Scott v Rawenata
[2022] NZHC 563
•24 March 2022
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2021-419-187
[2022] NZHC 563
UNDER Part 19 of the High Court Rules and the Land Transfer Act 2017 IN THE MATTER
of an application for an order altering the Land Transfer Register in respect of RT
SA10C/179 by cancelling the interest of the First Respondents in that Title and restoring the names of the Applicants to that Title
BETWEEN
CAMERON ROY SCOTT and SUZANNE MARGARET SCOTT
Applicants
AND
ANTHONY RAWENATA and 57 OTHER OWNERSHIP INTERESTS
First Respondents
REGISTRAR GENERAL OF LAND
Second RespondentMĀORI LAND COURT
Third Respondent
Hearing: On the papers (with telephone conference on 1 March 2022 and joint memorandum dated 10 March 2022) Counsel:
C Grenfell and N Brodnax for the Applicants N Anderson for the Second Respondent
D Harris for the Third Respondent
Judgment:
24 March 2022
JUDGMENT OF GAULT J
This judgment was delivered by me on 24 March 2022 at 4:30 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
SCOTT and SCOTT v RAWENATA and 57 OTHER OWNERSHIP INTERESTS [2022] NZHC 563 [24 March 2022]
[1] The applicants, Mr and Mrs Scott, seek an order cancelling the interest of the first respondents in a block of land known as the Whangaingatakupu 2C Block (2C Block)1 and restoring the applicants as registered owners.
[2] The Court granted leave to the applicants to bring the proceeding by way of application under Part 19 of the High Court Rules 2016,2 and subsequently made an order that the third respondent was to effect service on the first respondents by:3
(a)placing an advertisement of the proceeding and the directions of this Court in relevant newspapers throughout the Waikato/Maniapoto District by 1 October 2021; and
(b)sending a copy of the proceeding, together with the directions of this Court, to any of the first respondents for whom it has contact information by 1 October 2021.
[3] Following service, there has been no appearance or opposition by any of the first respondents. The second and third respondents consent to the order sought. It is therefore appropriate to determine the matter on the papers.
Factual background
[4] Mr and Mrs Scott own a farm property at Te Rauamoa, not far from Pirongia. The 2C Block was not part of the original family farm but Mr Scott bought it in 1981 and it was transferred into his name. It became part of the family farm.
[5]In 1997, Mr Scott mortgaged the property to the Bank of New Zealand.
[6] In 2003, Mr Scott transferred the family farm, including the 2C Block, to himself and Mrs Scott as tenants in common in equal shares.
1 Record of Title SA10C/179.
2 Minute/Directions of Venning J dated 2 September 2021.
3 Minute of Peters J dated 23 September 2021.
[7] In early 2021, Mr and Mrs Scott decided to change banks. When their solicitors received and actioned the mortgage instructions from their new bank, their solicitors searched the various titles to the properties and found that on 13 July 2009 the second respondent, the Registrar General of Land, had registered a Consolidated Order issued by the third respondent, the Māori Land Court. The effect of the Consolidated Order (and subsequent Court orders) registered against the title is to show the first respondents as registered owners. This was a surprise to Mr and Mrs Scott.
[8] The Registrar General of Land and the Māori Land Court agree that registration of a Consolidated Order against the title to Block 2C was an error. This arose as follows.
[9] The 2C Block is the subject of two records of title, which occurred in 1969 when the Māori Trustee transferred the fee simple (excluding mines and minerals) to Jack Kiore and Waiporaoa Kiore:4
(a)Title SAPR254/103 which relates to the mines and minerals in, on, or under the 2C Block. This title became part cancelled in 1969.
(b)Title SA10C/179 which relates to the fee simple but excludes mines and minerals in, on, or under the ground. This title was derived from SAPR265/103.
[10] In other words, when the title to the subject land (SA10C/179) was issued, the mines and minerals in, on, or under the ground were expressly retained in SAPR265/103.
[11] The Consolidated Order was made in the Māori Land Court in Hamilton on 19 June 2009 for registration against SAPR265/103, the title giving rights to the mines and minerals under the 2C Block.
4 Upon registration of transfer, the subject land ceased to be Māori freehold land by operation of s 2(2)(f) of the Māori Affairs Act 1953.
[12] The Māori Land Court presented the Consolidated Order to Land Information New Zealand (LINZ) for registration with a two page memorandum referring to “LINZ title Reference SA10C/179” instead of “SAPR265/103”. Likewise, the registration Abstract presented by the Māori Land Court to LINZ also referred to the incorrect title.
[13] Neither the Scotts, their solicitors nor Bank of New Zealand received any notification of intention to register the Consolidated Order. Until the Scotts wanted to refinance their bank borrowing in 2021, they had no reason to search the title.
