MLP LLC v Fabian HC Whangarei CIV 2010-488-568

[2010] NZHC 1813

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

CIV-2010-488-000568

UNDER  the Land Transfer Act 1952

IN THE MATTER OF     Caveat 8484926.1

BETWEEN  MLP LLC Applicant

ANDDENIS FRANK FABIAN Respondent

Hearing:         13 September 2010

Appearances: G C Williams for Applicant

D F Fabian  (Respondent in person) Judgment:  13 September 2010

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:

Bell Gully, PO Box 4199 , Auckland

Copy to:

D F Fabian (Respondent in person), PO Box 39, Paihia, Bay of Islands

MLP LLC V D F FABIAN HC WHA CIV-2010-488-000568  13 September 2010

[1]      This is an application for the removal of a caveat under s 143 of the Land

Transfer Act 1952.

[2]      The applicant is a Delaware limited liability company.  It owns a number of properties, some 31 titles altogether, near the end of the Purerua Peninsula in the Bay of Islands.  The properties are collectively known as Walter C Mountain Landing. The 31 titles are listed in a schedule to the applicant’s notice of application.

[3]      The  applicant  is  owned  by  Mountain  Landing  Properties  LLC,  another Delaware limited liability company.  The members of Mountain Landing Properties LLC are Peter C Cooper, Brian R Stebbins, Louis A Simpson, the Trustees of the Booth Family Trust, and the Gilbert E Levasseur Jr Revocable Trust.

[4]      Denis Frank Fabian has  lodged  a caveat against the titles owned by the applicant.  The  caveat  is  8484926.1.    It  was  registered  on  5  May  2010.    The caveatable interest claimed under the caveat is “as a beneficiary under an employed or constructive trust because of the series of transactions in connection with the current  registered  proprietors  MLP  LLC”.     The  caveat  has  attached  to  it  a handwritten document by Mr Fabian.  I take it that “employed trust” really means an implied trust.

[5]      Before this application was launched, the solicitors for MLP LLC wrote to Mr Fabian on 10 August 2010.  That letter set out the applicant’s position which has since been confirmed by the affidavit sworn by the applicant’s manager, Mr Cockrane.   The letter set out this.   The applicant denies that it holds any of the properties on trust for anyone and denies that any member of the Mountain family owns any interest in the properties.   The applicant is the registered proprietor and owner of both legal and beneficial interests in the land and the letter also says that none of the members of Mountain Landing Properties LLC hold their interest for any member of the Mountain family.  The letter also says that no officer or member of the management of the applicant or Mountain Landing Properties LLC is married to a daughter of Walter Mountain.   It also says that Mr Fabian’s claims to have a caveatable interest are baseless and the caveat is unsupportable.  The letter asks him

to withdraw the caveat.  Mr Fabian did not do so and has maintained his claim for a caveatable interest today.

[6]      Mr Fabian lodged with the Court a bundle of documents which are called a statement of claim and defence of caveat. He included a genealogy, which shows his descent from Walter Clapham Mountain, after whom the properties are named.  He apparently owned the property during the 19th century and the early 20th century. Mr Fabian included a death certificate for William Arthur Mountain, his grandfather. He  has  also  attached  other  typewritten  and  handwritten  documents  about  the property.  He includes a report by an advisory officer in the Maori Land Court.  That report carefully says that the report is not a legal opinion and the author is not qualified to give a legal opinion, but it says that Mr Fabian takes issue with the provisions of the will of Walter Clapham Mountain, his great-grandather, dated

14 February 1927.  It appears from that report that Mr Fabian’s grandfather, William Arthur Mountain, may have received limited provision from his father’s estate.   It appears that no land was given to him under the will as it was administered.  The Maori Land Court report indicates that while there are some Maori freehold titles in the name of Wiremu W Mountain at the date of the report, those blocks are not the subject of the caveat.  It appears that all the land in issue in this case is in general title.   Being in general title registered under the Land Transfer Act, it has clearly been the subject of a Crown grant and therefore cannot be susceptible to claims of Maori ownership that pre-dates it becoming general title.

[7]      In a further document, Mr Fabian takes issue with the sale of the land that belonged to the Walter Clapham Mountain Estate. It appears that the land was sold by the Public Trust in January 2001 to Mountain Landing Properties Unlimited.  I take it from that name that it is not the same company or entity as the present registered proprietor.  Mountain Landing Properties Unlimited gave a mortgage back to the Public Trust for the sum of $4 million.  It also shows Takutai Holdings Ltd as a covenantor.

[8]      In an application to remove a caveat under s 143 of the Land Transfer Act, the onus is on the caveator to show that he has a caveatable interest. The authority for this is a decision of the Court of Appeal, Sims v Lowe [1988] 1 NZLR 656, 660.

