Lodging caveats over title to land are a powerful legal weapon, but cannot be used when the dispute is simply about payment, as Vicki Katu found when she agreed to sell her south Auckland family home, part of a deal to bail out a failing business.
Ms Katu alleged Auckland accountant Anmol Seth acted fraudulently, welshing on payments promised as part of the sale. The High Court was told Ms Katu’s family home in Gray Avenue, Papatoetoe, was owned jointly with her business partner Kevin Elliott. Liquidity difficulties led them to Mr Seth who recommended they sell Gray Avenue to him, freeing up cash. The agreed deal proposed a sale to Mr Seth with Ms Katu staying in occupation under a residential tenancy agreement. A schedule of creditors to be paid out of net sale proceeds was agreed. Payment of $140,000 to Ms Katu and Mr Elliott was to be deferred, paid after Mr Seth had subdivided the site, part of a new development.
Ms Katu alleges Mr Seth has not paid all scheduled creditors, as required. She further alleges Mr Seth is lying when he claims the promised final payment of $140,000 has been paid. A document supposedly signed by herself and Mr Elliott purporting to acknowledge receipt of the $140,000 is a forgery, she alleges. They challenge a $40,000 fee charged by Mr Seth for what are described as liquidation expenses.
Ms Katu registered a caveat over title to Gray Avenue. Caveats give notice to the world of a claimed legal interest in the land. Further dealings in the land are blocked. Associate judge Bell dismissed the caveat. Ms Katu’s dispute was about consequences of her sale of Gray Avenue, not a claim to Gray Avenue itself. Title to land could not be blocked over what was a personal dispute over payment.
Katu v. Seth – High Court (8.03.21)
21.045