RABOBANK NEW ZEALAND LIMITED V BUSCH HC WHA CIV-2012-488-276

RABOBANK NEW ZEALAND LIMITED V BUSCH HC WHA CIV-2012-488-276 [9 May 2012]IN THE HIGH COURT OF NEW ZEALANDWHANGAREI REGISTRYCIV-2012-488-276[2012] NZHC 1547IN THE MATTER OF the Land Transfer Act 1952 Section 143BETWEEN RABOBANK NEW ZEALAND LIMITEDPlaintiffAND MEGAN JENNIFER LINDA BUSCHDefendantHearing: 9 May 2012(Heard at Auckland)Appearances: G J Toebes for PlaintiffDefendant in personJudgment: 9 May 2012JUDGMENT OF ASSOCIATE JUDGE BELLThis judgment was delivered by me on ..9 May 2012 at .3:30pmpursuant to Rule 11.5 of the High Court Rules....................................Registrar/Deputy RegistrarSolicitors:J T Law (Justin Toebes) P O Box 25-443 Wellington 6146Email: justin@jtlaw.co.nzCopy for:Megan J L Busch, Whangaruru Beachfront Camp, Oakura RD4, Hikurangi, Northland.Case Officer: Paul.Lincoln@justice[1] This is an application to remove caveat 9055812.1 (North Auckland Registry) from the titles 163997, 163998, 163999, 164000, 164001 and 164002 (North Auckland Registry) being a property at 124 Grays Road, Three Mile Bush, Kamo, Whangarei, upon lodging an e-dealing transferring the property in the exercise of a power of sale of the property by Rabobank New Zealand Ltd.[2] The registered proprietor of the six properties at Grays Road, Kamo, is Country Developments Ltd (In Receivership and In Liquidation). Receivers were appointed in 2011. The company went into liquidation by court order on 4 May 2012.[3] Rabobank New Zealand Ltd has a registered first mortgage against the titles –7178321.4. In the exercise of its powers under the mortgage, Rabobank New Zealand Ltd has entered into an agreement for the sale of the properties. The sale is due to settle on Thursday, 10 May 2012.[4] Caveats have been lodged against the titles. Rabobank has had to apply to the court for the removal of the caveats to complete the sales. One caveat was lodged by Elizabeth Mary Lambert of Huntly. On 4 May 2012 Associate Judge Faire heard an application by Rabobank for the removal of Ms Lambert's caveat.Following established principles, he held that Rabobank had an interest that took priority over the interest claimed by Ms Lambert and made an order for the removalof Ms Lambert's caveat.1[5] Last week Ms Busch also lodged a caveat against the same titles: caveat 9055812.1. It is the subject of the present application.1 Rabobank New Zealand Ltd v Lambert HC Hamilton CIV-2012-419-505 [2012] NZHC 908,4 May 2012.[6] On 8 May 2012, I gave directions for this matter to be dealt with by way of hearing by telephone at 10:00am on 9 May 2012. Ms Busch took part.[7] Ms Busch said that she was not a lawyer and she asked to be represented by her lawyer. She identified her lawyer as Elizabeth Mary Lambert. Ms Busch also said that Ms Lambert would not be available today and asked for the matter to be dealt with on 10 May 2012. I declined to adjourn the matter. I also indicated that I did not want to hear from Ms Lambert.[8] Ms Lambert is not a lawyer. She does not hold a practising certificate. She does not have a right of audience in this court. Ms Lambert is not entitled to be heard on this application. In any event, I am not confident that I would have been assisted by Ms Lambert. She has been involved in a number of cases where she has needlessly lodged caveats, with the effect that secured creditors have been impeded in realising their securities: Lambert v Plateau Farms Ltd (In Receivership) & Anor2and Plateau Farms Ltd (In Receivership and Liquidation) v Lambert3 as well as the caveat she lodged against the titles in Rabobank New Zealand Ltd v Lambert heard by Associate Judge Faire.[9] This case needs to be heard promptly, because the settlement of the sale is tomorrow. It cannot be heard later. Ms Busch created the difficulty because she lodged the caveat only last week. While Ms Busch is not a lawyer, in the hearing she provided information to assist in deciding the application. I have considered matters that a lawyer might want to raise on her behalf, in particular whether she has a caveatable interest and how that interest ranks in relation to the bank's interest asmortgagee.