Sergeant v Nigro
[2019] NZHC 328
•4 March 2019
IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY
I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE
CIV-2019-470-8
[2019] NZHC 328
UNDER the High Court Rules and the Residential Tenancies Act 1986 IN THE MATTER
of appeal against the decision of the District Court decision dated 24 January 2019
BETWEEN
CHARLES TE TOKOTU SERGEANT
Appellant
AND
ADRIENNE MAREE NIGRO AND
MICHAEL JOHN TAPSELL as trustees of the Tapsell Family Trust
Respondents
Hearing: 15 February 2019 Appearances:
G J Denize for the Appellant
M Ward-Johnson, for Respondents
Judgment:
4 March 2019
JUDGMENT OF GORDON J
This judgment was delivered by me on 4 March 2019 at 4.00 pm, pursuant to
r 11.5 of the High Court Rules
Registrar/Deputy Registrar Date:
Solicitors: Keam Standen, Tauranga
Chris Rejthar & Associates, Tauranga
Counsel: G J Denize, Tauranga
M Ward-Johnson, Tauranga
SERGEANT v NIGRO [2019] NZHC 328 [4 March 2019]
Introduction
[1] This is an appeal against a decision of Judge Mabey QC in the Tauranga District Court dated 24 January 20191 upholding an order of the Tenancy Tribunal (the Tribunal) under the Residential Tenancies Act 1986 (the Act) in Tauranga dated 29 October 2018.2
[2] By that order, the respondents, Adrienne Nigro and Michael Tapsell, as trustees (the trustees) of the Tapsell Family Trust (the trust), were granted possession of the residential premises at 23 Otimi Street, Maketu, RD 9, Paengaroa (the property).
Background
[3] The appellant, Charles Sergeant, had been in a long-term de facto relationship with Maureen Tapsell. Mrs Tapsell originally owned the property jointly with her late husband. After her husband’s death, the property was transmitted into Mrs Tapsell’s sole name.
[4] After her husband had died, Mrs Tapsell and Mr Sergeant started a relationship. The two of them lived in the property from about 1993 throughout their relationship, apart from a period between 2006 and 2008.
[5] In 2001, Mr Sergeant and Mrs Tapsell signed an agreement pursuant to the Property (Relationships) Act 1976 designating the property as Mrs Tapsell’s separate property (the Relationship Property Agreement).
[6] The trust was created by deed on 19 June 2003 with Mrs Tapsell as the settlor. The property was transferred to the trustees of the trust in 2005. The trustees at that time were Mrs Tapsell and the trustees in this proceeding (who are her children). Mrs Tapsell died in 2016 and Mr Sergeant has continued to live in the property. He has not paid rent and the trustees have continued to meet on-going obligations and outgoings relating to the property.
1 Sergeant v Nigro [2019] NZDC 1060.
2 Nigro v Sergeant [2018] NZTT Tauranga 4141733.
[7] The property is subject to a mortgage to the Heartland Bank securing a debt in the form of a reverse annuity mortgage. The debt is due for repayment six months after the death of the nominated resident of that property. Mrs Tapsell was the only nominated resident.
[8] The Heartland Bank has issued a Property Law Act notice demanding repayment, calling up the sum of approximately $159,000, and there is a threat of a mortgagee sale.
Other proceedings
[9] The bundle of evidence before the Tribunal (which was also before the District Court Judge) contained or referred to documents in five other proceedings. Four of those proceedings3 are brought by Mr Sergeant and one is brought by the trustees. I refer to three of those brought by Mr Sergeant as follows:
(a)A claim in the High Court against the executors of the estate of Mrs Tapsell and the trustees challenging the validity of the 2001 Relationship Property Agreement. Mr Sergeant pleads that if the agreement is invalid, then the transfer of the property to the trust is equally invalid, and the trustees have no right to demand possession of the property. He further pleads that he has an interest in the property under a constructive trust. Mr Sergeant seeks orders, amongst others, setting aside the Relationship Property Agreement, transferring the property from the trust to Mrs Tapsell’s estate and declaring that the trustees hold an equal share of the property as trustees on his behalf.
After the hearing in the Tribunal, Mr Sergeant filed a further amended statement of claim dated 31 October 2018, which included a pleading that he had a reasonable expectation of an interest in the property including, but not limited to, a right to occupy the property for the remainder of his life. As part of the amended relief, Mr Sergeant seeks
3 Although there is a reference to four proceedings, the detail of one (said to be a claim under the Family Protection Act 1955 against Mrs Tapsell’s estate) was not contained in the bundle which was before me.
a declaration that he is entitled to remain in the property for the remainder of his life or such time as his health will allow him to remain in the property.
The claim is yet to be heard in the High Court.
