Rickard v Bethell [2012] NZHC 411 (13 March 2012)

High Court of New Zealand

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Rickard v Bethell [2012] NZHC 411 (13 March 2012)

Last Updated: 18 April 2012

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-8075 [2012] NZHC 411

UNDER s 145A Land Transfer Act 1952

IN THE MATTER OF Caveat 7025844.2

BETWEEN CHRISTINE ANNE RICKARD Applicant

AND VICTORIA ELIZABETH BETHELL Respondent

Hearing: 7 March 2012

Appearances: R J Thompson for Applicant

S A Grant for Respondent

Judgment: 13 March 2012

_{JUDGMENT OF PETERS J}

This judgment was delivered by Justice Peters on 13 March 2012 at 2 pm

pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date: ...................................

Solicitors:

_{Patterson Hopkins, Auckland – email:} [e-mail]

_{Davenports, Henderson – email:} [e-mail]

Counsel:

_{R J Thompson, Barrister, Auckland – email:} [e-mail]

_{S A Grant, Shortland Chambers, Auckland – email:} [e-mail]

RICKARD V BETHELL HC AK CIV 2011-404-8075 [13 March 2012]

[1] The applicant seeks an order that a caveat not lapse. The respondent opposes the making of the order sought and contends that the applicant does not have a caveatable interest in the land subject to the caveat. The respondent also submits that the balance of convenience lies in declining the application.

[2] The applicant’s caveat, being 7025844.2 (“the caveat”), is lodged against CT NA6B/653. The respondent is the registered proprietor of the land comprised and described in CT NA6B/653 (“the land”) in her capacity as trustee and executrix of the estate of Ross McKay Bethell (“Ross”). Ross died intestate in October 2008 and the caveat is delaying completion of the administration of his estate.

[3] I propose to make an order that the caveat not lapse. I am satisfied that the applicant has an arguable case for a caveatable interest in the land and that the balance of convenience lies in her favour. That said, the applicant must commence proceedings to determine her rights to the land in question, and she must do so as a matter of urgency. I consider the applicant has delayed doing so for longer than is appropriate, despite the fact that this is an intra-family dispute which the parties have attempted to resolve by agreement.

Principles

[4] The applicant as caveator has the onus of demonstrating a reasonably arguable case for the interest that she claims in the caveat.[1] Even if she does so, the Court retains a discretion not to make an order and to allow the caveat to lapse, although the Court will exercise that discretion cautiously.[2]

[5] Accordingly, there are two issues to be considered, namely whether the applicant has an arguable case to a caveatable interest in the land and, if so, whether circumstances are such that the balance of convenience lies in the respondent’s

_{favour, meaning that I should decline to maintain the caveat.}

[6] The interest claimed in the caveat is as follows:

As cestui que trust pursuant to clause 6(i) of a Deed of Family Arrangement dated on or about October 1987 whereby [the applicant] is entitled at any time, to call for a transfer by the registered proprietor, [Ross], of up to 4 hectares being part of the land described in Certificate of Title NA6B/653

[7] The land formed part of the estate of John Neale Bethell (“Mr Bethell”). Mr Bethell died in December 1985. Mr Bethell left a will dated 15 October 1985 (“the will”), disposing of his estate to his children, being Margaret, Trudy, the applicant and Ross. Some provisions of the will are relevant to this dispute but, as is evident from the caveat, the applicant claims a caveatable interest based on clause 6(i) of a deed of family arrangement (“the deed”). There is a dispute between the parties as to the proper construction of clause 6(i) and the applicant’s claim to land can only be determined finally when that issue as to construction is resolved.

[8] For present purposes, however, particular provisions of the will have some relevance because they might affect the view taken of clause 6(i). These clauses are as follows.

Will

[9] First, part of clause 6 of the will devised a:

... farm property comprising 815 acres more or less to my son Ross ... free of all duties SUBJECT TO the tenancy created in Clause 7 hereof and the provisions of Clause 8 hereof ...

[10] References below to the “farm property” are references to the land described

in clause 6 of the will.

[11] Clause 7 was subject to clause 8 and it directed the executors that:

... a portion of the land contained in [the farm property] and comprising ten (10) acres more or less together with the camp and shop buildings thereon (if any) is to be and is hereby let to ... [the applicant] during her lifetime for the annual rental of ONE DOLLAR ($1.00) to the end that my son Ross ... shall take the bequest in Clause 6 SUBJECT TO the life tenancy granted herein.

[12] Accordingly, and subject to clause 8, the effect of clause 7 was to grant the applicant a life interest in a portion of the farm property comprising 10 acres more or less together with any camp and shop buildings thereon.

