Norrie v Registrar-General of Land HC Wellington CIV-2004-485-2153
[2005] NZHC 1284
•1 March 2005
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2004-485-2153
IN THE MATTER OF a notice to Registrar to appear pursuant to section 217 Land Transfer Act 1952 BETWEEN
CINDY SUE NORRIE
Plaintiff
AND
THE REGISTRAR-GENERAL OF LAND
Defendant
Hearing:
10 February 2005
Appearances: M J Wenley for the Plaintiff
J A L Oliver for the Defendant Judgment: 1 March 2005
In accordance with r 540(4) I direct the Registrar to endorse this judgment with the delivery time of 3pm on 1 March 2005.
JUDGMENT OF ELLEN FRANCE J
CONTENTS
Introduction Statutory provisions
Consistency with s 137(2) Result
Costs
Para No.
[1]
[7]
[14]
[46]
[47]
Introduction
[1] Cindy Norrie, the plaintiff, Ian Norrie, and M & H Trustee Services Limited were the registered proprietors of land in certificate of title HBA 4/860. Ms Norrie and her co-owners agreed to sell the land with settlement due on 30 August 2004.
C S NORRIE V THE REGISTRAR-GENERAL OF LAND HC WN CIV-2004-485-2153 [1 March 2005]
[2] On 27 August 2004, a search of the title recorded as a pending transaction a caveat lodged against the title by a Mark Norrie. The nature of the estate or interest claimed on the caveat was “As beneficiary of the Norrie Family Trust”.
[3] The solicitors acting on the sale for Ms Norrie, Willis Toomey Robinson, then took the matter up with the Registrar-General and said they did not think the caveat met the requirements of s 137(2)(b) or (c). The latter confirmed that the caveat would be processed without any change.
[4] Ultimately, a withdrawal of the caveat was obtained and the sale proceeded. However, the plaintiff brings these proceedings by way of originating application under s 217 of the Land Transfer Act 1952 requiring the Registrar to appear and uphold the grounds of a decision to register the caveat.
[5] Essentially, the plaintiff says the caveat did not contain the information required by s 137(2)(b) and (c) of the Land Transfer Act 1952 and should not have been accepted by the Registrar-General. In particular, the plaintiff says the caveat did not specify either:
a)The nature of the land or estate or interest claimed by the caveator; or
b)How the land or estate or interest claimed was derived from the registered proprietor.
[6] The Registrar-General accepts that it later became apparent the caveator did not have sufficient interest to support the caveat. But, the Registrar-General argues, the statutory requirements were met at the relevant time.
Statutory provisions
[7] Section 137 of the Land Transfer Act makes it clear that a person may lodge a caveat against dealings in any land in relation to an interest under a trust. A person may lodge a caveat against dealings if he or she:
(a) claims to be entitled to, or to be beneficially interested in, the land or estate or interest by virtue of any unregistered agreement or other instrument or transmission, or of any trust express or implied, or otherwise;
.. (s 137(1)(a))
[8] The information to be provided in a caveat is set out in s 137(2) which reads as follows:
(2)A caveat under this section must contain the following information:
(a)the name of the caveator; and
(b) the nature of the land or estate or interest claimed by the caveator, which must be stated with sufficient certainty; and
(c) how the land or estate or interest claimed is derived from the registered proprietor; and
(d) whether or not it is intended to forbid the making of all entries that would be prevented by section 141 or a specified subset of them; and
(e) the land subject to the claim, which must be stated with sufficient certainty; and
(f)an address for service for the caveator.
[9]In terms of s 137(4),
Caveats under this section must be entered on the register as of the day and hour of their receipt by the Registrar.
[10] Reference should also be made to ss 148A and 148B of the Act. Section 148A states that,
Except to the extent of ensuring that a caveat lodged under any provision of this Act complies on its face with the requirements of this Act and with the requirements of any regulations made for the purposes of this Act, the Registrar is not required to be satisfied that the caveator is in fact or at law entitled to the estate or interest claimed in the caveat.
[11] Section 148B deals with the situation where a caveat does not comply with the Act. In that case, s 148B provides that:
the Registrar may deal with [the caveat] under section 43 as if it were an instrument not in order for registration.