(b)An application dated 14 July 2017 in the Family Court for orders under the Property (Relationships) Act 1976 brought against the executors of Mrs Tapsell’s estate and the trustees seeking an order setting aside the 2001 Relationship Property Agreement and other orders.
In an affidavit (undated) sworn in support of that application, Mr Sergeant deposes as to a demand served on him by the trustees that he vacate the property by 19 October 2016, failing which the trustees would seek an order from the court to remove him from the property.
The current status of this proceeding was not made clear to me.
(c)An application to sustain a caveat against dealings in the property. It is not clear when that application was filed. In his affidavit, referred to in [9](b) above, Mr Sergeant deposed that the trustees attempted to evict him from the property after Mrs Tapsell died. He says he resisted the eviction by registering a caveat to protect his interest in the property.4
[10] On 3 May 2018, the trustees filed a claim in the High Court seeking to remove the caveat referred to in [9](c) above. The trustees, as plaintiffs, sought an order under s 143 of the Land Transfer Act 1952 removing both the caveat lodged by Mr Sergeant against the property and the Property (Relationships) Act Notice. The trustees, in that proceeding, also sought an order for possession of the land, requiring Mr Sergeant to vacate the property.
4 On 18 November 2016 Mr Sergeant lodged a caveat against the property.
[11] The application in the Tribunal in this proceeding was first called on 11 July 2018 and was adjourned pending the outcome of the trustees’ application in the High Court referred to in [10] above.
[12]Judgment was given by Associate Judge Andrew on 8 August 2018.5
[13] The judgment records that the trustees, for the purposes of those proceedings, did not take issue that Mr Sergeant had a arguable case to sustain the caveat. Rather, the trustees sought a discharge of the caveat and notice on terms they submitted would protect Mr Sergeant’s interests.6
[14] The trustees sought orders for discharge on condition that 50 per cent of the net sale proceeds of the property be held in their solicitor’s trust account, with an undertaking that the funds would not be disbursed pending resolution of Mr Sergeant’s claims against the property.
[15] The Judge did not consider the substantive issues between the parties but focussed on whether the caveat could be removed without prejudicing Mr Sergeant’s interests. The Judge concluded:
[26] I accept that the property has been Mr Sergeant’s home for a considerable time and that he is now of advanced years. It may well have been a special place for him. However, he has been living there for over two years following the passing of Maureen Tapsell and unless the plaintiffs are given the option of selling the property, the obvious disadvantages of a mortgagee sale seem inevitable. …
[27] I find that the plaintiffs’ proposal of removing the caveat and notice and substituting a fund of money under the control of the Court, is a reasonable way to accommodate the interests of Mr Sergeant. There is substantial equity in the property7 held by the plaintiff trustees and the proposal that 50 percent of the sale proceeds be held in a solicitor’s trust account is, in the circumstances, a reasonable one. …
[28] For reasons outlined above, I find that the defendants proposal that he remain living at the property and pay rent to cover mortgage payments and other expenses, is not a realistic one. The options available are limited and the issue of the plaintiffs’ proposal reasonably accommodating the defendant’s interests, has to be assessed in that context.
5 Nigro v Sergeant [2018] NZHC 1990.
6 At [5].
7 The judgment records at [18] that the government valuation as at July 2017 was $470,000.
…
[30] I accordingly conclude that I should order that the caveat and notice be removed subject to the condition that 50 percent of the net proceeds of sale of the property be held by the solicitor for the plaintiffs pending further order of this Court.
(Footnote added)
[16] As to an order for possession of the land, the Judge was inclined to the view that he did have jurisdiction to make such an order but, in the circumstances, concluded it was not necessary to do so. The Judge stated:
[32] … There are proceedings before the Tenancy Tribunal where the issue can in my view be more appropriately dealt with. …
[17] Mr Sergeant has filed an appeal against the decision of Associate Judge Andrew.
[18] On 29 August 2018, the application before the Tribunal was adjourned for a substantive hearing and timetable orders were made for further evidence and submissions to be filed.
[19] The Tribunal’s decision records that because of issues with legal aid, counsel for Mr Sergeant was not able to file any further evidence and relied on the affidavits filed in the High Court proceedings.8 It appears from the decision that counsel for Mr Sergeant had intended to call him to give evidence at the hearing, but for various reasons he did not attend. The Tribunal determined that the matter should proceed on the evidence available.
[20] The Tribunal granted the trustee’s application for possession of the property. Mr Sergeant appealed to the District Court.
Appeal to District Court
[21] The appeal proceeded by way of a rehearing based on the record from the Tenancy Tribunal, but with the Judge noting a discretion to receive further evidence.9
8 Nigro v Sergeant (NZTT), above n 2, at [5].
9 Sergeant v Nigro (DC), above n 1, at [16].
It appears that Mr Sergeant’s further amended statement of claim referred to in [9](a) above was received as further evidence.10
[22] The trustees cross-appealed the Tribunal decision on the issue of the period of notice for Mr Sergeant to vacate. Their position was that the 42 days’ notice ordered by the Tribunal should be reduced to immediate possession or no more than five days’ notice.
