Nee Harland v Asset Finance Limited HC Napier CIV-2011-441-143
[2011] NZHC 386
•25 March 2011
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
CIV-2011-441-143
BETWEEN PETER ANDREW NEE HARLAND Applicant
ANDASSET FINANCE LIMITED Respondent
Hearing: 24 March 2011 (Heard at Napier)
Counsel: P.A. Nee Harland - Counsel for himself the applicant
N. Gray - Counsel for the respondent
Judgment: 25 March 2011 at 2:00 PM
JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL
This judgment is delivered by Associate Judge Gendall on 25 March 2011 at 2.00 pm under r 11.5 of the High Court Rules.
Solicitors: P.A. Nee Harland, PO Box 8025, Havelock North
Osborne Attewell Clews, PO Box 641, Whakatane
PA NEE HARLAND V ASSET FINANCE LIMITED HC NAP CIV-2011-441-143 25 March 2011
Application for Order that Caveat Not Lapse
[1] The first application before the Court was an application from the applicant that Caveat No. 8686539.1 which he had registered against the title to a Havelock North property owned by his wife, Jenny Lucy Nee Harland (“Mrs Nee Harland”) on
28 January 2011 not lapse.
[2] The application was opposed by the respondent initially on jurisdiction grounds.
[3] Following registration of the caveat the respondent Asset Finance Limited who holds a second mortgage over the property made application to the Registrar General of Land for a Notice to be issued pursuant to s 145A Land Transfer Act 1952 that the caveat lapse.
[4] On this, s 145A(3) Land Transfer Act 1952 states:
(3) The caveat lapses with the close of the prescribed period after the date on which the Notice (from the Registrar) under sub-section (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 para (a) is given to the Registrar.
[5] There is no argument between the parties that the time by which the caveat was to lapse in terms of s 145A(3) Land Transfer Act 1952 expired on 21 March
2011. As I understand the position, a letter from the Registrar to the applicant confirmed that this was the operative date.
[6] Obviously no order from this Court preserving the caveat was made prior to
21 March 2011.
[7] Bennion & Ors, New Zealand Land Law Second Edition at para 4.5.04(2)
addresses this question of an early lapse of a caveat under s 145A and states:
If the caveator does nothing within the prescribed periods, the caveat will lapse. It has been held that the Court has no power to extend the time limits prescribed in s
145 (Wigglesworth v Keegan Alexander Tedcastle and Friedlander [1984] 2
NZCPR221; Fench v Public Trust Office, High Court Hamilton, 6 December 2002, M167/02, Master Faire) and, by implication, s 145A (Haycock v Robinson, High Court, Hamilton, 11 November 2003, CIV-2003-419-1344, Master Faire, Thomas v Winger, High Court, Auckland, 20 November 2003, Fogarty J, CIV-2003-404-
5784.
[8] All parties here including the applicant accept that the caveat in question has effectively lapsed in accordance with s 145A(3) Land Transfer Act 1952 and no jurisdiction exists therefore for the present application to proceed.
[9] That application to sustain the caveat is accordingly dismissed. The caveat will lapse by operation of the provisions of s 145A(3).
[10] That disposes of the first application before the Court.
Oral application by the applicant that second caveat may be lodged
[11] Once the first application noted above had been disposed of, the applicant, Mr Nee Harland at the hearing before me on 24 March 2011, made an oral application pursuant to s 148 Land Transfer Act 1952 that he might be permitted to lodge a second caveat against the title in question to Mrs Nee-Harland’s property. This was the first occasion on which this oral application had been signalled and Mr Gray, for the respondent, objected to the application being made and proceeding.
[12] Under all the circumstances here, I decided that the oral application under s
148 should be allowed to proceed given the urgency which was required as the respondent had entered into a contract for the sale of the property as mortgagee which was now overdue for settlement and it no doubt intended to move.
[13] The oral application under s 148 did proceed and I heard argument from both parties on this application.
[14] Section 148(1) Land Transfer Act 1952 provides:
(1) If a caveat has been removed under s 143 or has lapsed, no second caveat may be lodged by or on behalf of the same person in respect of the same interest except by order of the High Court.
[15] It is clear that in the past Courts have generally been reluctant to make orders under s 148. In Cotton v Keogh [1996] 3 NZLR1 Blanchard J stated:
A Court does not lightly consent to the lodgement of a second caveat. It is in the
nature of an indulgence and the applicant’s claim is scrutinised carefully.
[16] Bennion & Ors, New Zealand Land Law Second Edition at para 4.8.03 generally address as the grounds to be considered under a s 148 application and notes:
Thorp J in Muellner v Montagnat (1986) 2 NZCPR520 at 523-524 determined that the Court is given an unfettered discretion under s 148 but generally will have regard to:
(a) The strength of the case made by the applicant to support the claimed interest in the land;
(b) Any explanation for failure to exercise the caveator’s rights under s 145 or
s 145A; and
(c) Whether unavoidable prejudice would be suffered by those who have acted in reliance on the register, or in the belief that the caveator was not pursuing the claim.
[17] I now turn to address each of these specific considerations.
Strength of the Applicant’s Case
[18] Here the applicant’s caveat claims an interest as purchaser under a purported Agreement for Sale and Purchase he says he entered into on 15 January 2011 with his wife, Mrs Nee Harland, for the purchase of the property in question at a price of
$455,000.00. The purchaser is noted as Peter Andrew Nee Harland or nominee. The Agreement for Sale and Purchase provided for a possession and settlement date initially of 9 February 2011 which date was crossed out and then a new date 24
March 2011 added (in different ink and writing) which was also crossed out and then
another date of 7 April 2011 (again in different ink and writing) added. The agreement was otherwise unconditional.
