Reriti v Preece

[2014] NZHC 1313

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV 2013-409-001726 [2014] NZHC 1313

BETWEEN

EDWARD GEORGE TE WHARE

RERITI Applicant

AND

DOMINIC JASON PREECE Respondent

Hearing:	9 June 2014
Appearances:	A Riches for the Applicant C Ruane for the Respondent
Judgment:	12 June 2014

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on

12.06.14 at 4:00pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

E G T RERITI v D J PREECE [2014] NZHC 1313 [12 June 2014]

[1]      By agreement dated 23 December 2009 the applicant, Mr Reriti transferred his freehold Chatham Islands property (the property) to the respondent, Mr Preece. The purchase price was noted as $70,000.  The agreement was signed by Mr Reriti and Mr Preece.  The agreement notes Ms Simpson of the law firm Saunders & Co as acting for Mr Reriti.

[2]      A settlement statement issued by Saunders & Co noted that the purchase price together with a proportionate share of Council rates was to be paid on 28

January 2010.  On 27 January 2010 Mr Preece paid the settlement sum of $70,320.11 to Saunders & Co.

[3]      The evidence indicates that Mr Preece has paid Council rates since then.

Claim of a caveatable interest

[4]      Mr Reriti claims a cestui que trust interest on the basis that the property was transferred to Mr Preece and for him to hold that property as security for certain loan advances Mr Preece had made to Mr Reriti.  Mr Reriti says that after two years the property was to be transferred back to him on repayment of those loan advances.  Mr Reriti also claims that the purpose of the transfer was to protect the property from any potential relationship property claims by Mr Reriti’s ex-partner.  Also, he claims the transfer was to enable the eviction of tenants on the property in order to allow Mr Reriti to use the property for charter fishing expeditions.

[5]      There is a background of dealings (‘transactions’) between Mr Reriti and Mr Preece.  They involve the transfer or the sale of fishing quota owned by Mr Reriti. Mr Reriti says that of those transactions three concerned loans by companies of Mr Preece and for which quota was provided as security on the understanding that the quota would be returned to him upon repayment of those loans.

[6]      A more comprehensive review of the transactions will follow shortly.

[7]      Mr Reriti has the onus and burden of proof to show an arguable case for his claim of a caveatable interest in the property.  Ordinarily an application to maintain a caveat does not provide an appropriate forum to determine genuinely disputed questions of fact or law.   Usually if a caveator can show an arguable case for a caveatable interest then the caveat will remain until the merits of the whole matter have been tried by substantive proceedings.1

[8]      If there is significant dispute in the evidence of the parties then the Court should be reluctant to draw any conclusions regarding those disputes.  If the Court considers there is no valid ground for lodging a caveat it should order its removal.

[9]      A Court may be prepared to sustain a caveat lodged in support of a claim of an interest in land pursuant to an oral agreement.2     In the Holt case the caveator claimed the  registered  proprietor  had  agreed  to  hold  a property in  trust  and  to transfer it to the caveator upon the discharge of liability secured against the property.

Background to transactions

[10]     Mr Reriti had owned the property since 1995.

[11]     In  2007  he,  his  partner  and  their  child  lived  in  north  Canterbury.    In connection with his breakup he returned to the Chatham Islands intending to return to the fishing industry.   He said he needed to obtain a fishing vessel and required some capital for this. At the time Mr Reriti operated three companies through which he owned fishing quota.  He said Mr Preece was prepared to lend him $270,000 “in exchange for the transfer of a number of fishing quotas held by myself and [my company]  Island  Quota  Limited  to  Mr  Preece’s  company  Aotearoa  Brokers

Limited”.

