TANIRAU v TANIRAU [2022] NZHC 1792

TANIRAU v TANIRAU [2022] NZHC 1792 [26 July 2022]IN THE HIGH COURT OF NEW ZEALANDROTORUA REGISTRYI TE KŌTI MATUA O AOTEAROATE ROTORUA-NUI-A-KAHUMATAMOMOE ROHECIV-2022-463-31[2022] NZHC 1792BETWEEN LAVINIA TERESE TANIRAUApplicantAND ARLEEN MAKUINI TANIRAURespondentHearing: 12 July 2022Appearances: P J Marshall for the ApplicantNo appearance for the RespondentJudgment: 26 July 2022JUDGMENT OF ASSOCIATE JUDGE C B TAYLORThis judgment was delivered by me on 26 July 2022 at 3:00pmpursuant to Rule 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Robinsons Law (P J Marshall/N C Bradley), Whakatane, for the ApplicantIntroduction[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 marriedto Joseph.1[3] Lavinia purchased the Property for $69,000, comprising $5,000 from a grantshe obtained; $20,000 from her KiwiSaver fund and $44,000 by way of a loan fromJoseph and Arleen. The loan was recorded in a mortgage agreement. The mortgagewas and still is registered on the title of the Property.[4] When Lavinia purchased the Property, she agreed that Arleen and Joseph couldcontinue to live there for a year. After that time, she would take over possession andArleen and Joseph would move to live in their neighbouring property.[5] Joseph passed away in March 2018. Later that year, Lavinia informed Arleenthat she wanted to occupy the property and that she no longer agreed to Arleen'scontinued residence there. Arleen resisted.[6] Lavinia filed proceedings for a possession order, which was subsequentlygranted and enforced. She now has possession of the property, and Arleen lives in theneighbouring property.[7] Lavinia seeks to sell the property. The sale is conditional on Lavinia obtaininga 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 toeach of the Taniraus by their given names.Lavinia has not been able to secure the discharge of the mortgage from Arleen and hasaccordingly brought the current proceedings.Originating application for orders under the Property Law Act[8] Lavinia seeks:21. An order pursuant to s 115 of the Property Law Act 2007 directing orallowing the payment into court of $15, 029.49 or a specified amountthat, in the opinion of the court, is sufficient to constitute a fund thatwill produce enough income to meet any periodical payment securedby the mortgage 1078944.2 registered against the property situated at44 Matai St, Murupara comprised in Record of title referenceSA37B/570, legal description Lot 20 deposited Plan South Auckland4889, ("the property") as it falls due.2. An order that on receipt of the amount ordered to be paid into courtthe Registrar forthwith issue a certificate pursuant to 116 of theProperty Law Act 2007 having effect as if it were a duly executedmortgage discharge instrument for the mortgage under section 83.3. An order that the respondent, ARLEEN MAKUINI TANIRAU, paysthe applicants costs and disbursements of and incidental to theseproceedings.[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 toredeem the mortgage (s 99(1)).D. The mortgagee has failed or refused to discharge the property fromthe 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 notreasonable to expect that she will continue to be bound by the mortgage and unable tosell the property with clear title when she will, on settlement, be ready and able torepay the loan secured by the mortgage. She deposes she is concerned that furtherdelay 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 repaythe loan and discharge the mortgage is $15,092.49.3Submissions[11] Mr Marshall, for Lavinia, submits that Lavinia is the current mortgagor and isentitled to redeem the mortgage. He says Lavinia has sought to do so by writtenrequest to Arleen on 21 March 2022, but that Arleen has ignored the request and failedto confirm the current balance. He says Arleen has failed to meet her obligations unders 97(2) of the Property Law Act to discharge the property from mortgage. Laviniashould be allowed an order confirming the balance due to be $15,092.49 and for thissum to be paid into Court, with a certificate under s 116 to operate as a discharge ofthe mortgage and enable sale of the property.[12] Mr Marshall submits Lavinia seeks 2B costs.4Legal principlesProperty 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 redeemmortgaged property may redeem it in accordance with this subpart atany time before it has been sold, under a power of sale, by themortgagee or a receiver.(2) The mortgagee must, on payment to the mortgagee of all amounts andthe performance of all other obligations secured by the mortgage, atthe expense of the current mortgagor or other person seeking toredeem the mortgaged property, discharge the property from themortgage in accordance with section 83.115 Court may order discharge of mortgage if periodical paymentssecured are otherwise provided for3 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 underthe Property Law Act 2007 dated 4 July 2022 at [11]–[20].(1) This section applies if a mortgage over property secures the paymentto any person of a periodical payment, other than interest on theamounts secured by the mortgage.(2) A court may, on the application of the current mortgagor or any otherperson entitled to redeem the mortgaged property, make an orderdirecting or allowing the payment into court of a specified amountthat, in the opinion of the court, is sufficient to constitute a fund thatwill produce enough income to meet any periodical payment securedby the mortgage as it falls due.(3) In determining the specified amount under subsection (2), the courtmust—(a) assume that the fund will be invested in accordance with theTrusts Act 2019; and(b) make reasonable provision, in addition to the amountsufficient for the purpose specified in subsection (2), for thecontingency of further costs, expenses, and interest, and anyother contingency except the depreciation of any investment.(4) The court may, after giving notice to every person who is entitled toreceive a periodical payment secured by the mortgage, make furtherorders directing the application or distribution of the income or thecapital of the fund.116 Certificate operates as discharge of mortgage(1) A certificate by the Registrar that the amount specified in an orderunder section 115 has been paid into court has effect as if it were aduly executed mortgage discharge instrument for the mortgage undersection 83.(2) Section 111(2) to (7) apply to a certificate under subsection (1) as if ithad been given under section 111.Analysis[14] I am satisfied on the evidence that Lavinia is entitled to have the mortgagedischarged upon payment of the outstanding principal balance. She has attempted tosecure a discharge of mortgage from Arleen, and Arleen has failed or refused toprovide 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 ordersought by Lavinia. The reasons for this are:(a) Section 115(1) says that s 115 applies if a mortgage over propertysecures the payment to any person of a periodical payment, other thaninterest on the amount secured by the mortgage. The mortgage inquestion does not fit into this category as it does not secure periodicalpayments or payments other than interest.(b) Under s 115(2), the Court is entitled to make an order allowing paymentinto Court of a specified amount that, in the opinion of the Court, issufficient to constitute a fund that will produce enough income to meetany periodic payments secured by the mortgage as it falls due. Thisdoes not allow payment into Court of the principal amount to obtain adischarge of mortgage as is currently proposed by Lavinia.[16] Accordingly, the orders sought under s 115(2) and the certificate sought unders 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