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High Court of New Zealand Decisions |
Last Updated: 6 April 2018
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IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI TERENGA PARĀOA
ROHE
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CIV-2017-488-105 [2018] NZHC 564
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UNDER
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the Land Transfer Act 1952
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IN THE MATTER OF
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an application for an order that caveat 10879830.1 not lapse, and notice of
claim 8923006.1 not lapse
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BETWEEN
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TERESA JANE MATANGI-PARAHA
as administrator of the Estate of MARLEO ROBERT PARAHA
First Applicant
TERESA JANE MATANGI-PARAHA as the
surviving spouse of MARLEO ROBERT PARAHA
Second Applicant
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AND
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GINA SHERILEE PARAHA
as administrator of the Estate of
CONSTANCE CELIA RUKA-CONNELL
Respondent
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Hearing:
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6 March 2018
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Appearances:
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V McGoldrick for the Applicants
J Golightly and D Reeves for the Respondent
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Judgment:
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28 March 2018
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JUDGMENT OF ASSOCIATE JUDGE R M BELL
Solicitors:
This judgment was delivered by me on 28 March 2018 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules.
.......................................
Deputy Registrar
Henderson Reeves (Vanassa McGoldrick), Whangarei, for the Applicants
Marsden Woods Inskip Smith (Juliet Golightly/David Reeves), Whangarei for Respondent
MATANGI-PARAHA v PARAHA as administrator of the Estate of CONSTANCE CELIA RUKA-CONNELL [2018] NZHC 564 [28 March 2018]
[1] Teresa Matangi-Paraha applies under s 145A of the Land Transfer Act 1952 to sustain caveat 10879830.1 lodged against the title to the property at 10 Collingwood Street, Raumanga, Whangarei, being a fee simple estate of 1206 square metres, Lot 5 Deposited Plan 55903 described in identifier NA9B/1017 North Auckland Registry. She lodged the caveat on 18 August 2017. The respondent, Gina Sherilee Paraha, is the registered proprietor under a transmission registered on 17 August 2017. Teresa Matangi-Paraha also lodged a notice of claim 8923006.1 against the title, but she no longer seeks an order sustaining the notice of claim.
[2] 10 Collingwood Street originally belonged to Marleo Robert Paraha and his wife, Constance. They separated and later divorced. He remarried. They have since died, each intestate. The family has not been able to resolve what is to happen to the modest family home. Teresa Matangi-Paraha, the applicant, is the widow of the second marriage of Marleo, who died on 23 June 2011. Gina Paraha, the respondent, is one of the children of Constance, who died on 18 January 2015.
[3] In 1990, after the dissolution of their marriage, Marleo and Constance made an agreement under s 21 of the Matrimonial Property Act 1976 under which Constance was to transfer her half share in the property to their three children jointly. That would leave Marleo owning a half interest in the property as a tenant in common with their children.
[4] While some steps were taken, the conveyancing was not completed. Teresa says that, even so, Marleo retained an interest in the property as a tenant in common for a half share, and that interest has passed to her as the administrator of his estate following his death and the grant of letters of administration to her.
[5] On the other hand, Gina says that the joint tenancy under which Marleo and Constance owned the property was never severed, because their ownership was registered under the Joint Family Homes Act and they were buying the property by an agreement under the Maori Housing Amendment Act 1938. Constance took as survivor on Marleo’s death in 2011. After Constance died in January 2015, Gina was granted letters of administration. She says that she holds the property as administrator of the estate of her mother, Constance.
[6] The contest is essentially between Teresa as Marleo’s widow, and the surviving children of Constance. Marleo died intestate and under the intestacy rules the bulk of his estate passes to Teresa.1 As administrator of his estate, she says that he owned a half share in the property under the agreement of November 1990. On the other side are Gina and James Paraha, the surviving children of Constance. Gina claims the entire property as administrator of the estate of Constance. Gina and James do not claim any entitlement through the agreement of November 1990. That is because they rely on Constance having taken the entire property as survivor. They say that the Collingwood Street property is the only asset of her estate.