1 Sims v Lowe [1988] 1 NZLR 656 (CA).

2 Holt v Anchorage Management Ltd [1987] 1 NZLR 108.

[12]     Mr Reriti deposed that Mr Preece arranged an advance of $78,750 on 31 July

2009 to Mr Reriti’s company Aotearoa Fishing Company Limited (Aotearoa) ‘upon receipt of security of 300kg quota shares.   Mr Reriti annexed a copy of a quota transfer document confirming the payment of $70,000 plus GST for the transfer of

63,888 crayfish quota shares.   The document was dated 31 July 2009.   An accompanying Quota Purchase Agreement bears the signatures of Mr Reriti as the seller and Mr Preece on behalf of his company as the purchaser.

Transaction 2

[13]     In  his  first  affidavit  Mr  Reriti  states  that on  6 August  2009  the sum of

$855,000 was advanced  “upon receipt of security of 4T [tonne] of  Paua Quota Shares  transferred  from  [his  company]  Island  Quota  Limited”.    Mr  Reriti  has attached documents as evidence of this transaction.  One of those is a quota share transfer document.  It notes that Aotearoa is the buyer of 4T of paua quota for a price of $760,000 plus GST.  That document notes Mr Reriti was the owner of that quota. Mr Preece’s record on his company’s letterhead recorded the agreed price, the GST inclusive price and that the transfer of shares would be undertaken on 5 August 2009. It recorded the transfer was subject to conditions of payment including the supply by Mr Preece of a GST invoice.

[14]     Mr Reriti’s position now is that the transfer of 4 tonne of paua quota shares was a sale and was not a loan security arrangement.  Mr Reriti’s claim is for $40,000 of “a final amount of $70,000 to be transferred… which [Mr Preece] held in trust for me re sales of quota skimmed off the top $10,000 per tonne of 7 tonne of paua quota plus GST”.  Mr Reriti says this ‘commission’ was promised to him as an inducement for him allowing Mr Preece to sell it – because it was readily saleable and other parties were interested in purchasing it.

[15]     Mr  Reriti  claims  his  company  Island  Quota  Limited  “upon  receipt  of security”  transferred  to  Mr  Preece’s  company Aotearoa  Quota  Brokers  Limited

1300kg of paua quota and 7 tonne of blue cod quota for a total cost of $381,375 inclusive of GST.

[16]     Attached to Mr Reriti’s affidavit was a copy of the documents associated with that transaction.  Those included a transfer document which detailed the number of blue cod and paua shares and the sums of $247,000 and $92,000 respectively to be paid for those.

[17]     On this occasion Mr Reriti used the services of solicitors, Malley & Co of

Christchurch. Their letter dated 25 September 2009 to Aotearoa:

In consideration of you depositing to our trust account the sum of $381,375 in settlement of the purchase of 1300kg of PAU4 quota and 7000kg of BCO4 quota we undertake to hold same in our trust account undisbursed until such time as the discharge of mortgage and transfer to … are registered by FishServe.

[18]     Also on that day Mr Preece received at 9:44am from Malley & Co an email noting:

We now have discharge in hand.

Because of the undertaking we have given to the Bank, we would prefer to receive funds into our trust account and undertake we will not release same until we have received confirmation from FishServe that the discharge and transfer have been registered.

[19]     On 28 September Mr Preece arranged payment of the sum of $381,375 by direct credit.

[20]     This documentation notwithstanding Mr Reriti deposes that the money paid by Mr Preece was an advance “upon receipt of security of some of my blue cod and paua quota shares”.

[21]     The transaction was documented by a written and signed document prepared

by Mr Reriti’s solicitors and headed ‘Agreement for Sale and Purchase Quota’.

[22]     In his first affidavit Mr Reriti said the transfer was for the advance of $10,000 on 1 December 2009 upon “security comprising 1.4T of groper/shark quota shares and the remaining of the blue cod quota shares”.

[23]     In fact it is clear from the agreement for sale and purchase prepared by Mr Reriti’s solicitors that the value of the quota involved was noted as being $16,000 and not $10,000.

[24]     Also Mr Preece attaches a copy of a letter from FishServe confirming the transfer of that quota on 6 November 2009 and not on 1 December 2009 as Mr Reriti asserts.

Transaction 5

[25]     This is the transaction involving the property.