[9]      An application under s 143 is a summary procedure which is quite unsuitable for determining disputed questions of fact.  Accordingly, an order for removal will only be made under s 143 if it is patently clear that the caveat cannot be maintained either because there was no valid ground for lodging the caveat in the first place or that  a  valid  ground  no  longer  exists,  or  that  no  useful  purpose  is  served  by maintaining the caveat.   The patent clarity will not exist where the caveator has a reasonably arguable case in support of the interest claimed.

[10]     MLP LLC is the registered proprietor of the property.  That is very clear from the copies of the certificates of title that have been produced in Mr Cockram’s affidavit.  Because it is the registered proprietor, it has an indefeasible title under the Land Transfer Act 1952.   That is clear from s 62 of the Land Transfer Act 1952, which holds, in short, that the estate of the registered proprietor is paramount:

62   Estate of registered proprietor paramount

Notwithstanding the existence in any other person of any estate or interest, whether derived by grant from the Crown or otherwise, which but for this Act might be held to be paramount or to have priority, [but subject to the provisions  of  Part  1  of  the  Land  Transfer  Amendment  Act 1963],  the registered proprietor of land or of any estate or interest in land under the provisions of this Act shall, except in case of fraud, hold the same subject to such encumbrances, liens, estates, or interests as may be notified on the folium of the register constituted by the grant or certificate of title of the land,  but  absolutely  free  from all  other  encumbrances,  liens,  estates,  or interests whatsoever,—

(a)Except the estate or interest of a proprietor claiming the same land under a prior certificate of title or under a prior grant registered under the provisions of this Act; and

(b)       Except so far as regards the omission or misdescription of any right of way or other easement created in or existing upon any land; and

(c)Except so far as regards any portion of land that may be erroneously included in the grant, certificate of title, lease, or other instrument evidencing the title of the registered proprietor by wrong description of parcels or of boundaries

[11]     In this case, Mr Fabian does not allege that he had any dealings with MLP LLC after it became registered proprietor, which might give him some property interest in the land held by MLP LLC.  For example, he does not say that MLP LLC agreed to sell any of the titles to him.   He does not say that it agreed to give a mortgage over the property in his favour, or agreed to give him an easement, or

agreed to give him any other property interest which would enable him to claim a caveatable interest.  Instead, Mr Fabian’s case is directed at matters that arose before MLP LLC became a registered proprietor.  His documents suggest that bodies, such as the Public Trust, have engaged in questionable transactions.   He seems to be saying that because there were some questionable transactions, that gives him some claim against the land now owned by MLP LLC.

[12]     As s 62 of the Land Transfer Act makes clear, MLP LLC has an indefeasible title that is paramount title, except in the case of fraud.  Cases such as Assets Co Ltd v Mere Roihi [1905] AC 176 make it clear that fraud must be actual fraud, not just constructive fraud. That means that the registered proprietor must engage in some actual dishonesty. It is not good enough that the registered proprietor simply have notice of some prior questionable transactions by earlier owners of the land.

[13]     I see nothing in the evidence that suggests that MLP LLC, or any of its officers  or  directors  or  members  have  been  engaged  in  any  kind  of  fraudulent activity that would stand in the way of indefeasibility.  An allegation of fraud is a serious matter.  Mere assertions of fraud are not enough.  If Mr Fabian wants to say that the present registered proprietor engaged in some sort of fraud under the Land Transfer Act, he must lay a proper evidential foundation for that allegation.  In this case, there is simply none.

[14]     In any event, it is not clear that any of these matters would give Mr Fabian himself any claim to have a caveatable interest in the land.  His grievance seems to be based on the will of his great-grandfather, Walter Clapham Mountain, who died in the 1930s.  His great-grandfather died, apparently without making any provision for Mr Fabian’s grandfather by way of any interest in the land in the Purerua Peninsula. It appears from the materials Mr Fabian has put before the Court that only monetary provision was made.  Mr Fabian says some greater provision ought to be made for his grandfather because he worked on the land.  Whatever the merits of that claim may be, Mr Fabian now has no standing to challenge his great-grandfather’s will, whether the claim is brought under the Family Protection Act or the Law Reform Testamentary Promises Act, or even in terms of the will itself.  The point is that that will has been administered and the assets under it have been distributed long since.

[15]     Other people have acquired interests in the land since then and the present registered proprietor’s ownership under the Land Transfer Act cannot now be disturbed.

[16]     Accordingly, I find that the matters that Mr Fabian wishes to raise do not give him any caveatable interest in the land now that the land has been sold to its present owner who is the registered proprietor.

[17]     Accordingly, Mr Fabian’s claim for a caveatable interest fails entirely.  I now make an order for removal of caveat 8484926.1 from all the titles listed in the application, that order to take effect immediately.

[18]     Mr Fabian is to pay MLP LLC costs in the sum of $3,478, plus disbursements as fixed by the Registrar.  The costs have been fixed on a 2B basis.

R M Bell

Associate Judge