What's new in the courts?

An apartment is a "piece of land" under the landlocked provisions of Property Law Act 1952

Under section 129B of the present Property Law Act 1952 (with equivalent provisions being introduced by sections 326 to 331 of the new Property Law Act 2007), the court has the discretion, on application, to grant reasonable access to a "piece of land" that is landlocked (defined as "landlocked land" under the 2007 Act, but the effect is the same).

The decision in Druskovich¹ is an intriguing one as it was held that an apartment above a pharmacy, let on a short term lease, was a "piece of land" within the meaning of section 129B. The only access to the apartment was by an external staircase at the back of the building to the rear courtyard (an internal staircase, which previously provided access, having been removed some years earlier). The right of way, while used by the occupiers of the apartment and the pharmacy, was for the benefit of another lot further on. The registered proprietor of the right of way began to build a fence that would block this right of way, which resulted in this matter coming to court.

The Court of Appeal granted relief, but limited it to the apartment (the pharmacy enjoyed another route of access from the front of its premises) and only until one year after expiry of the pharmacy lease to give the owners the opportunity to provide an alternative access from the main road in front. The court commented that they did not consider that the existence of a separate title in respect of a part of a building is a prerequisite to that part being regarded as a "piece of land". The apartment was a separate and identifiable area to which there would, as a matter of fact, be no access to if the fence were completed. As a practical matter, the apartment would be landlocked. The court therefore felt it was consistent with the remedial purposes of section 129B to treat the apartment as "a piece of land".

A fax header - does this constitute a signature to a contract?

In Welsh², while the plaintiffs did succeed in having the sale and purchase agreement enforced, the interesting aspect of this recent case was the extensive consideration of case law both in New Zealand, and in other jurisdictions, on electronic signatures. Here, a fax header printed using the fax machine's capacity to add writing to the document as it is copied and sent, in the absence of any evidence that it was specifically inserted for the transaction concerned, was held not to constitute a signature both under the Contracts Enforcement Act 1956 (the 1956 Act) and the Electronic Transactions Act 2002 (the 2002 Act).

Justice Miller, in considering the 1956 Act, commented that a typed or printed signature in an electronic writing may amount to a signature if, on the facts, it identifies the person charged, is made by that person, and evidences his or her intention to be bound by its contents. While in this case the printed name and fax number sufficiently identified the person sending the fax, on the facts, the necessary intention to be bound to the transaction was not established. Justice Miller reached the same conclusions in relation to the 2002 Act, in that it did not comply with the legal requirements for a signature contained in section 22(1)(a). He noted that an electronic signature will not prove adequate unless the court is satisfied that its insertion was intended to signify adoption of the electronic note or memorandum of which it forms part or with which its is otherwise associated.

In this case the fax header was not attached for the purpose of the transaction, all it proved was that the defendant had sent the fax - it was not a signature. As to how that intention can be evidenced, this will depend on what one party says it intended to do or not. In this case the vendor husband had passed away, with the action being taken against the widow, who was not actively involved in the initial negotiations between the parties. On the basis that there was no evidence that the defendant husband had inserted the fax header manually, Justice Miller was prepared to draw an inference that the fax header was programmed into the machine's memory some time previously, probably when it was first set up, and then attached automatically to all faxes - therefore the necessary intention was not established.

It would therefore be prudent, where a party wishes to rely on an electronic signature, to expressly warn the party to be charged that the writing is a contract that will bind the party when he/she attaches an electronic signature to it, and to specify what form of electronic signature is required.

Updates on previously noted court news

No unit title subdivisions of sub-lessee interests

It has been just over a year since we reported on the NZPS³ case, where it was held that the framework of the Unit Titles Act 1972 does not contemplate subdivision of sublease interest in land nor does it allow unit titles to be created where the lease is a combination of a current lease and a future lease.

This decision has been upheld on appeal. The Court of Appeal, in its judgment of 31 August 2007, concluded that the courts are not well placed to embark on a modernisation process in this area, as that is a matter for policy makers and law reformers, noting that a review of the Act is underway and a variety of changes have been mooted. There is presently no draft legislation for consideration, as it is still being reviewed, but we will keep you advised on progress.

¹ B A Trustees Ltd v Druskovich [2007] 3 NZLR 279

² Welsh & Welsh v Gatchell (Unreported, High Court, Blenheim, CIV 2005-406-279, 21 June 2007 , Miller J)

³ NZPS Investments Limited v The Registrar General of Land (Unreported, Court of Appeal, 21 February 2007 , CA 138/06)

Enquiries and information

For more information on any of the cases, articles and features in Property Update, please email Tom Bennett or call on 64 9 916 8789.