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LW  354  Limited v EHNP Nominee Limited [2021] NZHC 2107 (13 August 2021)

Last Updated: 13 September 2021

BETWEEN	LW  354  LIMITED Applicant
AND	EHNP NOMINEE LIMITED Respondent

JUDGMENT OF GWYN J

[1] This matter has been referred to me, as Duty Judge, by the Registry of the High Court, pursuant to r 5.35A of the High Court Rules 2016.

• [2] It is an application under s 143(4) of the Land Transfer Act 2017 to sustain a caveat over a property. The application was filed by Vaughan Peter Bowkett, as a Director of the applicant company, LW  354  Limited (LW  354 ). The application was accepted for filing in the Napier High Court on 2 August 2021 and was received in the Wellington Registry of the High Court on 3 August 2021. The matter came before me, as Duty Judge, on 10 August 2021.

• [3] The respondent, EHNP Nominee Limited (ENL), is the registered owner of the property contained in Record of Title 921753, the successor to Record of Title 822871 (the property). The property is situated in the subdivision developments at  354  Kahuranaki Road, Havelock North.

• [4] On 17 June 2021, LW  354  lodged a caveat on the title for the property.

LW  354  LIMITED v EHNP NOMINEE LIMITED [2021] NZHC 2107 [13 August 2021]

[5] The solicitors for ENL have written to the Registry to advise that ENL entered into an agreement for sale and purchase in respect of the property, which was due to settle on 10 August 2021.

• [6] ENL has applied to Land Information New Zealand (LINZ) to lapse the caveat. That application has given rise to LW  354 ’s application in this proceeding to sustain the caveat.

• [7] Rule 5.35A of the High Court Rules provides:

5.35A Registrar may refer plainly abusive proceeding to Judge before service

(1) This rule applies if a Registrar believes that, on the face of a proceeding tendered for filing, the proceeding is plainly an abuse of the process of the court.

(2) The Registrar must accept the proceeding for filing if it meets the formal requirements for documents set out in rules 5.3 to 5.16.

(3) However, the Registrar may,—

(a) as soon as practicable after accepting the proceeding for filing, refer it to a Judge for consideration under rule 5.35B; and

(b) until a Judge has considered the proceeding under that rule, decline to sign and release the notice of proceeding and attached memorandum for the plaintiff or the applicant (as appropriate) to serve the proceeding.

[8] Rule 5.35B relevantly provides:

5.35B Judge’s powers to make orders and give directions before service

(1) This rule applies if a Judge to whom a Registrar refers a proceeding under rule 5.35A is satisfied that the proceeding is plainly an abuse of the process of the court.

(2) The Judge may, on his or her own initiative, make an order or give directions to ensure that the proceeding is disposed of or, as the case may be, proceeds in a way that complies with these rules, including (without limitation) an order under rule 15.1 that—

(a) the proceeding be struck out:

(b) the proceeding be stayed until further order:

(c) documents for service be kept by the court and not be served until the stay is lifted:

(d) no application to lift the stay be heard until the person who filed the proceeding files further documents as specified in the order (for example, an amended statement of claim or particulars of claim).

(3) Rule 7.43(3) does not apply. However, if a Judge makes an order on the Judge’s own initiative without giving the person who filed the proceeding an opportunity to be heard, the order must contain a statement of that person’s right to appeal against the decision.

(4) A copy of a Judge’s decision to strike out a proceeding must, if practicable, also be served on the person named as a party or, if more than 1 person is named, those persons named as parties to the proceeding.

(5) See rule 2.1(3)(b) concerning the exclusion of the jurisdiction and powers of a Judge under this rule from the jurisdiction and powers of an Associate Judge.

[9] Rule 5.35B applies to this matter for the following reasons.

• [10] Garth Bowkett Paterson is a current shareholder and former director of LW  354 . The company’s registered address is the home address of Mr Paterson as recorded in his resignation as a Director. Elizabeth O’Neil and Vaughan Peter Bowkett are the current Directors of LW  354 . Ms O’Neil is Mr Paterson’s former wife.

