IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2010-404-003987

UNDER	Land Transfer Act 1952, Section 137 and
145A

IN THE MATTER OF	Application that the Caveat not lapse

BETWEEN	ANTHONY MIKHAL SCHMIDT Applicant

AND	NOEL ROBERT HAIR Respondent

Hearing:	22 July 2010

Appearances: A M Schmidt in person, the Applicant
N W Woods for the Respondent

Judgment:	23 July 2010

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
23.07.10 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

Solicitors/Counsel:
N Woods, Rice Craig, Papakura –  rc@ricecraig.co.nz
Copy to:
A M Schmidt, C/- 11 Bell Road, RD1 Pokeno –  tonymschmidt@yahoo.com

ANTHONY MIKHAL SCHMIDT V NOEL ROBERT HAIR HC AK CIV 2010-404-003987  23 July 2010

[1]       This case concerns Mr  Schmidt’s application to prevent the lapse of  his caveat over Mr Hair’s property.

[2]       On 15 December 2008 Mr Hair purchased the property at 11 Bell Road, Mangatawhiri, Pokeno (the property) from Ebada Property Investments Limited (Ebada).  The purchase was settled on 13 January 2009 and on same date the transfer to Mr Hair was registered.

[3]       On 16 February 2009 notice was given to Mr Schmidt and Mrs Schmidt terminating their tenancy of the property.   The letter of notice recorded that since July 2008 no rental had been paid for the property.   It recorded that Mr and Mrs Schmidt provided a copy of a tenancy agreement purporting the same was executed by Mr Garrity of Ebada.  The letter states that Mr Garrity advised that the tenancy agreement had been presented to him on 30 January 2009 with a request to sign it, but that he refused to sign it.  The letter asserts that it was signed by Mr/Mrs Schmidt without  authority and  holding  themselves  out  as  the  prior  landlord.    The  letter enclosed a fresh tenancy agreement for the Schmidt’s execution.  It noted an increase of rent by $40 per week to $300 per week.  It required payment of arrears.

[4]       On 17 February 2010 Mr Schmidt lodged a caveat against the title to the property.  The estate or interest claimed by that caveat recorded:

Caveator is a trustee for a beneficial trust which has beneficial interest in the land by virtue of an unregistered interest.

[5]       On 27 May 2010 Mr Hair’s solicitors lodged an application for lapse of the caveat.  By letter dated 31 May 2010 the Registrar-General of Land sent notice to Mr Schmidt advising of Mr Hair’s application and informing him that the caveat would lapse 14 days after the notice was deemed to have been delivered unless an application was made to the Court.

[6]       On 25 June 2010, being the last day available (as extended) for Mr Schmidt to do so, he filed a ‘Notice of Application’.  The notice advised that Mr Schmidt was on 22 July 2010 applying to the High Court to ‘maintain the status of the land title

caveat…’.   The notice was signed by Mr Schmidt and provided his address for service as 11 Bell Road.  An email address was also provided.

[7]       On the front page of the Notice a Court Officer has written:

Document accepted as last day for filing.  Applicant advised that it does not comply with HC regs for form of docs.  Given templates, memorandum for lay litigants, and asked to re-file in correct format, together with an affidavit in support.

[8]       On 2 July 2010 Mr Schmidt filed a further Notice of Application.  It was in very similar form to the first Notice filed but also contained the address details of Mr Hair and his counsel.

[9]       In  a  memorandum  accompanying  his  original  Notice  of  Application  Mr Schmidt sought the leave of the Court to file an affidavit to fully outline his case.  He indicated he would be able to do that within 14 days.  He also set out the grounds for his application, namely:

(a)     That Ebada unlawfully transferred the property to Mr Hair because Ebada held the property in trust and was not entitled to transfer the property.

(b)    Mr  Hair  worked  with  Ebada  to  ‘bring  effect  to  this  unlawful transaction, and perform their role in the full knowledge that their actions were improper and unlawful’.

(c)     ‘There was unlawful and fraudulent actions on part of both the previous and present registered proprietor and the applicant will seek that any findings by the New Zealand Serious Fraud Office be made available in this matter’.

[10]    The memorandum concluded by noting that additional grounds may be submitted in support.

[11]     In  support  of  his  second  Notice  of  Application  Mr  Schmidt  filed  a memorandum which repeated the first two grounds mentioned in his earlier memorandum.  It too noted additional grounds may be submitted in support.

[12]     As well on 2 July 2010 Mr Schmidt filed an affidavit.  It deposes:

(a)     That Mr Garrity of Ebada held the property in trust for a trust called The Excel Estate Trust, a family trust for Mr Schmidt’s family, formed in 2002 with the assistance of a lawyer.