[12] Section 43 deals with what happens where an instrument which is lodged is not in order for registration. Essentially, in that case, the Registrar may either reject the instrument or make a requisition for rectification in relation to the instrument.
[13] Finally, Regulation 21(a) of the Land Transfer Regulations 2002 (SR 2002/213) states that the Registrar “must” not “register” any instrument that “does not comply in all respects with the requirements of the Act”.
Consistency with s 137(2)
(i)Submissions
[14] In developing the submission that this caveat did not comply with s 137(2)(b) or (c), the plaintiff emphasises that the requirements of that section are mandatory. That is because, first, the statute says so. Second, the plaintiff says there are policy reasons requiring strict compliance. The plaintiff refers in this regard to the following excerpt from New Zealand Mortgage Guarantee Company Limited v Pye [1979] 2 NZLR 188 at 197 per Vautier J:
if by statute a person is given the right to take a step which will prevent someone dealing with his own land as he thinks fit the person seeking to avail himself of this right must comply with the statutory requirements which are precisely laid down. These requirements are, in my view, clearly mandatory as the Australian Courts have held in respect of provisions to just the same effect. Moreover, the inconvenience and injustice which is likely to arise from the upholding of caveats of this kind expressed in loose and general or inaccurate words is very obvious when one considers the scheme of the provisions as a whole. It is not simply a matter, as counsel for the applicants’ argument would imply, of acquainting the registered proprietor with the general nature of the claim made against his land. ..
[15] The plaintiff relies on a similar comment in Paparua County v District Land Registrar [1968] NZLR 1017.
[16] In terms of the substantive policy considerations, the plaintiff says that the purpose of s 137 is to prevent the caveator from “fudging” his or her interest and to
prevent baseless caveats being advanced. The plaintiff points out that the material the plaintiff’s solicitor provided by letter of 31 August 2004 to the Registrar-General indicates that the caveator here was a discretionary beneficiary of a family trust which held the subject land. No appointment had been made and the caveator could not claim to be entitled to a beneficial interest in the subject land.
[17] Accordingly, the plaintiff submits it must be apparent on the face of the caveat what the nature of the estate or interest is and how that interest is derived from the registered proprietor. The Registrar is not able, as a matter of law, to make assumptions about these matters to “fill in the gaps”.
[18] The plaintiff submits that the wording used here falls short of that used in other cases. The plaintiff refers, first, to Buddle v Russell [1984] 1 NZLR 537 and, second, to In re Peychers’ Caveat [1954] NZLR 285. Third, the plaintiff refers to the forms and precedents in the booklet “Land Titles New Zealand Forms and Practice” printed and published for the Registrar-General of Land in May 1995. The sample forms there provide examples of the level of detail required on a caveat. To illustrate, the form recommended when a caveator claimed a beneficial interest under a trust was as follows:
The abovenamed caveator claims a beneficial interest in the land contained in the above certificate of title as cestui que trust of which the registered proprietor, Thomas Allan Brown, is trustee.
[19] Accordingly, the plaintiff submits that in the present case, wording along the following lines was necessary:
The above named caveator claims a beneficial interest in the land contained in the above certificate of title as a discretionary beneficiary of the Norrie Family Trust created by Deed of Trust dated 23 June 1994 pursuant to which the registered proprietors Ian David Maxwell Norrie, Cindy Sue Norrie and M & H Trustee Services Limited hold the said land as trustees.
[20] As a secondary argument, the plaintiff says there has been a breach of Regulation 21. The plaintiff submits that the caveat is an instrument and it is registered and accordingly registration in this case was in breach of the Regulations.
[21] The Registrar-General accepts that the phraseology used here comprises the “bare minimum” to meet the statutory requirements. But, Mr Oliver submits, the wording is sufficient to demonstrate a caveatable interest. An interest under a trust is caveatable and that was the “nature” of the interest claimed. Section 137(1)(a) refers simply to “any trust express or implied”. The approach taken in Buddle v Russell, Mr Oliver submits, is to be preferred over that adopted in Pye.
[22] The phraseology adopted here, taken with a consideration of the title, was also sufficient to meet the requirement to show how the estate or interest is derived from the registered proprietor.