[23] The Judge stated that at the heart of the Tribunal decision was s 65 of the Act which provides:
65 Eviction of squatters
(1)Where, on the application of any person entitled to possession of any residential premises, the Tribunal is satisfied that any other person is in possession of the premises as a squatter or trespasser, or otherwise than pursuant to any right of occupation granted to that person by any person having lawful authority to grant that right to that other person, the Tribunal shall make a possession order granting possession of the premises to the applicant.
(2)Nothing in subsection (1) shall limit or affect the provisions of the Trespass Act 1980, or any other remedy that may be available to the person lawfully entitled to possession of the premises.
(3)To avoid doubt, the Tribunal has jurisdiction under this section even though the premises are not subject to a tenancy agreement.
[24] One of the issues was whether s 85 of the Act applies to an application made under s 65. Section 85 provides:
85 Manner in which jurisdiction is to be exercised
(1)Subject to the provisions of this Act and of any regulations made under this Act, the Tribunal shall exercise its jurisdiction in a manner that is most likely to ensure the fair and expeditious resolution of disputes between landlords and tenants of residential premises to which this Act applies.
(2)The Tribunal shall determine each dispute according to the general principles of the law relating to the matter and the substantial merits and justice of the case, but shall not be bound to give effect to strict legal rights or obligations or to legal forms or technicalities.
10 At [12].
[25] The Judge noted that the Tribunal had referred to s 85. However, the Judge held that s 85 does not apply to applications under s 65. He noted that s 85 makes express reference to resolution of dispute “between landlords and tenants” of residential premises. The Judge found that Mr Sergeant was not a tenant as defined in the Act. He further found that the trustees are equally not landlords and Mr Sergeant had no right of occupation.
[26] The Judge recorded that although before the Tribunal the trustees did not maintain Mr Sergeant was a trespasser or squatter, that is exactly what he was.
[27] The Judge held that it was clear from the wording of s 65, that the exercise of the jurisdiction under that section does not involve a discretion. The Judge stated:
[25] It is clear from the wording of s 65 that the exercise of the jurisdiction under that section does not involve a discretion. Upon satisfaction of the primary jurisdictional requirements it is mandatory that the Tenancy Tribunal make a possession order.
[26] The s 65 jurisdictional thresholds to be satisfied on the balance of probabilities are:
(a)The premises the subject of the application are residential premises.
(b)The applicant for possession is entitled to possession of those premises.
(c)Another person or persons are in possession as squatters, trespassers or otherwise than pursuant to any right of occupation granted by a person having lawful authority to do so.
[27]I find, as did the Tribunal, that:
(a)The property falls squarely within the definition of “residential premises” contained within s 2 of the Act.
(b)The appellant has no right of occupation granted to him by any person having such authority and is therefore a squatter.
(c)The trustees are the legal owners of the property and are entitled to be in possession of it.
[28] In response to Mr Sergeant’s claim that he had a lawful right of occupation on the basis of his yet to be heard claim in the High Court (referred to in [9](a) above), the Judge held:
[29] Those arguments can only be assessed in terms of an analysis of the primary jurisdictional hurdles set out above. An as yet unresolved argument based on the High Court claim can only have an impact in the Tenancy Tribunal if it prevents the Tenancy Tribunal from being satisfied as to one or more of the above jurisdictional requirements.
[29] The Judge held that the claim did not prevent the Tribunal from being satisfied that the trustees are entitled to possession.
[30] The Judge accordingly upheld the Tribunal’s decision stating that the trustees were entitled to possession. He also granted the trustee’s cross-appeal and ordered that Mr Sergeant vacate the property within 10 days of his decision.
[31] Mr Sergeant filed an application in this court for a stay of the decision of the District Court Judge. On 5 February 2019, Wylie J made orders by consent that the orders of the District Court Judge are stayed until the High Court issues its judgment on this appeal.
Grounds of appeal
[32]The notice of appeal contains the following grounds:
(a)The Judge erred in finding that Mr Sergeant was a squatter;
(b)The Judge erred in finding the trust was entitled to possession of the property;
(c)The Judge erred in determining s 85 of the Act does not apply to all disputes filed in the Tenancy Tribunal; and
(d)The Judge erred in allowing the trustees’ cross-appeal.
[33]The relief sought is as follows:
(a)An order quashing the orders made by the Judge in his decision of 24 January 2018; and
(b)An order that Mr Sergeant has a right to continued occupation of the property pending resolution of Mr Sergeant’s High Court proceedings referred to in [9](a) above.
