Wanhill v Wanhill [2015] NZHC 1012 (13 May 2015)

Last Updated: 26 May 2015

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-000993 [2015] NZHC 1012

UNDER	s 145A of the Land Transfer Act 1952
IN THE MATTER OF	an application for an order that a caveat not lapse
BETWEEN	ROSALIE ANNE WANHILL Plaintiff/Applicant
AND	KEVIN BENJAMIN WANHILL Defendant/Respondent

Hearing:	13 May 2015
Appearances:	M V Rusk for Plaintiff P L Rice for Defendant
Judgment:	13 May 2015

_{ORAL JUDGMENT OF VENNING J}

Solicitors: Aurora Law Ltd, Waiuku

Peter Aitken, Waiuku

Copy to: P L Rice, Auckland

WANHILL v WANHILL [2015] NZHC 1012 [13 May 2015]

[1] This is an application that a caveat lodged by the plaintiff not lapse. It is opposed. The plaintiff and defendant are mother and son. The plaintiff at her son’s request advanced him $30,000. She says that was to enable him to complete the unconditional purchase of a property at 106 Queen Street, Waiuku. The plaintiff, who on the evidence before the Court, suffers from serious medical conditions, agreed to lend the $30,000 to her son. It represented a substantial part of her life savings.

[2] In order to secure the $30,000 advance a loan agreement was completed between the parties on 2 October 2014. That loan agreement provided that the loan expiry date was 2 October 2015 and importantly that the security was to be a caveat over 106 Queen Street, Waiuku. The defendant owned a second and separate property at George Street. The plaintiff instructed her solicitor to register a caveat against that property at George Street. At the time the caveat was registered, which is noted on the title as 23 April 2015, there was an existing mortgage to the ANZ National Bank and also a caveat by Mr and Mrs O’Connor, who may well be the purchasers of the property.

[3] The defendant took steps to initiate removal of the caveat over George Street as the property has been sold. The plaintiff responded with this application that the caveat not lapse. The defendant’s position is that the plaintiff has no arguable caveatable interest in the property at George Street as the loan agreement which allows for a caveat to be registered for security clearly refers only to Queen Street.

[4] To counter that submission Ms Rusk submitted that it was always intended that when the money was advanced it would be secured against the George Street property. The difficulty for the plaintiff is that, apart from the suggestion that that was some sort of oral agreement (when the parties had gone to the trouble of making a written agreement for the security in relation to Queen Street) there is nothing in her affidavit which expressly records that position. She does record the various discussions at the time of the advance and that the defendant had told her he was in the process of selling the second property at George Street. She says she relied on her son’s agreement that he would in fact repay the $30,000 on the sale of the existing property.

[5] As Mr Rice submits the onus is on the plaintiff as the caveator to show there is a reasonably arguable case for an interest in the land.¹

[6] In the present case, on the basis of the evidence before the Court, there is insufficient evidence for the plaintiff to satisfy the Court that she has an arguable interest in the land that would support a caveat against the George Street property. The position is of course quite different in relation to the Queen Street property and the plaintiff is clearly entitled to register and maintain a caveat against that property to secure the $30,000 she has advanced to the defendant.

[7] But in this case there is a further factor. Even if the plaintiff was able to establish an arguable case to sustain the caveat, which for the short reasons noted above she is not, the Court retains a discretion whether to make an order sustaining or removing the caveat in any event.²

[8] The Court will remove a caveat or allow it to lapse where there is no practical purpose to be achieved by sustaining the caveat. In the present case that is the position. The property at George Street has been sold. As noted, prior to registration of the plaintiff’s caveat a mortgage was registered in favour of the ANZ Bank. The defendant’s solicitor has sworn an affidavit in which he discloses the details of the settlement of the George Street sale. That records a sale price of $328,000. After payment of the costs of sale in the sum of $315,100 to the Bank the defendant will be required to pay approximately $2,609 to enable the settlement to be completed. The solicitor confirms in the affidavit that the Bank requires the full sale proceeds after deduction of costs to repay the mortgage and has provided advice from the ANZ Bank confirming a settlement advice of $315,100, including the discharge fee. In the circumstances there is no equity available to either the defendant or the plaintiff from the sale of that property at George Street.

[9] The law is well established that the mortgagee ANZ Bank takes priority over subsequent caveats. If the Bank had sold the property rather than the defendant the

¹ Castle Hill Run Ltd v NZI Finance Ltd [1985] 2 NZLR 105, and Sims v Lowe [1988] 1 NZLR

_656.

² Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA).

caveat would have been removed on presentation of the transfer by the Bank in any event.

[10] I am satisfied for those reasons that there is no practical purpose in sustaining the caveat even if otherwise there was an arguable interest which there is not. It follows that the caveat must lapse and I direct accordingly.

Costs

[11] For the plaintiff Ms Rusk submits that costs should either lie where they fall given the circumstances of this case or, alternatively, the Court should exercise its discretion and fix costs at no more than the minimum scale, namely 1A.

[12] Mr Rice seeks costs on a 2B basis, which might be regarded as the standard basis for costs.

[13] Costs are at the discretion of the Court but equally the Rules make it clear that costs awards should be predictable and should generally follow the event.

[14] I am satisfied that there is nothing particular about this case that would require or support anything other than the general rule applying, namely that costs should follow the event.

[15] The costs should be limited to the appearance in the list yesterday, the appearance this afternoon for hearing and the filing of a notice of opposition and affidavit. Those costs, however, are to be fixed according to category 2B in the usual

_{course of events, and the disbursement related to the filing of the opposition.}

Venning J