[7] Teresa’s caveat claims this interest:
The caveator claims an interest as to a one half share in the estate in fee simple as the administrator of the estate of one of the joint registered proprietors, namely Marleo Robert Paraha. Marleo Robert Paraha entered into a Deed dated 6 November 1990 (“the Deed”) with Constance Celia Paraha whereby the parties to the deed agreed that Constance Celia Paraha would transfer her half share and interest in the house and property to the three children of the marriage between Marleo Robert Paraha and Constance Celia Paraha, namely Gina Sherilee Paraha, Mario Lyndon Paraha and James Tu Wharerangi Paraha, co-jointly, thereby severing the joint tenancy with the ownership of the property, them being Marleo Robert Paraha as to a 1/2 share, and Gina Sherilee Paraha, Mario Lyndon Paraha and James Tu Wharerangi Paraha as to a 1/2 share.
General principles on caveat applications
[8] In Holt v Anchorage Management Ltd, McMullin J stated the purpose of a caveat against dealings under the Land Transfer Act 1952:2
Once lodged, a caveat is notice to all who search the title to the land against which it is registered and to the registered proprietor of the land (to whom notice of its receipt is given pursuant to s 142) that the caveator claims the estate or interest the subject of the caveat. It is both a warning to the persons mentioned that the caveator asserts rights against the land and a protection of those rights. (Section 143(1) uses the phrase "protected by the caveat".) Once the caveat is lodged the Registrar is prohibited from making any entry on the register which has the effect of charging or transferring or otherwise affecting the estate or interest protected by the caveat (s 141).
1 Administration Act 1969, s 77.
2 Holt v Anchorage Management Ltd [1987] NZCA 5; [1987] 1 NZLR 108 (CA) at 113.
[9] In caveat applications under ss 143, 145 and 145A of the Land Transfer Act, the caveator generally has the onus of showing a reasonably arguable case for the interest claimed. The interest must come within s 137(1) of the Act:
137 Caveat against dealings with land under Act
(1) Any person may lodge with the Registrar a caveat in the prescribed form against dealings in any land or estate or interest under this Act if the person—
(a) claims to be entitled to, or to be beneficially interested in, the land or estate or interest by virtue of any unregistered agreement or other instrument or transmission, or of any trust expressed or implied, or otherwise; or
(b) is transferring the land or estate or interest to any other person to be held in trust.
A personal or contractual right is not enough. The caveator must show an entitlement to a beneficial interest in the land under the caveat.3 It is not necessary for the caveator to have a registrable interest in the land. A purely equitable interest may be protected.4 The caveat must also comply with the formal requirements of s 137(2):
(2) A caveat under this section must contain the following information:
(a) the name of the caveator; and
(b) the nature of the land or estate or interest claimed by the caveator, which must be stated with sufficient certainty; and
(c) how the land or estate or interest claimed is derived from the registered proprietor; and
(d) whether or not it is intended to forbid the making of all entries that would be prevented by section 141 or a specified sub-set of them; and
(e) the land subject to the claim, which must be stated with sufficient certainty; and
(f) an address for service for the caveator.
[10] Caveat applications are summary and are therefore not suitable for deciding disputed questions of fact. On the other hand, the court is not required to accept uncritically as raising
a dispute of fact which calls for further investigation, every statement in an affidavit, however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable it may be. For a caveat to be removed, it must be patently clear that the caveat cannot stand either because there was no ground for lodging it at the outset or because any such ground no longer exists.