[34] In her submissions on behalf of Mr Sergeant, Ms Denize adjusted the grounds of appeal. She submits the Judge erred as to the following:11
(a)That Mr Sergeant is a squatter;
(b)That the trustees were entitled to possession of the property;
(c)That s 85 of the 1986 Act is limited to disputes between landlords and tenants and has no application to s 65 of the 1986 Act; and
(d)That if Mr Sergeant’s claim in the High Court results in a right of possession, and/or a proprietary interest in the property, then that can be a matter for the High Court to determine at an interlocutory stage.
The questions for this Court
[35] An appeal to this court under the Act is limited to a question of law.12 Ms Denize did not frame any questions of law based on the claimed errors of law.
[36] In relation to paragraph (a) in the notice of appeal and in the submissions, the Judge made a factual finding that Mr Sergeant was a squatter. An appeal against that finding does not raise a question of law. (It may be that if that finding was based on an error of law, that might be relevant to relief).
[37] In relation to question (b) the Judge made a finding that the trust was entitled to possession of the property. An appeal against that factual finding does not raise a
11 I have changed the order of alleged errors as appearing in the submissions, so as to align with the order in the notice of appeal.
12 Residential Tenancies Act 1986, s 119(1).
question of law. (Again, it may be that if that finding was based on an error of law, that might be relevant to relief).
[38] Ground (c), in both the notice of appeal and submissions, does raise a question of law. As it is framed in the submissions, the ground is more particularly directed to the issue in the District Court as opposed to the broad and general way in which it is expressed in the notice of appeal. I will adopt the language as to the alleged error in counsel’s submissions as opposed to the notice of appeal in framing a question of law.
[39] Ground (d) in the notice of appeal does not raise a question of law. However, this ground was not pursued in oral argument.
[40] Ground (d) in the submissions does raise a question of law. Ms Denize sought leave to amend the notice of appeal by adding this ground. Mr Ward-Johnson for the trustees, did not oppose the application to amend. I therefore granted leave as sought.
[41] Although grounds (b) and (c) do not give rise to questions of law, the thrust of the submissions on behalf of the appellant, on both (b) and (c), may be framed into a question of law as follows:
Are undetermined claims in separate proceedings (challenging an applicant’s entitlement to possession and asserting a right of occupation or other interest in the property) relevant in considering an application for an order under s 65?
[42] Accordingly, the questions of law I will consider, in the order as set out below, are as follows:
(a)Does s 85 of the Act apply to applications made under s 65?
(b)Are undetermined claims in separate proceedings (challenging an applicant’s entitlement to possession and asserting a right of occupation or other interest in the property) relevant in considering an application for an order under s 65 of the Act?
(c)If the appellant’s claim in the High Court might result in a right of possession and/or a proprietary interest in the property, can that be a
matter for the High Court to determine at an interlocutory stage in that proceeding?
The record
[43] In an appeal on a point of law, the alleged error must be found in the reasoning of the Court (or Tribunal) below based on the evidence before it.13
[44] This appeal was given a fixture at short notice. I therefore gave counsel for Mr Sergeant some leeway in the format in which the documents were placed before this Court. With the agreement of counsel for the trustees, the documents were:
(a)Two bundles of documents with intituling for the Tribunal hearing. (I was told that was the format in which the documents were placed before the District Court Judge);
(b)Affidavit of Bruce James Brown sworn 19 September 2018 on behalf of the trustees which was before the Tribunal. A copy of the affidavit was handed to the Court at the hearing of the appeal;
(c)Decision of the Tribunal (containing both the order and reasoning) dated 29 October 2018. (The decision was provided to this Court informally by counsel for the trustees through the Registrar); and
(d)Mr Sergeant’s further amended statement of claim dated 31 October 2018 referred to in [9](a) above.
[45] There was a question mark over an affidavit of Mr Sergeant, sworn on 7 January 2019, for the purposes of the appeal in the District Court. I was told by Ms Denize, who has appeared for Mr Sergeant throughout, that Mr Ward-Johnson, who has appeared for the trustees throughout, raised with her, prior to the hearing in the District Court, the need to apply to the Judge for the affidavit to be admitted.
13 Schier v Removal Review Authority [1999] 1 NZLR 703 (CA) at 705–706.
[46] Ms Denize accepted that she did not make an application at the hearing in the District Court for admission of the affidavit and that there was no discussion of the affidavit in the course of the hearing. She also accepted that there is no reference in the Judge’s decision to matters deposed to in Mr Sergeant’s affidavit. Therefore, although the Judge referred to a discretion to receive further evidence,14 it does not appear that he exercised his discretion in relation to this affidavit. It is therefore not part of the record in this appeal.
