IN THE MATTER OF ADCOCK & ZOHRAB HC AK CIV-2005-404-5121

IN THE MATTER OF ADCOCK & ZOHRAB HC AK CIV-2005-404-5121 13 October 2005IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2005-404-5121IN THE MATTER OF THE PROPERTY LAW ACT 1952 AND IN THE MATTER OF LESLEY MARGERY ADCOCK and JOHN DOUGLAS ZOHRAB Hearing: 13 October 2005 Appearances: Ms Willetts for Applicants Judgment: 13 October 2005(ORAL) JUDGMENT OF LANG JCopies to:Buddle Findlay, P O Box 1433, Auckland (S Willetts)[1] This an originating application under s 87(1) of the Property Law Act 1952 seeking a declaration that all money secured by a registered mortgage has been paid in full. Leave was granted by Venning J on 22 September 2005 to bring the proceeding way of originating application. [2] The applicants are the registered proprietors of a property situated at 7 Wallace Street, Herne Bay. In September 1995 the Australia & New Zealand Banking Corporation Limited advanced moneys to Mr John Zohrab, one of the applicants. That loan was secured by way of a registered mortgage over the property. The loan was also guaranteed by Mr Zohrab's business associates, Mr Hector Daniel Elbaum and Mr John Warwick Adcock. [3] In 1996 the bank made demand on Mr Elbaum and Mr Adcock pursuant to their guarantees. Mr Elbaum paid the outstanding balance of the loan, and the bank then transferred and assigned its mortgage to him. That transfer was registered on the title to the property. [4] Difficulties then arose in the business relationship between the applicants and Mr Elbaum and Mr Adcock. These led to Court proceedings being instituted in both Australia and New Zealand. Ultimately the Court proceedings were resolved by way of a deed of settlement that was signed by all parties, including Mr Elbaum. [5] Under clause 3 of the deed Mr Elbaum covenanted that he would "forthwith discharge and release the mortgage and execute such form of discharge of mortgage as Mr Zohrab and Lesley Adcock shall reasonably require and [that he would] cause the same to be delivered to Mr Zohrab's solicitors ". [6] I am satisfied from the material that has been placed before me that the applicants have now carried out their obligations under the deed of settlement. Despite repeated requests, however, Mr Elbaum has failed to provide a discharge of his mortgage. On that basis the applicants now seek an order under s 87(1) of the Property Law Act 1952 which provides as follows:Where any person entitled to receive or having received payment of any money secured by mortgage is out of the jurisdiction, cannot be found, or isunknown or is dead, or it is uncertain who is entitled, the Court, upon the application of the person entitled to redeem the mortgaged premises, may order the amount of the debt to be ascertained in such manner as the Court thinks fit, and direct the amount so ascertained to be paid into Court or, as the case may be, may by order declare that all money secured by the mortgage has been paid in full.[7] The Court can only make an order under s 87(1) if it is satisfied that the mortgagee is out of the jurisdiction and cannot be found. Extensive efforts have now been made by the applicant to locate Mr Elbaum. These confirm that he is most likely living in Victoria, Australia although his precise whereabouts are unknown. The difficulties that the applicants have had in locating Mr Elbaum also persuade me that at present it can be fairly be said that he cannot be found. I am therefore satisfied that jurisdiction exists to make the declarations sought by the applicants, either on the basis that Mr Elbaum is out of the jurisdiction or on the alternative basis that he cannot be found. [8] Although the wording of s 87(1) contemplates circumstances in which a mortgagor has paid off all moneys outstanding under a mortgage, nevertheless it must apply equally when the obligations of the mortgagor are satisfied in some other way. [9] I consider that the deed of settlement provided an alternative means by which the applicants were entitled to satisfy their obligations under the mortgage and that they have in fact done so. For this reason I am satisfied that it is appropriate to make a declaration that all moneys secured by registered mortgage D.020593.3 have been paid in full. I so declare. ________________________ Lang J