Wea v McQuoid

[2022] NZHC 1205

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-000327

[2022] NZHC 1205

UNDER

the Land Transfer Act 2017

BETWEEN

RAYMOND WEA

Applicant

AND

JULIE KAREN McQUOID

Respondent

Hearing:

12 May 2022

Appearances:

C F Godinet for the Applicant

No appearance by or for the Respondent

Judgment:

27 May 2022

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 27 May 2022 at 11.30 a.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Duggan & Murphy, Auckland C F L Godinet, Auckland

WEA v McQUOID [2022] NZHC 1205 [27 May 2022]

[1]    Raymond Wea applies for an order that caveat 12382292.1 lodged against Certificate  of  Title  NA89D/440  not  lapse.  This  follows  an   application   by Julie McQuoid to the District Land registrar to lapse the caveat. Ms McQuoid has not filed any documents in opposition to the application.

Facts

[2]    Mr Wea lodged the caveat on 22 February 2022. He claims to have an interest in the land that is the subject of the caveat pursuant to a cestui que trust by which he is beneficiary and Julie McQuoid, as registered proprietor of a two-thirds share of the land, is trustee.

[3]    Mr Wea has sworn an affidavit dated 16 March 2022 in support of his application. In that affidavit he deposes that in around June 2007 he and his partner, Karen Brown (now deceased), Ms McQuoid, and David Brown (his brother), arranged for he and his partner to buy a property at Woodglen Road, Titirangi. Mr Wea had recently been adjudicated bankrupt and was unable to obtain finance for the purchase himself. He was discharged from bankruptcy on 18 April 2010.

[4]    Mr Wea deposes that it was agreed that Mr Brown and Ms McQuoid would become registered proprietors of the property, with Mr Brown to own a one-third share for his own benefit and Ms McQuoid to own a two-thirds share as trustee for the benefit of Mr Wea and Ms Brown. There was no deposit payable, and the purchase was funded entirely from loans from Wizard Home Loans and Clegg & Co, now known respectively as Pepper New Zealand (Custodians) Limited and Prime Debt Collections Limited.

[5]    The arrangement is recorded in a “Property ownership agreement and deed of trust” attached to the affidavit of Mr Wea. That document records that:

(a)Mr Wea and Ms Brown entered into an agreement to purchase the property at Woodglen Road but were unable to raise the necessary finance due to Mr Wea’s bankruptcy.

(b)Mr Brown and Ms McQuoid agreed to complete the purchase on the following basis:

(i)Mr Brown would take ownership of a one-third share of the property for his own benefit, and Ms McQuoid would take ownership of  a two-third share as trustee for the benefit of   Mr Wea and Ms Brown;

(ii)Mr Brown would be responsible for one-third of the outgoings, and Mr Wea and Ms Brown would be responsible for two-thirds of the outgoings and would indemnify Ms McQuoid for all costs, charges, and claims concerning the property;

(iii)Ms McQuoid agreed to transfer the two-third share she held on trust to Mr Wea and Ms Brown or their nominee, when called upon by them, provided they met all costs of the transfer and paid any costs and charges outstanding concerning the property incurred by Ms McQuoid regarding ownership of the property.

[6]     The document is signed by Mr Brown, Mr Wea, Ms McQuoid and Ms Brown and dated 7 June 2007.

[7]    Mr Wea deposes that since he and Ms Brown left the property in January 2020, it has been tenanted. Until recently, the tenant paid rent of $500 per week into their bank account and they would top up the difference to make the mortgage payments. He deposes that he and Ms Brown, when she was alive, paid the mortgage throughout.

[8]    Mr Wea’s solicitors have filed an affidavit providing bank statements showing he and Ms Brown making the mortgage repayments for the property  between  March 2011 and February 2022.

[9]    The tenant stopped making the rent payments after 2 March 2022. Mr Wea has presented evidence suggesting that Ms McQuoid has listed the property for sale.

Legal principles

[10]   A person may lodge a caveat against dealings with an estate interest in land on the basis that the person has a beneficial estate or interest in the land under an express, implied, resulting or constructive trust.1

[11]   Where a specific parcel of land is held by a trustee upon trust for a named beneficiary, the beneficiary may lodge a caveat against the title.2

[12]   The right of a beneficiary, claiming to be entitled to or beneficially interested in any land, to lodge a caveat against the title to that land is not limited by any requirement to show that dealings with the property would be in breach of the trustee’s obligations, or would threaten or prejudice the entitlement or interest of the beneficiary.3

[13]   On an application for an order that a caveat not lapse, the applicant caveator bears the onus of demonstrating that they have an interest in the land sufficient to support the caveat. However, they need not establish that definitively. It is enough if they present a reasonably arguable case.4

Decision and result

[14]   Based on the document dated 7 June 2007 and the evidence of Mr Wea and Ms Brown paying the outgoings for the property consistent with that document, I am satisfied that Mr Wea has a reasonably arguable case that Ms McQuoid holds the two-third share of the property on trust for Mr Wea and his late partner. Therefore, Mr Wea has an arguable interest in the land as beneficiary under an express trust. He has made out grounds to support the caveat.

1      Land Transfer Act 2017, s 138(1)(b).

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

3      At 114, 118 and 122.

4      Botany Land Development Ltd v Auckland Council [2014] NZCA 61, [2014] 14 NZCPR 813. See also Philpott v Noble Investments Ltd [2015] NZCA 342.

[15]   The Court retains a residual discretion to remove a caveat where an applicant has discharged the burden of presenting a reasonably arguable case if that removal will not prejudice the caveator’s legitimate interest. That is not the case here.

[16]   I order that caveat number 12382292.1, registered against Certificate of Title NA89D/440 not lapse.

[17]   Ms McQuoid is to pay Mr Rea’s costs on a 2A basis being $4,182.50 and disbursements as fixed by the Registrar in relation to this application.

Associate Judge Gardiner