Ryan v Lobb

[2023] NZHC 1998

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-001591

[2023] NZHC 1998

BETWEEN

VERENA COLLEEN RYAN

First Plaintiff

DIGBY JOHN NOYCE
Second Plaintiff

AND

STUART JAMES LOBB

First Defendant

LOCKHART TRUSTEE SERVICES NO. 56 LIMITED
Second Defendant

WAG TRUSTEES (2020) LIMITED

Third Defendant

Hearing:

24 July 2023

Appearances:

W M Patterson for First Plaintiff

H L Thompson for Second Plaintiff
R J Latton for First and Third Defendants
A A H Law (attendance excused) for Second Defendant

Judgment:

28 July 2023

JUDGMENT OF EDWARDS J

This judgment was delivered by me on 28 July 2023 at 3.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Patterson Hopkins, Auckland

McMahon Butterworth Thompson, Auckland R L Latton, Auckland

A A H Low, Auckland

RYAN v LOBB [2023] NZHC 1998 [28 July 2023]

[1]        At [94] of my judgment dated 19 June 2023 (substantive judgment)1 I made the following orders:

(a)Declaring that the registered proprietors of the land in Identifier NA52A/1231, with the street address of 23 Orakei Road, Remuera (Property) do not owe any money or other obligation to the third defendant.

(b)Declaring that Mortgage Instrument 9977107.3 of which the third defendant is the registered mortgagee does not secure the repayment of any debt or the performance of any obligation whether of the registered proprietors of the Property or Mr Lobb or at all.

(c)The third defendant shall take all reasonable steps without delay to discharge the Mortgage pursuant to s 83 of the Property Law Act 2007.

(d)Leave is reserved to the receiver to seek further orders from the Court in the event a discharge of the Mortgage is not obtained within a reasonable time.

[2]        Steps to register a discharge of the Mortgage have not been taken. Accordingly, on 3 July 2023, counsel for the receiver filed a memorandum seeking an order that WAG discharge the Mortgage within five working days of the grant of the order, failing which that the Registrar of this Court execute a discharge of the Mortgage on behalf of WAG.

[3]        In the meantime, WAG filed a notice of appeal against that part of the substantive judgment relating to the Mortgage. An application for a stay pending the appeal was also filed. The stay application will be heard in the week of 7 August 2023.

[4]An order in the terms sought by the receiver in his memorandum was made in

Tietjens and Chatfield v Lake Terrace Opportunities Ltd and Anor.2 At that time, there

1      Ryan v Lobb [2023] NZHC 1518.

2      Tietjens and Chatfield v Lake Terrace Opportunities Ltd and Anor (unreported) HC Rotorua CIV- 2008-463-443, 24 December 2008.

was specific provision in s 3 of the Judicature Amendment Act 1910 to make an order directing another person to execute a conveyance. That section was repealed by s 182 of the Senior Courts Act 2016 and it was not replaced by an equivalent section in the new statute.

[5]        Mr Thompson, for the receiver, submits that an order in the same terms may be made under the inherent jurisdiction of the Court. The inherent powers include all those necessary to give effect to the Court’s substantive jurisdiction.3

[6]        I accept there is power to make an order in the terms sought by the receiver. I made such an order recently in Oaklane Dairy Ltd v Flooks.4 Like this case, I considered it preferable in that case to afford the respondent an opportunity to discharge the mortgage before an order which compelled that result was made.

[7]        That opportunity has been afforded in this case. No steps have been taken. This raises the question whether an order should now be made that the declaration made in the substantive judgment should take effect as if it were a duly executed mortgage discharge instrument. This was the order originally sought by the receiver. As noted in the substantive judgment, there are two cases where such an order has been made.5 The orders made in those cases were either pursuant to s 111 of the PLA or the Court’s inherent jurisdiction.

[8]        Section 111 of the PLA provides that a sealed copy of a Court order declaring that all amounts secured by the mortgage have been paid in full, has effect as if it were a duly executed mortgage discharge instrument under s 83. On registration of the order, the Registrar-General must make an entry in the register relating to the certificate or order, and when that entry is made, the mortgage is discharged.

[9]        That section follows s 110 which provides for redemption of a mortgage by order of the Court. Section 110 applies in the circumstances referred to in s 109.

3      Citing Taylor v Attorney-General [1975] 2 NZLR 675 at 681–682 (per Richmond J); Department of Social Welfare v Stewart [1990] 1 NZLR 697 at 701, referred to with approval by the Supreme Court in Zaoui v Attorney-General [2005] 1 NZLR 577 at [35].

4      Oaklane Dairy Ltd v Flooks [2023] NZHC 1852.

5      Ryan v Lobb [2023] NZHC 1518 at [62]–[64]. Country Hospitality Management (NZ) Ltd v McCullough [2012] NZHC 818; Re Far North District Council [2021] NZHC 329.

Section 109 provides that a mortgage over property “may be discharged by a court under ss 110 and 111 or by the Public Trust under section 112” if a person is out of the jurisdiction, cannot be found or is dead; or it is uncertain who is entitled to receive payment of the amounts secured by the mortgage.

[10]      On the plain reading of each of these three sections it appears that the effect of a Court order made under s 111 is limited to the circumstances described in s 109 of the PLA. None of those circumstances apply here. For that reason, it is necessary to engage the inherent jurisdiction of the Court.

[11]      I am satisfied that it is appropriate to exercise the inherent jurisdiction of the Court in this case to make an order that the declaration made in the substantive judgment shall take effect as if it were a duly executed mortgage discharge instrument under s 83 of the PLA. I say that for the following reasons:

(a)WAG has had an opportunity to make submissions on such an order at the hearing of the receiver’s application determined in the substantive judgment.

(b)WAG has been afforded a reasonable opportunity to file the discharge of mortgage instrument but has taken no steps at all.

(c)An order which effects an immediate discharge of the Mortgage is preferable to the order sought by the receiver, which would involve the Registrar of the High Court exercising powers as an intermediary step. There have been significant delays in this proceeding to date and further delay (and attendant costs) cannot be justified.

(d)The exercise of the inherent jurisdiction is necessary to give effect to the orders made in the substantive judgment.

(e)The orders sought are not inconsistent with ss 109 to 111 of the PLA.

(f)An order discharging the Mortgage is consistent with the maxim that “equity regards as done what should have been done”.

[12]      Mr Latton submits that any order made discharging the Mortgage directly will render the stay application nugatory. I accept that the stay should be heard and determined prior to the order taking effect. To address that issue, I intend to make the order, but direct that it shall lie in Court pending determination of the application for a stay or further order of the Court.

Result

[13]      The order I made at [94(b)] of my substantive judgment shall have effect as if it were a duly executed mortgage  discharge  instrument  under  s 83  of  the  Property Law Act 2007. This order shall lie in Court pending determination of WAG’s application for a stay of the substantive judgment pending appeal, or further order of the Court.

Edwards J