Re Far North District Council - [2021] NZHC 329

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CIV-2020-488-106

[2021] NZHC 329

UNDER section 110 Property Law Act 2007 and the High Court’s inherent jurisdiction

IN THE MATTER

of an application for an order for redemption

BETWEEN

FAR NORTH DISTRICT COUNCIL

Applicant

Hearing: On the papers

Counsel:

C Martin for the Applicant

Judgment:

1 March 2020

JUDGMENT OF GAULT J

This judgment was delivered by me on 1 March 2020 at 4:00 p.m. pursuant to r 11.5 of the High Court Rules 1985.

Registrar/Deputy Registrar

……………………………………

Solicitors:
Mr C Martin, Henderson Reeves Connell Rishworth Lawyers Ltd, Whangarei

RE FAR NORTH DISTRICT COUNCIL [2021] NZHC 329 [1 March 2020]

[1] The Far North District Council (FNDC) seeks to discharge a mortgage over a property at 4 Te Kahikatoa Peninsula Road, Kaeo (the property).1 FNDC applies without notice for permission to commence this proceeding by way of originating application. The substantive proceeding seeks the following orders in the alternative:

(a)a declaration that all amounts secured by the mortgage have been paid in full, under ss 109 and 110 of the Property Law Act 2007 (the Act); or

(b)an order that the mortgage be discharged, with that order having the same effect as a duly executed mortgage discharge instrument under s 83 of the Act, pursuant either to s 111 of the Act or the Court’s inherent jurisdiction.

Background

[2] FNDC is the current owner of the property, which was vested in it when it succeeded the Whangaroa County Council (WCC).2

[3] The relevant mortgage registered against the title to the property dates back to 1974.3 The mortgagees, Mr William John Cameron Bond and Mr George Ernest John Hutcherson, together with Mrs Mary Froude Bond, had purchased the land and operated the Tauranga Bay Motor Camp on it. When they decided to retire, they decided to sell the property to WCC at a reduced price as a gift with the intention that it remain a motor camp rather than be split up for residential or commercial development.

[4] The mortgagees reached an agreement with WCC whereby the property was transferred to WCC and in return a mortgage was secured against the title in favour of the mortgagees. The mortgage secured a $52,550 debt plus interest, and the mortgagees were to be paid half-yearly instalments of $1,800.

1      More particularly described as Part Lot 1 Deposited Plan 54531, record of title NA26B/334.
2      The Local Government (Northland Region) Reorganisation Order 1989.
3      Memorandum of Mortgage 314246.3. As a result of the Local Government (Northland Region) Reorganisation Order 1989, any reference to WCC in any instrument or other document is to be read as a reference to FNDC.

[5] Clause 18 of the mortgage agreement provided that notwithstanding that the amount owing under the mortgage shall not have been paid, the mortgagor’s liability for payment shall immediately cease and determine and the mortgagor shall be entitled to a discharge of the mortgage at the date of…

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.

Continue reading Re Far North District Council

Details

AGLC: Re Far North District Council [2021] NZHC 329
Case: [2021] NZHC 329
Decision Date: 1 March 2020

CaseChat Overview and Summary

The Far North District Council (FNDC) applied for an order to discharge a mortgage over a property located at 4 Te Kahikatoa Peninsula Road, Kaeo. The mortgage, originally registered in 1974, secured a debt of $52,550 plus interest in favour of the mortgagees, Mr William John Cameron Bond, Mr George Ernest John Hutcherson, and Mrs Mary Froude Bond. The mortgagees subsequently died, and FNDC, which now owns the property, seeks to have the mortgage discharged to allow for a new lease to be granted to the current operator. FNDC applied without notice for permission to commence the proceeding by way of an originating application, seeking either a declaration that all amounts secured by the mortgage had been paid in full or an order that the mortgage be discharged.

The court considered whether it was in the interests of justice to permit the proceeding to commence by way of an originating application, given that there was no opposing party and a full statement of claim was not required. The court noted that the mortgagees and Mrs Bond had died many years ago, and clause 18 of the mortgage agreement was clear, as a discharge of the mortgage had been provided at the time. The court accepted that it was in the interests of justice for the matter to proceed by way of an originating application and granted leave for the proceeding to commence accordingly. The court also dispensed with service, as there were no other interested parties.

The court then considered the substantive application, noting that under the Property Law Act 2007, a mortgage may be discharged if the person entitled to receive payment is deceased. FNDC no longer held records confirming that all amounts secured by the mortgage were repaid in full, but the solicitor acting for the mortgagees confirmed that a discharge was provided in 2006 and that FNDC had faithfully discharged its obligations under the mortgage agreement. The court held that it had the power under the Act or its inherent jurisdiction to make an order that would have the same effect as a duly executed mortgage discharge instrument and accepted that FNDC was entitled to a discharge of the mortgage.

The court made the following orders: (a) granting leave to commence the proceeding by way of an originating application; and (b) that the mortgage registered against the title to the property at 4 Te Kahikatoa Peninsula Road, Kaeo, be discharged.

Orders