week five

Question 1

what was the special term/interest in Bunt v Hallinan

Answer 1

Mrs Bunt used the pottery shed at the bottom of the garden so in the sales of the property the written agreement included that the pottery area be leased to Mr and Mrs Bunt for 15 years. This is an unregistered lease

Question 2

what would you, sensibly, do to protect an unregistered lease

Answer 2

lodge a caveat

Question 3

what did Mr Hallinan want from the property in Bunt v Hallinan

Answer 3

he wanted the property free of anything else on it.

Question 4

what advice did Mr Hallinan get regarding the Bunt’s unregistered lease

Answer 4

he asked the land agent and his solicitor if Mrs Bunt had a right to occupy the property and the land agent and the soliticitor both said she has no interest at all as it is not on the title and therefore she has no legal right.

the solicitor said mere notice of an unregistered interest is not fraud, so Mr Hallinan would be fine.

Question 5

did Mr Hallinan make it clear he didn’t want to recognise the pottery shed

Answer 5

yes, to everyone - relying on his solicitors advice

Question 6

was Mr Hallinan guilty of fraud in Bunt v Hallinan

Answer 6

no - he was relying on his solicitors advice and he had made it clear that he didn’t want to cheat Mrs Bunt of her interest because he wasn’t going to buy the property if he couldn’t get a free title

Question 7

what case is Waller v Davies similar to

Answer 7

Burmeister v O’Brien

Question 8

what was CH Finance’s scheme in Waller v Davies

Answer 8

CH Finance said they’ll manage the properties and raise bank finance for the owner’s benefit. They said they’ll pay bits and pieces, and marketed it as a buy back scheme.

Question 9

what happened to the 10 properties vs the 2 in Waller v Davis in terms of signing

Answer 9

10 were home and signed their rights away themselves. the other 2 were out at the time so their signatures were forged.

Question 10

what did CH Finance do with the properties in Waller v Davies

Answer 10

They mortgages them and gets mortgages registered on the titles. The mortgages were to Davies SNC

Question 11

who was Davies in Waller v Davies

Answer 11

He was acting as agent for both CH Finance and his own solicitors nominee company (SNC)

Question 12

what is a solicitors nominee company

Answer 12

basically an internal bank operating at a law firm where the solicitor tells people who are downsizing they can invest their money in the SNC and the firm lends it out to people who pay interest - operating as a bank just within a firm

Question 13

what is the problem with solicitors nominee companies (SNC)

Answer 13

when dishonest solicitors dip their fingers into that bank

Question 14

what was the result of Waller v Davies in the HC

Answer 14

• Mr Davies was fraudulent
• the 10 owners had their title taken by fraud so they should get it back
• CH Finance looses the houses by being fraudulent
• Mr Davies fraud can’t be carried down to the mortgagee, therefore they are safe and the owners can get compensation to pay off the mortgage

Question 15

what was the problem with this decision made in the High Court in Waller v Davies

Answer 15

the judge made a mistake - he thought that CHF had admitted fraudulent misrepresentation, but the owners hadn’t pleaded fraudulent misrepresentation, they had only made pleadings amounting to them not knowing what they were doing when they signed

Question 16

what was the result in the CA in Waller v Davies

Answer 16

the owners hadn’t pleaded fraudulent misrepresentation, so the judge couldn’t do anything for the homeowners.

Mr Davies couldn’t have committed fraud as no fraud was pleaded.

Everyone lost everything because it was just a matter of the people not knowing what they are doing, rather than the non-pleaded fraudulent misrepresentation.

Question 17

what was the result for the two people who had their signatures forged in Waller v Davies

Answer 17

their signatures were forged (clearly fraud) so they got their properties back.

Question 18

why was Black River not fraudulent in North Shore Aero Club v Black River Trustees

Answer 18

The NSAC’s little interest was sitting behind two large registered interests, therefore they had no chance of getting their $100,000.

Question 19

what is the definition of fraud from s6 of the Land Transfer Act 2017

Answer 19

“fraud means forgery or other dishonest conduct by the registered owner or the registered owners agent”

Question 20

why did Rodney go to Dollars and Sense in Nathan v Dollars and Sense

Answer 20

he wanted to get involved in a business proposition and needed to borrow $250,000.

Dollars and Sense said they’d lend him the money if they could put a mortgage on a house.

Question 21

what is a 3rd tier lender

Answer 21

first tier - nationwide e.g. ANZ and BNZ

second tier - not so stable

third tier - pretty unstable because they offer lots of money but have sketchy terms behind that for defaults etc.

Question 22

who was Mr Thomas in Nathan v Dollar and Sense

Answer 22

he was the solicitor and agent for Dollars and Sense.

Question 23

what did Mr Thomas and Rodney come up with to get the loan in Nathan v Dollars and Sense and what did Rodney do

Answer 23

That they would put a mortgage on Rodney’s parents’ house. Mr Thomas gave Rodney papers for his parents to sign.

He pressured his dad into signing them and forged his mums signature because he couldn’t be bothered finding her as they were separated.

Mr Thomas said this wasn’t good enough because the documents weren’t witnessed so Rodney got his girlfriend to witness the signatures and then took them back to Mr Thomas.