[11] In addition, the court has a residual discretion not to uphold a caveat. but that is exercised cautiously, as when the caveat could serve no useful purpose or alternative safeguards are available. In Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd, the Court of Appeal said:5
We are of the view that in the dictum in Sims v Lowe Somers and Gallen JJ were concerned with the situation which was then before the Court and were not putting their minds to a situation in which there is no practical advantage in maintaining a caveat lodged by someone who could properly claim a caveatable interest. In such circumstances the Court retains a discretion to make an order removing the caveat, though it will be exercised cautiously. An order will be made for removal only where the Court is completely satisfied that the legitimate interests of the caveator will not thereby be prejudiced. If, on the facts of a case, it can be seen that the caveator can have no reasonable expectation of obtaining benefit from continuance of the caveat in the form of the recovery of money secured over the land or specific performance of an agreement or if the caveator's interests can be reasonably accommodated in some other way, such as by substituting a fund of money under the control of the Court, then it may be appropriate for the caveat to be removed notwithstanding that the right to the claimed interest is undoubted.
[12] To establish a reasonably arguable case there must be evidence tending to prove the facts relied on. Assertion, whether in pleadings or affidavit, is not enough. The evidence need not be as extensive as that given in a hearing on the substantive merits. It may be circumstantial. But if there is no evidence to prove the facts contended for, the caveator will not have made out a reasonably arguable case for those facts.
The family
[13] Marleo and Constance married in September 1972. There were three children of his marriage to Constance: Gina Sherilee Paraha (born 31 October 1972) (the respondent), Marlio Lyndon Paraha (born 19 October 1985, died 10 March 1991), and James Tu
5 Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at 656.
Wharerangi Paraha (born 1 October 1976). Marleo separated from Constance in 1984 and their marriage was dissolved on 16 March 1988.
[14] Marleo began a de facto relationship with Teresa who moved into the Collingwood Street property in 1985. They married on 18 March 1988. They had four children: Teresa Jane Matangi-Paraha (the applicant), Angelo Paraha (born 27 August 1986), Irena Teresa Heremia Paraha (26 January 1989), Motion Paraha (18 July 1996) and Marleo Paraha (29 April 1998).
[15] Marleo also had a child from a de facto relationship with a Deborah Ann Shelford, Lewis Hamihura Paraha (born 26 May 2000). Deborah Shelford says that the affair lasted a number of years, but she lived in the Collingwood Street property for only a short time in 2000. Teresa does not agree with all that Deborah says about her relationship with Marleo.
Transactions involving the property
[16] In 1974, the Collingwood Street property was transferred to Her Majesty the Queen for Māori Housing purposes under the Māori Housing Act 1935. On 11 July 1975, Marleo and Constance entered into a deed of agreement for sale and purchase of residential property with the Crown to buy the Collingwood Street property. That was an agreement under s 5 of the Māori Housing Amendment Act 1938. The agreement allowed the Parahas to live in the property while they paid the purchase price in instalments, with title to be transferred upon payment in full. The agreement was registered against the title to the property. Section 11 of the Māori Housing Amendment Act 1938 provides:
(1) Except with the prior consent of the chief executive, no dwelling that is sold by the chief executive under the foregoing provisions of this Act shall be disposed of by the purchaser by way of sale, lease, mortgage, assignment, or in any other manner whatsoever before a certificate of title has been issued in respect of the dwelling pursuant to the next succeeding section. Every contract of sale, lease, mortgage, assignment, or other disposition in contravention of this section shall be absolutely void.
(2) The chief executive, in the chief executive’s discretion, may refuse his or her consent under this section to any proposed disposition, or
may grant his or her consent either unconditionally or upon or subject to such conditions as he or she thinks fit.
(3) Nothing I this section shall apply to any disposition by will in favour of the widow, widower, surviving civil union partner, or child of the purchaser, or to any disposition by operation of law.
