Ormond v Pongaroa Land Company Limited
[2018] NZHC 238
•23 February 2018
IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY
I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE
CIV-2018-441-4 [2018] NZHC 238
BETWEEN ARALEAJ ORMOND
Applicant
AND
PONGAROA LAND COMPANY LIMITED Respondent
Hearing: 21 February 2018 (by AVL) Counsel:
R McCutcheon for Applicant
R O’Connor and K Osborne for RespondentJudgment:
23 February 2018
JUDGMENT OF ASSOCIATE JUDGE JOHNSTON
Introduction
[1] This is an application pursuant to Part 8 of the Land Transfer Act 1952 for an order that a caveat not lapse. The caveator and applicant is Araleaj Ormond, and the registered owner of the property in question and respondent is Pongaroa Land Company Ltd.
[2] The applicant’s caveat was registered on 6 December 2017. On 6 January 2017 the respondent applied to the Registrar of Lands for the caveat to lapse. The Registrar thereafter notified the applicant of this application which triggered the tight statutory timeframe requiring the applicant to notify the Registrar that an application was being made for an order that the caveat not lapse within 14 days and then obtain and serve
on the Registrar such an order within a further 28 days.
ORMOND v PONGAROA LAND COMPANY LIMITED [2018] NZHC 238 [23 February 2018]
[3] The applicant filed and served this proceeding seeking such an order on
7 February 2018.
[4] Associate Judge Smith convened a teleconference on 12 February 2018, at the conclusion of which he made an interim order sustaining the caveat pending further order, and set the application down to be heard at 10.30 am on 21 February 2018. His Honour also issued timetabling directions that, amongst other things, obliged the applicant to file and serve any further affidavit evidence by 15 February 2018.
[5] The applicant did not file and serve further affidavit evidence by that date. But, the day prior to the hearing, her solicitors emailed to the Registrar seven further affidavits.
[6] When the case was called, an objection was raised by Mr O’Connor to the further affidavits filed and served in support of the application being read. The objection was based on three broad grounds:
(a) first, that these affidavits had not been filed and served within the timeframe set by Associate Judge Smith;
(b)second, that they were all irregular to one extent or another, being variously unsworn, not properly sworn, or not compliant with aspects of the High Court Rules 2016;
(c) third, that the respondent would be prejudiced by having insufficient time to consider and reply.
[7] Having heard argument, I allowed the affidavits to be read. Essentially, my conclusion was that the potential prejudice to the applicant that would result from excluding them outweighed the potential prejudice to the respondent that would result from their being allowed in. Mr O’Connor expressly declined to apply for an adjournment.
[8] It is well settled that in an application to sustain a caveat pending final resolution of the applicant’s claim, the applicant has the burden of establishing that it
has a reasonably arguable claim to a proprietory interest in the land.1 To use the terminology of s 137(1) of the Act, the applicant must:
… be beneficially interested in, the land or estate or interest, by virtue of any unregistered agreement or any instrument or transmission, or of any trust expressed or implied, or otherwise …
Background
[9] The affidavit evidence contains a good deal of material concerning the family background. No useful purpose would be served by outlining this in detail. A summary will suffice.
[10] John Davies Ormond was an immigrant to this country who arrived here in the early 1860’s. He had at least one child, George Canning Ormond (George Ormond I). The family was obviously very industrious and successful because, by the time of The Great War, it owned significant land holdings on Mahia Peninsula in Hawkes Bay. George Ormond I had no fewer than sixteen children. His eldest child was George Edward Ormond (George II). He had another son named Andrew Gordon Ormond (Andrew Ormond I). Primogeniture appears to have prevailed within the family at the time because the land owned by the family passed from John Ormond to George Ormond I and down his line through at least two further generations: George Ormond II and George Ormond III.
[11] Over the years George Ormond I’s descendants sold parcels of the land. On
23 December 1993 such family land as remained was sold to the respondent. The evidence is not clear as to the details of this transaction, but there is no suggestion that the transaction itself is challengeable in any way. George Ormond III is the majority shareholder and the sole director of the respondent.