[26]     Mr Reriti says there was a final amount of $70,000 “to be transferred”.  The Court infers that Mr Reriti is referring to his being paid a further sum which he says Mr Preece had agreed to advance.

[27]     Mr Reriti says that before Mr Preece would transfer “the remaining $70,000 which formed our agreement” that Mr Preece wanted further security.  Mr Reriti said that because he had already disposed of a large amount of his quota shareholdings the only asset remaining was his property in the Chatham Islands.   It was a commercial property where he stored a large amount of fishing gear.  He said that to provide Mr Preece with security he therefore agreed to transfer this property to him so Mr Reriti could obtain the final advance.

[28]     As with all other “advances” Mr Reriti says their agreement was that the blue cod quota shares would be transferred back to him upon repayment of the loan in full after two years.

[29]     Mr Reriti says that after a two year period he approached Mr Preece to purchase back the blue cod and cray quota but was told that Mr Preece received advice from his accountant against selling it “because of tax implications”.

[30]     Mr Reriti says at the time the property was transferred it had a rateable value of approximately $155,000.   In support of this claim Mr Reriti annexed a copy of rates assessment as at 19 March 2013.

[31]     Mr Reriti says he instructed his solicitors, Saunders & Co of Christchurch, to proceed with the transfer of the property to Mr Preece.

[32]     Mr Reriti deposes he did not instruct his solicitors on the background nature of the loan or of the use of the land as security.  He merely informed them to transfer the property.   Mr Reriti attached a copy of a settlement statement prepared by his solicitors showing that on settlement date a sum of $70,320.11 was required after an adjustment had been made for an apportionment of rates.

[33]     It was those same solicitors that Mr Reriti instructed to register a caveat over the property on 14 October 2013.  This was done because Mr Reriti said he always had:

[21]     … the agreement and expectation that upon payment in full of the loan to Mr Preece that this land would be transferred back to me. The land is worth approximately $200,000; it is in a prime site and is sought after by local authorities and a number of other investors.  There would be no logical reason for me to have sold the property for a mere $70,000 given the ability to sell for over $200,000 had I placed the property on the market.

[34]     Mr Reriti’s first affidavit concludes by noting he has not repaid the “$270,000 loan advanced”.

Mr Preece’s first affidavit in opposition

[35]     Mr Preece deposes he had known Mr Reriti in connection with the Chatham Islands and the fishing industry for a number of years; that in 2009 he was aware Mr Reriti was going through a separation and was selling down assets; and he became aware that Mr Reriti was starting to sell down quota that he owned or had control of.

[36]     Mr Preece deposes that the quota he obtained from Mr Reriti was bought by his company Aotearoa or was bought by him personally.  He says he is not in the business of lending money and was “certainly not in the business of using quota as security”.  “Quota “he says” is my stock in trade”.

[37]     Concerning transaction 3 Mr Preece exhibits a copy of two pages of the quota transfer document.   The second page shows Mr Reriti’s signature.   The first page contains no information at the bottom of the page indicating receipt of the document by FishServe.

[38]     Mr Preece said the purchase of the property was the last of a number of transactions entered into with Mr Reriti in 2009 and 2010.   By his evidence Mr Preece responds carefully to each assertion that quota was not sold to him but rather was provided as security for loans to Mr Reriti.  He rejects claims of advances.  He provided copies of relevant transfer documents with respect to each transaction.  He concludes none was related to nor recorded to be a loan advance.   Concerning transaction 4 he notes Mr Reriti had obtained the services of solicitors.  Mr Preece suggests it is clear from the solicitor’s records that the transaction concerns a sale and purchase and not an advance.

[39]     Concerning transaction 5 i.e. the sale of the property Mr Preece said this followed the same general arrangement as the sales of quota.  He said the sale and purchase of land was a straightforward agreement for sale and purchase.  Mr Preece exhibits an extensive collection of correspondence and legal documents prepared in relation to the transaction.  He notes none refers to an advance.