[17] That was, in turn, reflected in cl 12 of the deed:
12 Limitation of Rights of Assignment and Disposition-
(a) During the subsistence of this agreement the Purchaser(s) shall not without obtaining on each occasion the prior written consent of the Vendor assign transfer or lease mortgage charge or part with the possession or otherwise in any manner whatsoever alienate or deal with (either at law or in equity) either the whole or any part or parts of the property or of the whole or any part or parts of the estate or interest of the Purchaser(s) in the property or attempt to do any of such things and at all times during the subsistence of this agreement the Purchaser(s) shall reside at the property and shall use the property exclusively as a home for him/her/them and the members of his/her/their family: Provided that the mere cessation by the Purchaser(s) to reside at the property by reason of his/her/their respective deaths shall not be or be deemed to be a breach of the provisions of this paragraph (a) hereof: and Provided further that any such assignment transfer lease mortgage charge parting with possession alienation or other dealings in contravention of paragraph (a)_hereof shall be utterly null and void:
(b) Nothing in paragraph (a) of this clause 12 hereof shall prevent or be deemed to prevent the making by any Purchaser of a mortgage charge or other disposition in favour of the Vendor or of the Board of Māori Affairs or of the Māori Trustee or of a disposition by will of the estate or interest in the property of such Purchaser or to affect the disposition of any estate or interest in the property by operation of law upon the death of any Purchaser intestate or to require the prior consent of the Vendor to the settlement by the Purchaser(s) of the estate or interest in the property of the Purchaser(s) as a joint family home under the Joint Family Homes Act 1964:
(c) Any consent that may be required pursuant to paragraph (a) of this clause 12 hereof may in the sole discretion of the Vendor be refused or be granted unconditionally or be granted upon or subject to such conditions as the Vendor thinks fit to impose.
[18] Marleo and Constance’s interest in the property was registered under the Joint
Family Homes Act 1964. That was because they had capitalised the family benefit and a
family benefit charge was registered at the same time.6 Section 9 of the Joint Family Homes Act 1964 states the effect of registration.
[19] On 6 November 1990, after their marriage was dissolved, Marleo and Constance made an agreement under s 21 of the Matrimonial Property Act 1976 (as it was known then).7 The operative provisions said:
- (1) The wife will complete and execute a transfer of her half share and interest in the house and property at 10 Collingwood Street, Whangarei, in favour of the three children of the marriage, namely:
(1) Gina Sheralee Paraha
(2) Marleo Lyndon Paraha; and
(3) James Tu Wharerangi Paraha.
(2) All other assets being in the names or actual possession of the individual parties shall be regarded as the separate property of the parties.
(3) The parties hereto acknowledge that this agreement and the implementation of the provisions thereof is intended to settle all questions legal and equitable between them as to the division of matrimonial and separate property within the meaning of the Matrimonial Property Act 1976 and the parties agree that neither the husband nor the wife shall hereafter make any claim in respect of the division and title to a disposition of any such property as aforesaid under the Matrimonial Property Act 1976 or any other statutory enactment or at common law and all such claims shall be deemed to be settled and resolved by these presents (which also constitute an agreement between the parties for the purposes of s 21 of the Matrimonial Property act 1976).
Their lawyers certified that they had given them each independent legal advice.
[20] On 11 December 1990 Constance (as settlor), her lawyer and Gina (as trustees) signed a deed of trust. The recitals include this:
Certificate of Title 9B/1017 North Auckland Registry (and hereafter called the said property).
The trust was called the Connell Paraha Trust. The final beneficiaries were Gina, Marleo and James. The vesting date was the date that the youngest child, James, would reach 18 years: that was 1 October 1994. Under the deed, the trustees were to hold the trust property for the final beneficiaries until the vesting date, but with power to apply the trust fund for the maintenance and support of the beneficiaries. Clause 8 of the trust deed excluded Constance from receiving any capital:
Notwithstanding anything to the contrary hereinbefore expressed or implied or having effect under the general law no discretion or power conferred hereby or by law on any person or on the Trustees shall be exercised so as to cause any part of the capital of the Trust Fund to become payable to or applicable for the benefit of the Settlor.
[21] On the same day as the trust deed was signed, Constance’s lawyer wrote to the Iwi Transition Agency advising that he had completed the matrimonial property agreement and trust deed “which will allow the transfer of the wife’s one half share in the joint property to the children”. He advised that he would forward the memorandum of transfer after stamping.
