Wanoa v Pepper Custodians (New Zealand) Limited [2013] NZHC 765 (15 April 2013)

Last Updated: 16 May 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-1777 [2013] NZHC 765

BETWEEN WIREMU WANOA Appellant

AND PEPPER CUSTODIANS (NEW ZEALAND) LIMITED Respondent

Hearing: 12 April 2013

Appearances: Appellant in person

E Cox and I Miller for Respondent

Judgment: 12 April 2013

Reasons: 15 April 2013

_{REASONS FOR JUDGMENT OF KATZ J}

Solicitors / Parties: Mr W Wanoa

Mr E Cox / Mr I Miller, Gibson Sheat, Solicitors, Wellington

WANOA V PEPPER CUSTODIANS (NEW ZEALAND) LIMITED HC AK CIV-2013-404-1777 [12 April

2013]

Introduction

[1] On 24 December 2012 the Tenancy Tribunal made orders terminating the tenancy of the appellant, Wiremu Wanoa, in respect of two properties in Pokeno. Possession was granted to the respondent, Pepper Custodians (New Zealand) Limited (“Pepper”), effective midnight on Sunday, 20 January 2013.

[2] Mr Wanoa appealed that decision to the District Court and sought a stay of the Tenancy Tribunal decision pending the outcome of that appeal. On 22 February

2013 the District Court declined the stay application. Mr Wanoa appealed that decision to the High Court. The High Court granted an interim stay, pending full hearing of the stay appeal. However before the stay appeal could be heard the District Court (on 8 April 2013) dismissed Mr Wanoa’s substantive appeal against the Tenancy Tribunal decision. The original stay application therefore became moot and was dismissed on 9 April 2013.

[3] Mr Wanoa then appealed to this Court against the District Court’s dismissal of his substantive appeal. At the same time he filed a further stay application, pending determination of his appeal to the High Court (“Stay Application”). The Stay Application came before me as Duty Judge on 10 April 2013 and I made an interim stay order at 11.50 am, pending full argument of the application.

[4] The timing of the interim order is significant, because it subsequently transpired that the bailiffs had attended the Pokeno properties on the morning of

10 April 2013 in order to repossess them on behalf of Pepper. If the properties were repossessed prior to the interim stay order being made, then the interim order was moot, as was the Stay Application itself.

[5] Against that background, the key issues for determination at the hearing before me on 12 April 2013 were:

(a) Was the purported repossession effected under the Residential

Tenancies Act 1986, the Property Law Act 2007, or both? (It was

common ground that repossession had to be effected under the Residential Tenancies Act to be legally effective as against Mr Wanoa as tenant).

(b) If so, did Pepper complete enforcement of the Tenancy Tribunal’s

decision prior to the interim stay order being made?

(c) If repossession was effected prior to the interim stay order being made, is the Stay Application now moot?

(d) If it is not moot, should the Stay Application be granted on its merits?

[6] At the conclusion of argument at 5.00 pm on Friday 12 April I dismissed the Stay Application and revoked my interim stay order, with written reasons to follow. My reasons are set out below.

Was the purported repossession effected under the Residential Tenancies Act, the Property Law Act, or both?

[7] Mr Wanoa appeared in person at the hearing of the Stay Application, supported by Mr Schmidt (who had previously informed me that he was Mr Wanoa’s son) as his McKenzie friend. I note that Mr Schmidt and his wife were parties to related proceedings relating to the mortgagee sale of the Pokeno properties, in which they claimed a beneficial ownership interest. Their application for leave to appeal to the Supreme Court against a judgment in favour of Pepper and others was dismissed

on 12 April 2013.[1]

[8] I also note that although Mr Wanoa appeared in person, he filed an 11 page memorandum in support of his Stay Application. That document was comprehensive and appeared to have been drafted by a lawyer or, at the very least, had the benefit of

_{significant legal input.}

[9] One of the key arguments raised by Mr Wanoa was that repossession had been effected (if at all) under the Property Law Act rather than under the Residential Tenancies Act. Given Mr Wanoa’s status as a tenant it was common ground that repossession had to be effected under the Residential Tenancies Act, in order to be effective against him. In essence, Mr Wanoa argued that Pepper had repossessed the property as owner rather than as landlord. It was submitted that it had unlawfully relied on a possession order granted under the Property Law Act in the related High Court proceedings involving Mr and Mrs Schmidt, rather than the separate possession order granted by the Tenancy Tribunal in respect of Mr Wanoa as tenant.

