Development economists point to lack of secure title to land as a common feature holding back economic growth in third world countries. At risk of being kicked off their land, occupiers cannot borrow for further development. Lenders refuse to lend. In New Zealand, the High Court dismissed claims by disaffected Maori that recent changes to land title legislation provided leverage to kick property developer Ian Cassells off his proposed Shelly Bay development in Wellington.
Taranaki iwi received land at Shelly Bay on Miramar peninsular as part of its Waitangi Treaty redress. Formerly in use as an air force base, the land was valued at $15.2 million on transfer to its new Maori owner: Port Nicholson Block Settlement Trust. In 2016, Port Nicholson was looking to rationalise its property holdings. Plans to sell Shelly Bay created a furore: individual Maori adamant the land should never be sold; local citizens critical of development plans. By late 2019, developer Ian Cassells had cleared multiple local authority consent hearings and judicial challenges to his plans. He was ready to start, blocked only by a caveat lodged over title to Shelly Bay by individual Maori. They allege Port Nicholson trustees acted in breach of trust by selling to Mr Cassells’ company and transferring title to Shelly Bay. Their caveat had the effect of blocking any further dealing with the land.
The Land Transfer Act grants ‘indefeasible’ title to registered owners of land; in general terms, title cannot be overturned unless the now registered owner is guilty of fraud. Land transfer fraud has a specialised legal meaning. Individual Maori allege companies associated with Mr Cassells are guilty of ‘fraud’: they got title to Shelly Bay in the full knowledge there was a running dispute over Port Nicholson’s right to sell. They said changes in 2017 to land title legislation extended the definition of land transfer fraud.
Associate judge Johnstone ruled a sale accompanied by a vendor’s alleged breach of trust does not affect title to land. The new owner gets clear title, not open to attack. The caveat over Shelly Bay was removed. Aggrieved claimants’ remedy is to sue Port Nicholson trustees, Judge Johnstone said. Separate legal proceedings alleging the trustees were in breach of trust have yet to be heard.
Mau Whenua Incorporated v. Shelly Bay Investments Ltd – High Court (6.12.19)
20.008