Structured Finance (NZ) Limited v McKenna - [2012] NZHC 3093

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-5855 [2012] NZHC 3093

UNDER Section 143 of the Land Transfer Act 1952

IN THE MATTER OF an application under s 143 that caveat No
9183403.1 registered against title... be removed

BETWEEN STRUCTURED FINANCE (NZ) LIMITED
Applicant

ANDMARY MCKENNA Respondent

Hearing: 31 October 2012

Counsel: S Grant and S Gilmour for Plaintiff
H Waalkens QC and P Davey for Defendant

Judgment: 20 November 2012

RESERVED JUDGMENT OF ASSOCIATE JUDGE SARGISSON (caveat be removed)

This judgment was delivered by me on 20 November 2012 at 4.30 pm pursuant to

Rule 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date ..........................

Solicitors:
Duncan Cotterill, PO Box 5326, Wellesley Street, Auckland 1141
Steindle Williams Legal Limited, PO Box 47858, Ponsonby, Auckland

STRUCTURED FINANCE (NZ) LIMITED V MCKENNA HC AK CIV-2012-404-5855 [20 November 2012]

[1] The applicant, Structured Finance (NZ) Limited, is the holder of a second mortgage registered against the title to a property known as unit 5A at 87 Halsey Street in Auckland’s Viaduct Basin. The registered proprietors of the unit are Mr Nigel McKenna (a former property developer) and Mr John Stringer who hold their interest on behalf of one of Mr McKenna’s trusts, the NA McKenna Trust.

[2] With the agreement of Bank of New Zealand, which is the first registered mortgagee, Structured Finance has become the mortgagee in possession and has entered into an agreement to sell the property pursuant to the power of sale in its second mortgage. There is however an impediment to settlement.

[3] Mrs McKenna, the respondent, has registered a caveat against the title to the property claiming an estate or interest by virtue of an equitable lien. The caveat describes the claimed lien and its basis as follows:

An equitable lien over the land ... as a result of monies due to [her] by the registered proprietors, the land having been appropriated towards the payment of those monies.

[4] Structured Finance wants the caveat removed so that it can proceed with the sale. Settlement was due on 1 October 2012 and it is incurring interest and costs on a daily basis. It seeks an order for removal of the caveat pursuant to s 143 of the Land Transfer Act 1952.1

[5] Mrs McKenna filed documents in opposition to Structured Finance’s application resisting an order removing the caveat. Her position currently is somewhat changed. Through counsel she now accepts that no purpose would be
served by delaying Structured Finance’s sale and accepts that settlement should be

1 Section 143 of the Land Transfer Act 1954 provides:

143 Procedure for removal of caveat

(1) Any such applicant or registered proprietor, or any other person having any registered estate or interest in the estate or interest protected by the caveat, may, if he thinks fit, apply to the [High Court] for an order that the caveat be removed.

(2) The Court, upon proof that notice of the application has been served on the caveator or the…

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.

Keep reading for free

Create a free CaseChat account to read Structured Finance (NZ) Limited v McKenna and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2012] NZHC 3093
Decision Date: 20 November 2012

CaseChat Overview and Summary

In the High Court of New Zealand, Structured Finance (NZ) Limited applied for the removal of a caveat registered against the title of a property by Mary McKenna. Structured Finance holds a second mortgage over the property and seeks to sell it. The caveat, which claims an equitable lien over the land, impedes the sale. The court was required to determine if Mrs McKenna's claim for an interest in the property was arguable enough to support the caveat.

The court found that Mrs McKenna's claim was not sufficiently arguable. Firstly, she did not claim an equitable lien in respect of an obligation due to her by the registered proprietors, but rather an obligation owed to her by Mr McKenna personally. Secondly, there was no appropriation of the registered proprietors' land in equity "towards" payment, as the registered proprietors did not owe the relevant monies. Thirdly, even if Mrs McKenna had the claimed interest, it would be subject to s 105, which entitles a mortgagee exercising the power of sale to pass title to its purchaser free of the interest. Lastly, Mrs McKenna's interest in the sale proceeds could not confer on her an entitlement to the interest in land as she claims.

The court concluded that Mrs McKenna had not established an arguable case for the interest claimed in the caveat. Consequently, the caveat should be removed, and there was no case for an order removing the caveat on terms that require sale proceeds to be held in trust.

In conclusion, the court ordered the removal of the caveat and granted costs on a 2B basis plus disbursements as fixed by the Registrar.

Orders