IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE	
CIV-2019-404-1573
[2019] NZHC 2290	

UNDER	Part 19 of the High Court Rules 2016	
AND UNDER	Section 142 of the Land Transfer Act 2017	
IN THE MATTER	of an application to remove a caveat and other encumbrances from CT NA446/235	
BETWEEN	TONY LIM TZE CHEW as administrator of the estate of Lim Thiam Hong
Applicant	
AND	SIIK KEE LAU
First Respondent

EE KUOH LAU
Second Respondent
…Cont	

Hearing:	12 September 2019	
Appearances:	B Rooney for Applicant
No appearance for Respondents	
Judgment:	12 September 2019	

JUDGMENT OF LANG J
[on application for orders under s 142 Land Transfer Act 2017]

CHEW v LAU [2019] NZHC 2290 [12 September 2019]

OFFICIAL ASSIGNEE FOR THE ESTATES IN BANKRUPTCY OF SHIRELLEN SHIA LING SIM and EE KUOH LAU
Third Respondent

SECRETARY FOR THE TREASURY
in respect of any disclaimed assets of SHIRLEEN SHIA LING SIM and any
assets of MONCRIEFF PASTORAL LIMITED (A COMPANY REMOVED FROM THE REGISTER OF COMPANIES)
Fourth Respondent

This judgment was delivered by me on 12 September 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

[1]	This proceeding concerns a parcel of bare land situated at 672 Mount Albert Road, Auckland (the property).1 Ms Shirleen Shia Ling Sim (Ms Sim) has been the registered owner of the property since 2000.

[2]	Ms Sim lived for some time with her husband Mr Ee Kuoh (Augustine) Lau in a house erected on the property following her marriage to Mr Lau. When they separated Ms Sim and Mr Lau both moved out of the property. Mr Lau then used rental income received from the property to maintain the mortgage payments owing to the first mortgagee, the TSB Bank Limited.

[3]	Ms Sim deposes that her late grandfather, Mr Lim Thiam Hong, loaned her the sum of $200,000 to assist her to purchase the property in September 2000. This represented Mr Hong’s life savings. Ms Sim was to repay the loan, together with simple interest calculated at the rate of ten per cent per annum, when she was able to do so or when required to do so by her grandfather. Ms Sim says she has never been able to repay the loan. She now owes the sum of approximately $600,000 to the estate. This debt is the only asset held by Mr Hong’s estate.

[4]	The loan from Mr Hong was not documented until 2005. In that year Ms Sim executed an agreement to mortgage the property in favour of her grandfather and he then lodged a caveat against the title to the property to protect his interest under the agreement.

[5]	Mr Lau was ultimately prosecuted by the Auckland Council for carrying out unauthorised alterations to the house on the property. He received a sentence of imprisonment on those charges. Ms Sim then arranged for the house to be demolished to avoid the Council prosecuting her as well. Thereafter the property ceased to derive any income and Ms Sim has had no means of meeting the outgoings on the property.

[6]	Ms Sim was adjudicated bankrupt in 2016, but the Official Assignee took no steps to sell the property because he considered there was unlikely to be any equity in it. Ms Sim has now been discharged from bankruptcy and wishes to sell the property to repay her secured creditors. In order to do so she needs to be able to provide any

1	Being the land described in Identifier NA/446235 (North Auckland Land Registry).

purchaser  with  clear  title.	At present that is not possible because of several encumbrances registered on the title.

[7]	Ms Sim does not have the financial resources to fund an action to have the encumbrances removed. Mr Chew, the administrator of Mr Hong’s estate, has therefore filed the present proceeding seeking orders under s 142 of the Land Transfer Act 2017 removing all but four of the encumbrances from the title.

[8]	All of the parties who have registered encumbrances against the title to the property have been served with the proceeding. New Zealand Home Bonds Limited has filed a notice of appearance preserving its rights, but no other party has taken any steps to defend the proceeding.

The application

[9]	The following encumbrances are registered against the title to the property:

(a)	Mortgage in favour of the TSB Bank, registered on 5 February 2004.

(b)	Caveat  by  New  Zealand  Home   Bonds   Limited,   registered   on 22 September 2004.

(c)	Caveat by Tien Pick Ing, registered on 4 March 2005

(d)	Caveat by Lim Thiam Hong, registered on 16 February 2010.

(e)	Notice of claim of interest under s 42(2) of the Property (Relationships) Act 1976, registered by Ee Kuoh Lau on 8 March 2010.

(f)	Charging order absolute in favour of Moncrieff Pastoral Limited, registered on 6 September 2010.

(g)	Statutory land charge under s 32 of the Legal Services Act 2000, registered on 20 April 2011.

[10]	The mortgage to the TSB Bank secures borrowings of approximately
$300,000, whilst the caveat in favour of New Zealand Home Bonds Ltd relates to an agreement to mortgage securing advances totalling approximately $200,000. The statutory charge under the Legal Services Act 2000 charges the property to secure legal aid costs totalling approximately $3,000 paid by the Legal Services Agency on Ms Sim’s behalf. Ms Sim and the applicant accept that these three encumbrances are valid, and that the proceeds of any sale of the property will need to satisfy the interests they protect before being available to meet Ms Sim’s obligations under the remaining encumbrances.