[22] The evidence includes a copy of a memorandum of transfer signed by Constance and Marleo, which provides:
In consideration of matrimonial property agreement dated 6 November 1990 between Marleo Robert Paraha, of Whangarei, and Constance Cecilia Connell (former married name Paraha) of Paihia, Housewife, and pursuant to Trust Deed dated 11 December 1990 between Constance Cecilia Connell and Hemi- Rua Rapata of Whangarei, Solicitor, and Gina Sherilee Paraha of Whangarei, single woman.
Hereby transfers to Hemi-Rua Rapata of Whangarei, solicitor, Gina Sherilee Paraha of Whangarei, single woman (hereinafter called the “tranferee”) the transferor’s estate or interest in the said piece or pieces of land.
The rear of the memorandum of transfer shows that the Crown has given its consent to the transfer by a delegatee of the Chief Executive of the Ministry of Māori Development in June 1992. The solicitor signed the transfer correct. The transfer was not, however, registered.
[23] In July 1996 the Crown’s interest in the property was transferred to the Housing Corporation of New Zealand under the Housing Assets Transfer Act 1993. In November 1996, it was transferred to the Home Mortgage Company Ltd (not a government entity). The title continued to show Marleo and Constance as purchasers under the agreement for sale and purchase. The Home Mortgage Company Ltd transferred the property into the names of Marleo and Constance in September 2006, all payments under the agreement for sale and purchase having been paid. The property remained registered under the Joint Family Homes Act 1964. The family benefit charge was discharged.
[24] After Marleo’s death, Teresa lodged her notice of claim of interest under s 42(2) of the Property (Relationships) Act against the title in November 2011. On 17 August 2017, a transmission to Constance as survivor was registered, followed by a transmission to Gina as administrator of the estate of Constance. The Joint Family Homes settlement was cancelled at the same time. Teresa lodged her caveat on 18 August 2017.
Occupation of the property
[25] Marleo and Constance lived in the property from August 1975 until their separation in 1984. They met the outgoings for the property during that time. Marleo was in sole occupation from 1984 until July 1985 and paid the expenses. Teresa says that she and Marleo occupied the property from July 1985 until Marleo died in June 2011 and paid all the outgoings. She says that she has been in sole occupation since June 2011. On the other hand, Deborah Shelford says that she moved into the property before her son was born, but did not stay long.
[26] After Marleo’s death, Constance wrote to Teresa saying that she was the sole owner of the Collingwood Street property and relying on her survivorship under the Joint Family Homes Act 1964. There is no evidence she took that matter any further.
[27] In recent times, there have been discussions within the family on resolving differences but they have been unsuccessful.
Teresa’s severance argument
[28] Teresa’s case is that under the matrimonial property agreement of 6 November 1990, Marleo and Constance severed their joint tenancy. Their agreement that Constance was to transfer her half share to their children was inconsistent with their maintaining their joint tenancy. While the severance may not have been effective at law, equity would recognise it. The submission for her referred to the principles on the severance of a joint tenancy which Katz J summarised in Harvey v Gateshead Investments Ltd.8 Katz J referred to the leading decision of Sir William Page Wood V-C in Williams v Hensman,9 noting in particular these two means of severance—by mutual agreement and any course of dealing sufficient to indicate that interests of all can be virtually treated as becoming a tenancy in common.
[29] In Trent v Kiwi Internet Marketing Ltd, the Court of Appeal held that a husband and wife who owned a home as joint tenants had severed the joint tenancy by reason of their subsequent conduct on and after separation.10 That conduct included negotiations over the terms of a draft relationship property agreement even though they did not enter into an agreement. The draft was nevertheless held to indicate a common intention that the joint tenancy was severed.
[30] Teresa says that this case is stronger, because Marleo and Constance did enter into a binding agreement. Teresa also refers to the subsequent steps of Constance establishing the trust to transfer the property to their children, and the lawyer’s contemporaneous letter recording her intention for her half share to be transferred to the children. The transfer contains an obvious mistake because it was meant to transfer only Constance’s interest to her trustees, not the interest of them both. Marleo stayed in occupation of the property. He occupied it with Teresa. Constance did not intend to exercise any right of possession which she would have enjoyed as the joint tenant. Teresa’s case is that while there has not been a severance at law, equity would recognise the severance. Although she did not put it in so many words, equity would enforce that against Constance not only during her lifetime, but also against the administrator of her estate after death.