[40]     Regarding  the  property  Mr  Preece  attaches  a  copy  of  a  Council  rates assessment showing it had a capital value of $125,000 at time of purchase.   Mr Preece provides proof that the rateable value is now $200,000.   Mr Preece acknowledges paying less than the capital value in January 2010 but says that was a matter of negotiation and because Mr Reriti needed the money.

Affidavit of Mr Reriti in reply

[41]     Mr Reriti maintains the property was transferred merely as security and on the  basis  the  property  would  be  held  for  two  years  and  transferred  back  upon payment of $288,750 plus 10 per cent interest secured against “my transfer of quota to him”.  Mr Reriti provides his calculation of that sum as comprising:

(a)       $78,750 - was paid “by Mr Preece as a loan secured” against 63,888 shares of crayfish quota.

(b)      $200,000 - I was to receive from Mr Preece as a loan secured against

921,854 quota shares of blue cod (7 tonnes) (transaction 3).  Mr Reriti says that he believed the page of the share transfer form attached to Mr Preece’s first affidavit incorrectly recorded the sum of $92,000 was to be paid for the blue cod.

(c)       $10,000 – that was paid “as a loan secured against quota shares in

blue cod, hapuka bass and school shark”.

[42]     Noting  that  Mr  Preece  had  referred  to  Mr  Reriti’s  separation  Mr  Reriti explained that in 2008 he separated from his partner of 27 years.

[43]     Concerning transaction 1 Mr Reriti says the quota “was transferred to be held as security.  He says this is the reason Mr Preece has not sold it as he has other quota transferred to him”.

[44]     Concerning transaction 2 Mr Reriti now accepts that “this was a straight sale of paua quota to Mr Preece”.

[45]     He adds:

[8]       … At the time I had another purchaser lined up.  In order to convince me to sell to him for the price he had, he offered to give me $10,000 per tonne after he sold this off.  I was told that he would purchase the quota from me and sell it at public tender as he would earn a profit.  At the sale of this tender he promised me he would make payment of $10,000 per tonne.

[53]      It is for this reason Mr Reriti says he sold the quota to Mr Preece and not to another named person “who was also in a position to sell the quota at public tender”.  Mr Reriti says that after Mr Preece sold the quota “he did not immediately make payment to me of the funds that he had promised. Four tonne was sold and there was an outstanding amount of $40,000 owing to me that he was holding in trust for me”.

[46]     Regarding transaction 3 and the transfer of 7 tonne of blue cod quota and 1.3 tonne of paua quota Mr Reriti reasserts that the blue cod transfer was not a sale. Regarding the transfer of the paua quota Mr Reriti was disappointed that Mr Preece still had not paid him the “promised $40,000 [commission] from transaction 2”.  He said Mr Preece promised to place the further 1.3T of paua quota at a public tender and make payment to him in the amount of a further $30,000 upon that being sold. He said that upon the paua quota being sold he was then owed $70,000 including the

$40,000 earlier promised.

[47]     It is in regard to transaction 3 that Mr Reriti expands upon his claim that Mr Preece promised to advance $200,000 in relation to the transfer of the Blue Cod Quota, and not the sum of $92,000 that was recorded in the exhibit attached to Mr Preece’s first affidavit.

[48]     Although it was not mentioned in Mr Reriti’s first affidavit in his second

affidavit he claimed the security value of the blue cod shares was $200,000 and not

$92,000 as shown by the transfer document he has annexed.  By his second affidavit he plainly suggests a copy of the transfer document exhibited by Mr Preece was a forgery because the front page contained no transfer verification from FishServe.  Mr Reriti appears to be suggesting that because he received $108,000 less than he expected he should then receive a credit in that sum against that which he calculates is due to Mr Preece by way of repayment of the loan.

[49]     Mr Reriti acknowledged signing the second page of that document which Mr Preece  had  attached  to  his  affidavit,  for  indeed  it  bears  a  copy  of  Mr  Reriti’s signature and is dated 8 September 2009.