[23] In developing these submissions, Mr Oliver emphasises that the Registrar- General’s role is not an adjudicative one (see: Kuper v Keywest Constructions Pty Limited (1990) 3 WAR 419 at 433; and Adams’ Land Transfer at S138.6). In particular, the Registrar-General is not required to establish there is in fact a caveatable interest. Rather, the Registrar-General’s function is to check that the caveat is in proper form and discloses an apparently caveatable interest.
[24] As to the derivation from the registered proprietor, the submission is that a search of the title shows the property was settled as a joint family home on Ian Norrie and the plaintiff in June 1989). This settlement was cancelled on 5 December 1996 with the property being vested in Ian Norrie and the plaintiff as tenants in common in equal shares and, on the same date, the property was transferred to Mr and Mrs Norrie and M & H Trustee Services Limited. Hence, Mr Oliver submits it was apparent from the transactions that took place that a trust was formed and that the trustees became the registered proprietors of the land.
[25] Finally, the Registrar-General says Regulation 21 is inapplicable because a caveat is not “registered” and the Regulation deals with “registration” which is non- complying. Rather, a caveat is to be measured against the requirements of s 137(2). If it fails to meet any of those requirements then it may be dealt with as in s 148B which, in turn, invokes s 43.
(ii)Discussion
[26] In terms of the requirement in s 137(2)(b) to state “with sufficient certainty” the nature of the interest claimed, there are differences in the approaches taken in the authorities. This point is made by the authors of Hinde, McMorland & Sim Land Law in New Zealand (2004) at para 10.013. The authors, like the defendant, suggest that the more liberal approach reflected in Buddle v Russell is preferable.
[27] The first of these authorities is In re Peychers’ Caveat. The caveator in that case claimed an interest “as cestui que trust of which my wife is trustee.” The issue there was whether the caveat should be removed. For present purposes, the case is noteworthy for the observation by the then Supreme Court that,
the claim to be interested as a cestui que trust is sufficient to cover any trust interest, whatever the precise nature or extent of that interest. (at 286)
[28]In Pye, the caveat referred to an interest,
described by virtue of an unregistered Deed of Second Mortgage dated .. between .. and Pye .. and the Caveators ..
[29] In the context of an application to prevent the lapse of the caveat, Vautier J considered the wording did not fully and accurately describe the estate or interest the caveat was intended to protect.
[30] Casey J took a different approach in Buddle v Russell. His Honour said (at 539) that what the predecessor to s 137(2) requires “must depend on the circumstances of the case.” Casey J observed that he could see why Vautier J reached the view he did in Pye, “having regard to the dubious effect of the document relied on.” In Buddle, Casey J considered the words used were sufficient. They described a situation which was “quite clear” to anyone reading the document. There was a “danger” in following the Australian line in losing the “simplicity and speedy protection” afforded by the Act. The wording in the caveat in Buddle was as follows:
claiming an estate or interest in the land .. by virtue of a constructive trust between Michelle .. Russell .. and myself ..
[31] Similar wording was used in the caveat in issue in Attorney-General v Langdon [1999] 3 NZLR 457. That case was about a second caveat. However, the Full Court did make observations about the sufficiency of form. Williams J said that, as to s 137(2)(b), the document appeared to assert a caveatable interest. Elias J, as she then was, by contrast said that it was not necessary for the Registrar-General to accept the “bland” assertion of constructive trust. Further particulars should have been sought and these would have revealed the underlying claim of adverse possession.
[32] Subsequently to Buddle v Russell, Williams J in Vincent v Vincent (HC AK, M No. 671/87, 19 October 1995) was considering an application relating to orders for lapse of caveats. Williams J noted that the interest claimed was as follows:
.. as beneficiary by virtue of a certain trust under which Peter Raymond Vincent of Auckland, Driving Contractor .. is trustee and the caveator is a beneficiary.
[33]Of compliance with the predecessor to s 137(2)(b), His Honour said:
It could scarcely be contended that either of the caveats in contention in this matter complied with those requirements but the District Land Registrar nonetheless accepted the caveats for registration. (at 3)
[34] Then, in Allen v Hogan Developments Limited (2001) 4 NZ ConvC 193,420, Master Faire dealt with a caveat in which the defendant claimed an interest,
As beneficiary by virtue of a constructive trust affecting that land in CT 125D/956 in respect of which the registered proprietors of the said land are Steven John Allen and Rosemary England Allen as trustees and the caveator as beneficiary.
