Betham v Skelton [2017] WSSC 117 (18 July 2017)

THE SUPREME COURT OF SAMOA
Police v Betham and Skelton [2017] WSSC 117

Case name:	David Betham v Lizabell Skelton
Citation:	[2017] WSSC 117
Order date:	18 July 2017
Parties:	DAVID BETHAM of Vailoa, Businessman v LIZABELL SKELTON male of Tuanaimato, Domestic
Hearing date(s):	4 July 2017
File number(s):
Jurisdiction:	Civil
Place of delivery:	The Supreme Court of Samoa, Mulinuu
Judge(s):	Justice Tafaoimalo Tuala Warren
On appeal from:
Order:
Representation:	R Drake for Applicant I Sapolu for Respondent
Catchwords:	ex parte motion – order to remove caveat
Words and phrases:
Legislation cited:
Cases cited:
Summary of decision:

IN THE SUPREME COURT OF SAMOA
HELD AT MULINUU

BETWEEN

DAVID BETHAM of Vailoa, Businessman
Applicant

A N D

LIZABELL SKELTON of Tuanaimato, Domestic
Respondent

Counsel:
R Drake for Applicant
I Sapolu for Respondent

Order: 18 July 2017

WRITTEN REASONS OF TUALA-WARREN J FOR AN ORDER TO REMOVE CAVEAT

Background

1. The Applicant and Respondent were married on 24 February 2005 and their marriage was dissolved on 26 February 2017. They separated in or about 2014. They have two children together.
2. On 21 March 2017, the Respondent placed a caveat (50515) over three lots (6450, 6451, and 6452), claiming interest as beneficiary by virtue of an agreement dated 14 December 2014 and by virtue of matrimonial Property Law principles.
3. Lots 6450, 6451 and 6452 are adjoining lots and situated at Vaitele. The Applicant is the registered proprietor of all three Lots. The house in which the parties lived is situated on Lot 6450.
4. All three lots are mortgaged to Westpac Bank Samoa Limited. The Applicant has defaulted on his mortgage payments. Westpac Bank which is now Bank South Pacific has held off on the recovery process and given him the opportunity to sell some of the Lots to pay off his mortgage.
5. Lots 6451 and 6452 are subject to purchase and sales agreements with third parties. These third parties have secured finance and are awaiting the outcome of this application.

Nature of Proceedings

6. An ex parte motion for an order to remove caveat was filed by the Applicant on 6 June 2017.
7. The Court ordered that the Motion be served on the Respondent forthwith.
8. The Motion was heard on 4 July 2017 before me.
9. On same date, I made the following ruling;

Pursuant to Section 54 Land Titles Registration Act 2008, I make the following orders:

Caveat over lots 6450, 6451 and 6452 is to be removed forthwith.

The question of a claim for matrimonial property is reserved in relation to the following;

The first is the surplus Revenue from the sales of lots 6451, and 6452 (if any). The surplus is after the mortgage has been paid off on all three lots, (6450, 6451 and 6452); and

The second is lot 6450 on which the house is located.

These are to be dealt with in later proceedings for matrimonial property. No comment is made at this stage in relation to any other property for which a claim for matrimonial property may be brought, and no comment is made in relation to the merits or otherwise of that claim. It is in those proceedings for matrimonial property, when heard, that the applicable principles of matrimonial property will be more relevantly dealt with.

Each party to bear own costs.

Written Reasons for this Ruling will be made available in due course.

10. These are the written reasons for my ruling.
    

Submissions of the Respondent/Caveator

11. The Respondent claims to be entitled to or beneficially interested in the land by virtue of an unregistered agreement dated 14 December 2014 and by virtue of the principles applied to the division of matrimonial properties (paragraph 3 Memorandum of Submissions on behalf of the Respondent). This is in reliance on section 51 Land Titles Registration Act 2008.
12. The agreement dated 14 December 2014 is described by the Respondent as “an attempt at some form of settlement” (para 5 Affidavit of Lizabell Skelton dated 2 May 2017).
13. For the purposes of the application, what is relevant is a written agreement allegedly signed by the Applicant and the Respondent on 14 December 2014. The relevant clause is;

House/Land Vaitele: I would like to keep my promise to Liza and the kids that the house and land at Vaitele, its hers and the kids until I paid off the mortgage...