Application to admit further evidence
[47] Mr Sergeant has sworn an affidavit dated 8 February 2019, which Ms Denize initially sought to have admitted in this appeal. At the hearing I drew her attention to the traditional view that there is no power under r 20.16 of the High Court Rules 2016 to admit further evidence where the appeal is on a question of law only; however, the Court may exercise its inherent jurisdiction to receive further evidence in, at least, very special circumstances.15
[48] Ms Denize then elected not to pursue an application to admit the 8 February 2019 affidavit.
First question — Does s 85 of the Act apply to applications made under s 65?
[49] Ms Denize submits that the Judge erred in determining that s 85 can only apply to cases involving landlord and tenant. She submits that the intent of s 85 is to apply to the general exercise of the Tribunal’s discretion in relation to any dispute to which the Act applies, including applications under s 65.
[50] She further submits that, subs (1) and (2) of s 85 are conjunctive and that the words “landlords” and “tenants” in s 85(1) are to be read in a broad way. Their use in s 85(1) is simply a reflection of the generic manner in which those terms are used throughout the Act. Ms Denize submits that critical to her argument are the Parliamentary Debates on the Residential Tenancies Amendment Bill which resulted
14 Sergeant v Nigro (DC), above n 1, at [16].
15 Andrew Beck and others McGechan on Procedure (online ed, Thomson Reuters) at [HCR20.16].
in a number of amendments to the Act on 1 October 2010, including s 65(3) which was inserted as at that date.
[51] Ms Denize submits that the amendments introduced were about creating a forum where people who are either owners of properties or those living in properties are able to have a cost-effective and time-effective resolution of those disputes. That reinforces that any dispute that comes before the Tribunal is subject to s 85.
[52] In his submissions, Mr Ward-Johnson seeks to uphold the reasoning of the District Court Judge. He submits that none of the categories of persons in s 65(1) falls within the statutory definition of tenant (or landlord) of residential premises.
[53] Mr Ward-Johnson therefore submits that there is no proper basis to consider that a dispute between landlords and tenants of residential premises could be taken to import and/or include a squatter/trespasser or a person without a right of occupation granted by someone with lawful authority such that it could fall within s 85.
[54] Mr Ward-Johnson therefore says s 85(1) does not apply; s 85(1) and (2) are conjunctive; and so s 85(2) does not apply to applications made under s 65.
Discussion
[55] The submission made by Mr Ward-Johnson has a superficial appeal, but I do not consider the issue to be quite so straightforward.
[56] Both Ms Denize and Mr Ward-Johnson submit that the provisions of s 85 are conjunctive. Where they differ is that Ms Denize submits the whole of s 85 applies to s 65, whereas Mr Ward-Johnson submits that no part of s 85 applies.
[57] I accept the submissions that the two parts of s 85 are not disjunctive. Section 85(2) provides that “the Tribunal shall determine each dispute”. In my view, this is a reference back to “disputes between landlords and tenants” in s 85(1).
[58] There is support for that view in the judgment of Asher J in Ziki Investments (Properties) Ltd v McDonald, where the Court, considering s 85(2) (in a different context), stated that s 85(2) must be read with s 85(1).16
[59] Therefore, for s 85 to apply to s 65 applications, the words “landlords” and “tenants” in s 85(1) must be able to be read in a generic sense rather than as strictly defined in the Act.
[60]The jurisdiction of the Tribunal is set out in s 77 of the Act as follows:
77 Jurisdiction of Tribunal
(1)The Tribunal has, subject to the Limitation Act 2010, jurisdiction to determine in accordance with this Act any dispute that—
(a)exists between a landlord and a tenant or between a landlord and the guarantor of a tenant; and
(b)relates to any tenancy to which this Act applies or to which this Act did apply at any material time.
[61]“Landlord” is defined in s 2 of the Act as follows:
landlord, in relation to any residential premises that are the subject of a tenancy agreement, means the grantor of a tenancy of the premises under the agreement; and, where appropriate, includes—
(a)a prospective landlord; and
(b)a former landlord; and
(c)a lawful successor in title of a landlord to the premises; and
(d)the personal representative of a deceased landlord; and
(e)an agent of a landlord
[62]“Tenancy” is defined in s 2 of the Act as follows:
tenancy, in relation to any residential premises, means the right to occupy the premises (whether exclusively or otherwise) in consideration for rent; and includes any tenancy of residential premises implied or created by any enactment; and, where appropriate, also includes a former tenancy
[63]“Tenant” is defined in s 2 of the Act as follows:
16 Ziki Investments (Properties) Ltd v McDonald [2008] 3 NZLR 417 (HC) at [70].
tenant, in relation to any residential premises that are the subject of a tenancy agreement, means the grantee of a tenancy of the premises under the agreement; and, where appropriate, includes—
(a)a prospective tenant; and
(b)a former tenant; and
(c)a lawful successor in title of a tenant to the premises; and
(d)the personal representative of a deceased tenant; and
(e)an agent of a tenant
[64]“Tenancy agreement” is defined in s 2 of the Act as follows:
tenancy agreement, in relation to any residential premises, means any express or implied agreement under which any person, for rent, grants or agrees to grant to any other person a tenancy of the premises; and, where appropriate, includes a former tenancy agreement and any variation of a tenancy agreement.
