week thirteen

Question 1

what are the two proceedings to do with caveats

Answer 1

1. interlocutory hearing to determine whether caveat should remain/be removed (where RO wants removed) - decided by a judge alone based on filed affidavit forms of evidence (quick, urgent)
2. substantive hearing over the reason why the caveat was lodged - a slow court process with evidence given by witnesses to do a full hearing of the issue

Question 2

for a caveat to be lodged, a __________ must be shown

Answer 2

legal or beneficial interest in land

Question 3

what are some examples of interests that do not support a caveat

Answer 3

• potential interest in land (e.g. making inquiries of the real estate agent at an open home)
• mere contractual or personal rights (between you and the owner)
• licence to occupy (your footpath to the roadside gives them licence to come onto the property, but this licence can be revoked by telling them to get off and you only give it to allow them to come on e.g. tradies, sales people)
• right of first refusal (in contract)

Question 4

what is the difference between a legal and a beneficial interest?

Answer 4

legal = registered on the title

beneficial/equitable = where you claim you have an interest but it isn’t registered

Question 5

what interests may support a caveat

Answer 5

• an agreement for sale and purchase
• an agreement to mortgage or an unregistered mortgage
• an alleged trust (cestui que trust)
• an unregistered lease
• an unregistered easement

Question 6

what is an easement

Answer 6

a right, of some sort, over another persons land

Question 7

how can you get an unconditional agreement for sale and purchase

Answer 7

1. if there are no further terms (just the general agreement) and both parties sign the agreement
2. where all conditions become fulfilled within the time limit

Question 8

does an unconditional agreement for sale and purchase support a caveat + what case

Answer 8

Foreman v Hazard - the purchaser’s interest will support a caveat.

vendor holds the property on trust for the purchaser from the unconditional agreement till it is transferred and there is an equitable interest because there is nothing more they can do to own the property except the formality of the transfer

Question 9

can conditional agreements for sale and purchaser provide a purchaser with a caveatable interest + what case?

Answer 9

it used to be that if there was a conditional agreement for sale and purchase, the court could not order specific performance of a contract that still had conditions needing to be fulfilled.

the current law is that it can support - Bevin v Smith, although in this case the condition to be fulfilled was only a mere formality and it is unclear what would happen if it is not a mere formality as we don’t have law on that

Question 10

what is specific performance

Answer 10

where a contract has been formed, for some reason there’s a problem with it but the court orders it go ahead as is

Question 11

what are the facts of Bevin v Smith

Answer 11

Bevin and Smiths both required to help obtain the consent of the Tribunal for the Smith’s to own lots of land at one point.

Bevin changed his mind and didn’t do anything or instruct this solicitor to do anything to help that.

the date for condition to be fulfilled passed and the contract become void.

Question 12

did the Smith’s have a caveatable interest in Bevin v Smith

Answer 12

yes - in equity and to impose fiduciary obligations on the vendor continuing in possession

Question 13

whether an equitable interest has passed to the purchaser depends on (based on Bevin v Smith CA decision)

Answer 13

• the terms of the contract itself (the actual condition that the contract is subject to)

and

• intention - e.g. did you intend to for it be binding when entered or when the conditions were fulfilled

Question 14

when do contracts usually become binding and what is the unusual situation where it wouldn’t be

Answer 14

when entered into - unusual situation may be found where they have to wait for the condition to be fulfilled to be bound because of intention

Question 15

what was the result of Bevin v Smith

Answer 15

• bevin ordered to perform all his obligations under the ASAP
• transfer of property to Smiths

Question 16

what cases confirm the position taken in Bevin v Smith of a conditional ASAP being enough to support a caveat

Answer 16

McDonald v Isaac Construction

Bruce v Edwards

• equitable interest acquired as soon as ASAP formed

Question 17

generally, dispositions of land require __ _____ ___ _____ under which act?

Answer 17

a document in writing under s24-27 PLA 2007

Question 18

what happened in Windy Day Ltd v Whitehead

Answer 18

Mr Brody (director of Windy Day) owed Mr Whitehead money, who ordered a charging order over Mr Brody’s mothers house.

Windy Day was going to turn some land into apartments so Brody said he would sell Whitehead one at a discounted price to offset the debt.

There was some correspondence and emails between the parties’ solicitors and Mr Whitehead, after not hearing anything for a long time and seeing the apartments advertised for sale, lodged a caveat again Windy Days’ title.