Service / notice
[14] Following the Court’s order as to service on the first respondents, on 30 September 2021 the third respondent sent copies of the proceeding and associated directions to all of the first respondents for whom it held contact information. 18 of the 37 letters sent were returned to sender.
[15] On 2 October 2021, an advertisement of the proceeding and the directions of the Court was published in the Waikato Times. This was a day later than directed but does not give rise to any prejudice.
[16] Given uncertainty as to the notice requirements for correction of the register by the Registrar General of Land,5 I agree that seeking an order from the Court under s 55 of the Land Transfer Act 2017 is appropriate.
Relevant legal provisions
[17]Sections 54, 55 and 56 of the Land Transfer Act 2017 provide:
54Application to court for order for alteration of register
(1)This section and sections 55 to 57 apply to a person (person A) who—
(a)has been deprived of an estate or interest in land by the registration under a void or voidable instrument of another person (person B) as the owner of the estate or interest in the land; or
5 Under s 21(1) of the Land Transfer Act 2017.
(b)being the owner of an estate or interest in land, suffers loss or damage by the registration under a void or voidable instrument of another person (person B) as the owner of an estate or interest in the land.
(2)Person A may apply to the court for an order under section 55.
(3)An application for an order must be made not later than 6 months after person A becomes aware, or ought reasonably to have become aware, of the acquisition of the estate or interest by person B.
(4)The applicant must serve notice of the application on—
(a)the Registrar; and
(b)the registered owner of every estate or interest in the land and every person noted on the register as entitled to an interest in the land; and
(c)any other persons as the court directs.
55Court may make order only in cases of manifest injustice
(1)The court may make an order cancelling the registration of person B only if it is satisfied that it would be manifestly unjust for person B to remain the registered owner of the estate or interest.
(2)For the purpose of subsection (1), the existence of forgery or other dishonest conduct does not, of itself, constitute manifest injustice.
(3)An order under this section may be made only if the court is satisfied that in the circumstances the injustice could not properly be addressed by compensation or damages, whether under subpart 3 or otherwise.
(4)In determining whether to make an order, the court may take into account—
(a)the circumstances of the acquisition by person B of the estate or interest; and
(b)failure by person B to comply with any statutory power or authority in acquiring the estate or interest; and
(c)if the estate or interest is in Māori freehold land, failure by a person to comply with Te Ture Whenua Maori Act 1993; and
(d)the identity of the person in actual occupation of the land; and
(e)the nature of the estate or interest, for example, whether it is an estate in fee simple or a mortgage; and
(f)the length of time person A and person B have owned or occupied the land; and
(g)the nature of any improvements made to the land by either person A or person B; and
(h)the use to which the land has been put by either person A or person B; and
(i)any special characteristics of the land and their significance for either person A or person B; and
(j)the conduct of person A and person B in relation to the acquisition of the estate or interest; and
(k)any other circumstances that the court thinks relevant.
(5)The court may make an order under this section on any conditions that the court thinks fit (for example, an order relating to possession of the land).
56Court must not make order if estate or interest transferred to third person
The court must not make an order under section 55 if person B has transferred the estate or interest to a third person, that third person acting in good faith.
Discussion
[18]I deal with the requirements of ss 54 to 56 in turn.
[19] First, s 54(1)(a) applies to persons who have been “deprived of an estate or interest in land by the registration under a void or voidable instrument of another person (person B) as the owner of the estate or interest in the land”. I am satisfied that Mr and Mrs Scott have been deprived of an interest in land by the registration under a void or voidable instrument. The Consolidated Order itself is not void, that is of no legal effect,6 in respect of SAPR265/103. However, its registration in respect of SA10C/179 is void or voidable. The Consolidated Order does not relate to the subject land. Its registration against SA10C/179 was a mistake that requires, and is capable of, rectification by Court order.
[20] I raised with counsel whether the additional words “of another person” in s 54(1)(a) required person B to be involved in registering or creating the void or voidable instrument. That interpretation appeared open on the text since those words immediately follow the words “under a void or voidable instrument”, but statutory meaning is to be ascertained from the text in light of its purpose and its context.7 If the
6 Mau Whenua Inc v Shelly Bay Investments Ltd [2019] NZHC 3222, [2019] 20 NZCPR 923 at [65].
7 Legislation Act 2019, s 10(1). See also Allied Concrete Ltd v Meltzer [2016] 1 NZLR 141 (SC) at [55] applying s 5(1) of the Interpretation Act 1999.
relevant statutory purpose is not clear from the statute itself, it may be informed by any relevant background material. Counsel’s helpful memorandum indicated that the meaning of the additional words – or the underlying question whether the limited exception to indefeasibility intended by ss 54-57 may extend to an innocent party – was not specifically addressed in the Parliamentary process.
