Able Ventures Limited v Bolton

[2023] NZHC 1689

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2021-470-000039

[2023] NZHC 1689

UNDER

Section 105 of the Land Transfer Act 2017

IN THE MATTER

of an application for orders discharging mortgages

BETWEEN

ABLE VENTURES LIMITED

First Plaintiff

NELSON MATTHEW BELL and JUDITH KAY BELL

Second Plaintiffs

AND

JOHN GRAHAM KENNETH BOLTON

First Defendant

ELWOOD ALAN ROBERT BOLTON, RAQUEL SAPPHO KYLAH GYPSY

TANIA MILLER, and the Estate of ADELIA PAN FINLAY

Second Defendants

Hearing:	On the papers
Appearances:	G Grant and B Foster for the Plaintiffs J Delaney for the Second Defendants
Judgment:	3 July 2023

JUDGMENT OF WALKER J

This judgment was delivered by me on 03 July 2023 at 2.30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

ABLE VENTURES LIMITED v BOLTON [2023] NZHC 1689 [3 July 2023]

[1]        The plaintiffs and second defendants seek consent orders/directions following the grant of leave in a judgment issued on 9 August 2022 (August 2022 judgment)1 and settlement of the dispute between them.2

[2]         The August 2022 judgment followed a hearing in which the first defendant, John Graham Kenneth Bolton (Ken) did not participate.

[3]        The proceeding is one of a series of proceedings against Ken by family members following Ken’s estrangement from the family. The history is long and convoluted. Some of that history—and the most relevant for the purposes of this judgment— is set out in the August 2022 judgment. Further history is set out in my judgment issued on 11 May 20233 and a judgment of Moore J issued on 8 October 2021.4

[4]        Able Ventures Limited (Able) is the registered owner of a property at 23 Bain Street, Mount Manganui (the Property). The Property is held in certificates of title SA11D/699 and SA46A/890. Nelson Bell is the sole shareholder and director of Able. Judith Bell is his wife and a former director of Able.

[5]        Ken is the registered mortgagee of three mortgages registered against the titles of the Property although he did not advance funds to Able or the second plaintiffs.5 The registered mortgages are:

(a)       B.388436.5 (the 1996 mortgage);

(b)       B.674837.1 (the 2001 mortgage); and

(c)       M6484677.2 (the 2005 mortgage).

1      Able Ventures Ltd v Bolton [2022] NZHC 1957 (August 2022 Judgment).

2      Joint memorandum of counsel for plaintiffs and second defendants dated 2 June 2023. This memorandum was received by the Court on 7 June 2023.

3      Perpetual Trust Ltd v Bolton [2023] NZHC 1108.

4      Re Bolton [2021] NZHC 2692.

5      The funds came from the second defendants. There was not any evidence they either jointly or severally assigned their rights as lenders/mortgagees to Ken. The August 2022 judgment noted that Ken had not participated in the proceedings and therefore not provided any evidence or argument to contradict the second defendants’ case.

(together, the mortgages)

[6]        The second defendants are all family members of Ken.6 Elwood Alan Robert Bolton (Alan) is Ken’s brother. Raquel Miller (known as Rachel) is Ken and Alan’s niece. Adelia Pan Finlay (Pan) was Alan and Ken’s mother. She passed away in 2020.

[7]        The plaintiffs brought these proceedings under s 105 of the Land Transfer Act 2017 for discharge of the mortgages registered against the Property on the ground that recovery of funds secured under the mortgages is time barred. The second defendants joined the proceedings by consent of the plaintiffs. They sought rectification of the subject mortgages and substitution of their names as mortgagees on the basis that Ken was always acting as an agent for his late mother and the other individual second defendants. Alternatively, they sought a declaration that Ken was acting as a constructive trustee when he registered his name as mortgagee and an order requiring him to transfer the mortgages to them.

[8]The August 2022 judgment:

(a)determined that the secured debts Able Ventures owed under all three mortgages are now statute barred so that no claims for recovery or payment of those loans can be brought;

(b)declared that two of the three registered mortgages were held by Ken as constructive trustee for the second defendants; and

(c)ordered Ken to transfer two of the three mortgages to the second defendants.

[9]        The Court noted that it appeared that the 2001 mortgage had been omitted from the second defendants’ pleadings in error. The Judge said that she could not see any reason on the face of things why the second defendants had omitted the 2001 mortgage from their cross-claim and counterclaim but hesitated to grant a constructive trust over the mortgage where it had not been pleaded. She expressly reserved leave for the

6      To avoid confusion, I refer to the parties by their preferred names.

second defendants to seek a declaration that Ken holds a constructive trust over the 2001 mortgage and an order that he transfer it to them.

