MCLEAN v PAAKA [2018] NZHC 3018

MCLEAN v PAAKA [2018] NZHC 3018 [21 November 2018]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2018-485-744[2018] NZHC 3018UNDER section 110 of the Property Law Act 2007IN THE MATTER of a discharge of mortgage 7402353.3registered over the property at 18 AshburnRoad, WainuiomataBETWEEN CHARMAINE HINEKURA MCLEAN andGARY MCLEANPlaintiffsAND DORA JEAN TEPAEKURA PAAKADefendantHearing: 20 November 2018Counsel: K Lawrence for plaintiffsDefendant in personMinute: 21 November 2018REASONS FOR JUDGMENT OF ASSOCIATE JUDGE JOHNSTON[1] This proceeding relates to the administration of the estate of the late WikitoriaHeretengaronoa Paaka who died on 15 August 2016 leaving a will dated 5 May 2000.The defendant, Dora Jean Tepaekura Paaka, one of the late Mrs Paaka's daughters, isthe executrix and trustee of the estate. The plaintiffs, Mr Gary and Mrs CharmaineMcLean, are Mrs Dora Paaka's brother-in-law and sister.[2] Mr and Mrs McLean own a property in Lower Hutt. Mrs Dora Paaka in hercapacity as executrix and trustee, holds a mortgage over the property which reflectsmonies apparently lent by the late Mrs Paaka to Mr and Mrs McLean prior to her death.[3] The instrument creating the mortgage is dated 18 April 2007. By thatinstrument, the security is limited to an amount of $38,500. The mortgage wasregistered against the title to Mr and Mrs McLean's property on 5 June 2007.[4] Clause 6 of the late Mrs Paaka's will provided:I FORGIVE any debt owing to my [sic – me?] by GARY MCLEAN andCHARMAINE HINEKURA MCLEAN pursuant to a mortgage.[5] It is common ground that by that clause the late Mrs Paaka forgave the $38,500debt secured by the mortgage over Mr and Mrs McLean's property.[6] Since the late Mrs Paaka's death, Mr and Mrs McLean have been attemptingto secure the discharge of this mortgage. Mrs Dora Paaka has hitherto refused to signthe necessary documentation to enable them to do so. She says that the original loanfrom the late Mrs Paaka to Mr and Mrs McLean was actually $88,500. She says thatwhilst her sister – Mrs McLean – maintains that she and Mr McLean repaid $50,000of that loan so as to leave the $38,500 now secured by mortgage over their property,she – Mrs Dora Paaka – has never been able to verify that. She says that she has soughton a number of occasions to engage with her sister in relation to that, including bycorrespondence and by arranging a family meeting, but her sister has never beenprepared to demonstrate conclusively that the $50,000 was repaid. This empasse asbetween Mrs Dora Paaka and Mr and Mrs McLean has resulted in the commencementof this proceeding by Mr and Mrs McLean and their application for summaryjudgment. The originating documentation is dated 3 October 2018. It was filed shortlythereafter and served on 12 October 2018. Mrs Dora Paaka took no steps whatsoeveruntil the day before the matter was due to be called in the commercial list when shefiled and served a statement of defence and counterclaim, a notice of opposition to theapplication for summary judgment and an affidavit in support of her opposition.[7] Without going into any detail, Mrs Dora Paaka's case is directed at establishingthat Mr and Mrs McLean never repaid the $50,000 which they say they have repaid.[8] At the conclusion of a short hearing, I informed the parties that I was enteringjudgment for the plaintiffs on their summary judgment application and ordering thattheir costs be paid on a 2B basis from the assets of the estate (as opposed to Mrs DoraPaaka personally). I indicated that I would give my reasons in writing as soon aspossible and I now do so.[9] I am not in a position to determine on this summary judgment application howmuch the late Mrs Paaka lent Mr and Mrs McLean or, if, as Mrs Dora Paaka maintains,she lent $88,500, none of which has been repaid, whether Mrs Dora Paaka in hercapacity as the executrix and trustee of the estate has a claim against Mr and MrsMcLean for $50,000.[10] What is however abundantly clear from the evidence is that the only amountsecured over Mr and Mrs McLean's property as at the date of the late Mrs Paaka'sdeath was $38,500, and that that secured debt has been forgiven. From the papers andher presentation to me Mrs Dora Paaka appears to be asking the Court to treat anyamount which remains due over and above $38,500 as also being secured by themortgage. The Court does not have jurisdiction to elevate an unsecured debt to asecured one in that way.[11] On any view, Mr and Mrs McLean are entitled to the orders they seek inrelation to the discharge of the mortgage.[12] If Mrs Dora Paaka is correct, and the estate is still owed $50,000 by Mr andMrs McLean, then that is a claim which she, as the executrix and trustee of the estate,may pursue, and she may do so in the context of this proceeding having put it in issueby her counterclaim.[13] I make the following orders:(a) I enter summary judgment for the plaintiffs against the defendant interms of paras (a)–(c) of the plaintiff's statement of claim dated3 October 2018;(b) I direct that the estate is to pay the plaintiffs the cost of and incidentalto this proceeding down to the sealing of this order. Those costs are tobe calculated on a 2B basis. The disbursements may be set by theRegistrar.[14] The proceeding will remain extant as Mrs Dora Paaka may wish to pursue hercounterclaim. To that end, I direct the Registrar to liaise with counsel and Mrs DoraPaaka as necessary with a view to arranging a case management conference as soonas conveniently possible to set the counterclaim down for trial and issue pre-trialdirections.Associate Judge JohnstonSolicitors:Greg Kelly Law, Wellington for the plaintiffs