[10] The evidence filed by Pepper however indicates that both possession orders (i.e. that made by the High Court in the Schmidt proceedings and that made by the Tenancy Tribunal in the Wanoa proceedings) were enforced concurrently on the morning of 10 April 2013.

[11] This is apparent from (amongst other things) letters to the Papakura District Court from Pepper’s solicitors, which are exhibited to an affidavit shown by Holly Ann Ball on behalf of Pepper. Those letters expressly sought the District Court’s enforcement of the Tenancy Tribunal orders, but also noted that separate possession orders had been obtained in the High Court. The 9 April 2013 letter stated that “we understand the Auckland High Court will also instruct you to enforce the possession order Pepper obtained in the High Court (over the same properties).” That appears to be what occurred.

[12] I am satisfied that the bailiffs enforced both the Tenancy Tribunal and the

High Court possession orders on the morning of 10 April 2013.

Did Pepper complete enforcement of the Tenancy Tribunal’s decision prior to

the interim stay order being made?

[13] Pepper was not represented in Court on the morning of 10 April 2013 when the interim order was made,[2] however, Pepper became aware of the order shortly

_{afterwards. Mr Cox immediately filed a Memorandum on behalf of Pepper advising}

that enforcement had been completed prior to the interim order being made and both parties appeared before me (Mr Cox by telephone) at 1.30 pm on 10 April 2013 to outline the events of that morning.

[14] Enforcement of a possession order is complete when all persons found on the property have been removed. It is not necessary to remove the occupier’s goods, the giving of possession to the party entitled to the possession order is the completion of enforcement: Goodfellow v Carson.[3] The execution of a possession order is completed when quiet possession has been delivered to the plaintiff and the bailiffs have gone away.[4]

[15] The evidence filed by Pepper, including affidavits filed by the two attending bailiffs, demonstrates that the Tenancy Tribunal orders had been enforced and exclusive possession given to Pepper by 11.30 am on 10 April 2013 at the latest, when the bailiffs left the property. This was prior to the interim order being made.

[16] Accordingly, there has been no breach of the interim stay order, as alleged by

Mr Wanoa.

If repossession was effected prior to the interim stay order being made, is the

HC Stay Application now moot?

[17] By the time the interim stay order was made there was no longer any extant enforcement procedure to which the Stay Application could apply. The Stay Application is accordingly now moot.

If the HC Stay Application were not moot, should it be granted on its merits?

[18] For completeness I record that even if the Stay Application were not moot, I

_{would not have granted it on its merits.}

[19] An interim stay was ordered by the High Court pending full hearing of Mr Wanoa’s appeal against the decision of Judge M E Sharp to decline the original stay application in the District Court. The stay appeal was rendered moot, however, when the District Court issued substantive judgment prior to the stay appeal being heard.

[20] Having now had an opportunity to consider the District Court stay judgment, and having heard argument in this court on the subsequent Stay Application, I think it unlikely that the stay appeal would have succeeded. In order to obtain a stay in the District Court Mr Wanoa had to satisfy the threshold jurisdictional requirement of s 117(1) of the Residential Tenancies Act. That subsection states:

Where the appeal relates to an order terminating the tenancy made on the ground of non-payment of rent a stay of proceedings shall not be granted unless the application for stay is supported by a receipt or other written evidence tending to show that the rent was not in fact in arrear at the date of the hearing before the tribunal.

[21] The District Court found that Mr Wanoa had failed to overcome this jurisdictional hurdle. That appears to be a conclusion that was entirely open to the Judge on the evidence before her. Accordingly, if the stay appeal had been heard in the High Court prior to it becoming moot, it would likely have been dismissed, with the result that repossession would have taken place some time ago.

