owners at times. In 2023, Doris & Te Atarangi obtained an injunction requiring Toner Law to provide disclosure of documents relating to the co-ownership arrangements and  the  settlement  of  the  property  created  in  the  period  between 8 December 2021 and 13 January 2022 (the injunction).

[3]    Jo-Anne and John now seek orders under s 339 of the Property Law Act 2007 (PLA),  for the sale of the property  and  the division  of the proceeds.  Doris  and   Te Atarangi have lodged a caveat against the title to the property to protect their interests as beneficial co-owners. Jo-Anne and John seek an order under s 142 of the Land Transfer Act 2019 (LTA) removing the caveat to facilitate the sale.

[4]    An application for an order removing a caveat can be commenced as an originating application as of right.1 An application under s 339 of the PLA cannot be commenced as an originating application as of right. Jo-Anne and John have applied for permission to commence the proceeding as an originating application2 (the application for permission). Doris and Te Atarangi oppose permission being granted. They say that the proceeding should be commenced as an ordinary proceeding.3

Legal principles

[5]    Under r 19.5(1) of the High Court Rules 2016 (HCR), the Court may give permission for a proceeding to be commenced as an originating application if it is in the interests of justice to do so.

1      High Court Rules 2016 [HCR], r 19.2(l).

2      Rule 19.5.

3      Under pt 5 of the HCR.

[6]    The originating application procedure under pt 19 of the HCR is generally reserved for cases where full pleadings and interlocutory steps such as discovery are unnecessary for the proper determination of the issues. The procedure is not an alternative mode of obtaining an urgent hearing.4

[7]    Although the pt 19 procedure can include the determination of substantive personal and property rights, it is not well suited to the determination of substantive rights involving the application of common law principles, as distinct from statutory tests.5

[8]    Applications under s 339 of the PLA are rarely brought under pt 19. Applications under s 339 are not routine and are often complex, involving a range of disputed factual and legal issues necessitating clear pleadings and, often, interlocutory applications.6

[9]    Permission is sometimes granted for applications under s 339 of the PLA to be brought under pt 19, generally where the issues are few and straightforward, and evidence is able to be effectively presented by affidavits.7

The arguments advanced for Jo-Anne and John

[10]   Mr Keall submitted that several factors combine to justify a grant of permission:

(a)The application under s 339 of the PLA is related to the application under s 142 LTA which can be brought by an originating application as of right. The two applications have common facts and issues which should be determined in the same proceeding.

(b)The issues are well defined and detailed pleadings are not required. The main issue is whether the breakdown in the relationship between the

4      Hong Kong and Shanghai Banking Corp Ltd v Erceg (2010) 20 PRNZ 652 (HC) at [26].

5 At [25].

6      Casbolt v Harman [2020] NZHC 1354 at [16].

7      For example, see, Gallagher v Grant [2021] NZHC 1907.

parties requires that the property be sold. There are no complex issues of law to resolve.

(c)Discovery is unnecessary, because Doris and Te Atarangi were provided with informal discovery before they filed the injunction proceeding, and the additional disclosure required from Toner Law by the injunction has been completed.

(d)The evidence required to resolve the proceeding is already before the Court in the affidavits filed in the injunction proceeding and the affidavits filed in respect of the application for permission. The essential underlying facts are not in dispute. There are no issues with credibility. There is no dispute in respect of the parties’ respective financial contributions.

(e)An originating procedure will ensure that the dispute is determined quickly and inexpensively. The proceeding is substantially ready to proceed. Jo-Anne and John have the bulk of their capital invested in the property and urgently require a return of their capital to house themselves and their family. A sale of the land is inevitable.

Analysis

[11]   The applications under s 339 of the PLA and s 142 of the LTA are related. However, this factor is neutral because a proceeding seeking relief under both Acts could be either an originating application or an ordinary proceeding.

[12]   I see no utility in ordering consolidation of this proceeding and the injunction proceeding. The Court ordered a mandatory injunction which finally determined that proceeding.8

[13]   I accept Mr Keall’s submission that the notice of application is comprehensive and provides adequate particulars of the grounds in support of the claim. The

8      Neubauer v Toner [2024] NZHC 1870 at [55].

determinative factors in the exercise of the Court’s discretion are discovery and the appropriate form of the evidence.

[14]   The parties’ signed a written agreement dated 1 December 2021, together with a third co-owner, Ana Lucia Dias-Vieira and George Hamilton Gall (Ana and George). Jo-Anne and John say that Ana and George have subsequently assigned all of their rights to Jo-Anne and John.

[15]   The interpretation and implementation of the agreement are in issue. At trial the Court will be required to determine the substantive rights of each party under the agreement. For example, Doris and Te Atarangi intend to argue that they have rights under cl 8.4 which deals with the exit of a party:

The share of the exiting party interest shall be transferrable; with a first right of refusal to the collective parties; or sold to a third party, providing that consent is given from the other parties to this agreement.

[16]   Evidence of the agreement’s background and subsequent conduct of the parties will be required. Doris and Te Atarangi intend to argue that the agreement requires a consideration of tikanga concepts, and they may adduce expert evidence on tikanga.

[17]   There are disputes of fact regarding the use that the property has been put to since December 2021, and the respective contributions of the parties to the improvement of the property since December 2021.

[18]   The value of any contributions made by the parties to the property since December 2021, and any corresponding increase in the value of the property, are in issue. This will require narrative evidence and possibly expert evidence on the value of the property.

[19]Discovery of at least the following categories of documents will be required:

(a)communications between the parties relating to the acquisition of the property and the negotiation of the agreement;

(b)any documents that relate to the implementation of the agreement and the occupation, use or development of the property since December 2021, including communications between the parties since the acquisition of the property;

(c)documents that relate to expenses incurred by the parties in respect of the property;

(d)documents that relate to the transfer of Ana and George’s interest in the property to Jo-Anne and John; and

(e)documents relied on by valuers.

[20]   There is going to be contested evidence. There will need to be cross-examination.

[21]   The parties have filed affidavits in the injunction proceeding. Some of those affidavits have been produced in this proceeding as exhibits to an affidavit from Jo-Anne. The various affidavits include significant evidence which was relevant to the issue of disclosure of the files of Toner Law, but likely to be irrelevant to the issues to be determined in this proceeding. The affidavits duplicate some evidence.

[22]   The Court will benefit from a recasting of this evidence, to exclude averments that are now irrelevant and to include the further evidence that will be required regarding the events since December 2021 and relevant to other discretionary factors that arise under s 339 of the PLA. That evidence is best adduced in the form of briefs of evidence in the usual way for an ordinary proceeding, with the usual rights of cross-examination. This is not an appropriate case to be commenced as an originating application.

[23]   An ordinary proceeding can be disposed of efficiently if the parties request a trial fixture promptly, for example at the time of case management review under r 7.3 of the HCR.

Orders

[24]   Permission to commence this proceeding as an originating application is declined.

[25]   The applicants shall pay the respondents’ costs of $4,780 plus the filing fee on the notice of opposition.

[26]   The enforcement of the costs order is stayed until the conclusion of a judicial settlement conference, with leave reserved to the respondents to request that the stay be revoked if a judicial settlement conference does not proceed for any reason.

Associate Judge Brittain