[13] Clause 8 directed the executors as follows:

8. I DIRECT that the area of land behind the McKAY sub-division be divided so that the following areas are transferred to the person named hereunder:-

(a) Ten acres to ... [the applicant] being the same land referred to in Clause 7 herein and if so sub-divided [off] my main block Clause 7 need no longer have any effect.

...

[14] Accordingly, pursuant to clause 8 of the will, the executors were to subdivide and then transfer to the applicant 10 acres of the farm property behind the McKay subdivision. If the area was subdivided off the main block, the life interest conferred by clause 7 would be extinguished.

[15] Clause 10 gave directions to the executors as to the course they were to follow if they had not obtained approval for the subdivisions referred to in clause 8 within three months from the grant of probate. In that event, Mr Bethell made different dispositions. Probate was granted on 12 February 1986, meaning the three month period referred to in clause 8 ended on 12 May 1986. There is no suggestion in the evidence that the necessary approvals for the subdivisions were given within the relevant period.

Deed

[16] The executors/trustees and beneficiaries under the will executed the deed in about October 1987. The recitals to the deed record:

... the express wish of all the Beneficiaries that [Mr Bethell’s] testamentary wishes be altered or modified as set out herein in place of the provisions of the Will as Probated.

[17] After providing that particular clauses of the will, not relevant for present purposes, should continue, clause 6(i) of the deed provided:

6. THAT the ... will shall be amended/clarified as set out herein:

(i) That ... Ross ... shall receive the principal farm property more particularly described in Certificate of Title 6B/653 subject to [the applicant] being entitled to call for, at any time, an allotment up to

10 acres in the area known as the camping grounds near the main road and ... Ross ... shall sign any such survey plans, Memorandum of Transfer or other documentation to enable ... [the applicant] to receive the said area, subject to the local authority’s approval provided that such approval can be obtained at any time during the period of the joint lives of ... [Ross and the applicant].

...

[18] Clause 6(i) refers to the area known as the camping grounds (“camp ground area”). There is no dispute as to the location of the camp ground area and there is no dispute that it comprises five or six acres, not 10 acres. It is also common ground that the local authority approval to which clause 6(i) refers is approval to subdivide the area to be allotted to the applicant.

[19] What is in dispute, however, is whether clause 6(i) entitles the applicant to

10 acres, provided it is in the camp ground area near the main road, or whether it entitles the applicant to the five or six acres that make up the camp ground area, and no more than that.

[20] There has never been a camp ground on the land, but there was discussion in the family before Mr Bethell’s death about the possibility of establishing a camp ground. There is vehicular access from a public road across the camp ground area, and that access is used to reach other parts of the farm property.

[21] It appears from the affidavit evidence that, in about 1999, the applicant raised with Ross the allotment of a block of the farm property that comprised 10 acres and included the camp ground. The applicant’s evidence was that Ross was uncooperative, at least in part because he was unwilling to give up the vehicular access referred to in the previous paragraph. The applicant’s evidence is that she offered to grant a right of way, but to no avail. By 2005 Ross and the applicant had each instructed solicitors.

Caveatable interest

[22] The applicant submits that clause 6(i) entitles her to 10 acres in the camp ground area and that, without more, is sufficient to give her a caveatable interest in the land.

[23] If more is required, however, in May 2007 and therefore during Ross’

lifetime, the applicant obtained local authority approval to subdivide an area of

10 acres including the camp ground. I refer to this area as “the 10 acre block”. The applicant also gives evidence that she asked Ross to execute any documents required to effect the subdivision and to transfer the 10 acre block to her but Ross refused to do so. Accordingly, the applicant submits that she has a caveatable interest in the land.

[24] The respondent advanced several arguments as to why the applicant does not have a caveatable interest. The first concerned the dispute to which I have referred as to the construction of clause 6(i). The respondent’s second argument was that, even if the applicant’s submission as to the proper construction of clause 6(i) is correct and she is entitled to 10 acres, the applicant did not have a caveatable interest at the time she lodged her caveat. That is because the applicant lodged the caveat before she obtained resource consent. The respondent’s third argument was made pursuant to the provisions of the Perpetuities Act 1964.

[25] The respondent’s first argument is that clause 6(i) entitles the applicant to the camp ground area alone and that the applicant could only have a caveatable interest in the land if she had obtained resource consent to subdivide the camp ground area during Ross’ lifetime. As she did not and now cannot, the respondent submits that the applicant has no caveatable interest.

[26] Counsel for the respondent referred me to several authorities as supporting the respondent’s position. The arguments advanced on these authorities assumed, however, that the respondent’s construction of clause 6(i) was to be preferred.