[10]      The judgment was sent by the court to Ken. It was sent to the email address used by Ken in accordance with directions made by Associate Judge Gardiner.7

[11]      The plaintiffs appealed that aspect of the August 2022 judgment dismissing the application to discharge the mortgages. Following settlement with the second defendants, the plaintiffs abandoned that appeal.

[12]      Materially, Ken has not complied with the order to transfer the 1996 and 2005 mortgages to the second defendants.

[13]      The consent memorandum filed by the plaintiffs and second defendants initially sought orders addressing the omission of the 2001 mortgage from the orders made, as anticipated by the Judge, and discharging all three (related) mortgages registered on the title of the Property.

[14]      Following my minute indicating a preliminary view that there was a jurisdictional obstacle to the form of orders, the parties amended the orders they seek.8 They provided a further consent memorandum now seeking:9

(a)A declaration that the first defendant holds the 2001 mortgage as constructive trustee for the second defendants.

(b)An order pursuant to s 44A of the Senior Courts Act 2016 that the Registrar of the High Court, or nominee, execute any conveyance, contract, document or instrument necessary to transfer the three mortgages (B.388436.5, B.674837.1 and M6484677.2) currently registered on the tile to the Property to the second defendants.

7      Minute of Associate Judge Gardiner dated 30 September 2021.

8      My provisional view was that I had no jurisdiction to effectively override a decision made by a fellow High Court judge yet the orders initially sought appeared to do that.

9      Consent memorandum of counsel for plaintiffs and second defendants dated 29 June 2023.

[15]      In short, the present parties are no longer seeking a discharge of the mortgages Once the second defendants are registered as mortgagees (as envisaged by the August 2022 judgment), they will be in a position to execute discharges themselves.

Procedural history

[16]       I take the following summary from the consent memorandum dated 2 June 2023.

[17]      On or around 19 April 2021, the plaintiffs filed an originating application to discharge the three mortgages registered on the titles to the Property.

[18]      Ken took no steps after service of the proceedings on him in May 2021. The matter was set down for a formal proof hearing on 6 October 2021.

[19]      On or around 14 September 2021, the second defendants applied to be joined. The plaintiffs consented to the joinder. The second defendants opposed the discharge of the mortgages on the grounds that they were held by Ken on constructive trust for them. They also cross-claimed against Ken, seeking declarations to this effect and to be substituted as mortgagees in place of Ken.

[20]      A two-day hearing took place on 15 and 17 February 2022. Ken did not attend. He took no steps throughout the proceedings. Judgment was issued on 9 August 2022.10

[21]      On 6 September 2022, the plaintiffs filed an appeal against the August 2022 judgment in the Court of Appeal.

[22]      On 18 November 2022, the second defendants filed a memorandum seeking amendment of the second defendants’ counterclaim under the earlier leave granted by the Court. They sought:

10     August 2022 Judgment, above n 1.

(a)a declaration that the first defendant also holds the 2001 mortgage on constructive trust for the second defendants; and

(b)an order that the first defendant transfer the 2001 mortgage to the second defendants.

[23]      However, they also sought a declaration as to which of the mortgages registered on the title to the Property are enforceable and for orders under the Senior Courts Act 2016. They properly acknowledged that this question was broader than the enquiry envisaged under the leave provisions of the August 2022 judgment. They anticipated a further hearing to determine those issues.

[24]      On 14 February 2023, the plaintiffs and second defendants filed a joint memorandum of counsel to advise the Court that the underlying disputes between them had been resolved, subject to recording the agreement in writing.

[25]      The parties have now entered into a written settlement agreement. It is apparent that the second defendants no longer oppose discharge of the mortgages to which they are beneficially entitled. This of course was the appeal point in the now-abandoned appeal.

[26]      In the Perpetual Trust proceedings, I issued a judgment against Ken in which I held that Ken had wrongly executed a mortgage in breach of duties he owed as then administrator of his father’s estate.11 Ken did not engage with the Court in those proceedings either. He took no steps and judgment proceeded by way of formal proof.

[27]      Referring to s 44A of the Senior Courts Act 2016 (the Act) and Ken’s failure to engage in the proceeding or antecedent proceedings, I ordered Ken to deliver a registerable discharge of the mortgage over a property at 84 Sutherland Road, Tauranga within 14 days of my judgment, failing which I directed the Registrar or Deputy Registrar of the High Court at Tauranga to execute a discharge of mortgage.

[28]Ken did not deliver a registrable discharge as so ordered.