14. The Respondent submits that there are proceedings pending for the resolution of the parties’ matrimonial properties and if the caveat is removed, it will defeat the right of the Respondent in those proceedings. (paras 4 & 7 Memorandum of Submissions). This is because it is claimed that the Lots in question were acquired during the parties’ marriage through the joint effort of the parties (para 24 Affidavit of LIzabell Skelton dated 2 May 2017).
15. Those proceedings were scheduled for mention in the Supreme Court on 14 July 2017.
16. The Respondent therefore opposes the removal of caveat.

Submissions of the Applicant/Caveatee

17. The Applicant submits that he has no knowledge of the agreement dated 14 December 2014 (paras 20-23 Affidavit of David Betham dated 6 June 2017), and that it is a fraudulent document (para 15(1)(a) Submissions by the Applicant).
18. It is submitted that the wording of the particular sentence “I would like to keep my promise to Liza and the kids that the house and land at Vaitele, its hers and the kids until I paid off the mortgage...”, does not create a caveatable interest on the part of the Respondent. The Applicant relies on the learned authors Hinde, McMorland & Sim( First edition, Butterworths Land Law in New Zealand, 1997 at page 258) who say “The crucial question when deciding whether a person has a caveatable interest under s 137 of the Land Transfer Act 1952 is whether that person has a present (as distinct from a potential) interest in the land”(para 7.4.3(b) Submissions by the Applicant). Section 51 of Samoa’s Land Titles Registration Act 2008 mirrors section 137 Land Transfer Act 1952 (NZ).
19. Therefore it is submitted that even if the Court finds that the agreement is genuine, the Respondent does not become entitled to or beneficially interested in the Applicant’s land until after the Applicant has paid off his mortgage(para 7.4.4 Submissions of the Applicant). In any event, it is submitted that the agreement relates only to Lot 6450 on which the house is located (para 15 Submissions by the Applicant).
20. The Applicant submits that caveat 50515 be removed forthwith.

Law

21. Section 51(1)(a) of the Land Titles Registration Act 2008 relevantly provides;

Caveat-(1) A person:

claiming to be entitled to or beneficially interested in any land, estate, or interest authorised to be included in the Register by virtue of any unregistered agreement or other instrument or transmission or of any trust, expressed or implied or otherwise howsoever; or

(b) ...

May lodge with the Registrar a caveat in the approved form.

22. Section 51 of the Land Titles Registration Act 2008(Samoa) is similar to section 137 Land Transfer Act 1952 (NZ). The interpretation of section 137 by the New Zealand Courts is relevant and helpful in this case.
23. Section 54 of the Land Titles Registration Act 2008 reads:

54. Notice and Removal of caveat-(1) Upon receipt of a caveat, the Registrar shall record in the Register particulars of the caveat and shall give notice of the same to the person against whose estate or interest the caveat has been lodged.

(2) The person to whom the notice is given or any other person having registered estate or interest in the estate or interest protected by the caveat, may apply to the Court for an order that the caveat be removed.

(3) The Court upon proof that notice of the application has been served on the caveator or the person on whose behalf the caveat has been lodged, may make such order as the Court deems just.

(4) If a caveat has been removed no second caveat may be lodged by or on behalf of the same person in respect of the same interest except by order of the Supreme Court.

24. In Toleafoa v Ben [2008] WSSC 62 (13 August 2008) Sapolu CJ clearly sets out the procedure followed by the Court on an application to remove a caveat:

It has been held by this Court on a number of occasions that the procedure to be adopted in proceedings on an application for removal of &#aveat i160;is the summrry pure. Tre. That means the Court deals with the application and determines the question ether the caveator has a reasonably arguable case for the interest he claims to support hist his t&#16> o160;on the base basis of affidavits and submissions by counsel: Air New Zealand v Higginson [19">[1993] W93] WSSC 23.

1. In ">In Ortquist v Su’a [2008] WSSC 99 (28 November 2008) Vaai J, states the relevant law succinctly as;

The onus of proof is on the caveator to show cause why his caveat should not be removed;

The caveator must prove that he has a reasonably arguable case for the interest he claims must be a caveatable interest.

The procedure adopted by the court in dealing with application for removal of caveat is a summary procedure.

