McGregor v Berg

[2025] NZHC 2027

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2141

[2025] NZHC 2027

UNDER

The Declaratory Judgments Act 1908, the Property Law Act 2007 and Part 18 of the High Court Rules 2016

IN THE MATTER OF

An application for discharge of mortgage D047795.5

BETWEEN

DEBORAH KATHLEEN MCGREGOR

Plaintiff

AND

BEVAN CHARLES BERG

Defendant

Hearing:	16 July 2025
Appearances:	S R Mitchell KC and S R J Hamilton for the plaintiff The defendant in person
Judgment:	22 July 2025

JUDGMENT OF BLANCHARD J

This judgment was delivered by me on 22 July 2025 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules 2016

Registrar/Deputy Registrar

Solicitors:

Hobson Chambers, Auckland

Michael Foley, Foley Hughes, Auckland

MCGREGOR v BERG [2025] NZHC 2027 [22 July 2025]

[1]    Ms McGregor seeks an order discharging a mortgage registered against her property. The mortgagee is her husband, Mr Berg. They married in 1982. They separated in 1995 but remain legally married.

The property and the mortgage

[2]    Ms McGregor is the registered proprietor of a property at 552 New North Road, Kingsland, Auckland. She lives at the property.

[3]    Ms McGregor and Mr Berg bought the property together in 1988. They owned it as tenants in common and lived there together until their separation.

[4]    In July 1996, Ms McGregor and Mr Berg entered into a relationship property agreement by which Ms McGregor agreed to pay Mr Berg $40,000 for his share in the property.

[5]    Pursuant to the agreement, in September 1996, Mr Berg transferred his interest in the property to Ms McGregor. He also registered a mortgage against the title to the property to secure payment of the $40,000 debt. No interest was payable on the debt.

Repayment of the mortgage debt

[6]    Ms McGregor was required to pay the $40,000 by 5 July 2006. She did not pay the debt by the due date. To enable her to make the payment, she applied to the Family  Court  seeking  a  lump  sum  payment  of  child  support.   As  a  result,  on 8 June 2007, the Family Court ordered Mr Berg to pay $40,000 to Ms McGregor by way of lump sum child support. Ms McGregor’s position is that the effect of this order was to discharge her obligation to pay the $40,000 by way of set-off.

Overpayment of child support

[7]    On 8 June 2007, the Family Court also directed that an actuary be appointed by the registrar to determine the length of time that Mr Berg should be exempt from child support on account of the $40,000 lump sum payment. The actuary determined that Mr Berg should be exempt from child support payment until 7 September 2013.

[8]    Unfortunately, however, the Family Court did not enter judgment in respect of the actuary’s report.   Consequently, the Inland Revenue Department continued   to deduct child support from Mr Berg’s  income and paid it to  Ms McGregor when  it should not have. Ms McGregor accepts that, as a result, she owes Mr Berg the sum of $24,247.14 by way of overpaid child support. Ms McGregor says that she has been ready, willing and able to pay this amount to Mr Berg, but he refuses to facilitate receipt of the funds.

Formal proof hearing

[9]    Ms McGregor commenced this proceeding in 2023. In December 2024, she obtained an order for substituted service against Mr Berg.1 Service in accordance with the orders for substituted service was completed on 5 June 2025. The proceeding was listed for a formal proof hearing before me on 16 July 2025.

[10]   On 15 July 2025, Mr Berg filed an application  for leave to file a statement  of defence under r 15.9(3) of the High Court Rules 2016. He also filed a draft statement of defence that he proposed filing if he obtained leave.

[11]   Mr Berg attended the hearing on 16 July 2025. I permitted him to appear and make submissions in support of his application for leave.

Mr Berg’s application for leave

[12]   Mr Berg’s  position is that the mortgage should not be discharged because  Ms McGregor owes him around $35,000 which is secured by the mortgage. His figure of $35,000 is made up as follows:

(a)the $24,247.14 of overpaid child support;

(b)interest on that sum; and

1      McGregor v Berg HC Auckland CIV-2023-404-2141, 10 December 2024 (Minute of Gardiner J).

(c)around $2,000 for  costs  that  he  says  that  he  incurred  in  seeking to recover the $40,000 that was owed to him by Ms McGregor before the order made by the Family Court on 8 June 2007.

[13]   Mr Berg did not expressly say how much interest he is claiming or how      he calculated that sum. But so his figures add up to the total amount he is claiming  of $35,000, his interest figure must be approximately $10,700.

[14]   I decline to grant leave to Mr Berg because I do not consider that he has        a substantial ground of defence to the claim.2 The sum of $24,147.14, together with any interest on that sum, is not and has never been, secured by the mortgage. The mortgage is a fixed sum mortgage, not an all obligations one. It related only to the

$40,000, which was paid by way of set-off on 8 June 2007. Under the mortgage, the mortgagee can recover  costs of enforcement on  a solicitor and client  basis.  But  Mr Berg has provided no evidence in support of his assertion that he incurred costs of around $2,000 in attempting to recover the $40,000.

Conclusion

[15]   My conclusion is that no money is secured by the mortgage and, therefore, the mortgage should be discharged.

[16]   I was hopeful at the hearing that it might be possible for Ms McGregor and Mr Berg to agree on an amount that she could pay to him in return for him agreeing to discharge the mortgage. Unfortunately, that was  not  possible.  As I have said,  Mr Berg wants to be paid $35,000, but the most that Ms McGregor is prepared to pay is $29,000. My understanding is that, despite the fact that agreement could not be reached, Ms  McGregor  remains ready,  willing and able to pay  Mr Berg  $29,000  if he allows her to do so by advising a bank account into which the funds should be paid.

2      Neumayer v Kapiti Coast District Council [2014] NZHC 417, [2015] NZAR 1185 at [8].

Costs

[17]   Mr McGregor seeks an order that Mr Berg pay her costs calculated on a 2B basis.

[18]   In my view, costs should follow the event. Accordingly, Mr Berg should pay the costs sought by Ms McGregor.

Result

[19]   I declare that no money is owed by Ms McGregor to Mr Berg under the mortgage.

[20]I make the following orders:3

(a)Mr Berg is to deliver to Ms McGregor a registerable discharge of the mortgage (D047795.5) over the property at 552 New North Road, Kingsland, Auckland, described in Certificate of Title NZ427/247 within 14 days of the date of this judgment.

(b)In the event Mr Berg fails to do so, I direct the Registrar or Deputy Registrar to execute a discharge of mortgage (D047795.5) over the property at 552 New North  Road,  Kingsland, Auckland,  described in Certificate of Title NZ427/247.

[21]   Finally, I order Mr Berg to pay Ms McGregor costs for a category 2 proceeding with time band B applying in relation to all steps, together with reasonable disbursements.

Blanchard J

3      See Perpetual Trust Ltd v Bolton [2023] NZHC 1108 at [30]; and Ryan v Lobb [2023] NZHC 1998 at [11].