[50]     Of this document Mr Reriti deposes:

[42]      I signed the last page of the transfer but I believe the front page has been altered by Mr Preece to lower the transfer price by $108,000.   The transfer was not registered with the Ministry of Agriculture and Fisheries [FishServe] as would be evident at the bottom of the document where the transfer is certified with department stamps.

I based my calculations for repayment [to Mr Preece in consideration of the return of the shares to Mr Reriti] on a $200,000 payment for 921,954 Quota shares.  This was incorrect.  The amount I will need to repay to recover the land and shares is actually $180,750 being $288,750 minus $108,000 which was the amount missing from the amount I assumed was advanced for Blue Cod…  I was to be paid $200,000 but only received $92,000.

[51]     Regarding transaction 4 Mr Reriti reasserts that it was not a sale but that the transfer was made for the purpose of offering security for his advance.

[52]     Concerning transaction 5 Mr Reriti deposes that they having completed four transactions he thought he had received most of the funds promised to be advanced to him.  However he says Mr Preece had not paid the $70,000 owing to him that had been promised [by way of commission] upon the sale of the paua quota.  Mr Reriti then says:

[16]      This left us at a position where I was owed $70,000 however I owed Mr Preece $288,750.  Mr Preece was in possession of the quotas as specified in transactions one, three and four.  Mr Preece was loaning the money for it to be paid back in two years time.  He evaluated the value of the quota he has as security.  He informed me that he felt he did not have enough security and did not want to transfer me the $70,000 which was owing.

It was this $70,000 that led to the transfer of the [Chatham Islands] property.

[53]     Mr Reriti then provides his account in rejecting Mr Preece’s claim that there had been no discussion of the kind around the transfer of the property.   Mr Reriti explains the difficulties he faced returning to the Chatham Islands and because “all my assets were tied up in relationship property and my ex-partner was becoming increasingly difficult”.  He said he agreed to the transfer for a period of two years because it was of mutual benefit to them both and would give Mr Preece greater

security for the funds advanced and would give him “the confidence to transfer me

the $70,000 that was owing to me”.

[54]     Mr Reriti then explained, from his viewpoint, that the transfer meant that his ex-partner would no longer be able to bring a relationship property claim against the property “and would not be able to otherwise interfere with it”.

[55]     Mr Reriti claims he discussed this with Mr Preece and:

[20]     … This was a major part of the motivation for the transaction.  The

$70,000 was not paid in consideration for purchasing the property, but we wanted to execute the documentation for the transfer to show the property

had been transferred at value to prevent my Ex-partner claiming I had “given

it away” or tried to keep it away from her.

[56]     Mr Reriti said the property was Maori Freehold Land and that he was unable to transfer it to just anyone because it had to be offered first to a relative.  In this regard he attaches a copy of a letter dated 3 December 2009 from his solicitors, Saunders & Co, to Mr Preece.  Mr Reriti said that Mr Preece was “a cousin of mine through my father’s side.   We are both from Ngati Tahu and Ngaiti Mutunga and therefore Mr Preece was eligible to have the land transferred to him.

[57]     Mr Reriti says a further reason for the transfer of the property was to enable Mr Preece to give notice to existing tenants to vacate it, and because Mr Reriti wanted access to the property to conduct his fishing charter business.

[58]     Mr Reriti then described efforts he had made to meet with Mr Preece and to discuss the return of quota and his property to him.   Mr Reriti includes details of about when and where discussions in this regard took place.

[59]     Mr Reriti’s firm position is that he would have never have entered into a

transaction to sell the property for a price that was “a fraction of its actual worth”.

[60]     Referring to Mr Preece’s opposition affidavit in which comment was made regarding Mr Preece’s failure to advise his solicitors that the sale and purchase of the property was instead all about providing security for  advances made,  Mr Reriti responds:

The reason was that a primary motivator for transferring the property to Mr Preece was that I wanted to keep the property away from my ex-Partner, to prevent her from lodging any relationship claim over the property and to evict the tenants.