26. Where there is conflicting affidavit evidence, the approach again has been settled by Sapolu CJ in Toleafoa v Ben where he says;

I would also refer to Chan Chui & Ltd v PereiPereira In Woodroffe v Coleman (2011) 13 NZCPR 161 at 172, Bell AJ has this to say in relation e wor216;interest̵’ as7; as used in the New Zealand legislation;

A caveat. In referring to the predecessor of s 137 o137 of the;Land&#16d Transfer t 1952, the, the Court of Appeal said in Staples & d v Corby[1900] NZGazLawRp 157; (1900) 19 NZLR 517 (CA & SC) at 536-537;

There ords &#822 person claiming to be entitled to or to be o be benefbeneficially interested in any lani>land, estor intr interest.” The word “interest,” last used; shows that legal interest is meant, and this section was meant to guard equitable interestsore a person can caveat&#nder this seis sectionction he must be a person who claims to be entitled to the land, orestate or inor interest in the , or to be “ben0;beneficially interested” in the land, or in atate or interest in the land, and trson in e in either event must claim “8220;by virtue of any unregistered agreement, oer instrument or transmission” [“transmission” meaning acquirement by tity title or estate consequent on death, will, intestacy, bankruptcy, &c], “or of any trust expressed or implied, or otherwise howsoever.” By this section a purchaser who has only an agreement to purchase, &c, may protect his agreement, or a cestui que trust may protect his interests.

A purely contractual or personal right will not support a caveat.(GW HInde ahe others Land Law in New Zealand(looseleaf ed, LexisNexis, Wellington at [10.009]-[10.010].

The property interest must exist at the time the cavi>&#1 lodged and when when an order is sought for it not toot to lapse. It is not enough that the claimant may have a potential intern the property later. In Philv NZI Bank 13 (113 (1989) 1 NZConvC 190,246(CA) atA) at 190, 248, Cooke P said:

Interests in /i> that come into into being only on a court making an order that establishes the interest are not caveatable.

28. In MORTRE ngs Ltd v ANCL Investments ents Ltd [2016] NZHC 1413, Bell AJ says of the general principles;

A personal or contractual right is not enough. The caveator must show an entitlement to a beneficial interest in the land under the caveat (Guardiant anst and Executors Company of New Zealand Ltd v Hall (No 2) [1938] NZLR 1020 (CA) at 1025). Something more than a potential orre interest is required.

29. In relation to the Court’s residual discretion, Bell AJ says;

Caveat applons are summary and ared are therefore not suitable for deciding disputed questions of fact. On the other hand, the court is not required to accept uncriticallyaising a dispute of fact which calls for further investigattigation, every statement in an affidavit, however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent or inherently improbable it may be. For a caveat<160;to be removed, it be t be patently clear that the caveat cannot stand eitecause ther there was no ground for lodging it at the outset or because any such ground no longer exists. In addition,courta res discreiscretion not to uphold a caveat but that is exercised cautiouutiously, sly, as when the caveat could nrveseful purpose orse or alternative safeguards are available. In

We are of the view tiew that ihat in the dictum in Sims v Lowe S&and Gand Gallen JJ werJ were concerned with the situation which was then before the Court and were not putting their minds to a tion in which there is no practical advantage in maintaining a lodg;lodged bged by someho who could properly claim a caveatable interest. In such circumstances the Court retains a discretion to make an order rem the&#16cave6cavea, though it will will be exercised cautiously. An order wilr will be made for removal only where thrt is complesaplesatisthat the legitimate interests of the caveator wilr will not thereby be prejudiced. If, on t on the facts of a case, it can be seen the cav can have no reasonable expectation of obtaining ning benefbenefit from continuance of the ca/i> in the form oorm of the recovery of money secured over the land or specific performance of an agreement or if the caveator’s interests can be realy acdated in some other way, such as by substituting ting a fund of money under the control of l of the Court, then it may be appropriate for the caveat&#160e removed notwithsta that the right tght to the claimed interest is undoubted.

To establish a reasonably arguable case there must be evidence tending to prove the facts relied on. Assertion, whether iadingaffidavit, is nots not enou enough. The evidence need not be as extensive as that given in a hearing on the substantive merits. It may be circumstantial. But if there is no evidence to prove the facts contended for, the caveator will not have made out a reasonably arguable case for those facts. As a qualification to the reasonably arguable standard, where there are

allegations of fraud or other reprehensible conduct, it is necessary to show a prima facie case (Schmidt v Pepper New Zealand(Custodians) Ltd [2012] NZCA565 at [15]).

