F L Jeffries & Company Limited - [2019] NZHC 1790

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2019-485-367

[2019] NZHC 1790

UNDER the land Transfer Act 2017

IN THE MATTER

of an application under section 105 for the discharge of a mortgage

BETWEEN

F L JEFFRIES & COMPANY LIMITED

Applicant

Hearing: On the papers

Counsel:

J R Parker for the Applicant

Judgment:

26 July 2019

JUDGMENT OF COOKE J

[1]By applications dated 5 July 2019 the applicant seeks orders:

(a)directing that the proceeding be commenced by an originating application under r 19.5 of the High Court Rules 2016;

(b)directing that the application may proceed without notice to any other parties; and

(c)for orders under s 105 of the Land Transfer Act 2017 that Mortgage No. 206388.3 on Record of Title WN98/107 (Wellington Land Registry) be discharged.

F L JEFFRIES & COMPANY LIMITED [2019] NZHC 1790 [26 July 2019]

[2] The application is supported by an affidavit from John Renwick Harkness sworn 31 May 2019, an affidavit of Andrew James Stewart sworn 20 June 2019, and a memorandum of counsel.

[3] I am satisfied that the application can proceed by way of originating application, and without notice to the other parties for the reasons set out in the affidavits and the memorandum of counsel. I note r 18.1(d) of the High Court Rules 2016 contemplates that the application could have been made under that part, but I think this is immaterial.

Facts

[4] In 1976 Mr Paul Jeffries instructed the firm Scott Hardie Boys Morrison to act for him in relation to the purchase of a property in Thorndon. Mr Jeffries requested that his solicitor, Mr Harkness, act as nominee in purchasing the property. Mr Jeffries already owned a few of the adjoining properties and it was thought best if the offer was made by a different party. The property was duly transferred to Mr Harkness and registered on 7 September 1976, Mr Harkness holding the property on trust with Mr Jeffries as beneficiary.

[5] Mr Harkness arranged for a mortgage on the property from some of the firm’s clients. This was a time where it was reasonably common for law firms with a substantial conveyancing practice to operate a Solicitors Nominee Company to facilitate the lending and borrowing of money between clients. The mortgage on the Thorndon property secured the sum of $16,000. The original mortgagees were Ms Rickard, for $8,000; Mr Rickard for $7,000; and Mr Ellison and Ms Ellison for
$1,000 as tenants in common. The Ellisons later transferred their interest to Ms Pootjes. In 1976 a second ranking mortgage was registered, with a Ms Humm as mortgagee.

[6] In 1978, pursuant to the trust arrangement, Mr Harkness transferred the legal title to the property to Mr Jeffries. That transfer was registered in May 1978, subject to the two registered mortgages.

[7] The first ranking mortgage was due for repayment on 20 August 1979. Interest was to be paid at a rate of 11%, due at quarterly…

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: [2019] NZHC 1790
Decision Date: 26 July 2019

CaseChat Overview and Summary

The High Court of New Zealand was asked to consider an application by F L Jeffries & Company Limited to discharge a mortgage on a property located in Thorndon. The mortgage in question, Mortgage No. 206388.3, was registered on the property's title in 1976 and secured a loan of $16,000. The application was brought under Section 105 of the Land Transfer Act 2017, which allows the court to discharge a mortgage if the mortgagee's remedies are barred by the Limitation Act 2010. The applicant argued that the mortgage should be discharged as the mortgagees' remedies were barred by the Limitation Act due to the passage of time since the mortgage was due for repayment.

The primary legal issue before the court was whether the court could exercise its discretion under Section 105 of the Land Transfer Act to discharge the mortgage. The court had to consider whether the mortgagee's remedies were indeed barred by the Limitation Act and whether the applicant had provided sufficient evidence to support the discharge of the mortgage. The court also needed to determine whether the application could proceed without notice to other parties.

The court found that the application could proceed without notice to other parties as the evidence demonstrated that the mortgage had likely been repaid and that any dispute regarding repayment would be barred by the Limitation Act. The court accepted that the mortgage was repaid based on the lack of any action taken to recover the monies from the applicant, the registration of a subsequent mortgage by the firm, and the administrative oversight that likely led to the non-registration of the discharge. The court also noted that the applicant had established a strong case in favour of the exercise of its discretion to discharge the mortgage. Therefore, the court granted the orders sought by the applicant, discharging the mortgage under Section 105 of the Land Transfer Act.

Orders