[11]	The applicant now seeks orders removing the caveat registered by Tien Pick Ing, the notice of claim of interest registered by Mr Lau and the charging order registered in favour of Moncrieff Pastoral Limited. If the application succeeds in relation to the caveat registered by Tien Pick Ing, the caveat registered by Mr Hong would be next in order of priority.

[12]	The property is estimated to have a current market value of between $1.04 and
$1.317 million. Depending on the sale price achieved, the proceeds of any sale are likely to be sufficient to repay the TSB Bank, New Zealand Home Bonds Limited, the Legal Services Agency and the estate of Mr Hong.

The test

[13]	The test to be applied in the present context is whether the holder of the encumbrance can establish a reasonably arguable case for the interest protected by the encumbrance.2 The encumbrance will be removed if it is “patently clear that the caveat cannot be maintained either because there was no valid ground for lodging it or that such valid ground as then existed no longer does so.”3

2	Sims v Lowe [1988] 1 NZLR 656.
3	At 659-660.

The caveat registered by Tien Pick Ing

[14]	This caveat is signed by Mr Lau “as agent” for Tien Pick Tien. Although Mr Lau appears to have held a power of attorney given in his favour by Tien Pick Ing he did not sign the caveat as her attorney.

[15]	The caveat purports to protect interests created by a term loan contract and an agreement for sale and purchase of the property under which Tien Pick Ing is stated to be the lender and purchaser respectively. Ms Sim is correspondingly said to have signed the documents as borrower and vendor. Ms Sim deposes, however, that she never signed either of these documents, and that the signatures attributed to her are not her signatures. Furthermore, Ms Lim says she has never borrowed or received any money from Tien Pick Ing and has never agreed to sell the property to her. Ms Sim has also produced a statement from an expert document examiner who says the signatures on the term loan contract and the agreement for sale and purchase were not those of Ms Sim.

[16]	Furthermore, Ms Sim says that for many years Mr Lau signed documents in her name to enable him to buy properties and borrow money. At one stage she also gave Mr Lau a power of attorney to act on her behalf.

[17]	In addition, Ms Sim’s signature on the term loan contract purports to be witnessed by a person named Ann Yiin. Ms Sim says Ms Yiin is Mr Lau’s mother, and Ms Sim maintains she has never signed any legal documents in Ms Yiin’s presence. Ms Sim also believes Ms Yiin is still involved with Mr Lau and his property dealings. Earlier this year she received a telephone message from a lawyer purporting to act for Ms Yiin in which the lawyer raised the possibility that Ms Yiin might purchase the property from Ms Sim. Thereafter, however, Ms Sim never received any written offer by Ms Yiin to purchase the property.

[18]	Ms Sim has produced evidence that Madam Tien died intestate in Malaysia in 2011. She has spoken to members of Madam Tien’s family in Malaysia, and has been told that the family are not aware of any debt owing by Ms Sim to Tien Pick Ing’s estate.

[19]	Taking all these matters into account I am satisfied it is more likely than not that Mr Lau signed the documents in Ms Sim’s name and without her authority. I am also satisfied that Tien Pick Ing did not lend any money to Ms Sim as the documents allege. Furthermore, the documents do not create any caveatable interest in the property because they do not charge the property with payment of the debt.

[20]	The application must therefore succeed in relation to the caveat registered by Tien Pick Ing.

Notice of claim of interest registered by Mr Lau

[21]	Mr Lau did not make any claim or file a proof of debt in Ms Sim’s bankruptcy in 2016. Mr Lau was himself adjudicated bankrupt in 2018. The Official Assignee has not advanced any claim against the property on Mr Lau’s behalf and has taken no steps to defend the present proceeding.

[22]	Any claim Mr Lau may have had vested in the Official Assignee upon Mr Lau’s adjudication. Mr Lau does not have any ability to advance a claim in his right at this point. There is no evidence Mr Lau or the Official Assignee have sought to advance any claim in either this Court or the Family Court. The Official Assignee has also confirmed in a letter to the applicant’s counsel that he does not oppose the present application. I am therefore satisfied the notice of claim does not currently protect a valid interest in the property. It must accordingly be removed.

Charging order lodged by Moncrieff Pastoral Ltd

[23]	The charging order was obtained in proceedings brought in this Court by Moncrieff Pastoral Ltd against Ms Sim. The claim was based on documents signed by Mr Lau in Ms Sim’s name.

[24]	The charging order was registered against the title in 2010 and accordingly lapsed by operation of law in 2012.4 It no longer binds the land affected and is discharged unless it is extended by the Court. No application for extension has been

4	High Court Rules 2016, r 17.52.

made. Furthermore, Moncrieff has now been struck off the Register of Companies and it did not file a proof of debt in Ms Sim’s bankruptcy.

[25]	It is therefore appropriate to make an order removing the charging order from the title to the property.

Result

[26]	I make orders under s 142 of the Land Transfer Act 2017 removing the following encumbrances from Identifier NA446/235:

(a)	Caveat No. 6334737.1 registered by Tien Pick Ing on 4 March 2005.

(b)	Notice of claim 8427338.1 registered by Ee Kuoh Lau on 8 March 2010.

(c)	Charging order absolute No. 8584782.1 registered by Moncrieff Pastoral Limited on 6 September 2010.

Costs

[27]	I make no order as to costs.

Lang J