Ryan

[2023] NZHC 1641

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2023-425-29

[2023] NZHC 1641

IN THE MATTER OF

s 105 of the Land Transfer Act 2017

BETWEEN

JULIE SARAH RYAN

Applicant

Hearing:	On the papers
Appearances:	R G R Eagles for Applicant
Judgment:	29 June 2023

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 29 June 2023 at 2 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

[1]                The applicant, Julie Ryan, applies for an order discharging a registered mortgage.

[2]                The application has been made without notice to any party on the grounds that the mortgagee, Andrew Housing Ltd (AHL), was removed from the Companies Office Register on 25 January 1999 and the company which Ms Ryan understands is the

RE RYAN [2023] NZHC 1641 [29 June 2023]

successor to AHL, Nationwide Homes Ltd, has no record of a mortgage involving Ms Ryan.

[3]                In the circumstances, on 17 May 2023, Eaton J directed that the substantive application would be dealt with on the papers and in light of a memorandum of counsel addressing the pertinent facts and the applicable law.

[4]                That memorandum has now been filed, and I address Ms Ryan’s application in light of the materials before me.

Factual background

[5]                Ms  Ryan  (formerly  known  as  Julie  Sarah  McIvor),  purchased  Flat  3,  64 Glengarry Crescent, Invercargill (SL7C/416) in 1985 for $48,000. This was a new home built by AHL. Ms Ryan had a first and second mortgage to AHL. The second mortgage (125324.4) was registered on 5 December 1985. There was also a family benefit charge to Housing Corporation New Zealand registered on the title at the same time “but Kainga Ora has agreed to discharge this”.

[6]                In 1992 Ms Ryan was in arrears with the second mortgage. Her mother,  Sarah McIvor, agreed to help Ms Ryan repay this mortgage. Ms Ryan gives evidence that the full amount of the outstanding second mortgage, $8,300, was paid by cheque to AHL by Ms McIvor on behalf of her daughter Ms Ryan. The person at AHL stamped the document “received 10 June 1992, Ans’d”, and a copy of that document is annexed to Ms Ryan’s affidavit.

[7]                AHL was on the New Zealand Companies Register until 25 January 1999. It was recorded as having gone into liquidation on 12 December 2000.

[8]                Ms Ryan seeks to have mortgage 125324.4 to AHL registered against SL7C/416, discharged to enable her to sell the property in the future. The first basis on which she seeks the discharge is under s 105 Land Transfer Act 2017 (LTA). This is because the mortgage has been paid off in full, AHLs money claim is now barred by the Limitation Act 2010 and, in any event, AHL is no longer on the Companies Register.

Section 105 Land Transfer Act

[9]                Section 105 LTA allows the Court to order a mortgage to be discharged if the mortgagee’s remedies are barred by the Limitation Act 2010. Section 11 Limitation Act 2010 provides that it is a defence to a claim for money secured by a mortgage if the defendant proves that the date on which the claim is filed is at least six years after the date of the act or omission on which the claim is based.

[10]            Section 105 LTA sets out a procedure under which a discharge of mortgage can be granted. A registered owner of land subject to a registered mortgage can apply to the High Court and ask that it exercise its discretion and make an order directing the mortgage be discharged. To do so, the Court must be satisfied of two requirements:

(a)a proceeding by the mortgagee for payment of the amount of money secured by the mortgage is barred; and

(b)except for an application under subpart 1 of Part 4 LTA, any other proceeding by the mortgagee for a remedy in respect of the mortgaged land would also be barred by the Limitation Act 2010 or any other enactment.

[11]            If these two requirements are met, it is open to the Judge to exercise their discretion to order that the mortgage be discharged but, in addition, it has been held that the applicant must also establish circumstances which make it just and equitable that the Court exercise its discretion in their favour.1

Section 109 Property Law Act 2007

[12]            In the alternative, Mr Eagles argues that the applicant can rely on the procedure in s 109 Property Law Act 2007 (PLA).

[13]            One of the circumstances in which an application can be made under s 109 PLA is that a person who has received the payment of amount secured by the mortgage cannot be found. Under s 110 the Court may, in a circumstance referred to in s 109(1),

1      Thomson v Commissioner of Inland Revenue [1955] NZLR 69 at 83.

make an order on the application of the current mortgagor (or any other person entitled to redeem the mortgage property) declaring that all amounts secured by the mortgage have been paid in full.2 Under s 111(a)(1) and (2) an order under s 110 declaring that all amounts secured by the mortgage have been paid in full, has effect as if it were a duly exercised mortgage discharge instrument under s 83.

[14]            Mr Eagles explains that in a similar case, Re Hardiman, the High Court held that the liquidation and winding up of a mortgagee meant that the mortgagee “cannot be found” and that the mortgagee no longer existed for the purposes of s 109 PLA.3 On that basis, an order for removal of the mortgage was able to be made, particularly where there was evidence that the testatrix had paid off her mortgage.4

Application to the current circumstances

[15]            In the present case, Mr Eagles submits that the mortgage can be discharged through either statutory route.

[16]            The applicant has met the first and second requirements of s 105 LTA in that sufficient time has passed that any proceeding by the mortgagee for payment of money secured by the mortgage is barred by the Limitation Act. Furthermore, any other proceedings by the mortgagee for a remedy in respect of the mortgaged land would also be barred by the Limitation Act or any other enactment. Some 38 years have passed since the mortgage was registered, 31 years have passed since the mortgage was paid off, and AHL was removed from the Companies Register 24 years ago.

[17]            Not only are the requirements in s 105(1)(a) and (b) LTA met, but in addition, it is just and equitable that the mortgage be discharged. The evidence is that Ms Ryan has paid off the mortgage in full but, through no fault of her own, it remains registered against the title to her home. Ms Ryan wants to be able to sell her house in the future and confirm the title is free of any issues. Her partner is already sick and it would only increase the burden on her if this process was drawn out.

2      Property Law Act 2007, s 110A(iii)

3      Re Hardiman [2021] NZHC 1491 at [8]

4 At [6].

[18]            Alternatively, the Court can be satisfied for the purpose of s 109 PLA that the mortgage cannot be found due to the company being discharged from the Companies Register. The Court has sufficient evidence to be satisfied under s 110 PLA that the mortgage has been repaid in full. For these reasons, the Court could order the discharge of the mortgage and it can be removed from the title under s 111 PLA.

Result

[19]            I am satisfied that the mortgage should be discharged regardless of which route is chosen. However, because I am satisfied that all amounts secured by the mortgage have been paid in full, the order will be made under s 109 PLA. The mortgagee, AHL, clearly cannot be found as it was removed from the Companies Register 24 years ago in 1999. I am also satisfied that Ms Ryan has paid in full all amounts secured by the relevant mortgage. In that regard, I rely on the fact that her mother paid the second mortgage in full, and the successor to AHL does not have any record of her as a client.

[20]            Accordingly, I declare that all amounts secured by the mortgage have been paid in full and, pursuant to s 111 PLA, the mortgage in the name of Andrew Housing Ltd registered against record of title SL7C/416 is to be discharged.

Solicitors:

Eagles Eagles & Redpath, Invercargill