8 Harvey v Gateshead Investments Ltd [2013] NZHC 2253, [2014] 2 NZLR 79 at [18]–[22].
9 Williams v Hensman (1861) 1 John and H 546[1861] EngR 701; , (1861) 70 ER 862, 30 LJ Ch 878.
10 Trent v Kiwi Internet Marketing Ltd [2017] NZCA 25.
[31] For Gina, it was accepted that while those acts may provide good grounds for equity to recognise severance of a joint tenancy, this case was different, because of the conditions restricting disposition of the property under the agreement for sale and purchase with the Maori Housing Amendment Act 1938 and the effect of registration under s 9(2) of the Joint Family Homes 1964:
...
(2) While the settlement under this Act of any property remains uncancelled the following provisions shall apply:
(a) the husband and wife shall have equal rights in connection with the possession, use, and enjoyment of the settled property while they are both living:
(b) on the death of the husband or wife, whichever first occurs, the settled property shall become the property of the survivor of them, subject to all mortgages, charges, encumbrances, estates, and interests then affecting it:
...
(c) the husband and wife or the survivor of them may at any time sell, transfer, mortgage, charge, lease, or otherwise dispose of or deal with the settled property:
provided that, while they are both living, neither of them may sell, transfer, mortgage, charge, lease, or otherwise dispose of or deal with his or her undivided estate or interest in the settled property or any part thereof:
...
[32] As the property remained settled under the Joint Family Homes Act throughout until the death of Constance, she took the entire property as survivor. The proviso to s 9(2)(c) barred Marleo and Constance from dealing with their interests separately. The Court of Appeal has recognised that the usual rules as to severance do not apply to joint tenancies under the Joint Family Homes Act.11
[33] Section 10 of the Joint Family Homes Act provides for cancellation of registration by the Registrar in six cases:
(1) The Registrar may cancel any settlement under this Act as to the whole or any part of the settled property in any of the following cases:
(a) where the husband and wife apply, or the survivor of them applies, in the prescribed manner to the Registrar for cancellation:
(b) where the husband and wife have both died:
(c) where the husband and wife cease to be the legal and beneficial owners of the settled property while they are both living or where the survivor of them ceases to be the legal and beneficial owner of that property:
(d) where the court so orders under section 16:
(e) where neither the husband nor the wife resides, or has within 6 months after the date of the application to settle resided in a flat or dwellinghouse on the land to which the settlement relates; or where (after such residence has commenced) the flat, or (in the case of a settlement of land which does not comprise or include a flat in which the husband and wife reside) the land, has ceased to be used exclusively or principally as a home for the husband and wife or either of them and for such of the members of their, his, or her household (if any) as for the time being reside in the flat or dwellinghouse:
(f) where the settlement should not have been registered.
In Official Assignee v Noonan, Richardson J recognised that cancellation does not happen automatically and when it is effected it is not retrospective.12
[34] For Gina, Fisher on Matrimonial Relationship Property was cited:13
Separation or dissolution of marriage does not per se affect a joint family home settlement or its consequences. In particular, each spouse retains the right to occupy the joint family home (s 9(2)(a)), neither spouse can unilaterally charge, dispose of or otherwise deal with the property (s 9(2)(c)), and each spouse retains his or her right to survivorship (s 9(1)(b)) and (s 9(2)(b)). Nor does the fact that one spouse is no longer living in the joint family home give the Registrar the power to cancel the settlement (s 10(1)). Discord between the parties does not necessarily remove the primary objects of the settlement, which are to give security, survivorship and uninterrupted life-long use.