[10] Because Ms Busch had lodged her caveat only last week, Rabobank'slawyers had not been able to obtain a copy of the caveat. However, Ms Busch explained the basis on which she derived an interest in the land from Country Developments Ltd, the registered proprietor. She said that Country Developments2 Lambert v Plateau Farms Ltd (In Receivership) CIV-2011-463-528, HC Rotorua, 12 September2011, Allan J.3 Plateau Farms Ltd (In Receivership and Liquidation) v Lambert [2012] NZHC 109, CIV-2012-419-93 HC Rotorua. 9 February 2012, Lang J.Ltd had entered into an agreement for sale and purchase of the properties on 21 January 2012. Ms Lambert was the purchaser. The purchase price was $1.00. Ms Lambert, in turn, granted a lease of the property to Country Developments Ltd for 99 years. Country Developments Ltd, in turn, granted a sub-lease of the property to Ms Busch for 95 years. The sub-lease was for the entire property.[11] At the time of these transactions, Country Developments Ltd was in receivership, but not in liquidation. Mrs Patricia Busch had apparently signed the agreement for sale and purchase on behalf of Country Developments Ltd. The receivers had not signed the agreement for sale and purchase or the sub-lease. Even though Mrs Patricia Busch was a director of the company, while the company was inreceivership she did not have the power to sell the company's land to Ms Lambert orto enter into a sub-lease to Ms Busch.4[12] Ms Busch says that the receivers were not consulted about these transactions. She also says that Rabobank New Zealand Ltd was not told about these transactions. Rabobank New Zealand Ltd was not approached to give its consent to these transactions. Instead, Ms Busch said that the transactions "had nothing to do with it [Rabobank New Zealand Ltd]".[13] Ms Busch has lodged a caveat against the title as sub-lessee. A sub-lease is a caveatable interest, but I am not satisfied that Country Developments Ltd has given a valid sub-lease because it was made without the authority or consent of the receivers.[14] Moreover, Rabobank New Zealand Ltd is not bound by the sub-lease unless it has consented to it. Section 119 of the Land Transfer Act says:No lease of mortgaged or encumbered land shall be binding upon the mortgagee except so far as the mortgagee has consented thereto.[15] Similarly, when a mortgagee exercises a power of sale, the mortgagee passes an interest in the land, free of any estate or interest except one which has priority over the mortgage or which the mortgagee has consented to; see s 105 of the Land Transfer Act:4 Lambert v Plateau Farms Ltd (In Receivership) CIV-2011-463-528 at [11].Upon the registration of any transfer executed by a mortgagee for the purpose of exercising a power of sale over any land, the estate or interest of the mortgagor therein expressed to be transferred shall pass to and vest in the purchaser, freed and discharged from all liability on account of the mortgage, or of any estate or interest except an estate or interest created by any instrument which has priority over the mortgage or which by reason of the consent of the mortgagee is binding on him.[16] In this case I am satisfied that Rabobank New Zealand Ltd has not consented to any sub-lease in favour of Ms Busch.[17] In the absence of any consent to the sub-lease, Rabobank New Zealand Ltd is entitled to exercise its power of sale and to transfer the land subject to its mortgage free of the interest claimed by Ms Busch. On this point I also adopt the reasoning of Associate Judge Faire in his decision removing the caveat of Ms Lambert. As there is no basis for the sublease relied on by Ms Busch and it does not bind the bank, there is no reason for the caveat to stay on the titles.[18] This is a clear case for Ms Busch's caveat to be removed, upon a transfer bye-dealing being lodged on behalf of Rabobank New Zealand Ltd in the exercise of its power of sale under its mortgage.[19] Accordingly, I make the following orders:[a] The caveat no. 9055812.1 (North Auckland Registry) lodged by Megan Jennifer Linda Busch against Identifiers 163997, 163998, 163999, 164000, 164001, 164002 (North Auckland Registry) is to be removed on the lodging by e-dealing of a transfer in exercise of a power of sale authorised by Rabobank New Zealand Ltd;[b] Ms Busch is ordered to pay costs to Rabobank New Zealand Ltd on a 2B basis; and[c] Rabobank New Zealand Ltd is to file and serve sworn affidavits in terms of the draft affidavits tendered with its application.________________________R M BellAssociate Judge