[65] I agree with the District Court Judge that the trustees are not landlords as defined, nor is Mr Sergeant a tenant. But that does not dispose of the issue in my view.
[66] Up until the 1 October 2010 amendment, which inserted s 65(3) explicitly giving the Tribunal jurisdiction under s 65 even though the premises are not subject to a tenancy agreement, there was a view that s 65 only applied to a landlord/tenant relationship.17 The amendment explicitly recognised the jurisdiction of the Tribunal even though there is no tenancy agreement.
[67] Section 85(1) sets out how the Tribunal is to go about exercising its jurisdiction. It is to be exercised in a manner that is most likely to ensure the fair and expeditious resolution of disputes (between landlords and tenants).
[68] The enactment of s 65(3) could be said to have enlarged, or at least explicitly made clear, the kind of disputes over which the Tribunal has jurisdiction as set out in s 77 of the Act.
17 See Andrew Alston Residential Tenancies (3rd ed, Butterworths, Wellington, 1998) at [7.26].
[69] It cannot have been the intent of the legislature to enlarge or clarify the Tribunal’s jurisdiction only to limit the manner in which the Tribunal exercises its jurisdiction (as set out in s 85) by excluding those class of cases under s 65(3) where there is no tenancy agreement.
[70] Such a reading is consistent with the wording of s 117(4) which provides for the District Court to hear an appeal from a decision of the Tribunal and the way in which the District Court exercises its jurisdiction. Section 117(4) provides:
The provisions of s 85, with any necessary modifications, shall apply in respect of the hearing and determination by the District Court of an appeal brought under this section.
[71] There are no words limiting s 85 to appeals involving a landlord and tenant as defined in the Act. The words “with any necessary modifications” are not a relevant limitation. They would simply modify the words “the Tribunal” so as to read “The District Court”.
[72] While I have noted Ms Denize’s submissions regarding the Parliamentary Debates, in the end I did not find those debates of particular assistance in determining the issue.
[73] In my view, for the above reasons, the learned Judge erred when he concluded that s 85 did not apply to applications made under s 65 of the Act.
Second question of law — Are undetermined claims in separate proceedings (challenging an applicant’s entitlement to possession and asserting a right to occupation or other interest in the property) relevant in considering an application for an order under s 65 of the Act?
[74] I start with the three pre-conditions which must be established before an order may be made under s 65. I consider they were correctly stated by the District Court Judge at [26] of his decision as set out in [27] above. I repeat them below for ease of reference:
(a)The premises the subject of the application are residential premises.
(b)The applicant for possession is entitled to possession of those premises.
(c)Another person or persons are in possession as squatters,18 trespassers or otherwise than pursuant to any right of occupation granted by a person having lawful authority to do so.
[75] Ms Denize accepts that once the three pre-conditions in s 65 are established, it is mandatory for the Tribunal to make an order. She does not seek to employ s 85 after those three pre-conditions are established.
[76] Rather, Ms Denize relies on s 85 when the Tribunal (or District Court) is considering those pre-conditions. In this case it is the second and third pre-conditions that are in issue, as it is accepted the premises are residential.
[77] Ms Denize submits that s 85 entitles the Tribunal (or District Court) to consider a claim, as yet undetermined, in other proceedings, as part of its determination as to whether a pre-condition is made out by the applicant for possession. In this case that is the claim is that made by Mr Sergeant in the High Court, referred to in [9](a) above.
[78] The approach of the Tribunal or District Court on appeal, as submitted by Ms Denize, would be to first determine whether the property was residential. As noted, that is not disputed in this case.
[79] Then the next step is to determine whether the applicant for possession (in this case the trustees) is entitled to possession. Ms Denize submits, as part of this analysis, the fact that the trustees are the legal owners of the property cannot be a determinative factor. She submits that it must be a relevant consideration as to whether the party opposing the application (in this case Mr Sergeant) also has a claim for possession in another court, which is actively pursued.
[80] Mr Denize submits that in terms of the extent to which the Tribunal or District Court can assess a claim against possession, such as the present case, it would undermine the jurisdiction of the court in which the substantive claim has been filed (in this case the High Court) if a determination is made by the Tribunal or District
18 In s 65 the word “or” appears between squatters and trespassers but nothing turns on that omission by the Judge.
Court which completely undermines the cause of action and relief sought in the substantive proceedings.