[35] Master Faire did not consider this met the requirements of the Act and Regulations. Master Faire stated,
If reliance is placed on the allegation that a trust exists, it should briefly state the nature and basis for the trust. (at [39])
[36] Finally, reference should be made to the obiter comment of Somers J in Holt v Anchorage Management Ltd [1987] 1 NZLR 108 at 117 that the description used there did not meet the requirements of (then) Regulation 24 of the 1966 Regulations. The description on the caveat in Holt was as follows:
as cestui que trust from Anchorage Management Ltd as trustee, the said Anchorage Management Ltd being the registered proprietor of the land hereinafter described and Henry Peter Holt as beneficiary.
[37] Somers J said the description was inadequate because it did not contain particulars of date or circumstance.
[38] What will be “sufficient certainty” (“adequate” to the purpose – Oxford English Dictionary (2ed 1989)) will vary according to the circumstances. Clearly, also, the Registrar on receipt of a caveat is not exercising an adjudicative function. The plaintiff did not dispute that. And, in Holt v Anchorage Management at 115, McMullin J refers to the Registrar’s “administrative” act in accepting a caveat for lodgement.
[39] On the other hand, equally clearly, the Registrar must be satisfied that the requirements as to form are met. One purpose of requiring adherence to the form is to provide a threshold of some sort albeit there are avenues of redress for the registered proprietor (making an application for removal of a caveat under s 143 and the ability under s 146 to seek damages from the caveator).
[40] On balance, I do not consider it was necessary here to make reference to the fact the interest claimed was as a discretionary beneficiary. Although it is the “bare minimum”, the description here equates with that in In re Peychers’ Caveat in terms of the description of the nature of the interest (see Equity and Trusts in New Zealand (2003) (general editor Andrew Butler): ch 3.1.4(5), p 53) and with the form in the “Land Titles” precedents booklet.
[41] Hinde, McMorland Sim suggest that where a registered proprietor claims a caveator has not complied with s 137(2)(b), “frequently the real complaint” is non- compliance with s 137(2)(c) and I consider that is the case here. It was necessary to explain how the interest derived from the registered proprietor. In some cases this
factor may be obvious from the title but that was not so here. “M & H Trustee Services” are not so clearly linked to the “Norrie Family Trust”.
[42] Accordingly, I consider the plaintiff is correct in that the requirements of s 137(2)(c) were not met.
[43] The Registrar-General queried the utility of the proceeding (given the caveat was withdrawn) and the availability of a remedy against the caveator. Obviously, the usual course would be to seek removal of the caveat and/or to pursue the caveator. In this case though, although not directed to the question of utility, I consider that Mr Wenley’s submissions about the process followed are relevant.
[44] In particular, the plaintiff says she was put to delay in settlement and further expenses as a result of the defendant’s decision. In the event the caveat was subsequently removed without the need for an application but there is also an interest in having these legal issues clarified. However, I do not consider any particular order is necessary. The finding of non-compliance with s 137(2)(c) is sufficient.
[45] Nor do I consider it necessary to deal with whether or not the Registrar could have rejected the caveat after it was lodged. Finally, in the circumstances, it is not necessary to address the plaintiff’s secondary argument about non-compliance with Regulation 21.
Result
[46]The application is accordingly successful in part.
Costs
[47] Section 219 of the Land Transfer Act provides that all expenses attendant upon a s 217 proceeding, “shall be borne and paid by the person initiating the proceedings, unless the Court exercises its power to order that the same be paid out of the Crown Bank Account”.
[48] Given the public interest in the matters raised, I consider it is appropriate for costs effectively to follow the event. The parties agree 2B is the appropriate categorisation. The plaintiff is accordingly entitled to costs on a 2B basis together with any reasonable disbursements to be determined by the Registrar if necessary. These costs are to be paid out of the Crown Bank Account.
Ellen France J
Solicitors:
Willis Toomey Robinson, Lawyers, Napier, for the Plaintiff Crown Law Office, Wellington, for the Defendant
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