Able Ventures Limited v Bolton - [2022] NZHC 1957

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2021-470-39

[2022] NZHC 1957

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: 15 and 17 February 2022

Appearances:

G Grant and B Foster for the Plaintiffs

No appearance for or on behalf of the First Defendant J Delaney for the Second Defendants

Judgment:

9 August 2022

JUDGMENT OF DUFFY J

This judgment is delivered by me on 9 August 2022 at 4pm pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Solicitors/Counsel: Grant & Co, Auckland
Keam Standen, Tauranga
J Delaney, Barrister, Tauranga

ABLE VENTURES LIMITED v BOLTON [2022] NZHC 1957 [9 August 2022]

[1] The first plaintiff, Able Ventures, is a registered company, and one of the second plaintiffs, Nelson Bell, is its sole director and shareholder. His wife Judith Bell is the other second plaintiff. Since 16 December 1996 Able Ventures has been the registered proprietor of land situated at 23 Bain Street Mount Manganui and held in certificates of title SA11D/699 and SA46A/890 (the Bain St titles). The plaintiffs bring proceedings under s 105 of the Land Transfer Act 2017 for discharge of three mortgages registered against these titles on the ground that recovery of funds secured under the mortgagees is time barred.

[2] The first defendant, John Graham Kenneth Bolton (known as Ken), is the registered mortgagee of the subject mortgages.1 These are: B388436.5, registered on 16 December 1996 (the 1996 mortgage); B674837.1, registered on 23 August 2001 (the 2001 mortgage); and M6484677.2, registered on 6 July 2005 (the 2005 mortgage). Ken Bolton has taken no steps in this proceeding.

[3] Two of the second defendants are related to Ken Bolton; the third is the estate of his late mother. Disputes between the first and second defendants, including allegations of Ken Bolton defrauding the second defendants, colour the issue raised by the plaintiffs.

[4] The second defendants bring a counterclaim seeking rectification of the subject mortgages by removal of Ken Bolton and substitution of their names as mortgagees. They claim he was always acting as an agent for his late mother and the other individual second defendants. Alternatively, if rectification is not granted, they seek a declaration that Ken Bolton was acting as a constructive trustee when he registered his name as mortgagee, and an order requiring him to transfer the mortgages to them.

[5] The plaintiffs defend the counterclaim on the basis that after December 1996 (when the first mortgage in dispute was registered) the Bells believed they were dealing solely with Ken Bolton as lender/mortgagee.2 Secondly, any beneficial

1 Because Alan Bolton, who is one of the second…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NZHC 1957
Decision Date: 9 August 2022

CaseChat Overview and Summary

The case of Able Ventures Limited v Bolton involved an application by Able Ventures, a New Zealand registered company, to discharge three mortgages registered against land it owned. The second defendants, who claimed to be the true lenders under the mortgages, sought rectification or a declaration that the first defendant, Ken Bolton, held the mortgages on constructive trust for them. The first defendant did not participate in the proceeding. The plaintiffs argued that the secured debts were time barred and the mortgages should be discharged. The second defendants argued the mortgages should not be discharged and that they were the true mortgagees. Duffy J found that the debts secured by the mortgages were time barred, but that the mortgages should not be discharged because the second defendants were entitled to retain them. The Court also found that the mortgages should not be rectified but that Ken Bolton held the mortgages on constructive trust for the second defendants. Duffy J ordered Ken Bolton to transfer the mortgages to the second defendants.

The key legal issues were whether the secured debts were time barred, whether the mortgages should be discharged if the debts were time barred, and whether the mortgages should be rectified or if Ken Bolton held them on constructive trust for the second defendants. Duffy J held that the debts were time barred as no acknowledgement of liability had been made. However, the Court should only discharge the mortgages if the applicant could persuade it that discharge was appropriate in all the circumstances. Duffy J found that the equities weighed against discharge because the second defendants were entitled to retain the value of the mortgages. The Court also found that the mortgages should not be rectified because there had never been a common intention that the second defendants be named as mortgagees. However, Ken Bolton held the mortgages on constructive trust for the second defendants because he had acted as their agent but failed to reconvey the mortgages when asked. Duffy J ordered Ken Bolton to transfer the mortgages to the second defendants.

Orders