• [11] Previous decisions of this Court have found that Mr Paterson is the controlling mind of LW  354 . In Paterson v Lepionka and Company Investments Limited,¹ Doogue J said:

... All three companies (including LW  354 ) were, at the relevant times, controlled by associates of Mr Paterson, Ms Elizabeth O’Neil (Mr Paterson’s former wife) incorporated Horseshoe Bend Hawkes Bay Limited and Ms Nadia Dapas (Mr Paterson’s current de facto partner) was its sole director at the time; Ms Dapas was the Director and Shareholder of LW  354  Limited and Naldapat Limited. Fitzgerald J later recorded, when dealing with the Paterson caveat, that Mr Paterson accepted he was responsible for causing Horseshoe Bend to lodge the caveat. Associate Judge Bell found he was behind the lodging of the LW  354  caveat.

[12] In respect of an earlier LW  354  caveat, Associate Judge Bell held:2

... the breaches of the order and the undertaking mean that the caveat should not have been lodged at all. I am satisfied that LW  354  Limited’s caveat was vexatious and an abuse of the caveat process. Mr Paterson was clearly behind lodging the caveat. He and his associates should understand that the litigation cannot be reopened and that the Lepionka mortgagee can complete the sales of the lots in the Kahuranaki Road property. This attempt to block the transfers of title has been pointless.

¹ Paterson v Lepionka and Company Investments Limited [2020] NZHC 2184 at [140] (footnotes omitted).

² Lepionka and Co Investments Ltd v Naldapat Ltd [2019] NZHC 1646 at [85].

[13] In her judgment of 26 August 2020, Doogue J made an order under s 166 of the Senior Courts Act 2016, in respect of Mr Paterson. The terms of the order were:

[170] An order under s 166 is made on the following terms:

Garth Bowkett Paterson, in any capacity, including but not limited to as a trustee of any trust, is restrained from commencing or continuing any civil proceeding (or matter arising out of a civil proceeding) that relates in any way to the matters listed below, for a period of three years:

(a) Any interest in any of, or part of, land at  354  Kahuranaki Road, Hawke’s Bay, including the parcels of land having the following unique identifiers:

(i) 716653;

(ii) 716652;

(iii) 716651;

(iv) 822870;

(v) 822871;

(vi) 868572;

(vii) 868573;

(viii) 868574; (ix) 868575;
(x) 868576;

(xi) 868577.

(b) Any caveat lodged on any of the parcels of land identified at

(a) or their predecessors or successors in title.

(c) Any sale or proposed sale of any of the parcels of land identified at (a).

(d) The development by GLW Limited (in liquidation), and/or Lepionka and Company Investments Limited as mortgagee, at  354  Kahuranaki Road, Hawkes Bay and which resulted in the parcels of land identified at (a).

(e) The borrowing or lending arrangements involving two or more of: GLW Limited (in liquidation), Lepionka and Company Investments Limited, AFI Management Pty Limited, K R Mortgage Company Limited, and Garth Bowkett Paterson (in any capacity whatsoever).

(f) Any actions of any of the defendants in this proceeding, or any of their family members, or KR Mortgage Company Limited, which in any way relates to any of the above matters.

[14] What is plain from Doogue J’s order is that Mr Paterson, in any capacity, is restrained from commencing or continuing any civil proceeding, in relation to the listed interests, for a period of three years from the judgment.

• [15] As I have noted, the property is contained in Record of Title 921753 and that is the successor to Record of Title 822871. Record of Title 822871 is included in the terms of Doogue J’s s 166 order at [170(a)(v)] and any caveat in respect of that property is covered by [170(b)] of the order.

• [16] This application was filed within three years of Doogue J’s order.

• [17] I am satisfied that the caveat lodged by LW  354  on the property on 17 June 2021 was lodged in breach of the s 166 order made by Doogue J and that the caveat was vexatious and an abuse of the caveat process. It follows that this application to sustain the caveat is an abuse of the process of the court.

• [18] I order that the proceeding be struck out, pursuant to r 5.35B(2)(a) of the High Court Rules.³

• [19] A copy of this judgment is to be served on the respondent, EHNP Nominee Limited.

• [20] The applicant has a right of appeal against this decision.⁴

Gwyn J

³ For completeness I note that the application could not have been accepted for filing in any event. It is signed by Mr Bowkett as the director of the applicant company, but the company cannot be represented in the higher courts other than by an agent who is a barrister or solicitor (subject to the discretion of the Court): Re G J Mannix Ltd [1984] 1 NZLR 309 (CA); Hoole v Darby (No 2) HC Auckland CIV-2006-404-5235, 30 May 2007, Heath J, at [10]-[11].

⁴ High Court Rules 2016, r 5.35B(3).