[81] However, Ms Denize went on to submit there must be a balancing in such an exercise to protect against abuse of process and the advancing of speculative claims. This is where there is scope for s 85.
[82] In opposition, Mr Ward-Johnson submits that even if this Court were to find against the trustees on the application of s 85 to s 65 applications (which I have done) that makes no difference on this issue because it is irrelevant that there is a claim in another court in which Mr Sergeant seeks an order that he is entitled to occupy the premises. It is not open to the Tribunal (or District Court) to consider either the fact of the claim or the substance of the claim in that other court. Section 85 cannot be utilised for that purpose.
Discussion
[83] There was evidence before the Tribunal that the trustees held legal title to the property. There was also evidence that they had not given Mr Sergeant any right to occupy. On the contrary, there was evidence that they had given him notice that he was required to vacate the property.
[84] Effectively, Ms Denize is asking the Tribunal or District Court to examine the claim in the High Court to decide if it has some merit, in other words that it is not speculative, and then determine the very issues that are awaiting determination in the High Court.
[85] To an extent, that is exactly what the Tribunal did in this case. In the Tribunal decision it is stated that the Tribunal has traditionally been cautious about making a possession order where the rights of the parties are yet to be established by a High Court and an order would affect the status quo.19
19 Nigro v Sergeant (NZTT), above n 2, at [25].
[86] But the Tribunal went on to say that notwithstanding that approach, the Tribunal cannot refuse to make an order merely because the respondent has a claim about the property in another court.20 It must evaluate the evidence and should make the possession order where the claim yet to be determined is “speculative”.
[87] The Tribunal then analysed the evidence before it for each of the three jurisdictional pre-conditions for s 65. In determining whether the trust had the right to possess the property, the Tribunal stated that, as legal owner, it did so.21 It then went on to say:
[53] Obviously the Tribunal cannot determine the validity of the property sharing agreement: that is a matter for the High Court. However, it is required to consider whether the evidence presented in relation to the agreement is sufficient to displace a finding that the Trust, as owner, is entitled to possession.
[88] The Tribunal then proceeded to evaluate Mr Sergeant’s evidence regarding the property sharing agreement and the evidence in the affidavit of Bruce James Brown, a solicitor, who deposed as to Mr Sergeant’s signing of that agreement.
[89] The Tribunal concluded that its view of the evidence was that, for present purposes, it did not displace the finding that the trust was entitled to possession.22
[90]In my view, the District Court Judge was correct when he said:
[32] The adjudicator said he is not in a position to evaluate the claims before the High Court although he did go on to do so. I consider he was wrong in that regard.
[33] Evidence was presented to the Tribunal in support of the matters pleaded in the High Court in an attempt to establish the appellant’s right to occupy. However no effective assessment of that evidence or the strength of the claim it is intended to support can properly or usefully be conducted within Tenancy Tribunal parameters. How could it be?
[91] The wording of s 65 requires the Tribunal to be satisfied that the applicant is “entitled” to possession. The fact that there is an extant claim challenging that entitlement does not change the present position. Similarly, Mr Sergeant’s
20 Chou v Chou [2016] NZDC 15768 at [21] as cited in Nigro v Sergeant (NZTT), above n 2, at [26].
21 Nigro v Sergeant (NZTT), above n 2, at [51].
22 At [60].
undetermined claim as to his rights in respect of the property does not change the position that the legal owners have given him notice to vacate.
[92]Resort to s 85 does not change the position. In Ziki Investments, Asher J said:
[69] Section 85(2) states specifically that each dispute shall be determined “according to the general principles of law relating to the matter”. Significantly, the reference to determining in accordance with the substantial merits and justice comes after the reference to determining the dispute according to the general principles of law. The overarching application of those general principles is not undermined by the provision that the Tribunal is not bound to give effect to strict legal rights or obligations or to legal forms or technicalities. This simply means that technical requirements such as matters of form or time, may not be strictly applied. In this the subsection indicates that general principles of law should be interpreted or applied consistently with the merits and justice of the case where possible.
[70] Section 85(2) must also be read with s 85(1), which provides that the Tribunal should exercise its jurisdiction in a manner that is most likely to ensure the fair and expeditious resolution of disputes. Section 85(2) does not therefore give the Tribunal a carte blanche to decide the case on its perception of merits and justice. However, it can be an aid to interpretation. …
[93] I respectfully endorse those words. Section 85, when interpreted in that way, does not provide the opportunity to infuse considerations from the High Court claim into the Tribunal’s factual determinations under s 65.
[94] It is not open to the Tribunal to consider the fact of a claim or the contents of the claim in another court when deciding if the trustees were entitled to possession and/or if Mr Sergeant was in possession as a squatter or trespasser or otherwise than pursuant to any right of occupation granted to him. The Judge was correct to hold that the Tribunal had erred in its approach in this regard.
