Sirocco Trustees Tainui Limited v Hickey

[2018] NZHC 3159

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2018-409-000754

[2018] NZHC 3159

UNDER

the Land Transfer Act 1952

IN THE MATTER

of a notice of application to sustain caveats

BETWEEN

SIROCCO TRUSTEES TAINUI LIMITED

Applicant

AND

JAMES PATRICK HICKEY

Respondent

Hearing:	29 November 2018
Counsel:	D M Lester for Respondent No appearance by Applicant
Judgment:	3 December 2018

JUDGMENT OF ASSOCIATE JUDGE OSBORNE

(on application for orders sustaining caveats)

Introduction – the two caveats

[1]                  The respondent, James Hickey, is the registered proprietor of two properties at 89B and 89C Taylors Mistake Road, Christchurch.

[2]                  This proceeding concerns two caveats which have been registered against the titles to the two properties.

[3]                  On 5 October 2018, the caveats were lodged against the titles in the name of the applicant, Sirocco Trustees Tainui Ltd (Sirocco). In its caveats, Sirocco claimed to be the beneficiary of a trust of which Mr Hickey is trustee.

SIROCCO TRUSTEES TAINUI LIMITED v HICKEY [2018] NZHC 3159 [3 December 2018]

[4]                  Following the registration of the caveats, Mr Hickey commenced the caveat- lapsing procedure under the Land Transfer Act 1952. Land Information New Zealand on 18 October 2018 gave Sirocco notices under s 145A of the Act that the caveats would lapse in 14 days unless notice was received that an application to the contrary had been filed in court within 14 days.

This proceeding

[5]                  On 1 November 2018 (within the 14 day period), Murray Ian Withers lodged at Court four documents:

(a)an originating application on notice (in the name of Sirocco) to sustain the two caveats;

(b)his own affidavit in support of the originating application;

(c)an interlocutory application for permission to represent the applicant; and

(d)his own affidavit in support of the interlocutory application.

[6]                  Mr Withers is a director and shareholder of Sirocco. In his substantive affidavit, he identifies the trust in relation to each property as being an express, bare trust.

Opposition

[7]                  Mr Hickey filed a notice of opposition and an affidavit in opposition. The ground of opposition involved a relatively short point. Mr Withers, for Sirocco, had deposed that the two titles were held by Mr Hickey as bare trustee for Clifden Holdings Ltd (that is to say, not Sirocco as asserted in the caveats).

Progress of the proceeding

[8]                  On the allocated hearing date (22 November 2018) Mr Lester, appearing for Mr Hickey, requested that the Court proceed to hear substantive submissions. I

indicated that I would hear briefly from both Mr Lester and (by leave for Sirocco) Mr Withers in relation to the substantive arguments they intended to pursue and I would also consider Mr Withers’ interlocutory application for permission to represent Sirocco.

[9]I reserved my decision.

[10]              In a judgment the following day, I refused Mr Withers’ permission to represent Sirocco.1 I further adjourned the substantive proceeding to Thursday, 29 November 2018 for the purpose of submissions on both the formalities of the proceeding and the substance of the application. I recorded that, as a consequence of the refusal of permission to Mr Withers, the originating application filed on 1 November 2018 had not been filed in accordance with the Rules.

The procedural issue

[11]              It is settled law in New Zealand that a company has no right to be represented in the conduct of a case in Court except by a qualified solicitor (unless the rules of a particular court provide otherwise). This rule was confirmed by the Court of Appeal in Re G J Mannix Ltd.2 In Re G J Mannix Ltd, Cooke J also observed:3

There is a cognate rule that, apart from statutory acceptance, a corporation has no right to bring or carry on proceedings in a Court except by a solicitor. This refers to the filing of documents – writs, statements of defence, notices of appeal, etc.

[12]              Cooke J went on to recognise that the “cognate rule” stands in New Zealand as a matter of practice.

[13]              Subsequently, in Time Ticket International Ltd v Broughton, Master Venning dealt directly with a proceeding which had been filed in the name of a company by a barrister and solicitor who (as in the case of Mr Withers here) did not hold a practising

1      Sirocco Trustees Tainui Ltd v Hickey [2018] NZHC 3072.

2      Re G J Mannix Ltd [1984] 1 NZLR 309, (1984) 2 NZCLC 99,095 (CA).

3      At 311.

certificate.4 His Honour reviewed the case law following Re G J Mannix Ltd and the High Court Rules before concluding:5

In summary, civil proceedings must either be issued by a litigant in person or through the agency of a solicitor. It is not enough that the person issuing the proceedings is enrolled as a barrister and solicitor of this Court, he/she must also practise as a solicitor and must satisfy the additional requirements of     r 41.⁶

[14]              In Time Ticket International Ltd, Master Venning, having referred to both Victorian authority and Re G J Mannix Ltd, treated the method of filing of the documents in question as creating an irregularity rather than a nullity. While reference was not made to a particular High Court Rule, that approach is consistent with what is now r 1.5(1) High Court Rules which provides:

1.5Non-compliance with rules

(1)A failure to comply with the requirements of these rules—

(a)     must be treated as an irregularity; and

(b)    does not nullify—

(i)the proceeding; or

(ii)any step taken in the proceeding; or

(iii)any document, judgment, or order in the proceeding.