[22] However, I must now consider the new Stay Application on its merits. Firstly, I note that the jurisdictional bar in s 117(1) of the Residential Tenancies Act does not expressly apply to a stay application in the High Court. The fact that, in this case, both the Tenancy Tribunal and the District Court found that there was no credible evidence tending to show that Mr Wanoa’s rent was not in fact in arrears is however highly relevant to the issue of stay. That issue goes directly to the prospects of success on appeal, which appear to be weak in this case.

[23] Mr Wanoa’s arguments have already been carefully and comprehensively

considered by both the Tenancy Tribunal and District Court. Although an appeal

from the Tenancy Tribunal to the District Court operates as a full re-hearing, the further right of appeal to the High Court is limited to points of law only.[5]

[24] Mr Wanoa faces the formidable obstacle that he has been unable to prove the factual foundation of his case (full payment of rent to the correct landlord) in either the Tenancy Tribunal or District Court. Judge M E Sharp summarised her views on this issue as follows:

In summary, the adjudicator said that Mr Wanoa’s claim of continued rent payment by him was solely dependent on his and the Schmidt’s oral evidence without supporting documentation of any evidential value. In the end, the adjudicator found that it was simply not credible that rent was paid every week without fail for over four years without leaving any evidential trail. It seems to me that is a determination that the Tribunal was perfectly entitled to make. Had I been in the place of the adjudicator, it seems to me that I would have reached the same determination about the credibility of that position.

[25] That finding must stand in this Court on appeal. I note that Judge M E Sharp

also raised concerns regarding Mr Wanoa’s credibility in her stay decision of

22 February 2013. Her Honour noted major inconsistencies between both Mr Wanoa’s and Ms Schmidt’s evidence before the Tenancy Tribunal and in the District Court, as well as between the contemporaneous documents and the assertions made in respect of them.

[26] Mr Wanoa will face formidable obstacles in his substantive appeal to this Court, given the factual findings of the Tenancy Tribunal and District Court. This militates against a stay being granted, particularly in circumstances where it seems likely that the original decision of the District Court to decline the earlier stay application was correct. The hurdle to obtaining a stay in this Court should logically be higher, not lower, than in the District Court on the facts of this case. That is because the appeal grounds in this Court are much narrower than those in the District Court and Mr Wanoa is in the difficult position of having to accept factual findings which may well be fatal to his prospects of success on appeal.

[27] Mr Wanoa argued that his appeal prospects would be rendered nugatory if the

_{Stay Application were not granted. There is some force in that submission, albeit Mr}

Cox submitted that a tenant’s rights are in personam, not in rem, and Mr Wanoa would still have an arguable claim to damages. Overall, it is my view that the possibility of the appeal being rendered nugatory is not decisive on the facts of this particular case and is outweighed by the matters I have outlined above.

[28] I further note that there appears to have been no miscarriage of justice (or risk of one) which would warrant a stay. Pepper is a first ranking mortgagee with indefeasible title, which was entitled to conduct a mortgagee sale with vacant possession. It appears that Pepper would have been entitled under s 58(1)(d) of the Residential Tenancies Act 1986 to convert Mr Wanoa’s alleged fixed term tenancy to a periodic tenancy and terminate it in any event. The consequences of this are that Mr Wanoa was, at best, simply staving off his inevitable departure from the properties for a brief period. His prospects of remaining as a tenant in the medium to long term (regardless of the outcome of the current appeal process) appeared to be very low.

Conclusion

[29] For all of the above reasons, I dismissed the Stay Application, revoked my interim stay order, and granted leave to file memoranda on costs.

Katz J

---

[1] T J and A M Schmidt v Pepper New Zealand (Custodians) Ltd and Ors [2013] NZSC 29.

[2] Full details of the various court events of 9 and 10 April 2013 are set out in my Minute of 11 April

2013.

[3] _{Goodfellow v Carson [1947] NZLR 482 at 486.}

[4] Laws of New Zealand, Creditor’s Remedies (online ed) at [97].

[5] Residential Tenancy Act 1986, s 119.