I did tell Ernie Tait at Malley & Co that my intention was to transfer the property to keep this away from my ex-partner.  Mr Tait advised me not to do this as he believed that she would stop the transaction by lodging a caveat on the title.  Because of the fact that he was so against me conducting the proposed transaction, I stopped using Malley & Co and went to Saunders & Co.  The solicitor I used at Saunders & Co, Amelia Simpson, was a personal friend of my ex-partner, Trace MacLean.  I was worried that she would take me out of the transaction or otherwise cast some adverse comment on it if I told her the reasons behind it.   For this reason it was important to me to present this as merely a sale and purchase agreement on the papers.  I did not tell her any of the details and allowed her to think it was a straight sale.

Mr Preece’s reply affidavit

[61]     Mr Preece was aware in 2009 that Mr Reriti had separated from his partner and that there was a relationship property dispute.   He said “this was common knowledge on the Chatham Islands”.  Mr Preece was aware Mr Reriti needed to raise money in order to pay out his former partner but he denies any agreement with Mr Reriti that he “…would be able to acquire back a number of these quotas”.   Mr Preece saw the opportunity to buy “from him and did it in the usual course of his business”.

[62]     Mr Preece retains the quota transferred by transaction 1.   He believes the crayfish quota price is likely to rise and believes there is a long-term gain to be made.  He will sell it when the right price is offered.

[63]     Regarding transaction 2 Mr Preece notes that Mr Reriti now accepts it was a sale.   Mr Preece recalls Mr Reriti mentioning he had a potential purchaser and proposed that if Mr Preece was able to sell to that purchaser he, Mr Reriti, should get

$10,000 per tonne by way of commission.   He said Mr Reriti insisted Mr Preece draw up a commission agreement recording that arrangement.  Mr Preece said he did not want to do so because that would have meant he would get no profit on the transaction himself.

[64]     Mr Preece commented that Mr Reriti then insisted he wanted to be paid

$70,000 in cash for the transaction so that there would no record of it.  Whilst Mr Preece made enquiries in regard to that proposal it did not proceed.  Mr Preece said the transaction did not go any further because he did not sell to the purchaser that Mr Reriti  said  he  had  lined  up.    Mr Preece  said  that  the  deal  Mr Reriti  proposed depended on him selling the quota by public tender and getting a price that was

$10,000 more than Mr Reriti had sold the quota to Mr Preece for.

[65]     In  respect  of  transaction  3  Mr  Preece  notes  that  Mr  Reriti  accepts  the transaction involving 1.3 tonne of paua quota was a sale but that however he claims to be entitled to some commission on the resale.  He denies this and notes no other evidence is offered in support of it.

[66]     Regarding Mr Reriti’s suggestions that the first page of the transfer document was a forgery because of Mr Reriti’s belief that a sum of $200,000 had been offered as payment for the blue cod quota, Mr Preece attaches a copy of the original transfer document that was registered with FishServe in connection with the transfer.  That document is stamped by FishServe as having been received on 29 September 2009 and contains the signature of an officer within that office.  It confirms the transfer price of $92,000 and not $200,000 as Mr Reriti claims.

[67]     With regard to transaction 4 Mr Preece denies there was any agreement that Mr Reriti would be able to lease back the quota transferred for a price of $16,000 and not as Mr Reriti claims for a price of $10,000 plus GST and interest.

[68]     It is with respect to transaction 5 that Mr Preece focuses most of his attention. He said there was never any talk about the transfer occurring because of him wanting more security.  There were never any loans because all of the transactions concerned sales.

[69]     Mr Preece negotiated a price of $70,000 because Mr Reriti needed the money urgently.  Mr Preece said Mr Reriti was permitted to rent the property for $100 per week plus GST but no invoices were paid and consequently the matter has been referred to a debt collection agency.

[70]     Mr Preece purchased the property because he considered it was a good long term investment.   Mr Preece was aware Mr Reriti was involved in a relationship property dispute.  Mr Reriti has never paid rates or rent on the property since.