[19] Certain concerns must arise immediately concerning this agreement. First, in his submissions before me at the hearing of this matter, Mr Nee-Harland the applicant stated specifically as background to this whole matter:
We are taking this course of action in an attempt to retrieve a home of some 21 years and to retrieve it from an aggressive mortgagee (the respondent).
(emphasis added)
[20] This raises the clear implication that the 15 January 2011 “Agreement for Sale and Purchase” between Mrs Nee-Harland and the applicant represents little more than an attempted device to prevent the respondent exercising its proper powers as a mortgagee to sell the security property. The respondent had earlier issued Property Law Act Default Notices which expired some time ago and had finally entered into a contract to sell the property as mortgagee to an outside third party buyer on 26 January 2011. That sale contract was at a price of $356,000.00, which as I understand it would be more than sufficient to clear both the first and second mortgages on the property, it was unconditional and was nearly two months overdue for settlement because of the presence of the applicant’s caveat on the title.
[21] Next, as I have noted above, the Agreement for Sale and Purchase between Mrs Nee-Harland and the applicant, rather confusingly specifies three different possession and settlement dates (of which 9 February 2011 and 24 March 2011 had been deleted) with a final possession and settlement date of 7 April 2011. The applicant, Mr Nee Harland, in his affidavit dated 21 February 2011 in support of the present application referred to this agreement with Mrs Nee Harland and deposed:
The settlement date is set for 24 March 2011.
[22] If at the time this affidavit was sworn, being 21 February 2011, the possession and settlement date under this Agreement for Sale and Purchase was 24
March 2011 then this must beg the obvious question when was this date changed in the agreement itself to a possession and settlement date of 7 April 2011. Further, it
must call into question whether indeed a concluded Agreement for Sale and Purchase between Mrs Nee-Harland and the applicant was reached on 15 January 2011, and the genuineness of this agreement.
[23] In addition, no evidence was provided to me by the applicant to confirm that he or his nominee was in any position to complete settlement of the purchase of the property from Mrs Nee Harland under that purported 15 January 2011 agreement. If he was able to complete the purchase at the price of $455,000.00 (being nearly
$100,000.00 in excess of the respondent mortgagee’s sale price with the third party), one can only wonder why steps had not been taken earlier to repay the lesser sums owed under the mortgages and clear the title.
[24] Next, the vast majority of the arguments put to me at the hearing by the applicant Mr Nee Harland actually related to complaints Mrs Nee Harland as mortgagor appears to have against the respondent as mortgagee and generally over the default and sale process it has adopted here. I fail to see how these aspects have any relevance to the strength of the case the applicant may have to support his claimed interest under the caveat. Mrs Nee Harland is not a caveator or party to this proceeding and if she has issues with the mortgagee sale process undertaken by the respondent then those are matters on which she might proceed separately against the respondent.
[25] Finally, before me the applicant accepted that under the circumstances prevailing here, it is clear that the right of the respondent as mortgagee to sell the property to realise its security will trump and take priority over the ability of Mrs Nee Harland as registered proprietor to sell the property to any third party – National Mutual Finance (1988) Limited v Berryman, High Court, Wellington, 2 October
1991 M451/92 McGechan J and Canterbury Finance Limited v Sagar Trust Limited, High Court Christchurch, 27 June 1997, M285/97, Master Venning. On the face of matters the respondent as mortgagee has an indefeasible right to sell the property consequent on the default of the mortgagor under its mortgage and as I see it there can be no likely argument that the respondent here is not entitled to effect the mortgagee sale it has entered into with a third party given the default.
[26] For all these reasons, I take the view that the applicant’s case to support his claimed caveatable interest in the land is weak. This does not assist his present application under s 148.
The applicant’s failure to exercise the caveator’s rights under s 145 or s145A
[27] In Kapoor v Te Namu High Court, Napier, 11 September 2006, Associate Judge Gendall, CIV-2006-441-684, the solicitors who prepared the caveat in question had provided an incorrect address for service which resulted in the caveat lapsing without the caveator’s knowledge. In that case a second caveat was allowed.
[28] In the present case, as I have noted above, the caveat was lodged by the applicant himself, Mr Nee Harland, who is a barrister and solicitor of this Court. In addition, he acknowledged before me that the Registrar General of Land had provided him with correspondence confirming that under s 145A the date for lapse of the caveat, unless an order of the Court was obtained and served, was to be 21 March
2011.
[29] Notwithstanding that, the applicant took no steps to obtain any interim order preserving the caveat until the hearing of this matter on 24 March 2011. In my view this is not a situation where an adequate explanation for the failure on the part of the applicant to exercise and preserve his rights under the caveat exists. This ground also does not assist the applicant.
Unavoidable Prejudice
[30] The third aspect to be considered is whether unavoidable prejudice would be suffered by parties who have acted in reliance on the register or in the belief that the caveator was not pursuing his claim.
[31] Here, it is clear that on 26 January 2011 the respondent entered into a contract for the sale of the property as mortgagee to a third party. As I understand the position, that contract is now unconditional and the respondent, because of the existence of the applicant’s caveat has been in default in providing settlement with
the third party for about 2 months. It is clear to me that prejudice would be suffered by the respondent if, in the circumstances here, an order is made permitting the applicant to register a second caveat under s 148.
Conclusion
[32] For all these reasons the oral application by the applicant for consent to register a second caveat under s 148 must fail. That application is dismissed.
[33] As to costs, counsel suggested these might be reserved and be the subject of memoranda provided by each counsel.
[34] Costs accordingly are reserved.
[35] If counsel are unable to agree on the issue of costs then they may file memoranda sequentially and I will decide the issue based upon the material before the Court in the absence of either party indicating they wish to be heard on the matter.
‘Associate Judge D.I. Gendall’
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