A mortgagee on Mr and Mrs Nathan Srs’ title is registered.

Question 24

Mr Thomas is described as being ___ ____ to what was going on - no questions were asked

Answer 24

wilfully blind

Question 25

how did Mrs Nathan discover the mortgage

Answer 25

Mr Nathan died and she discovered the mortgage and said to get rid of it

Question 26

what happened in the HC in Nathan v Dollars and Sense

Answer 26

the signature had been forged so the son was a fraudster - he was acting for the agent for the mortgagee (Mr Thomas) so the fraud could be visited down to the mortgagee because they have been wilfully blind to what is going on and are therefore also fraudulent.

the mortgage is removed.

Question 27

what happened in the CA in Nathan v Dollars and Sense

Answer 27

the CA affirmed the HC decision, but added that the mortgagee were wilfully blind, but on a false attestation ground (from Rodney going and getting his girlfriend to witness)

Question 28

what happened in the SC in Nathan v Dollars and Sense

Answer 28

the court said Rodney was acting within the authority given to him by Mr Thomas, both as agents of the mortgagee and therefore since there was a close connection between what the agent did (fraud) and the instructions the mortgagee and Mr Thomas gave him, Rodney was acting within his agency and therefore the fraud could be visitied down to the mortgagee.

Question 29

what did the SC want to correct in their decision in Nathan v Dollars and Sense

Answer 29

there was a line of cases protecting the mortgagee from the agents fraud (a concrete wall created by the mortgagee not explicitly telling the agent to do fraud and therefore the agent acting outside his instructions). the SC decided to rewrite this because the statute says otherwise.

the mortgagee took on risk because they told Rodney to go get his parents signatures and they didn’t question the signatures or the attestation.

the mortgagee acquired vicarious liability.

Question 30

can you attack a mortgagee if its agent goes and conducts fraud that is closely connected to what you instructed him to do after Nathan v Dollars and Sense.

Answer 30

yes - loose instructions

Question 31

the SC in Dollars v Sense said that Rodney was fraudulent and was acting ___ ___ ____ ____ and therefore this could be visited down to the principal

Answer 31

within his agents authority

Question 32

what liability was there in Nathan v Dollars and Sense on the part of Dollars and Sense

Answer 32

vicarious liability

Question 33

what are the two parts to vicarious liability with fraud

Answer 33

what acts had the principal authorised and was there a close connection with the agent

Question 34

what cases did Nathan v Dollars and Sense say was incorrect when the SC rewrote the law on the topic?

Answer 34

Cricklewood Holdings Ltd v CV Quigley & Sons Nominees

Question 35

what happened in Cricklewood Holdings Ltd v CV Quigley & Sons Nominees

Answer 35

Quigler was a solicitor in a legal partnership. The firm had a nominee company and within this an internal company called Farmshare. One of the subsidiary companies coming out of this was Cricklewood holdings, which had its own title.

Cricklewood already had a mortgage. Mr Quigley decided to take $300,000 from them to invest and then book back. He made up a mortgage document whereby Cricklewood was borrowing that $300,000 from the nominee company.

the other partners wanted to legitimately register a mortgage to BNZ but couldn’t find the title. When they found it in Quigleys drawer with the mortgage document he said he hadn’t registered the mortgage yet so the other parties registered that mortgage and then the one to BNZ

Question 36

what was the question for the court in Cricklewood

Answer 36

Quigley was fraudulent, should this fraud be visited down to the nominee company (the second mortgage)

Question 37

what was the result of Cricklewood, which would now be wrong due to the approach being changed in Dollars and Sense

Answer 37

the mortgagee company was safe because the agent was acting outside his authority. because of the concrete wall, the nominee company mortgage (second mortgage was safe) because they didn’t tell quigley to do fraud

Question 38

what should ASB have done first in Burmeister v O’Brien

Answer 38

applied to be struck out - they weren’t a part of it because they were squeaky clean

Question 39

what did the Burmeister’s waste their time doing

Answer 39

fighting for the ASB to be found to be fraudulent. this wasted 4 years of litigation before they even got to start to decide if the OB trust had been fraudulent. the mortgage kept rising and the Burmeister’s were only ever going to get $215,000 (the value of the property at the time of deprivation) and so the mortgage went out of control and grew far beyond this to $641,000

Question 40

who was rodney to dollars and sense

Answer 40

their agent - entrusted with obtaining signatures on their behalf and was implicitly authorised to do so

Question 41

whether the principal is liable for an agent’s conduct depends upon what?

Answer 41

whether the conduct of the agent fell within the scope of the task the agent had been engaged to perform - there has to be a sufficiently close connection between the task for which the agent had been engaged and the unlawful action of the agent

Question 42

what does vicarious liability consider

Answer 42

what acts the principal authorised and is the agent’s act so connected with those acts that it can be regarded as a mode of performing them

Question 43

what acts did dollars and sense authorise rodney to do

Answer 43

obtaining of signatures, uplifting of the duplicate certificate of title, obtaining insurance details

Question 44

Blanchard J in Nathan v Dollars and Sense found?

Answer 44

that Rodney’s forgery was within the course of his agency