Held: Mr Whitehead delayed selling Brody’s mothers house on the basis of the agreement and despite no formal documentation there was enough between the parties to determine what they agreed to be the basis of an agreement and the essential terms needed to effect the transfer of the property

Question 19

if there was a true oral contract ASAP (absolutely nothing written, unlike in Windy Days) would there be a caveatable interest

Answer 19

unclear, but likely not since PLA 2007 requires transfer in writing

Question 20

what is a trust

Answer 20

where one person holds property/money/something on behalf of another person (to look after)

Question 21

what is an implied trust

Answer 21

an implied trust can arise where the parties have a common intention as to property without having used express words to communicate that intention to one another

Question 22

what are the two types of implied trust

Answer 22

resulting trust and constructive trust

Question 23

what is a resulting trust (type of implied)

Answer 23

a trust that arises where the beneficial interest in property is not applicable to an indicated beneficiary and therefore results/reverts to the disposer

Question 24

what is a constructive trust (type of implied)

Answer 24

a trust that arises where property is held by a person in circumstances where it would be inequitable to allow them to assert full beneficial ownership of the property

Question 25

what is a cestui que trust

Answer 25

if land is held by A in trust for the benefit of B

A is the trustee (the person who holds the legal estate on behalf of B)

B is the beneficiary (the person who is to benefit from the estate)

Question 26

does the beneficiary of a trust have a caveatable interest

Answer 26

yes

Question 27

does the beneficiary of a discretionary trust have a caveatable interest

Answer 27

no

Question 28

does the beneficiary of a will - in land prior to the administration of the estate have a caveatable interest

Answer 28

yes

Question 29

does the beneficiary of a will - a share in residue prior to administration of estate have a caveatable interest

Answer 29

no

Question 30

what is a discretionary trust

Answer 30

whereby the trustees can decide whether they give you money - there is no caveatable interest because you might never get it

Question 31

why is a share in residue prior to administration of estate not caveatable

Answer 31

it is too uncertain

Question 32

what happened in Willigers v McFarlane

Answer 32

Willigers owned the property but transferred to McFarlane who was to hold the property on trust for it. the point of the trust was to sell property and make a profit.

Willigers lodged a caveat over the property because there was issues with repaying the mortgage and the bank issued notices of intention to sell it.

Willigers claimed an interest as beneficiary pursuant to a deed of trust.

he didn’t have a caveatable interest because the purpose of the trust was for profit and wasn’t about the property and land itself. his only claim was to the money he would receive over and above the $500,000

Question 33

what happened in Zhong v Wang

Answer 33

Zhong had to meet criteria as an investor - $1M held in NZ for two years - prior to a grant of residence for him and his family to move here.

Wand invested the money for him in some property and then wasn’t going to return it.

It was held that Wang was Zhong’s agent for the purpose of applying that money and since he had invested that money in property, there was a reasonably arguable case to support a trust and a caveat

Question 34

what happened in Herbert Equities Ltd v Mamfredos

Answer 34

Herbert wanted to borrow $100M USD and Mamfredos agreed to act as broker. Herbert paid him a $60,000 brokerage fee which wasn’t repaid when the loan didn’t go ahead.

Herbert alleged Mamfredos had used the funds to purchase property which they can put a caveat over.

Herbert had a caveatable interest on the basis of fiduciary obligations owed by Mr M to Herbert.

Question 35

what happened in TE Group v Lin

Answer 35

TE Group, in financial stress, were selling properties, one to Mr Lin.

They trusted Mr Lin to pay the $1.6M he was short and went ahead and registered Mr Lin on the title.

TE Group argued Mr Lin had not paid the $1.6M so caveated the property but Mr Lin said it was paid by his sister in China.

TE Group then alleged documents on which it had relied from Mr Lin had been fraudulently prepared to take advantage of the difficult position TE Group were in.

Mr Lin argued that he hadn’t and even if there was a proper foundation for challenging the title to the land, at best all the TE Group had was an action for debt.

There was enough of an arguable case on the documents the court had before it for there to be a caveatable interest on the basis of fraud (rather than the money owed).

The factual problems will be sorted at the substantive hearing.

Question 36

under S140 of the LTA 2017, a registrar cannot make any entry on the register which has the effect of ?

Answer 36

charging, transferring or prejudicially affecting things

Question 37

can you have a caveatable interest on a conditional agreement for sale and purchase? give authority

Answer 37

yes, Bevin v Smith

Question 38

finance is for the benefit of which party?

Answer 38

the purchaser

Question 39

in nz, it is generally taken that the parties to an agreement for sale and purchase are bound when?

Answer 39

at the time they enter into the contract, unless terms of the contract and intention of the parties proved

Question 40

which section of the LTA 2017 lists three requirements for whether a mortgagee can jump a caveat lodged on the record of title when exercising its mortgagee power of sale?

Answer 40

S141 - if the three requirements are met, it can be jumped over