HELMBRIGHT V POTTS & HODGSON HC ROT CIV 2005-463-299 [2006] NZHC 899 (2 August 2006)

IN THE HIGH COURT OF NEW ZEALAND
ROTORUA REGISTRY
                                                                         CIV 2005-463-299



                BETWEEN                       PETER GRIFFITH HELMBRIGHT AND
                                              AUDREY
WAIMIRIRANGI
                                              HELMBRIGHT
                                              Appellants


               AND                           POTTS & HODGSON
                                              Respondents


Hearing:
       28 July 2006

Appearances: Mr & Mrs Helmbright in person
             K Ashby-Koppens for Respondents

Judgment:       2 August
2006


                               JUDGMENT OF KEANE J



             This judgment was delivered by Justice Keane on 2 August
2006 at 4pm
                        pursuant to Rule540(4) of the High Court Rules.

                                   Registrar/
Deputy Registrar

                                             Date:




Solicitors:
Hesketh Henry, Auckland for Respondents

Copy
to:
P G & A W Helmbright, 73 Buchanan Street, Opotiki


HELMBRIGHT V POTTS & HODGSON HC ROT CIV 2005-463-299 2 August 2006

[1]
     In January 1989 Mr and Mrs Helmbright purchased their present home at 73
Buchanan Street, Opotiki. But, as a result of a conveyancing
error in 1975 when their
predecessors took title, replicated in 1989, the title they obtained related to 67
Buchanan Street.


[2]
     This error became manifest in 1998, when the Opotiki District Council
pursued Mr and Mrs Helmbright for arrears of rates. Mr
and Mrs Helmbright denied
liability. They could not be rated on their own property, they said, if they did not
have title to it.
Nor could they be rated on the property to which they did have title,
title to which lay with Her Majesty the Queen for State Housing
purposes. More
fundamentally, they regarded their land as Maori customary land, not amenable to
rates.


         Potts & Hodgson,
the solicitors who had acted on the 1989 transaction, and
[3]
perhaps also that in 1975, immediately invited Mr and Mrs Helmbright
to transfer to
Housing New Zealand their seeming interest in 67 Buchanan Street, in exchange for
a reciprocal transfer giving them
title to their own property. They refused and the
Council, on 22 March 2001, obtained declarations enabling the titles to be corrected
and confirming Mr and Mrs Helmbright's liability to rates. Their own purported
counterclaim was dismissed and they were ordered to
pay costs. (Opotiki District
Council v Housing New Zealand Ltd & Helmbright HC Rotorua, M 86/00, 22 March
2001, Chambers J)


  
      On 4 April 2002, Mr and Mrs Helmbright brought an action for damages in
[4]
this Court against Potts & Hodgson, Housing New
Zealand, the Opotiki District
Council and the Minister of Maori Affairs. On 20 November 2002, their claim
against all but Potts &
Hodgson was struck out and in March 2003 that residual
claim was transferred to the District Court for hearing.


Decision under
appeal


         At the hearing in the District Court, extending over two days, 14 and 15
[5]
February 2005, Mr and Mrs Helmbright,
who represented themselves, abandoned,
the Judge confirms, one of their two causes of action: that Potts & Hodgson had

coerced
them into entering the agreement for sale and purchase in 1989. The Judge
was able to resolve their remaining cause of action in
negligence on Potts &
Hodgson's own concession that in their conveyancing in 1989-1990, they had indeed
been negligent. All the Judge
then had to determine, as he said, was whether this
admitted negligence resulted in the losses Mr and Mrs Helmbright claimed.


[6]
    The damages Mr and Mrs Helmbright claimed came to $207,428. They
sought $56,168 for the error in title; $140,000 for the effects
on them of that error
(loss of enjoyment, $20,000, pain and suffering, $20,000 and traumatic stress
disorder, $100,000); $10,000
for travel costs, $1,000 for use of cellphones and a
shortfall of $1,360.


[7]     The Judge concluded that Mr and Mrs Helmbright had suffered no loss. The
error as to title, he
found, did not become apparent to anyone until 1998, and until
then there could have been no loss. When in 1998 the error was discovered,
he
concluded also, Mr and Mrs Helmbright had it in their hands to cure that
immediately. They could have agreed to the reciprocal
transfers of title then offered,
declared necessary by this Court in 2001. That would have shut off instantly any
possibility of
detriment in the future. Instead, to avoid their rates liability, they
chose, the Judge concluded, Mr Helmbright principally, to
leave the titles just as they
were.


[8]     That, so far as the Judge was concerned, was conclusive.              He did not
consider,
because he saw no need to, Mr and Mrs Helmbright's various heads of
claim. But he did record that, when cross-examined, Mr Helmbright
had conceded
that from 1998 onwards any detriment he and his wife had suffered, his wife
particularly, had at least been contributed
to by other events.


[9]     In 1999 Mrs Helmbright had undergone surgery and after-care. In that year
too Mr Helmbright and his
hapu had contested a developer's earthworks on coastal
land and he had been restrained by injunction from entering Maori land. In
2000
their daughter had suffered an assault at school. In 2001-2002 Mrs Helmbright was
prevented by trespass notice from entering
73 Buchanan Street. Evidently, the Judge
saw no link between those events, or any detriment, and the error in title.

