Tanirau v Tanirau

[2022] NZHC 1792

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV-2022-463-31

[2022] NZHC 1792

BETWEEN

LAVINIA TERESE TANIRAU

Applicant

AND

ARLEEN MAKUINI TANIRAU

Respondent

Hearing:

12 July 2022

Appearances:

P J Marshall for the Applicant

No appearance for the Respondent

Judgment:

26 July 2022

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 26 July 2022 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

………………………….

Registrar/Deputy Registrar

Solicitors:

Robinsons Law (P J Marshall/N C Bradley), Whakatane, for the Applicant

TANIRAU v TANIRAU [2022] NZHC 1792 [26 July 2022]

Introduction

[1]Ms Lavinia Tanirau applies for orders under the Property Law Act 2007.

Background

[2]                  In June 2017, Lavinia purchased the property at 44 Matai St, Murupara (comprised in record of title SA37B/570 being Lot 20 on DP4889 South Auckland) (the Property), from the respondent, Mrs Arlene Makuini Tanirau, and her father, Joseph Tanirau. The respondent in this proceeding, Mrs Arleen Tanirau, was married to Joseph.1

[3]                  Lavinia purchased the Property for $69,000, comprising $5,000 from a grant she obtained; $20,000 from her KiwiSaver fund and $44,000 by way of a loan from Joseph and Arleen. The loan was recorded in a mortgage agreement. The mortgage was and still is registered on the title of the Property.

[4]                  When Lavinia purchased the Property, she agreed that Arleen and Joseph could continue to live there for a year. After that time, she would take over possession and Arleen and Joseph would move to live in their neighbouring property.

[5]                  Joseph passed away in March 2018. Later that year, Lavinia informed Arleen that she wanted to occupy the property and that she no longer agreed to Arleen’s continued residence there. Arleen resisted.

[6]                  Lavinia filed proceedings for a possession order, which was subsequently granted and enforced. She now has possession of the property, and Arleen lives in the neighbouring property.

[7]                  Lavinia seeks to sell the property. The sale is conditional on Lavinia obtaining a discharge of the mortgage. By survivorship, Arleen is the sole mortgagee. However,

1      Given the commonality of surnames in this proceeding, and meaning no disrespect, I will refer to each of the Taniraus by their given names.

Lavinia has not been able to secure the discharge of the mortgage from Arleen and has accordingly brought the current proceedings.

Originating application for orders under the Property Law Act

[8]Lavinia seeks:2

1.An order pursuant to s 115 of the Property Law Act 2007 directing or allowing the payment into court of $15, 029.49 or a specified amount that, in the opinion of the court, is sufficient to constitute a fund that will produce enough income to meet any periodical payment secured by the mortgage 1078944.2 registered against the property situated at

44 Matai St, Murupara comprised in Record of title reference SA37B/570, legal description Lot 20 deposited Plan South Auckland 4889, (“the property”) as it falls due.

2.An order that on receipt of the amount ordered to be paid into court the Registrar forthwith issue a certificate pursuant to 116 of the Property Law Act 2007 having effect as if it were a duly executed mortgage discharge instrument for the mortgage under section 83.

3.An order that the respondent, ARLEEN MAKUINI TANIRAU, pays the applicants costs and disbursements of and incidental to these proceedings.

[9]The grounds on which the orders are sought are:

A.The applicant is the current mortgagor (s115(2)).

B.The applicant is entitled to redeem the mortgage (s97(1)).

C.The mortgagor has given notice to the mortgagee of the intention to redeem the mortgage (s 99(1)).

D.The mortgagee has failed or refused to discharge the property from the mortgage (s 97 (2)).