11     Perpetual Trust Ltd v Bolton, above n 3.

Discussion

[29]      I make the requested declaration that Ken holds the 2001 mortgage (B.674837.1) as a constructive trustee for the second defendants because I am satisfied that there is nothing to distinguish the 2001 mortgage from the 1996 and 2005 mortgages. The Judge clearly anticipated this in the August 2022 judgment.

[30]      The next question is whether I direct the Registrar or Deputy Registrar to execute transfers of all three mortgages in the light of Ken’s non-compliance.

[31]      Section 44A has the purpose of enabling a successful party to secure the benefit of a Court order where the other party has failed or refused to execute a document such as a memorandum of transfer to enable perfection of the decree. A recalcitrant mortgagee who refuses to comply would also be caught.12 The section reads:

44A     Execution of instruments by order of High Court

(1)This section applies if a person fails to comply, before a date specified by the court or, if no date is specified, within a reasonable time, with a judgment or order of the High Court directing the person to—

(a)execute a conveyance, contract, or other document; or

(b)endorse a negotiable instrument.

(2)The High Court may, on application and on the terms it thinks just, make an order directing another person, who it nominates for the purpose, to—

(a)execute the conveyance, contract, or other document; or

(b)endorse the negotiable instrument.

(3)The nominee must execute the conveyance, contract, or other document, or endorse the negotiable instrument, before the date specified by the court, or, if no date is specified, within a reasonable time.

(4)A conveyance, contract, document, or instrument executed or endorsed by the nominee operates and is effective as if the person referred to in subsection (1) had made the execution or endorsement.

12     Barge v Freeport Development Ltd (No 2) (2006) 7 NZCPR 414 (HC).

(5)The exercise of the High Court’s power in subsection (2) does not—

(a)affect a proceeding already commenced in a court; or

(b)invalidate anything that was previously lawful; or

(c)validate anything previously declared invalid in any proceeding.

[32]      However, the section clearly requires that there has been a failure to comply with a judgment or order of the High Court before it is engaged. Ken has failed to comply with an order of the High Court to transfer the 1996 and 2005 mortgages. Although no time frame was stipulated, he has not done so within a reasonable time. His obligation to transfer the 2001 mortgage did not however arise from the August 2022 judgment. It arises at this date and under this judgment.

[33]      On reflection and notwithstanding my preliminary views, although there is a reasonable inference that Ken will not comply with any order, it is nonetheless necessary that this judgment first be served on Ken before I make orders in relation to the 2001 mortgage under s 44A of the Act.

[34]      As a matter of practicality, it is for the parties to determine whether to proceed now to have the Registrar or Deputy Registrar execute the transfer of the 1996 and 2005 mortgages or to present the instrument(s) transferring the three mortgages to the Registrar or Deputy Registrar together if Ken does not execute the transfer of the 2001 mortgage.

[35]I make the following orders/directions:

(a)The first defendant, Ken Bolton, be served with a copy of this judgment and orders by email sent to his email address notified to the Court earlier in the proceeding [REDACTED],13 along with a registrable transfer of mortgage B.674837.1. A copy of the served email is to be filed with a memorandum from counsel within three working days and placed on the Court file.

13     Refer minute of AJ Gardiner dated 30 September 2021 at [13(f)].

(b)The first defendant is to deliver to the second defendants a registrable transfer of the mortgage B.674837.1 registered on 23 August 2001 in respect of 23 Bain Street, Mount Maunganui, being an estate in fee simple with an area of 1,712 square metres more or less on Records of Title with identifiers SA11D/699 and SA46A/890 in the South Auckland Registry prepared by the solicitor for the second defendants, within 10 working days of this judgment.

(c)In the event that the first defendant does not comply with the order in

(b) above within the stipulated time, I direct the Registrar or Deputy Registrar of the High Court at Tauranga to execute a registrable transfer of the mortgage, as prepared by the solicitor for the second defendants, with the instrument number B674837.1, registered in respect of 23 Bain Street, Mount Maunganui, being an estate in fee simple with an area of 1,712 square metres more or less on Records of Title with identifiers SA11D/699 and SA46A/890 in the South Auckland Registry and deliver the transfer to the second defendants’ solicitors.

(d)On request by the plaintiffs and/or second defendants, I direct the Registrar or Deputy Registrar of the High Court at Tauranga to execute a registrable transfer of the mortgages, as prepared by the solicitor for the second defendants, with instrument numbers B.388436.5 and M6484677.2, registered in respect of 23 Bain Street, Mount Maunganui, being an estate in fee simple with an area of 1,712 square metres more or less on Records of Title with identifiers SA11D/699 and SA46A/890 in the South Auckland Registry, to the second defendants.

[36]No costs are sought.

[37]      Leave to the parties to apply if further directions are required to implement these orders.

............................................................

Walker J