[71]     Mr Preece rejects suggestions that he was party to a transaction that would have resulted in Mr Reriti defrauding his ex-partner.   He comments that if as Mr Reriti claims there was an agreement to transfer the property back to him then Mr Reriti would still have had an interest in the property and would have had to account to his ex-partner for it.  Mr Preece says he wanted no involvement at all with any relationship property dispute.

[72]     Concerning the claims of Mr Reriti and his solicitors that the property was Maori freehold land he annexes a copy of a letter from the Maori  Land Court confirming the land in question was not Maori freehold land nor subject to any restrictions on transfer.  Also, Mr Preece has no reason to believe he is a cousin of Mr Reriti even though their tribal background associations are similar.

[73]     Mr Preece recalls some contact with Mr Reriti including an occasion when Mr Reriti asked if he could buy the land back.   Mr Preece’s response was that provided Mr Reriti paid the rent owed and the rates then he might think about it.  He said Mr Reriti became annoyed and threatened him.

[74]     Mr Preece is clear that the reason for the transfer of the land to him was because he had bought it and that the transfer had nothing to do with further security being required for money advanced because he never advanced any money at all to Mr Reriti.  Also he would not have been prepared to take part in any fraud upon Mr Reriti’s ex-partner.

Considerations

[75]     The focus of submissions on behalf of Mr Reriti has been to encourage the Court not to draw any conclusions concerning the disputes between the affidavit accounts of Mr Reriti or Mr Preece.  That is understandable for the weight of case authority urges caution.  And it is usual that when a caveator has shown an arguable

case for a caveatable interest that the caveat remain in place until a trial can be arranged.

[76]     As earlier noted the Holt case was authority for the proposition that caveats can be sustained where the claim of an interest rests on an oral agreement.  However in that case there was no issue about there being an oral agreement, rather what the terms of it were.

[77]     On the other hand, a Court may make an order to remove a caveat if of the view there was no valid ground for lodging it in the first place or for it remaining in place any longer.

[78]     Also the mere fact that there is a dispute concerning critical evidence does not prevent a Court from discounting the account of one side where their evidence is improbable or inconsistent with relevant contemporary and reliable written record.

[79]     It appears from Mr Reriti’s first affidavit that except in relation to transaction

2,  all  other  transactions  did  not  involve  sale  but  rather  loans  by Mr  Preece  in consideration for security being provided over fish quota or Mr Reriti’s property.  In relation to transaction 2 Mr Reriti’s claim is for a commission calculated at $10,000 per tonne of blue cod quota sold.

[80]     The  transfer  of  quota  was  documented,  indeed  as  was  by  law  required through the services of FishServe.  The documents provided as evidence to the Court do not support claims of loans or the offer of security for advances.  If that had been Mr Reriti’s purpose then a mortgage interest could have been registered.  In this case there was no such registration.

[81]     Mr Reriti’s initial evidence was that transactions 1, 3, 4 and 5 were all about the transfer of property as security for advances.   That position appears to have changed with the evidence he provided in his second affidavit.   In particular with respect of transaction 3 he appears to acknowledge the sale of quota because he now identifies the sum of $30,000 as a commission payable to him in that regard.

[82]     Mr Reriti has strongly suggested fraud on the part of Mr Preece in relation to transaction 3.  He suggested the figure of $92,000 for the transfer of blue cod quota was changed and should have been $200,000.   He claims the lack of a document showing that FishServe had processed the transfer, was evidence of the fraud.  The Court now has evidence that the figure of $92,000 was the correct figure because FishServe has provided its copy of the transfer document which shows its receipt and signature having been endorsed.

[83]     Mr Preece used solicitors to assist him with transactions 4 and 5.  It is clear, as Mr Reriti acknowledges that his solicitors were not given instructions in relation to the offer of quota as security, for clearly their documents record an agreement for sale and purchase of that quota.  Likewise Mr Reriti did not inform his solicitors that transaction 5 was undertaken for any purpose other than to affect a sale of the property to Mr Preece.