Customary
title


[10]   During the hearing, though the Judge does not say so, Mr Helmbright
attempted to challenge the validity of the titles
issued for 67 and 73 Buchanan Street
under the Land Transfer Act. The Judge declined to allow Mr Helmbright to enlarge
the case in
that way, holding that on the pleadings the action lay in negligence
deriving from an error in those titles; and it is against that
aspect of the decision
primarily that Mr and Mrs Helmbright appeal.


[11]   The Judge, they contend, was fundamentally wrong when
he confined their
claim to negligence only and held that, after they refused to enter reciprocal transfers
to correct the error in
title, they became the authors of any loss they may afterwards
have suffered. The land was customary Maori land to which the Land
Transfer Act
could not apply. The remedy the Judge envisaged was no remedy at all.


[12]   The Judge was right, however, I consider,
to hold Mr and Mrs Helmbright's
claim to customary title to be beyond the scope of their actions. Both 67 and 73
Buchanan Street
are subject to the Land Transfer Act and Mr and Mrs Helmbright
hold an estate in fee simple. To displace that and to assert customary
title, they rely
on Ngati Apa v Attorney-General  [2003] 3 NZLR 643 (CA). But they had acquired
their interest by purchase, not by asserting any customary interest. Their claim is
more radical. It
is that tenure under the Land Transfer Acts has never superseded
customary Maori title. That is the antithesis of the Ngati Apa decision.


[13]   Mr and Mrs Helmbright's claim, moreover, rests on an error in registration
under the Land Transfer Act. If, all the while,
the land was customary Maori land
and that error was incapable of remedy, that complicates still further their claim
relying on the
detriments they attribute to the error. On their argument it cannot have
had any significance.


Coercion and fraud


[14]   Secondly,
Mr and Mrs Helmbright contend, the Judge was wrong to confine
their case in two other ways. He was wrong to deny them their right
to advance their

first cause of action that they were coerced into the 1989 agreement. He was wrong
also to deny them the right
to advance their claim relying on the error in title, not just
in negligence but also in fraud.


[15]   If, as Mr and Mrs Helmbright
say, they did not abandon their first cause of
action that they were coerced into the 1989 agreement, the Judge would have been
obliged
to resolve it. But on the record the Judge was right to say that it was
abandoned. Mr Helmbright says on this appeal that he was
coerced by the Judge.
That is simply not so. The record shows that the Judge was scrupulous to elicit from
Mr Helmbright the full
extent of the claims pleaded. The decision to abandon the
first cause of action was Mr and Mrs Helmbright's own.


[16]   The Judge
did decline to allow Mr and Mrs Helmbright, in respect of the
cause of action resting on the error in title, to advance fraud as
well as negligence,
but that was because fraud had not been pleaded in the statement of claim. Nor could
the Judge discern any evidence
of a fraud as distinct from negligence. Fraud added
nothing, the Judge held, to Mr and Mrs Helmbright's case. In that too, I consider,
the
Judge was right.


[17]   Fraud calls for dishonesty, not merely carelessness. If fraud had been alleged
against Potts & Hodgson
that should have been pleaded distinctly and in detail. Potts
& Hodgson were entitled to nothing less. Fraud could not just be tacked
on at the
hearing. Fraud, moreover, attracts a heightened standard of proof. If Mr and Mrs
Helmbright could not succeed in negligence
they had no hope in fraud, unless they
could rely on a different order of evidence and they could not.


Claim in negligence


[18]
  Ultimately Mr and Mrs Helmbright contend, the Judge made two errors in his
decision to deny their claim in negligence. He did not
identify fully, and sheet home
to Potts & Hodgson, their errors in conveyancing. He failed to recognise the
detriments flowing from
that error that entitled Mr and Mrs Helmbright to damages.

[19]   As to the first, the Judge had no need to analyse in any detail
the errors in
conveyancing that resulted in the error in title. He had Potts & Hodgson's concession
that there had been negligence.
The only issue he had to consider was whether the
losses claimed were fairly attributable to the errors conceded. That is a different
inquiry.


[20]   As to the issue of loss, the Judge was right to conclude that there had been
none before 1998 when the error in
title was discovered. Mr Helmbright attempted to
say that he knew of it in 1994 when the mortgage security was recast. But how he
could have known that then is obscure and how any loss could have resulted no less
so. The Judge was right to give no emphasis to
this.


[21]   The Judge was right also, I consider, to hold that when in 1998 Mr and Mrs
Helmbright decided to leave the titles
as they were they had to accept any later
detriment. He was right, equally, to conclude that there had been no detriment. None
of
the losses they claimed were linked to the error in title.


[22]   Finally, the Judge was right to refuse to award Mr and Mrs Helmbright
damages, the effect of which was to impose on Potts & Hodgson the costs awarded
against the Helmbrights in the declaratory judgment proceedings. The declaration
only became necessary because they refused to enter into reciprocal transfers; and
they resisted the declaration.


Conclusion


[23]   For those reasons the appeal will be dismissed. Potts & Hodgson, who are
entitled to costs, are to file any memorandum within
ten days of the date of this
decision. Mr and Mrs Helmbright are to file any reply within the succeeding ten
days. I will deal with
costs on the papers.




                                                                _____________
                         
                                      P.J. Keane J