[15]              Master Venning stayed the plaintiff’s proceeding until regularised by a solicitor entering upon the record for the plaintiff.7 His Honour noted that the defendants had already taken a number of steps in the proceedings.

Exercise of discretion

[16]              In situations where there has been a non-compliance with the High Court Rules in terms of r 1.5(1), the Court has the discretion set out in r 1.5(2):

(2)Subject to subclauses (3) and (4), the court may, on the ground that there has been a failure to which subclause (1) applies, and on any terms as to costs or otherwise that it thinks just,—

(a)     set aside, either wholly or in part,—

(i)the proceeding in which the failure occurred; or

4      Time Ticket International Ltd v Broughton [1996] 2 NZLR 176, (1996) NZCLC 261,196 (HC).

5      Above n 4, at 179.

6      Rule 41 was the predecessor to the current r 5.36 High Court Rules.

7      Time Ticket International Ltd v Broughton, above n 4, at 181.

(ii)any step taken in the proceeding in which the failure occurred; or

(iii)any document, judgment, or order in the proceeding in which the failure occurred; or

(b)exercise its powers under these rules to allow any amendments to be made and to make any order dealing with the proceeding generally as it thinks just.

[17]              Sirocco did not appear at the (telephone conference) hearing. By the Court’s earlier judgment, Mr Withers did not have permission to appear again on Sirocco’s behalf.

[18]              Mr Withers addressed a “letter to the Court”. In it, he explained that Sirocco is not in a position to pursue its application further given that Mr Withers is not permitted to represent Sirocco. Mr Withers explained that, although he had stated to the Court on 22 November 2018 that Sirocco did not assert it was unable to afford counsel, Mr Withers does not in fact have the resources to instruct solicitors and/or counsel. Mr Withers concluded this part of his letter by apologising to the Court for utilising its valuable time on this matter. (Mr Withers then went on in the letter to make some additional comments as to substantive arguments that Sirocco might have pursued).

[19]              Mr Lester has invited the Court to set aside this proceeding in its entirety in terms of r 1.5(2)(a).

[20]              An alternative application which might have  been  made  by Sirocco,  under r 1.5(2)(b), had Sirocco been represented, would have been for an order validating the irregularity in relation to the filing of the originating application. A further alternative would have been, as occurred in Time Ticket International, to have stayed the proceeding pending legal representation of the company.

[21]              I have considered those alternatives despite the absence of an express request by the company. I am satisfied that it is not appropriate either to stay the proceeding or to validate the irregularity in relation to filing.

[22]              Mr Withers himself has indicated in his letter that Sirocco, if it is unable to be represented by Mr Withers, is unable to pursue the matter further (by reason of the financial situation). That makes a consideration of stay inappropriate – having regard to the fact that there are caveats in place which prevent the registered proprietor dealing with the properties any meaningful stay would need to be of indefinite duration.

[23]              Equally, with no qualified lawyer to take conduct of the proceeding and investigate the basis of the caveat claims (including allegations of fraud contained in Mr Withers’ affidavit), it would be inappropriate to consider validating the filing of a proceeding.

[24]              Caveats involve a substantial interference with the entitlements of the registered proprietors of the land which they affect. The caveat-lapsing procedures under the Land Transfer Act are intended to be a means by which challenges to the registered proprietor’s interests may be determined in a speedy and efficient manner. Given that the caveator here is not in a position to regularise its pleadings and take part in the process to vindicate its caveat claims, the balancing of interests is strongly in favour of the registered proprietor’s right to have the proceeding brought to an end.

Orders

[25]I order:

(a)The originating application dated 1 November 2018 is dismissed.

(b)The applicant is to pay to the respondent the costs of the proceeding on a 2B8 basis together with disbursements to be fixed by the Registrar.

8      High Court Rules, Category 2 under r 14.3(1) and band B under r 14.5(2).

(c)The proceeding, except to the extent of the orders made at [25](a) – (b) above, is set aside in terms of r 1.5(2) High Court Rules.

Associate Judge Osborne

Solicitors:

Saunders & Co, Christchurch

Counsel: D M Lester, Barrister, Christchurch