Lavinia’s affidavit in support of application dated 6 May 2022

[10]              Lavinia has made an affidavit in support of her application. She says it is not reasonable to expect that she will continue to be bound by the mortgage and unable to sell the property with clear title when she will, on settlement, be ready and able to repay the loan secured by the mortgage. She deposes she is concerned that further delay may cause her loss, especially if the sale agreement is cancelled for non-

2      Originating application for orders under the Property Law Act 2007 dated 13 May 2022.

satisfaction of the mortgage discharge condition. She says the amount due to repay the loan and discharge the mortgage is $15,092.49.3

Submissions

[11]              Mr Marshall, for Lavinia, submits that Lavinia is the current mortgagor and is entitled to redeem the mortgage. He says Lavinia has sought to do so by written request to Arleen on 21 March 2022, but that Arleen has ignored the request and failed to confirm the current balance. He says Arleen has failed to meet her obligations under s 97(2) of the Property Law Act to discharge the property from mortgage. Lavinia should be allowed an order confirming the balance due to be $15,092.49 and for this sum to be paid into Court, with a certificate under s 116 to operate as a discharge of the mortgage and enable sale of the property.

[12]Mr Marshall submits Lavinia seeks 2B costs.4

Legal principles

Property Law Act

[13]Sections 97, 115 and 116 of the Property Law Act provide, so far as is relevant:

97       Equity of redemption

(1)The current mortgagor or any other person entitled to redeem mortgaged property may redeem it in accordance with this subpart at any time before it has been sold, under a power of sale, by the mortgagee or a receiver.

(2)The mortgagee must, on payment to the mortgagee of all amounts and the performance of all other obligations secured by the mortgage, at the expense of the current mortgagor or other person seeking to redeem the mortgaged property, discharge the property from the mortgage in accordance with section 83.

…

115Court may order discharge of mortgage if periodical payments secured are otherwise provided for

3      Affidavit of Lavinia Terese Tanirau dated 6 May 2022 at [13]–[14].

4      Memorandum of counsel for the applicant with respect to originating application for orders under the Property Law Act 2007 dated 4 July 2022 at [11]–[20].

(1)This section applies if a mortgage over property secures the payment to any person of a periodical payment, other than interest on the amounts secured by the mortgage.

(2)A court may, on the application of the current mortgagor or any other person entitled to redeem the mortgaged property, make an order directing or allowing the payment into court of a specified amount that, in the opinion of the court, is sufficient to constitute a fund that will produce enough income to meet any periodical payment secured by the mortgage as it falls due.

(3)In determining the specified amount under subsection (2), the court must—

(a)assume that the fund will be invested in accordance with the Trusts Act 2019; and

(b)make reasonable provision, in addition to the amount sufficient for the purpose specified in subsection (2), for the contingency of further costs, expenses, and interest, and any other contingency except the depreciation of any investment.

(4)The court may, after giving notice to every person who is entitled to receive a periodical payment secured by the mortgage, make further orders directing the application or distribution of the income or the capital of the fund.

116Certificate operates as discharge of mortgage

(1)A certificate by the Registrar that the amount specified in an order under section 115 has been paid into court has effect as if it were a duly executed mortgage discharge instrument for the mortgage under section 83.

(2)Section 111(2) to (7) apply to a certificate under subsection (1) as if it had been given under section 111.

Analysis

[14]              I am satisfied on the evidence that Lavinia is entitled to have the mortgage discharged upon payment of the outstanding principal balance. She has attempted to secure a discharge of mortgage from Arleen, and Arleen has failed or refused to provide the discharge of mortgage pursuant to s 83 of the Property Law Act.

[15]              However, in my view the Court does not have jurisdiction to make the order sought by Lavinia. The reasons for this are:

(a)Section 115(1) says that s 115 applies if a mortgage over property secures the payment to any person of a periodical payment, other than

interest on the amount secured by the mortgage. The mortgage in question does not fit into this category as it does not secure periodical payments or payments other than interest.

(b)Under s 115(2), the Court is entitled to make an order allowing payment into Court of a specified amount that, in the opinion of the Court, is sufficient to constitute a fund that will produce enough income to meet any periodic payments secured by the mortgage as it falls due. This does not allow payment into Court of the principal amount to obtain a discharge of mortgage as is currently proposed by Lavinia.

[16]              Accordingly, the orders sought under s 115(2) and the certificate sought under s 116 of the Act cannot be forced(?).

Result

[17]I make the following orders:

(a)The application by Lavinia is dismissed.

(b)Costs are reserved.

…………………………….. Associate Judge Taylor