Discussion

The Relevant Legal principles

30. According to the case law above, the relevant legal principles in dealing with this application are as follows;

It is a summary procedure;

The onus is on the caveator to prove that she has a reasonably arguable case;

If there are conflicts in the affidavit evidence, the Judge should proceed on the assumption that the factual allegations in the affidavits for the caveator are correct;

The interest must be a property interest which must exist at the time the caveat is lodged;

It is not enough that the claimant may have a potential interest in the property later; and

The Court has a residual discretion to remove the caveat where the Court is completely satisfied that the legitimate interests of the caveator will not thereby be prejudiced.

The Caveat

31. The Respondent lodged a caveat according to Schedule 1 of the Caveat, that the Respondent is “entitled to and beneficially interested in the said land by virtue of an agreement dated 14 December 2014, attached herewith, and by virtue of matrimonial property law principles”. This wording is based largely on section 51(1)(a) of the Land Titles Registration Act 2008.
32. In accordance with section 54 Land Titles Registration Act 2008, the Applicant having a registered interest applied to the Court for an order to remove the caveat.

Matrimonial property

33. This application was dealt with summarily with both parties offering affidavit evidence.
34. Both Counsel to their credit, made submissions both on the agreement and the principles relating to the division of matrimonial property.
35. I have reserved the question of claim for matrimonial property as there are substantive proceedings which have been filed. There are conflicts in affidavit evidence which must be resolved during the hearing of those proceedings.
    

The agreement

36. For the purposes of this application, I therefore deal only the relevant paragraph of the agreement pertaining to the house and land at Vaitele.
37. At the outset, I note that there is conflicting affidavit evidence in relation to the existence of the agreement. The Respondent claims the agreement was duly signed by the Applicant and the Applicant denies that he signed the agreement. That question and resolution of conflicting evidence in relation to other matrimonial property is a matter for the proceedings for matrimonial property.
38. For the purpose of determining whether the Respondent has a reasonably arguable case for the interest claimed, I proceed according to well established common law principles, on the assumption that the factual allegations in the affidavits of the Respondent are correct in relation to the agreement because the onus is on the Respondent to show that she has a reasonably arguable case for maintaining her caveat.(see Toleafoa v Ben)
39. The relevant paragraph of the agreement which deals with the caveated land is “I would like to keep my promise to Liza and the kids that the house and land at Vaitele, its hers and the kids until I paid off the mortgage ...”.

Present as opposed to a potential interest

40. Even if I assume for the purposes of this application that the relevant paragraph is correct, the property interest claimed must exist at the time the caveat is lodged. It is not enough that the claimant may have a potential interest in the property later.( see Woodroffe v Coleman)
41. On the reading of the relevant paragraph, the intention cannot be mistaken. The Applicant intends to keep his promise to Liza and the kids to give them the house and land at Vaitele, when he has paid off the mortgage. This coincides with the actual state of affairs, that the land is mortgaged to Westpac. It is only when that mortgage is paid off, that the Respondent may have an interest in the property depending on the resolution of matrimonial property issues. On the relevant paragraph of the agreement alone, the Respondent has not made out a reasonably arguable case for the interest she claims must be a caveatable interest.

Residual Discretion

42. 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 be 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 Investments Ltd)
43. The surplus from the sale of the two lots (Lots 6451 and 6452), being the surplus after the repayment of the mortgage on all three lots is reserved for the proceedings filed for division of matrimonial property.
44. Lot 6450 on which the house is located is not subject to a sale and purchase agreement and will also be reserved to be dealt with in the proceedings for division of matrimonial property.
45. Specific performance of the relevant paragraph of the agreement, if the agreement is found to be genuine in later proceedings, may then be possible in the event that the mortgage on Lot 6450 is paid off. This will depend on whether the proceeds of the sale from Lots 6451 and 6452 are adequate to pay off the mortgage on all three Lots.
46. I find no prejudice to the material interests of the Respondent if the caveat is removed. The surplus and Lot 6450 being reserved for the matrimonial property proceedings protects her interests in the event that she is entitled to some of the surplus and/or Lot 6450. I make no further comment on those proceedings and/or the Respondent’s claim for the division of matrimonial property.

Conclusion

47. Authorities provided and submissions of Counsel were extremely helpful.
48. In the circumstances, my orders dated 4 July 2017 are what I deem just. No second caveat can be lodged by or on behalf of the Respondent pursuant to section 54(4) Land Titles Registration Act 2008, except by order of the Supreme Court.
    

JUSTICE TAFAOIMALO TUALA WARREN