Third question of law — If the appellant’s claim in the High Court might result in a right of possession and/or a proprietary interest in the property, can that be a matter for the High Court to determine at an interlocutory stage in that proceeding?
[95] The Judge observed the following in relation to the proceedings in the High Court brought by the trustees:
[37] In that regard, I note that Judge Andrew in the High Court granted an application to remove a caveat and notice of claim under the relationship property legislation lodged by the appellant. The judge concluded that at best
the appellant had a monetary claim and removed the caveat and notice on the basis that 50% of the proceeds of sale of the property be held in trust pending the outcome of the substantive High Court proceedings.
…
[40] I do note however that the appellant has other remedies. If in fact all he has is a monetary claim and if, on his arguments in the High Court, 50% of the net proceeds of sale may be insufficient to meet his claim an application can be made to hold more than 50% of the proceeds of sale in trust.
[41] If the claim in the High Court may arguably result in a right to possession and/or a propriety interest in the property then that can be a matter for the High Court to determine at an interlocutory stage. If there is such an arguable case and if the balance of convenience dictates no doubt an interim injunction against sale by the trustees could be obtained. The High Court would not be in a position to injunct the mortgagee to prevent a mortgagee sale but that matter would be relevant to weighing the balance of convenience.
[96] Ms Denize submits that the Judge erred in determining, at [41] of his decision (set out above), that if Mr Sergeant’s claim in the High Court may arguably result in a right to possession and/or proprietary interests in the property, that can be a matter for the High Court to determine at an interlocutory stage.
[97] She submits that once the order of possession is granted by the Tribunal, the only way in which Mr Sergeant can remain in the property is to appeal that determination and seek a stay of the Tribunal’s orders.
[98] Once Mr Sergeant has exhausted all options for appeal and stay, if it is determined the possession order in favour of the trustees must stand then, Ms Denize submits, it would not be possible to seek interlocutory relief against such an order in the High Court as part of the substantive proceeding.
[99] Mr Ward-Johnson submits that as Mr Sergeant’s claims are financial only, the proper remedy available to Mr Sergeant is his present appeal to the Court of Appeal against the decision of Associate Judge Andrew ordering the removal of caveats and retention of 50 per cent of the net proceeds of sale. If Mr Sergeant’s claims are greater than 50 per cent of the net sale proceeds (which is denied) then his remedy is for a greater percentage to be held in trust pending the hearing and determination of those claims.
[100] Mr Ward-Johnson also submits that the Judge made the observation in [41] after he had determined that the trustees were entitled to possession of the property. Effectively, Mr Ward-Johnson submitted that this was an obiter statement.
Discussion
[101] Any claim by Mr Sergeant, in this Court, for occupation, relying on other legal grounds, may well be a matter this Court could consider on an application to injunct the trustees from selling the property before the substantive claim was heard.
[102]However, any decision in that regard would be for the High Court at the time.
[103] Although I gave Ms Denize leave to add this ground of appeal, it is not necessary for me to determine if the Judge erred. The statement, which is said by Ms Denize to be incorrect, was not part of the Judge’s reasoning for refusing Mr Sergeant’s appeal.
[104] It was simply a comment as to an alternative remedy. As noted, once the statutory pre-requisites under s 65 are satisfied, it is mandatory for the Tribunal to make an order. Accordingly, the existence of alternative remedies is irrelevant.
Conclusion
[105] I conclude that the learned Judge made an error of law when he determined that s 85 does not apply when the Tribunal is determining an application under s 65.
[106] However, that determination did not affect the outcome of the appeal in the District Court. That is because the Judge was correct to determine that the Tribunal cannot consider claims made by the appellant in another proceeding when deciding if the applicant for an order for possession has proven the pre-condition for an order under s 65. That is the correct position even employing s 85. That section does not have such a wide ambit so as to allow a consideration of Mr Sergeant’s claim in those other (undetermined) proceedings.
[107] I have not found it necessary to answer the third question of law. Whether or not Mr Sergeant has an alternative remedy was not a matter that the Judge relied on in making his decision.
Result
[108]The appeal is dismissed.
Stay
[109] The orders of the District Court Judge were stayed until this judgment issued. That stay is now lifted. The orders now come into force. Those orders were:
(a)The trustees are entitled to possession of the property; and
(b)Mr Sergeant must vacate the property within 10 days of the date of the judgment. (For the avoidance of doubt the 10 days run from the date of this judgment).
Costs
[110] Costs are reserved. If the parties are able to agree costs, they should file a joint memorandum within 15 working days of this judgment. If agreement cannot be reached, the trustees may file and serve their memorandum within 10 working days of the date for the joint memorandum. Mr Sergeant is to file and serve his reply within a further 10 working days. Memoranda should not exceed five pages.
Gordon J
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