[12] Andrew Ormond I, to whom reference has already been made, had a son by the name of Andrew Gordon Ormond (Andrew Ormond II). Andrew Ormond II was the
1 See Sim v Lowe [1988] 1 NZLR 656, NBNZ v Gun City Wellington (unreported), High Court, Christchurch, Master Hansen, 22 April 1994 and Paugra Holdings (in Liquidation) v Harvestfield Holdings [2014] NZCA at [34].
father of six children, including the applicant (and Andrew Gordon Ormond
(Andrew Ormond III)).
The Applicant’s Case
[13] The basis upon which the applicant asserts a beneficial interest in the land is pleaded by her in these terms:
My grandfather Andrew Gordon Ormond [Andrew Ormond I] paid consideration to his father’s [George Ormond I’s] estate for the land (or some of the land; a good part of it (“the property”)) contained in the certificate of title or Identifier 450429 of the Hawkes Bay Land Registration District.
[14] She says that because of “… difficulties with the solicitor …” Andrew Ormond I’s interest in the property was never registered, and that it “… instead passed down the family line of George Edward Ormond [George Ormond III], the director and a shareholder of the registered proprietor and respondent Pongaroa Land Co …”. Finally, she says that “[t]he family line of George Edward Ormond [George Ormond III] has on a number of occasions over the years acknowledged my family’s interest in the property, to the extent (and my family) have an acknowledged cestui que trust interest in the property that has followed it.”
[15] So in short, the applicant’s case is that Andrew Ormond I bought and paid for the land in question (or some significant proportion of it), thereby becoming the beneficial owner, that George Ormond II and every subsequent legal owner, including the respondent, acquired legal title with notice of that beneficial interest. On that basis, she says that she now enjoys that beneficial interest.
Discussion
[16] In my judgment, this argument suffers from two insuperable difficulties; the first evidential, the second legal.
[17] The affidavit evidence going to the issue of whether there was any completed transaction whereby Andrew Ormond I acquired a beneficial interest in the land is far from compelling.
[18] Mr McCutcheon draws my attention to the assertions in the affidavits of the applicant and her siblings to the effect that there had been such arrangements. In fact, some of the seven deponents say that Andrew Ormond I bought the land from his father’s (George Ormond I’s) estate, and others, including the applicant herself, say that he bought it from his older brother, George Ormond II, but I do not place great weight on that inconsistency.
[19] If any arrangements were contemplated, discussed or put in place, then this occurred about seventy years ago, around the time of the Second World War, and long before the applicant or any of her siblings were born. Plainly their evidence in relation to any such dealings is hearsay, and in some cases double or triple hearsay — intergenerational hearsay one might say. As Mr McCutcheon submits, that does not mean that it is inadmissible. But it certainly means it is evidence that I am obliged to treat with considerable caution.
[20] Second, Mr McCutcheon points to the minutes of the meetings of the trustees of George Ormond I’s estate. These certainly refer to the possibility of some agreement between the trustees and Andrew Ormond I concerning land, but they do not go much further than that, and they are by no means clear as to what exactly was contemplated. They fall well short of a statement that there was any agreement between the trustees (or George Ormond II) for the sale of any particular land to Andrew Ormond I. Even if such an arrangement was contemplated, the minutes do not confirm that it was implemented.
[21] Third, Mr McCutcheon refers to the evidence of the applicant and her siblings to the effect that over the years Andrew Ormond I and his descendants have lived on and farmed some of the land, which he submits is evidence of an arrangement pursuant to which Andrew Ormond I acquired the land.
[22] It is common ground that Andrew Ormond I and his descendants have indeed lived on and farmed at least some of the land, and continue to do so.
[23] But there are two points about that which undermine the applicant’s contention that this is significant. The first is that if indeed George Ormond II and his descendants
raised no particular objection over the last 70 years or so to Andrew Ormond I and his descendants living on and farming the land, whilst that might suggest the existence of some sort of earlier arrangement, it is equally consistent with close family relationships and an unwillingness on the part of George Ormond II and his descendants to disrupt those relationships. The second and more telling point is that there is in fact evidence that the descendants of George Ormond II took steps to formalise arrangements by way of a lease. In particular, Mr O’Connor pointed to a letter dated 23 November 2009 written by solicitors acting for descendants of George Ormond I which seems expressly to deny any right on the part of the descendants of Andrew Ormond I to occupy the land.
