F L JEFFRIES & COMPANY LIMITED [2019] NZHC 1790

F L JEFFRIES & COMPANY LIMITED [2019] NZHC 1790 [26 July 2019]IN THE HIGH COURT OF NEW ZEALANDWELLINGTON REGISTRYI TE KŌTI MATUA O AOTEAROATE WHANGANUI-A-TARA ROHECIV-2019-485-367[2019] NZHC 1790UNDER the land Transfer Act 2017IN THE MATTER of an application under section 105 for thedischarge of a mortgageBETWEEN F L JEFFRIES & COMPANY LIMITEDApplicantHearing: On the papersCounsel: J R Parker for the ApplicantJudgment: 26 July 2019JUDGMENT OF COOKE J[1] By applications dated 5 July 2019 the applicant seeks orders:(a) directing that the proceeding be commenced by an originatingapplication under r 19.5 of the High Court Rules 2016;(b) directing that the application may proceed without notice to any otherparties; and(c) for orders under s 105 of the Land Transfer Act 2017 that Mortgage No.206388.3 on Record of Title WN98/107 (Wellington Land Registry) bedischarged.[2] The application is supported by an affidavit from John Renwick Harknesssworn 31 May 2019, an affidavit of Andrew James Stewart sworn 20 June 2019, anda memorandum of counsel.[3] I am satisfied that the application can proceed by way of originatingapplication, and without notice to the other parties for the reasons set out in theaffidavits and the memorandum of counsel. I note r 18.1(d) of the High Court Rules2016 contemplates that the application could have been made under that part, but Ithink this is immaterial.Facts[4] In 1976 Mr Paul Jeffries instructed the firm Scott Hardie Boys Morrison to actfor him in relation to the purchase of a property in Thorndon. Mr Jeffries requestedthat his solicitor, Mr Harkness, act as nominee in purchasing the property. Mr Jeffriesalready owned a few of the adjoining properties and it was thought best if the offerwas made by a different party. The property was duly transferred to Mr Harkness andregistered on 7 September 1976, Mr Harkness holding the property on trust withMr Jeffries as beneficiary.[5] Mr Harkness arranged for a mortgage on the property from some of the firm'sclients. This was a time where it was reasonably common for law firms with asubstantial conveyancing practice to operate a Solicitors Nominee Company tofacilitate the lending and borrowing of money between clients. The mortgage on theThorndon property secured the sum of $16,000. The original mortgagees wereMs Rickard, for $8,000; Mr Rickard for $7,000; and Mr Ellison and Ms Ellison for$1,000 as tenants in common. The Ellisons later transferred their interest toMs Pootjes. In 1976 a second ranking mortgage was registered, with a Ms Humm asmortgagee.[6] In 1978, pursuant to the trust arrangement, Mr Harkness transferred the legaltitle to the property to Mr Jeffries. That transfer was registered in May 1978, subjectto the two registered mortgages.[7] The first ranking mortgage was due for repayment on 20 August 1979. Interestwas to be paid at a rate of 11%, due at quarterly instalments during the term. There isno evidence to suggest the terms of the loan secured by the mortgage were varied inany way.[8] No record of mortgage repayments has been found. Nor has any record ofattempts to obtain or register a discharge of the mortgage. But Mr Harkness is certainthe firm received payments of the principle payments, together with interest, on behalfof their mortgagee clients who were in turn repaid. The second ranking mortgage wasrepaid, and a discharge registered in 1985. But no discharge of mortgage was everregistered in respect of the first mortgage. No action was ever taken to recover any ofthe monies secured and owing to the original mortgagees. Now, nearly 40 years afterthe repayment due date, the mortgage is still registered on the certificate of title.[9] Mr Harkness offered the following evidence to demonstrate the mortgage musthave been repaid:(a) Mr Harkness as trustee was personally liable for the principal paymentsand interest. No action was taken to recover those monies on the partof any of the mortgagees.(b) The certificate of title confirms that Scott Hardie Boys Morrison (thennamed Scott Morrison Dunphy) made a new loan to Mr Jeffries securedby a mortgage. That mortgage was registered on 13 August 1985. It ishighly improbable the Solicitor Nominee Company would agree to afurther loan if Mr Jeffries had not repaid the earlier mortgage to thefirm's mortgagee clients.[10] It appears that, due to some administrative oversight, no one ever registered adischarge of the mortgage. The applicant now seeks an order to discharge themortgage on the basis the mortgagees' remedies are barred by the Limitation Act 2010.Relevant law[11] Section 105 of the Land Transfer Act 2017 provides:105 Court may order mortgage to be discharged if mortgagee'sremedies barred by Limitation Act 2010(1) The court may, on application by the registered owner of an estate orinterest in land that is subject to a registered mortgage, order that themortgage is discharged if the court is satisfied that—(a) a proceeding by the mortgagee for payment of money secured bythe mortgage is barred by the Limitation Act 2010 or any otherenactment; and(b) except for an application under subpart 1 of Part 4, any otherproceeding by the mortgagee for a remedy in respect of themortgaged land would also be barred by the Limitation Act 2010or any other enactment.(2) The Registrar must register the order discharging the mortgage onlodgement of a sealed copy of the order.(3) The mortgage is discharged on registration of the order.(4) The court may direct that—(a) public notice of an application be given under this section:(b) notice of the application be served on any person the courtspecifies.[12] The Limitation Act 2010 applies. Section 11(3)(b) provides it is a defence toany money claim if the defendant can prove the claim is filed at least 15 years afterthe debt is due. The Act defines a money claim as including a claim to recover a sumof money secured by a mortgage.1 Given that the Limitation Act barring a proceedingfor recovery of the debt (if indeed it has not been repaid), the requirements of s 105 ofthe Land Transfer Act 2017 are met.Relevant principles[13] I am satisfied that the Court may make the orders sought as a matter ofprinciple. In Re a Mortgage, Presland v Death, Cooke J held that the discretion of theCourt to make an order discharging a mortgage is unfettered, but in order to succeedan applicant must make out a case in favour of the exercise of the discretion.2 Suchorders were made by Venning J in Lee v Khang.31 Section 16(1)(c).2 Re a Mortgage, Presland v Death [1954] NZLR 9333 Lee v Khang [2013] NZHC 2985.[14] I am satisfied on the basis of the evidence that the amounts due under theborrowing supported by the mortgage were repaid. Apart from the circumstantialevidence, Mr Harkness also notes that Mr Jeffries was a member of a distinguishedfamily. One of his brothers was a High Court Judge, and the other a Minister of Justice.In any event if there were any real question on the question whether the monies hadbeen repaid, any disputes would now be statute barred by the limitation period.[15] For those reasons I accept the orders should be made.Orders[16] I order that mortgage 206388.3 on record of title WN98/107 (Wellington LandRegistry) be discharged under s 105 of the Land Transfer Act. No orders unders 105(4) are necessary.Cooke JSolicitors:WCM Legal, Wellington