[21] Having regard to purpose and context as well as the text, I consider the words “of another person” refer to the registration of that person (person B) as owner, rather than to person B’s actions in relation to the instrument. As submitted, it is the registration of person B as owner that deprives person A of the estate or interest in land under s 54(1)(a) or causes loss or damage under s 54(1)(b). The words “under a void or voidable instrument” refer to the means by which person B must have become the registered owner. The additional words “of another person” do not require that person to be involved in registering the void or voidable instrument even though that may often be the case. Of course, such involvement will be relevant to whether an order is appropriate. Section 54 and ss 55-57 need to be read together;8 s 54 is only the gateway. The broad range of relevant factors in s 55 support this interpretation of s 54(1)(a). In particular, they recognise that person B may also be an innocent party. Further, the alternative interpretation may have the unintended effect of enabling a person who was fraudulently involved in registering or creating a void or voidable instrument to avoid the application of the provisions by registering in the name of a related but innocent third person.
[22]Therefore, I consider that s 54(1)(a) applies here.
[23] In terms of s 54(3), the application was filed within the six month period after the Scotts became aware, or ought reasonably to have become aware, of the acquisition of the estate or interest by the first respondents. As indicated, the Scotts did not receive notification of intention to register the Consolidated Order, and until they wanted to refinance their bank borrowing in 2021, they had no reason to search the title.
[24] The service requirements in s 54(4) have been met given substantive compliance with the Court’s order for (substituted) service.
8 Mau Whenua Inc v Shelly Bay Investments Ltd [2019] NZHC 3222, [2019] 20 NZCPR 923 at [63].
[25] In terms of s 55, I am satisfied that it would be manifestly unjust for the first respondents to remain registered owners of the interest in land and that the injustice could not properly be addressed by compensation or damages, taking into account the relevant factors in s 55(4). The first respondents acquired their interests as a result of acknowledged errors on the part of the Registrar General of Land and the Māori Land Court, without the Scotts’ knowledge. Block 2C has been part of the Scott family farm since 1981. Mr Scott has been in occupation of the land since then, with Mrs Scott also becoming a registered owner in 2003. There is no suggestion that the first respondents have occupied the land, nor made any improvements to it, since the mistaken registration. Block 2C is landlocked and, except for some boundary with Crown land, shares common boundaries with the rest of the Scotts’ farm. Once the Scotts became aware of the mistake, they took steps promptly to correct it. The first respondents have not opposed the application.
[26] Finally, in terms of s 56, there has been no transfer of the interests in land to a third person. The subsequent consequential orders of the Māori Land Court which have been registered against the title since 2009 do not amount to transfers for the purpose of s 56.
[27]For these reasons, the order sought by Mr and Mrs Scott is appropriate.
[28] It is also appropriate to register the relevant orders of the Māori Land Court against the correct title, SAPR265/103.
Costs
[29] The Scotts also seek an order that the respondents pay the legal and other costs incurred in restoring them as registered proprietors. This claim is yet to be quantified. There is no suggestion the first respondents should pay costs. The second respondent is prepared to consider a claim for compensation (together with the Attorney-General if the claim exceeds $10,000). I agree that in this respect the proceeding should be adjourned for three months for the applicants to quantify their claim and for the second respondent to consider it.
Result
[30]I make the following orders:
(a)Pursuant to s 55 of the Land Transfer Act 2017, the second respondent is directed to:
(i)remove the Consolidated Order of the Māori Land Court dated 19 June 2009 (13 Otorohanga MB 127-129) and a subsequent order of the Chief Judge dated 13 May 2020 (2020 Chief Judge’s MB 134-136) from SA10C/179;
(ii)restore Cameron Roy Scott and Suzanne Margaret Scott as registered owners (as tenants in common in equal shares) of the fee simple estate in SA10C/179; and
(iii)register the Consolidated Order of the Māori Land Court dated 19 June 2009 (13 Otorohanga MB 127-129) and a subsequent order of the Chief Judge dated 13 May 2020 (2020 Chief Judge’s MB 134-136) against SAPR265/103.
[31] The proceeding is adjourned for a period of three months for the applicants to quantify their claim for compensation under s 58(1) of the Land Transfer Act 2017 and for the second respondent (and, if necessary, the Attorney-General) to consider that claim.
Gault J
Solicitors / Counsel:
Mr C Grenfell and Ms N Brodnax, Edmonds Judd, Te Awamutu Mr N Anderson, Crown Law, Wellington
Ms D Harris, Crown Law, Wellington
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