Lakhiyan v Lakhiyan

[2019] NZHC 1553

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-322

[2019] NZHC 1553

IN THE MATTER

Of the Land Transfer Act 1952.

AND IN THE MATTER

Of an application to prevent the early removal of a caveat.

BETWEEN

DIDAR SINGH LAKHIYAN

First Applicant

JAGJEET KAUR LAKHIYAN
Second applicant

AND

PARAMVIR SINGH LAKHIYAN

Respondent

Hearing:	16 May 2019
Counsel:	D A Jaques for Applicants
Judgment:	4 July 2019

JUDGMENT OF WHATA J

This judgment was delivered by me on 4 July 2019 at 11.30 am, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:           Legal Associates, Papatoetoe

LAKHIYAN v LAKHIYAN [2019] NZHC 1553 [4 July 2019]

[1]    This is an application seeking prevention of early release of a caveat. The registered proprietor has been served, but he has taken no steps in the proceeding. This is, in effect, an application for orders on formal proof.

Background

[2]    The applicants were the registered owners of a house and property on premises at 84 Tiriwa Drive, Massey, until 15 September 2017. On that day, they transferred the property to the respondent, their son, on the basis that the respondent assumed liability for the remainder of the mortgage but otherwise received a benefit of the transfer of the equity. They say that the transfer of the premises to the respondent was on the understanding between the respondent and them that they could live in the house for the remainder of their lives and that the respondent and his wife were committed to looking after them for the remainder of their lives.

[3]    The applicants then commenced living with the respondent and his wife from 21 April 2018. There was then a deterioration of the relationship between them, to the point where, on 25 June 2018, the applicants were forced to leave the house. Since then, there has been no communication between the respondent and the applicants.

[4]    On 29 January 2019, the applicants registered a caveat against the property and,  on  11  February,  the  Land  Registrar  issued  a  notice  of  lapse,  pursuant  to  s 143(1)(b) of the Land Transfer Act 2017 (upon the application by the respondent). This Court then made an interim order preventing early lapse which was acknowledged by the Land Registrar on 23 March 2017.

Jurisdiction

[5]    The application is made pursuant to s 145A of the Land Transfer Act 1952. However, the land is now subject to the Land Transfer Act 2017. The relevant section is now s 143 of that Act. It relevantly states:

143     Lapse of caveat against dealings

(1)The following persons may apply to the Registrar for the lapse of a caveat against dealings affecting an estate or interest in land:

(a)    a person who wishes to register an instrument affecting the estate or interest protected by the caveat; or

(b)    the registered owner or a person acting for or on behalf of the registered owner of the estate or interest affected by the caveat.

(2)The Registrar must give notice of an application under subsection (1) to the caveator.

(3)A caveat to which an application relates lapses unless,—

(a)    within 10 working days after the date on which the Registrar gives notice of an application under subsection (1) to the caveator, the caveator gives notice to the Registrar that an application has been made to the court for an order that the caveat not lapse; and

(b)    within 20 working days after the date on which the caveator gives a notice to the Registrar under paragraph (a) (the relevant period), an order of the kind referred to in subsection (4) is served on the Registrar.

[6]It is on materially similar terms to s 145A of the 1952 Act which stated:

145A   Early lapse of caveat against dealings

(1)The registered proprietor of any estate or interest in the land protected by a caveat against dealings (other than a caveat lodged by the Registrar) may apply to the Registrar for the caveat to lapse.

(2)The Registrar must give the caveator notice of an application under subsection (1).

(3)The caveat lapses with the close of the prescribed period after the date on which the notice under subsection (2) is given unless—

(a)the caveator has earlier given to the Registrar notice that an application for an order to the contrary has been made to the High Court; and

(b)an order to that effect has been made and served on the Registrar within the prescribed period after the date on which the notice under paragraph (a) is given to the Registrar.

[7]    As Court of Appeal stated in Sims, dealing with s 143 of the Land Transfer Act 1952 and the procedure for removal of caveats, “an order to remove 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 such valid ground as then

existed no longer does so.”1 The onus lies, however, on the caveator.2 I see no reason to depart from this longstanding approach in the context of the 2017 Act.

Caveatable interest

[8]    When this matter was called before me, I indicated that I was minded to grant the orders sought, subject to being satisfied that the applicants held a caveatable interest in the land. The applicants subsequently filed a memorandum addressing these points. It is submitted:

(a)Section 138(1)(b) of the land Transfer Act 2017 provides a person may lodge a caveat that has a beneficial estate or interest in land under an express, implied, resulting or constructive trust.

(b)In the present case, there is clear evidence of an intention between the applicants and the respondent to enter into an agreement in relation to the subject property and that it was to be for the benefit of the applicants.

(c)All of this satisfied the basic requirements of a trust, namely, that the settlor’s intention is:3

(i)An intention that the trustee to owe legally enforceable duties, rather than duties of a social or moral value nature; and

(ii)An intention to create a legal relationship involving trust duties as distinct from some kind of legal relationship such as simple relationship of debtor and creditor.

Assessment

[9]Section 138 of the Land Transfer Act 2017 states:

1      Sims v Lowe [1988] 1 NZLR 656 (CA) at 659-660.

2      At 660.

3 John McGhee (ed) Snell’s Equity (33rd ed, Sweet and Maxwell, London, 2015) at [596].

138     Caveats against dealings with land

(1)A person may lodge a caveat against dealings with an estate or interest in land (a caveat against dealings) on the basis that the person—

(a)       claims an estate or interest in the land, whether capable of registration or not; or

(b)       has a beneficial estate or interest in the land under an express, implied, resulting, or constructive trust; or

(c)       is transferring the estate or interest in the land to another person to be held on trust; or

(d)       is the registered owner of the estate or interest in the land and—

(i)has an interest that is distinct from that of registered owner; or

(ii)establishes to the satisfaction of the Registrar that at the time the caveat is lodged there is a risk that the estate or interest may be lost through fraud.

(2)A caveat against dealings document must be executed by the caveator or the caveator’s agent.

(3)A caveat against dealings document must contain the prescribed information.

[10]   It is also tolerably clear that within the scheme of this Act, a life estate created under a trust is a caveatable interest in land. As noted in Land Law:4

The range of caveatable estate or interests contemplated by the Act is wide:

(a)caveats by the registered owner of a fee simple, life estate, future estate or any other freehold estate that terminates when a future event happens but which has not yet terminated: s 164;

(b)caveats by any person claiming to be the beneficial or equitable owner of a fee simple estate, life estate, future estate or any other freehold estate that terminates when a future event happens but which has not yet terminated: s 165;

(c)caveats by the registered owner of, or person who is noted on the register as entitled to, any estate or interest not caught by s 164 or s 165: s 166; or

4      John Burrows (ed) Land Law (online looseleaf ed, Thomson Reuters) at [CV9.02].

(d)caveats by any person claiming to be the beneficial, equitable owner of, or entitled to, or estate or interest not caught by s 164, s 165 or s 166: s 167.

[11]   On the uncontested facts before me, the respondent intended to confer a life estate on his parents and thereby to hold the property on trust for them for the purposes of that life estate.

[12]   I am therefore satisfied that the applicants hold a caveatable interest in land and that the caveat should not lapse.

[13]   There shall be a final order, pursuant to s 143 of the 2017 Act or, if I am wrong about which Act applies, pursuant to s 145A of the 1952 Act, preventing the caveat from lapsing until further order of the Court.