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Boon v Registrar of Lands (MNRE) [2017] WSSC 149 (14 December 2017)

SUPREME COURT OF SAMOA
Boon v Registrar of Lands (MNRE) [2017] WSSC 149

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

BETWEEN:

PATRICK BOON, Businessman of Toomatagi.
Applicant

AND:

REGISTRAR OF LANDS (MNRE).
First Respondent

AND:

ANZ BANK SAMOA LIMITED a duly incorporated company carrying on the business of Banking.
Second Respondent

AND:

TAVITA FESOLAI of Siusega, and Auckland New Zealand, Banker.
Third Respondent

Counsel:
F Tufuga for applicant
M Vaai and D Fong for first respondent
M G Latu for second respondent
M V Peteru for third respondent

Hearing: 01 December 2017

Decision: 14 December 2017

DECISION OF NELSON J
(Application to remove caveat)

Background

1. The background to these proceedings can be found in Fesolai v Boon [2016] WSSC 206; in particular the existence of Caveat 41625 lodged by the applicant over inter alia Parcel 3536 at Siusega the property of the third respondent. Mortgage 27336 to the second respondent being in default, the Bank has exercised its power of sale and secured a buyer for Parcel 3536. Consequently two urgent applications are now before the court: the first from the applicant seeking an order for his caveat to remain and the second from the second respondent seeking removal of the caveat in order to facilitate the sale of the secured property. I will deal with each in turn.

Caveat to remain

2. This application is fatally flawed in two respects: firstly it seeks a continuance of Caveat 41625 over Parcel 3535. While the Caveat encompasses Parcel 3535, it is clear the applicant has no caveatable or other interest in or over Parcel 3535. What he purchased from the second respondent was the other two Parcels, 3536 and 3537. As noted in Fesolai v Boon (supra) at paragraph 2:

“Parcel 3535 is not involved in these proceedings.”

3. Secondly as pointed out to counsel at the hearing there is no process under the Land Titles Registration Act 2008 whereby a caveator can apply for caveats to remain in place. Certainly there is none under s.55(2) (address in Samoa for service) and s.57(1)(c) (lapse of caveat) relied on by counsel. A caveat is a creature of statute and as such can only possess those attributes and characteristics endowed by legislation. The focus of Part 8 Division 4 of the Act being the part dealing with ‘Caveats’ is on definition, duration and removal of caveats.

Removal of caveat

4. The second respondent seeks removal of the caveat in relation to Parcel 3536 on the basis that the applicants interest is subject to the Banks mortgage. The other respondents naturally do not oppose this but their response was focused on opposing the application for the caveat to remain which I have already addressed. It is clear however from the applicants affidavit in support he in effect opposes the second respondents application but his arguments are emotive not legal.
5. The law governing an application to remove a caveat is well established. The relevant principles were recently restated by Tuala-Warren, J in Betham v Skelton [2017] WSSC 117. And the onus is always on the caveator, in this case Mr Boon to show why his caveat should not be removed: per Vaai, J in Ortquist v Sua [2008] WSSC 99 as applied in many subsequent cases.
6. The authorities also show that even if the caveator is able to demonstrate an arguable case for retention, there remains in the court a residual discretion to order removal where there is nothing to be gained by preserving the caveat. This was recognized by Sapolu, CJ in Chan Chui and Sons Ltd v Pereira [2006] WSSC 34 citing with approval Blanchard, J who delivered the New Zealand Court of Appeal judgment in Pacific Homes Ltd v Consolidated Joineries Ltd [1996] NZCA 264; [1996] 2 NZLR 652 where at page 656 in dealing with “a situation in which there is no practical advantage in maintaining a caveat lodged by someone who could properly claim a caveatable interest,” the court said:

“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..........then it may be appropriate for the caveat to be removed notwithstanding that the right to the claimed interest is undoubted” (emphasis is mine).

7. This discretion was duly exercised in Betham v Skelton (supra) in ordering removal of a wifes caveat over disputed matrimonial property on the basis that the interests of her and her children in the residue was sufficiently protected. At paragraph 42 of her judgment the learned trial judge observed:

“In any event, the Court has a residual discretion to remove the caveat where the Court is completely satisfied that the material interests of the caveator will not thereby the prejudiced. If the caveat is not removed, the caveator can have no reasonable expectation of obtaining a benefit in the form of recovery of money or specific performance of the agreement (see Motre Holdings Ltd v ANCL Investment Ltd [2016] NZHC 1413).”

Analysis

8. There is no question the applicant has a caveatable interest over Parcel 3536. Which interest warranted protection. There is equally no doubt the second respondent has a valid mortgage over 3536 to which the applicants interest is subject. There is further no issue that the mortgagor third respondent is in default and significant interest charges continues to accrue on the mortgage on a daily basis.
9. It would be irresponsible and possibly in breach of its fiduciary duty for the Bank given the impasse between the applicant and the third respondent and the uncertainty surrounding completion of their sale and purchase transaction to allow the situation to continue unresolved. Maintaining the status quo and the caveat would in fact be to the applicants ultimate detriment as his interest is subject to the accumulating mortgage debt.
10. This is a case where notwithstanding the applicants caveatable interest, it is to his long term benefit that the sale of Parcel 3536 be allowed to proceed and the mortgage be cleared. His beneficial interest and monies already paid remains protected by his caveat over the remaining unencumbered Parcel 3537.

Orders

(i) The application for Caveat 41625 as it relates to Parcel 3535 to remain is dismissed. Caveat 41625 insofar as it pertains to Parcel 3535 is to be removed forthwith.
(ii) The application to remove Caveat 41625 in relation to Parcel 3536 is granted and the first respondent is to give effect to same forthwith.
(iii) Caveat 41625 is to remain in respect of Parcel 3537.
(iv) The parties should seriously consider as an option for final settlement that the third respondent be handed clear title to Parcel 3535 and that the applicant shall upon such terms as mutually agreed upon, either release his caveat over Parcel 3537 or again upon mutually acceptable terms be conveyed title to the said Parcel 3537. Otherwise the current impasse may well continue indefinitely and without resolution. That cannot be in anyones interests.
(v) Each party having been to some degree successful, each will again bear their own costs in this matter.

..............................
JUSTICE NELSON