WTG Holdings Limited v Anthem Vineyards Limited (in liquidation) [2016] NZHC 1087 (24 May 2016)

High Court of New Zealand

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WTG Holdings Limited v Anthem Vineyards Limited (in liquidation) [2016] NZHC 1087 (24 May 2016)

Last Updated: 21 June 2016

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

CIV-2016-425-000055 [2016] NZHC 1087

BETWEEN	WTG HOLDINGS LIMITED Applicant
AND	ANTHEM VINEYARDS LIMITED (IN LIQUIDATION) Respondent

Hearing:	23 May 2016 (by way of telephone conference)
Appearances:	J Moss for Applicant K P Sullivan for Respondent
Judgment:	24 May 2016

_{JUDGMENT OF GENDALL J}

[1] On 3 May 2006 the applicant WTG Holdings Ltd filed an application on notice in this Court to sustain caveat 10145795.1 which was lodged on 11 August

2015 the title to a property owned by the respondent Anthem Vineyards Limited (In Liquidation). This application was supported by affidavits of Ian Bruce Hyndman, a director of the applicant, and David Ian Henderson.

[2] The application was made effectively relying on s 145A Land Transfer Act

1952.

[3] The caveat lodged by the applicant is a claim to an estate or interest in the respondent’s land described as being “pursuant to a cestui que trust between the registered proprietor as trustee and the caveator as beneficiary”.

[4] Essentially, as I understand the position, the caveat concerns a small portion

of land at present included in the title to the respondent’s property relating to an over-planted water race area which the applicant now maintains should have been

WTG HOLDINGS LTD v ANTHEM VINEYARDS LTD (IN LIQUIDATION) [2016] NZHC 1087 [24 May

2016]

transferred into the title owned by the applicant under binding arrangements some time ago. As best I can tell this forms the basis upon which the trust claim is made.

[5] On Thursday last, 19 May 2016, the respondent filed a notice of opposition to this application and a detailed affidavit from John Marshall Scutter, the liquidator of the respondent. The application is opposed amongst other reasons on the basis that the respondent says the applicant does not have a caveatable interest in the property. Counsel for the respondent also contends that, in light of the value of the caveated land (said to be not more than $10,000 - $15,000), this proceeding makes no sense from a commercial perspective and should be resolved directly between the parties.

[6] Nevertheless, I need to note that this matter has taken on some urgency because of certain restrictive time periods for the continuation of a caveat noted in s

145A Land Transfer Act which applies here. On all of this, Hinde, McMorland & Sim Land Law in New Zealand¹ addresses this issue and states:

10.019 Application to the Registrar for the caveat to lapse

...

By s 145A(2) the Registrar must give the caveator notice of an application for lapse under s 145A(1). The caveat will then lapse unless the caveator does two things:

(1) Gives notice to the Registrar within 14 days that an application for an order that the caveat not lapse has been made to the High Court; and

(2) Obtains an order of the High Court that the caveat not lapse and serves that order on the Registrar within a further period of 28 days from the date on which notice of the application was given to the Registrar

...

These time periods are described as “prescribed periods” in s 145A, and are prescribed by the Land Transfer Regulations 2002 (SR 2002/213), reg 39. As with s 145, neither of these periods can be extended, though the strictness of the second time period can be ameliorated by the use of an interim order sustaining the caveat pending a hearing of the application.

_{(Emphasis added)}

¹ Hinde, McMorland & Sim Land Law in New Zealand at para 10.019A.

[7] It is clear here that the lapse of a caveat simply by operation of time under s 145A exposes a caveator to the risk of losing any real equitable interest they may have in the property against which they have lodged their claim. As soon as a caveat lapses an adverse instrument can be registered which could defeat the interest of a caveator.

[8] In the present case, the time limits under s 145A will prevail. In particular, automatic lapsing of the caveat will occur unless an order of this Court is served on the Registrar within the 28 day period noted at para [6] above preserving the caveat. In this case this proceeding is not scheduled for a first call until 2 June 2016 which is outside the 28 day period and therefore lapsing of the caveat would happen if an interim preservation order was not made.

[9] On its face and on the basis of the material which is presently before the Court, there may well be some doubt as to the applicant having a valid caveatable claim to the property concerned by way of the alleged trust to justify the caveat which has been registered. Only a full hearing to explore the merits of this claim can determine this.

[10] But here, Mr Sullivan for the respondent accepted that an interim order should be made now simply to preserve the position with a later substantive hearing set to properly explore the applicant’s argument that it has a valid caveatable claim.

[11] That said, I agree that purely on an interim basis the order sought should be made. An interim order is now made preserving caveat 10145795.1 registered Identifier 112678 (Otago Land Registry).

[12] The opposed application to sustain the caveat is now set down for substantive hearing (1/2 – 1 day is allowed) at the High Court at Invercargill commencing at

10 a.m. on 25 August 2016.

[13] Five working days before that allocated hearing date the applicant is to file and serve its submissions for this hearing.

[14] Two working days before that allocated hearing date the respondent is to file and serve its submissions for this hearing.

[15] Leave is reserved for either party to approach the Court further on 24 hours’

notice if additional directions may be required in the meantime.

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

Gendall J

Solicitors:

Jai Moss, Christchurch

WCM Legal, Wellington

Copy to:

Kevin Sullivan, Wellington