[84]     Mr Reriti explains his reason for his deception on account of his purpose being  to  conceal  from  his  former  partner that  he was  disposing of  relationship property.  Mr Reriti said he had informed a former solicitor of this purpose and that is why that solicitor would not act for him.  That is why it appears, Mr Reriti did not inform his second solicitors, Saunders & Co of this background purpose.  But, if as Mr Reriti contends he has a caveatable interest then it must follow that his former partner will have a claim in respect of that interest.  In short there was nothing to have been gained by the deception Mr Reriti says he created.

[85]     The legal documentation provided in relation to transactions 4 and 5 show nothing in support of Mr Reriti’s claim of an ulterior motive on Mr Reriti’s behalf. The settlement statement prepared by his solicitors in connection with the property sale even provided for an apportionment of rates.

[86]     Claims of a commission for quota that Mr Reriti now acknowledges was sold by Mr Preece may have been the subject of a discussion with Mr Preece but the property was not sold to Mr Reriti’s third party purchaser recommendation.  Why then would Mr Preece agree to receive $10,000 per tonne less than he had on-sold the quota for on the open market. This suggestion defies commonsense.

[87]     It appears in his dealings with his solicitors Mr Reriti has been economical with the truth.  Also, if the property was as valuable as Mr Reriti now claims it was, then there would have been no impediment to him arranging a mortgage over the security  of  that  property.    Also  why  has  not  Mr  Reriti  before  now  brought proceedings for the recovery of the property he says is his.  By his account he could have done this as early as January 2012.

[88]     The evidence of Mr Preece that he was a broker and not a banker, that he purchased the quota and the property and did not advance money upon the security of that property, is acceptable.   Mr Reriti’s evidence to the contrary is simply not credible.

[89]     A first sight it appears the Court could be forgiven for concluding there was an element of complexity about the arrangement such that an element of truth might lie within.   Mr Reriti has managed to relate the figure of $70,000 paid for the property to his calculation of the sum of $70,000 owed to him as commission upon the on-sale of fish quota.  It is quite clear however that his calculation of commission in relation to transaction 3 was significantly different from his calculation in relation to transaction 2.

[90]     It is a fact that by the manner of his presentation of a claim of retaining an interest in the property Mr Reriti is attempting to rely on his own fraud in order to assert the claim of a trust.   By not telling his solicitors about his purpose he was attempting to rely on his own dishonesty.

[91]     Also he has endeavoured to mislead the Court as to his perceptions of the value of the property sold to Mr Preece because he has offered in support of his idea of value in 2009, a council rates assessment dated March 2013.

Summary

[92]     Mr Reriti has portrayed himself and Mr Preece as unsophisticated persons who relied on their word and their handshake rather than upon any concern for legal

formality.   That, despite the fact that all transactions were witnessed by legal documentation and in respect of two of those the services of lawyers were used.

[93]     There  are  certain  obvious  cases  where  despite  a dispute  over  significant issues it is plain to the Court whose account is credible and supportable and whose account is not.

[94]     Mr Reriti has no supportable credible claim of an interest in the property and therefore his caveat cannot be sustained.

[95]     Mr  Ruane  submitted  in  conclusion  that  the  parties’  transactions  were relatively straightforward matters, although the underlying nature of same appeared to be complicated.  He submitted that the assertions made by Mr Reriti were simply incredible and rely on the Court accepting that he was acting dishonestly in relation to transaction 5 and that he should be rewarded for his dishonesty.

[96]     It is not an unfair assessment.  Mr Reriti’s claim lacks credibility.  It invites sympathy when there is no proper ground for such.   It suggests complexity but assumes Mr Reriti’s claims have credibility or at least that those ought to be tested by a trial process. The Court disagrees.

[97]     The claim of a caveatable interest fails.

Judgment

[98]     The application to sustain the caveat is dismissed.

[99]     Mr Reriti is to pay costs calculated on a 2B basis together with disbursements approved by the Registrar.

Associate Judge Christiansen