[24] Finally, Mr McCutcheon refers me to the evidence of Ratua Ormond, the widow of the late Andrew Ormond II, and a number of the other deponents, to the effect that over the years that the descendants of George Ormond I have expressly acknowledged some sort of right on the part of the latter to the land. Although this evidence is of course self-serving, and is denied by the respondent’s equally self-serving evidence, I do not dismiss it altogether, and, for present purposes, I am prepared to accept that things have been said over the years by members of the George Ormond side of the family to members of the Andrew Ormond side that might have resulted in the later believing that they enjoyed some entitlement to the land. But the discussions reported by the deponents ars equally consistent with a willingness on the part of one side of the family to facilitate the wishes of the other side, as opposed to an acknowledgement of any sort of legal entitlement on the part of the latter.
[25] In his submissions on behalf of the respondent, Mr O’Connor made the obvious point that if indeed there had been a formal transaction involving the sale and purchase of the land between either the trustees of the George Ormond I estate, or George Ormond II, on the one hand, and Andrew Ormond I, on the other hand, and that Andrew Ormond I had in fact — as his descendants now assert — bought and paid for the land, then there would be evidence supporting this. As he said, a
Mr Chamberlain, who is referred to in the minutes of the meetings of the trustees of George Ormond I’s estate, and who was both a trustee and the solicitor who appears to have acted for the family on property transactions, might be thought to have had generated trust account records of any such dealings, which of course would be
supported by banking records. No attempt appears to have been made to ascertain whether any such records survive.
[26] At the conclusion of his submissions, Mr O’Connor suggested that whilst there may have been some consideration given to a transaction at the relevant time, the information about this that has passed down through three generations of the Andrew Ormond I family, and is now reflected to one extent or another in the seven affidavits before the Court, is wholly unreliable. I agree.
[27] In the end, I am far from satisfied that the applicant is able to make out even a reasonably arguable case that Andrew Ormond I acquired a beneficial interest in the land that would be recognised by the law.
[28] As already foreshadowed, there is a second point.
[29] If the applicant had been able to make out a reasonably arguable case to the effect that Andrew Ormond I acquired a beneficial interest in the land around the time of the Second World War, the issue would then become how that translates into a beneficial interest on her part capable of supporting her caveat.
[30] The applicant’s case appears to proceed on the glib assumption that any such beneficial interest on Andrew Ormond I’s part passed down the family line as a matter of course. It is perhaps possible to understand how that assumption might be made within the family, but of course, as a matter of law, there is no foundation for it.
[31] In order for the applicant to establish a reasonably arguable case that she enjoys any beneficial entitlement that Andrew Ormond I may have acquired, she would have to establish that at law that entitlement passed from Andrew Ormond I to her.
[32] There is no evidence before me upon which I could conclude that that is the case.
[33] Indeed, the evidence is that one of the applicant’s siblings, Johanna Ormond, lodged a caveat against this land in 2012, asserting the same right, and in exactly the same terms, that is asserted by the applicant in this proceeding. There is also evidence
that another of her siblings has recently filed a further caveat, and that yet another, one Andrew Ormond III, is threatening to do so. So in short, at least three, and possibly four, individuals assert the same right as is asserted by the applicant.
[34] In my judgment, the applicant is unable to make out a reasonably arguable case that she enjoys a proprietary right of any sort in the land which is the subject matter of the caveat.
Conclusion
[35] The application that the caveat not lapse is declined.
Costs
[36] The parties have not, of course, addressed costs issues at this point.
[37] My preliminary view is that the respondent is entitled to costs on a 2B basis.
[38] In the course of argument, Mr O’Connor submitted that the applicant’s lodging of a caveat and commencement of this proceeding, against the backdrop of her sister’s earlier caveat, and having regard to her other sister’s recent caveat, constitutes an abuse of process, and that that might be relevant to costs. I do not accept that submission. Even although I have reached a contrary conclusion, I accept that the applicant genuinely believed that she had a legitimate proprietary interest in the land, and the caveat procedure exists to enable people to test and, if valid, protect such interests.
[39] I invite counsel to confer on costs, and my expectation is that they will be able to resolve them without further assistance from the Court.
[40] If, however, that does not prove to be the case, memoranda may be filed and I
will deal with costs.
Solicitors:
Peter McCutcheon, Auckland for applicant
Bramwell Bate, Hastings for respondent
Associate Judge Johnston
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