Clearly, however, separation or dissolution will normally be followed by proceedings or an agreement under the Property (Relationships) Act 1976, and
12 Official Assignee v Noonan [1988] NZCA 136; [1988] 2 NZLR 252 (CA).
ultimate cancellation by virtue of a sale or transfer of the property or a court order. Specifically, cancellation may be effected by:
(i) a direct order for cancellation under s 33(3)(h) of the Property (Relationships) Act 1976; or
(ii) cancellation by the Registrar under s 10(1)(c) of the Joint Family Homes Act 1964 where, perhaps, as a result of an order or agreement under the Property (Relationships) Act 1976, the property is no longer owned by both spouses; or
(iii) cancellation by the Registrar under s 10(2A) of the Joint Family Homes Act 1964 where necessary to give full effect to an order under the Property (Relationships) Act 1976.
[35] In response, Teresa cited Re Roberts.14 In that case, Giles J ordered cancellation of a joint family home settlement when the rights and interest had been transferred to the husband under a matrimonial property order without cancelling the joint family home registration. The husband later went bankrupt. The Official Assignee sought cancellation of the joint family home settlement. Giles J held that s 10(1)(c) gave grounds for the court to order cancellation—that is, the husband and wife ceased to be the legal or beneficial owners of the settled property while they were both living. That is, the cessation of the legal/beneficial interest was enough to justify cancellation.
[36] The principles on which that case was decided only take the matter so far. They show that in the circumstances of this case, Marleo could have sought cancellation of the registration, even if Constance objected, relying on the matrimonial property agreement and s 10(1)(c). Gina’s point remains that cancellation of registration is not retrospective and because the property continued to remain settled under the Joint Family Homes Act, Constance took as survivor under s 9(2)(b).
[37] As to the agreement for the sale and purchase of the property, Gina takes the point that any disposition of the property had to be approved by the Maori Land Board (or the Chief Executive) before any agreement was entered into and any consent given afterwards was ineffective.
14 Re Roberts [1997] NZFLR 821.
The agreement of November 1990
[38] Gina still has to deal with the matrimonial property agreement of November 1990. Without the agreement, there is force in her case. Under the agreement, Constance undertook to execute a transfer of her half share and interest in the property to the three children of her marriage with Marleo. That required her interest in the property to be severed from Marleo’s so as to create a separate half share. In Mackay v Dick, Lord Blackburn said:15
I think I may safely say, as a general rule, that where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. What is the part of each must depend on circumstances.
Accordingly, Marleo and Constance can be taken to have undertaken to do whatever was required to create a transferrable half interest to be held by Constance. That would require doing everything necessary to cancel the joint family home registration (including applying for cancellation under s 10(1)(a) of the Joint Family Homes Act), and obtaining the consent of the Chief Executive. Following those steps, Marleo and Constance could transfer the property to themselves as tenants in common in equal shares. That would give Constance a half share which she could transfer to her children.
[39] The agreement for sale and purchase remained in full force and effect. No one suggests that the agreement was invalid or unenforceable, or could be set aside under s 21 of the Matrimonial Property Act or otherwise.
[40] The conveyancing to carry out the agreement misfired. Establishing the trust is understandable, given that not all the children were of full age. The memorandum of transfer shows the consent on behalf of the Chief Executive of the Ministry of Maori Development, indicating that the consent of the vendor was not a problem. The memorandum of transfer does not, however, conform to the matrimonial property agreement because Constance’s half share had not been created and could not be transferred
15 MacKay v Dick (1881) 6 App Cas 251 (HL) at 263.
to the trustees. Notwithstanding the ineffectual conveyancing, the agreement remained enforceable.
