Loan Investment Trustees Limited (formerly named SCFL Nominees Limited) v Wiri Holdings Limited

[2019] NZHC 2634

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2141

[2019] NZHC 2634

BETWEEN

LOAN INVESTMENT TRUSTEES

LIMITED (FORMERLY NAMED SCFL NOMINEES LIMITED)
Applicant

AND

WIRI HOLDINGS LIMITED

First Respondent

MADHU RESHMI SAHAY

Second Respondent

Hearing:

15 October 2019

Appearances:

M D Toulmin for the Applicant

No appearance by or for the Respondents

Judgment:

16 October 2019

JUDGMENT OF GAULT J

This judgment was delivered by me on 16 October 2019 at 2:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr M D Toulmin, MinterEllisonRuddWatts, Auckland

LOAN INVESTMENT TRUSTEES LTD v WIRI HOLDINGS LTD [2019] NZHC 2634 [16 October 2019]

[1]    This originating application for removal of a caveat was listed for first call in the caveat list yesterday. Mr Toulmin, for the applicant, had filed a memorandum addressing service and seeking orders.

[2]    The respondents have not filed any notice of opposition, and they did not appear.

[3]    I am satisfied that the originating application (with yesterday’s return date) and the affidavit in support were validly served on 8 October 2019. Although the second respondent could not be served personally, service was validly effected at the address for service stated in the caveat.1

[4]    While yesterday’s hearing date gave the respondents little time to respond, that was appropriate in the circumstances. Mr Toulmin responsibly indicated that the second respondent conveyed a message (via a lawyer who has no instructions from her in this proceeding) that she is currently not in New Zealand and will be returning on 20 October 2019. Even so, the respondents have not filed any opposition or sought an extension of time from the Court.

[5]    Mr Toulmin submitted that the caveat is holding up settlement of two mortgagee sales of properties at 27 and 27A Puhinui Road, Papatoetoe.2 There is urgency in having the application resolved because settlement under each of the agreements is already overdue, is compromised by the caveats and there is currently expected to be a surplus in the sale proceeds, but that surplus will be eroded by ongoing legal attendances in relation to the application and continued accrual of interest.

[6]    Mr Toulmin submitted that the interest claimed by the respondents in the caveat does not bind the applicant as a registered first mortgagee, relying on Cantab Management Ltd v Greagh Investments Ltd.3 He submitted that consequently

1      High Court Rules 2016, r 19.12A. The reference in the rule to s 143 of the Land Transfer Act 1952 is, by virtue of s 22(2) of the Interpretation Act 1999 and s 147 of the Senior Courts Act 2016, a reference to the equivalent provision, s 142 of the Land Transfer Act 2017.

2      Acknowledging that settlement in relation to 27A Puhinui Road has also been delayed by the purchaser needing time to draw down on KiwiSaver funds.

3      Cantab Management Ltd v Greagh Investments Ltd HC Hamilton M95/02, 20 November 2002 at [29].

whatever rights the respondents may or may not have as against the mortgagor, they are subordinate and subject to the interests of the applicant under, and the applicant’s rights and powers contained in, the applicant’s registered first mortgage.

[7]    I am satisfied that the caveat should be removed under s 142 of the Land Transfer Act 2017. The caveat claims a beneficial interest in the land contained in the certificate of title “under a cestui que trust of which the registered proprietor is the trustee (the caveatee) and the caveators are the beneficiaries”. I accept Mr Toulmin’s submission that this interest claimed by the respondents does not bind the applicant as a registered first mortgagee. The respondents may have a claim in relation to any surplus on sale but that does not justify sustaining the caveat to prevent sale.

[8]    Allowing removal of the caveat only upon presentation for registration of an instrument for transfer of title from the applicant (now an e-dealing) is appropriate. Removal should only affect priority as between the applicant and the respondents.

Result

[9]    The applicant is entitled to an order that, upon presentation for registration of an instrument for transfer of title from the applicant to the applicant’s purchaser, caveat number 11250128.1 be removed from the land described in Certificate of Title:

(a)750429 (North Auckland Registry); and

(b)750430 (North Auckland Registry).

[10]   The applicant is entitled to costs on a 2B basis (not actual solicitor/client) plus disbursements.

Gault J