(b)    His family trust had the property transferred to it in early 2007 from another family trust of his.  That arrangement continued until January
13, 2009 when the property was transferred from Ebada to Mr Hair for

$140,000 less than a current registered valuation figure.   Mr Schmidt claims that Mr Hair and Ebada were both aware that his family trust was the owner of the property.

(c)     Mr Hair had been a lessee of the property for more than four years prior to purchasing it, and “had dealt with myself and other trustees on this issue”.  He said the trust had paid lease payments for over four years
‘until just before the property transfer from Ebada to Hair in January

2009’.  Indeed Mr Schmidt intends to show ‘a vast amount of evidence from witnesses and documents it will clearly show’ that the caveat be maintained.

[13]     On 8 July 2010 Mr Hair’s solicitor received an email from “The Family

2006’, apparently authored by Mr Schmidt.  It attached copies of the documents filed on 2 July 2010.  Mr Hair advises he has not been served with any documents relating to this proceeding.

[14]     In his affidavit in opposition Mr Hair deposes:

(a)	He has no knowledge of Mr Schmidt’s claims of the Trust’s interest.

(b)	That although the parties had been in a tenancy dispute since February

2009,  Mr  Schmidt  has  not  previously  provided  any  documentary evidence to support his claim of an interest.

[15]     Mr Hair explains that due to financial pressures he has recently been required to sell his diary farm, including the property at 11 Bell Road.  He deposes that the lodgement of Mr Schmidt’s caveat is preventing the sale of the property.

Considerations

[16]     Caveat claims are usually brought by way of originating application.   For dealings involving land subject to a caveat, leave of the Court to apply, must be obtained.  In this case leave has not been sought.

[17]     Section 145A of the Land Transfer Act 1952 provides that once the caveator has received notice of an application to lapse the caveat the caveator must:

(a)	Within 14 days apply to the High Court for an order that the caveat not lapse, and

(b)	Obtain an order from the High Court to the affect that the caveat shall not lapse and serve that order on the Registrar within a further period of
28 days i.e. within 28 days from the date on which notice has been given to the Registrar of having made an application to the High Court.

[18]     If a caveator fails to apply with these time limits then the caveat lapses automatically by operation of law.

[19]     In this case there is no proof of notice being served upon the Registrar of Mr

Schmidt’s intention to apply for an order to prevent the lapse of the caveat.

[20]     Mr Schmidt’s ability to comply with the 28 day period requirement depends on the success of his application before me today.

[21]     When the matter was called before me Mr Schmidt requested an adjournment to enable him to instruct counsel.  He says he has obtained such but that person was not available at the time the hearing was scheduled for.  I refused his request.  It was clear that even with the services of counsel, Mr Schmidt’s application to sustain his caveat could not succeed.   The documents filed on 2 July 2010 were out of time. Before then the documents filed were inadequate and fundamentally did not comply with  the  High  Court  rules  because no  leave  was  sought  to  proceed  by way of originating application and otherwise no statement of claim or notice of proceeding was filed.   Had Mr Schmidt applied for leave to proceed by way of originating application then along with his notice of application an affidavit should have been filed within the prescribed period.  It was not.

[22]     Rule 1.5 dealing with non compliance with rules cannot be employed to obviate the necessity to  comply with statutory time requirements.   But, even if Rule 1.5 could have been utilised to cure the prescriptive time requirements, the application would still fail because:

(a)	It failed to set out the factual basis upon which the alleged caveatable interest is said to arise;

(b)	It  does  not  adequately  disclose  the  estate  or  interest  claimed,  the grounds of claim, or derivation from registered proprietor;

(c)	The applicant delayed for more than a year before filing a caveat in support of a claim that, by his account, he was aware of much earlier.

[23]     Mr Schmidt does not have an arguable case, nor is there is a serious issue to be tried as to a caveatable interest.

[24]     The description of the claim of an interest contained in the caveat is really quite nondescript – it is vague and does not really say how it arises.  If, as it appears from Mr Schmidt’s documents, it relates to a complaint against Ebada then the lapsing of the caveat will not prevent him from taking that complaint up.

[25]     In his submissions Mr Woods has alluded to other background factors which he submits the Court could take into account in assessing whether Mr Schmidt is a truthful person.  I do not propose to refer to those, they adding nothing I think to the case for Mr Hair which must be successful in the outcome.

[26]     The application is dismissed.

[27]     Mr Hair is entitled to costs and these are awarded against Mr Schmidt on a category 2B basis, together with reasonable disbursements.

Associate Judge Christiansen