[41] As the agreement required a half interest held by Constance to be created, it followed that a half interest held by Marleo would also be created. Marleo could accordingly require Constance to take those steps needed to give him a half share in the property. As equity regards as done that which ought to be done, equity would recognise that while Marleo and Constance owned the property as joint tenants, they held the property for each other as tenants in common in equal shares. That would remain the position while each of them could enforce the contract. Their position is analogous to that recognised in Lysaght v Edwards: that pending completion a vendor holds his interest in a property on trust for the purchaser.16
[42] For Gina, it was submitted that the contract was not enforceable because under s 4(1) of the Limitation Act 1950 the six years for bringing an action on it had expired. Section 4 does not apply to proceedings for specific performance.17 Limitation by analogy does not apply here.18 In No 68 Ltd v Eastern Services Ltd, the Court of Appeal ordered specific performance of an agreement made in 1977 and overturned the first instance decision that had applied limitation by analogy. Laches may be a ground for not awarding specific performance, but a decision on laches is not generally suitable for summary disposal, as when an application to sustain a caveat is resisted.19 Besides, an important factor here is that those claiming the equitable interest, Marleo and later Teresa, were in occupation. The dictum of Lord Redesdale, Lord Chancellor of Ireland, in Crofton v Ormsby still applies:20
The whole laches here consists in the not clothing an equitable estate with a legal title, and that by a party in possession. Now I do not conceive that this is that species of laches which will prevail against the equitable title; if I should hold it so, it would tend to overset a great deal of property in this country, where parties often continue to hold under an equitable contract for 40 or 50 years, without clothing it with the legal title. I conceive, therefore,
16 Lysaght v Edwards (1876) 2 Ch D 499 at 506.
17 Limitation Act 1950, s 4(9).
18 No 68 Ltd v Eastern Services Ltd [2005] NZCA 495; [2006] 2 NZLR 43 (CA) at [61]. It was upheld on appeal, although the present point was not argued. The Supreme Court dealt only with laches: Eastern Services Ltd v No 68 Ltd [2006] NZSC 42, [2006] 3 NZLR 335.
19 Matai Industries Ltd v Jensen [1988] NZHC 205; [1989] 1 NZLR 525 (HC) at 545.
20 Crofton v Ormsby (1806) 2 Sch & Lef 583 at 603–604. Williams v Greatrex [1957] 1 WLR 31 (CA) is another example of specific performance ordered in favour of a purchaser in possession many years after the agreement without laches being applied.
that possession having gone with the contract, there is no room for the objection.
[43] While Constance took as legal owner after Marleo’s death, she continued to hold the property subject to Marleo’s equitable half interest as a tenant in common. Similarly, under the Contracts (Privity) Act 1982, their children could enforce the agreement to require her to transfer her equitable half share to them.21 The agreement remained enforceable by Teresa as the administrator of Marleo’s estate.22 Teresa, as administrator of Marleo’s estate, can likewise enforce the agreement against Gina as administrator of the estate of Constance.
Other matters
[44] For Gina, technical challenges were raised. The drafting of the caveat was criticised. Marleo was described as one of the joint registered proprietors whereas that was not the case at the time the caveat was lodged. The caveat claimed a severance, whereas I have found that there was an arguably enforceable agreement to sever. There is no merit in these objections. The caveat more than adequately identifies the interest claimed in the property and how it is derived from the registered proprietor. It meets the requirements of s 137(2) of the Land Transfer Act 1952. The interest claimed, an interest as to a one half share in the fee simple estate, is one that may be protected by caveat under s 137(1)(a).
Outcome
[45] I find that Teresa has established a case to sustain caveat 10879830.1. As a standard requirement for sustaining the caveat, she is required to begin a proceeding to uphold the interest she has claimed. As the value of the property is within the civil jurisdiction of the District Court, the proceeding may be brought in that court.
[46] Teresa is entitled to costs on the application as she has succeeded. For Gina, it was objected that the Collingwood Street property was the only asset of the estate. A possible resolution of these matters may involve one side buying out the other. That may provide the opportunity for any costs order to be paid. It is not a reason for not ordering costs.
21 See now the Contract and Commercial Law Act 2017, Part 2 subpart 1.
22 Hoddel v Pugh [1864] EngR 411; (1864) 33 Beav 489 and Law Reform Act 1936, s 3(1)
[47] I make these orders:
.....................................
Associate Judge R M Bell
Solicitors:
Henderson Reeves Lawyers (Vanassa McGoldrick), Whangarei, for the Applicants
Marsden Woods Inskip Smith (Juliet Golightly/David Reeves), Whangarei, for the Respondent
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