[27] On the first issue, I am satisfied that the applicant has an arguable case that clause 6(i) entitles her to 10 acres, provided it is in the camp ground area. The principal arguments in favour of the applicant’s construction of clause 6(i) are first that the clause entitles the applicant to call for an allotment “up to 10 acres”. It was open to the parties to provide that the applicant might call for an allotment of the camp ground area, and no more or less, if that was what they intended. In addition, and as counsel for the applicant submitted, an entitlement to 10 acres is consistent with clause 8 of the will and with the life interest that clause 7 of the will conferred, and perhaps still confers, on the applicant.

[28] Given that the applicant has obtained resource consent to subdivide and given the request(s) of Ross to execute all necessary documents, the applicant has an arguable case to a caveatable interest.

[29] I emphasise that I am dealing with this matter on an interlocutory basis. It may be that a different view is taken when the matter is argued more fully, after all relevant and admissible evidence as to the proper construction of clause 6(i) is before the Court.

[30] Turning to the respondent’s second point, the applicant lodged her caveat in September 2006 but she did not obtain resource consent until May 2007. With respect to the respondent, however, the caveat was lodged in its present form at the suggestion of Ross’ solicitors in September 2005. Although the solicitors maintained the view that the applicant was not entitled to call for as much as 10 acres, there was no suggestion that any point would be taken as to the (then) lack of resource consent to subdivide. Given that the present caveat followed the solicitors’ suggestion, it is clearly arguable that the respondent is now estopped from relying on a lack of resource consent at the relevant time.

[31] The respondent’s third submission concerns the Perpetuities Act 1964. The respondent’s submission is that s 17 of the Perpetuities Act 1964 provides that an option for the purchase of land may only be exercised within 21 years of the grant of the option. The grant occurred in 1987 and, accordingly, the argument is that the option expired in 2008. Counsel for the applicant did not accept that view of

clause 6(i) of the deed but, in any event, submitted that the applicant had in fact exercised the option within the 21 year period to which counsel for the respondent referred.

[32] It is not necessary for me to resolve these rival contentions. As counsel for the respondent acknowledged, it is not an argument capable of resolution at the present time. It is, however, a matter that may need to be determined in the course of judgment on the parties’ substantive rights.

[33] To conclude, I am satisfied that the applicant has an arguable case for a caveatable interest.

Balance of convenience

[34] The next issue is whether the caveat ought to lapse because the balance of convenience lies in the respondent’s favour.

[35] The respondent wishes to complete the administration of Ross’ estate and she should not be delayed longer than is necessary. I was informed from the bar that the farm property is to be held on trust. From the applicant’s perspective, however, her father intended that she should have a share of the family land. The applicant also has a strong attachment to the land. The balance of convenience lies in the applicant’s favour but I repeat that she must commence proceedings promptly and have her rights determined.

[36] There are two additional points that I mention.

[37] The first is that, in about 1999, Ross and his first wife, Maria, moved a house onto the 10 acre block (“the house”). As a matter of general principle, thereafter the house would have been a fixture to the land. In addition, as part of their division of matrimonial property, Ross and Maria agreed in 2004 that Maria would have a life interest in land within the 10 acre block. Ross of course would have known of the provisions of the will and his obligations under the deed, and it would be surprising if Maria had been unaware of these matters. Regardless, it is not necessary at

present to resolve any matters that might arise regarding the house or the purported life interest in Maria’s favour. If necessary, such issues could be resolved in the proceedings that the applicant must now commence.

[38] The second matter concerns the terms of the resource consent to subdivide which the applicant has obtained. Counsel for the respondent referred to various conditions to the consent which, on the respondent’s view of it, require the house to remain on the 10 acre block. Whatever the conditions to the consent require, as a fixture, the house forms part of the land. Accordingly, I am not satisfied that the applicant could not implement the resource consent as it stands at present. It is for the applicant to comply with those conditions or to negotiate any variation that may be required. I do not consider the terms of the resource consent to be relevant to the balance of convenience as between the applicant and respondent.

Result

[39] I make an order that caveat 7025844.2 registered against CT NA6B/653 being the property at 280-282 Bethells Road, Bethells, Waitakere, not lapse.

[40] Having succeeded, the applicant is entitled to an award of costs. I trust the parties will be able to resolve any issue as to costs by agreement but they may submit memoranda if necessary.

..................................................................

PETERS J

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[1] _{Sims v Lowe [1988] 1 NZLR 656 (CA).}
[2] Pacific Homes Ltd (in receivership) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA).