Le v Khang - [2013] NZHC 2985

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003998 [2013] NZHC 2985

BETWEEN DONG HUY LE and PHUONG THI NGUYEN LE
Plaintiffs

ANDNGUYEN DUY KHANG Defendant

Hearing: 12 November 2013

Appearances: J Ropati for Plaintiff
No appearance for Defendant

Judgment: 12 November 2013

ORAL JUDGMENT OF VENNING J

Solicitors: John Ropati, Auckland
Copy to: Defendant

LE v KHANG [2013] NZHC 2985 [12 November 2013]

[1] This is an application for summary judgment. It is not the usual type of application for summary judgment. The plaintiffs seek to have a mortgage registered against a property in their name removed. The mortgage is in favour of the defendant Mr Khang. I am satisfied that Mr Khang has been served with and has notice of the proceeding and has taken no steps to oppose it. To deal with the matter it is necessary to set out the background in a little detail.

[2] In June 1991 the plaintiffs agreed to purchase a bakery business from a third party, Mr Nguyen. The purchase price was $89,000. Payment was to be made by
$35,000 cash with the balance to be vendor finance, that vendor finance to be provided by Mr Nguyen.

[3] To complete the settlement of the purchase the plaintiffs signed a number of documents. One of the documents they signed was a mortgage in favour of the defendant. That mortgage was subsequently registered over the plaintiffs’ property in July 1991. The defendant is apparently a cousin of Mr Nguyen, the vendor of the bakery. However, Mr Khang had no interest in the bakery. Why the mortgage was in his name is not clear to the plaintiffs or to the Court. Mr Khang, the defendant, did not advance any moneys to the plaintiffs. As noted it was to be a vendor advance.

[4] In any event the plaintiffs made regular payments under the vendor advance as they understood it to be. They made those payments directly to Mr Nguyen. They understood their obligation in relation to the vendor finance to be satisfied.

[5] When the plaintiffs sought to sell their property in 1996 Mr Khang refused to discharge the mortgage. There were further communications between the solicitors for the parties, the last of those communications from Mr Khang being in October
1999.

[6] The maturity date of the loan was 28 June 1996 in accordance with the agreement between the parties. Any moneys owing remaining unpaid by 28 June
1996 were to be paid on that day. On that basis any claim by Mr Khang was required to have been brought by 28 June 2008.

[7] The plaintiffs have pursued an application to have the mortgage discharged from their title by way of summary judgment. They raised two causes of action. First, in reliance on s 112 of the Land Transfer Act 1952 and second, a lack of consideration.

[8] As discussed with counsel I consider the plaintiffs best claim is under s 112 of the Land Transfer Act.

[9] The Limitation Act…

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: [2013] NZHC 2985
Decision Date: 12 November 2013

CaseChat Overview and Summary

In Le v Khang, the plaintiffs, Dong Huy Le and Phuong Thi Nguyen Le, sought the removal of a mortgage registered against their property in the name of the defendant, Nguyen Duy Khang. The matter was heard and determined by Venning J in the High Court of New Zealand Auckland Registry on 12 November 2013. The defendant did not appear or engage a solicitor, and the plaintiffs were represented by John Ropati.

The court had to determine whether the mortgage, which was registered in 1991, could be removed from the plaintiffs' property. The plaintiffs contended that the mortgage should be discharged as the defendant had not taken any steps to enforce the mortgage, and any claim for repayment was statute-barred under the Limitation Act 1950. The court was required to consider whether the application for summary judgment was appropriate and whether the plaintiffs were entitled to have the mortgage discharged under s 112 of the Land Transfer Act 1952.

The court found that the defendant had notice of the proceedings and had taken no steps to oppose the application. The court was satisfied that the plaintiffs' best claim was under s 112 of the Land Transfer Act, as the defendant's right to recover moneys under the mortgage was statute-barred. The court noted that the defendant was a cousin of the vendor, but had no interest in the bakery business, and had not advanced any funds to the plaintiffs. The court accepted that the plaintiffs had made regular payments to the vendor, satisfying their understanding of the vendor finance arrangement. The court concluded that the application for summary judgment was appropriate in the circumstances and ordered the discharge of the mortgage and costs for the plaintiffs against the defendant.

Orders