Menere v Jackson Mews Management Ltd

• Jurisdiction: New Zealand
• Court: Supreme Court
• Judge: Elias CJ,McGrath,Wilson JJ
• Judgment Date: 16 April 2010
• Neutral Citation: [2010] NZSC 39
• Date: 16 April 2010
• Docket Number: SC 121/2009

[2010] NZSC 39

IN THE SUPREME COURT OF NEW ZEALAND

court:

Elias CJ, McGrath and Wilson JJ

SC 121/2009

BETWEEN

Janice Mary Menere

Applicant

and

Jackson Mews Management Limited

Respondent

I R Millard QC for Applicant

P S J Withnall for Respondent

Application for leave to appeal a decision of the Court of Appeal that an encumbrance over land containing a retirement village, where the encumbrancer agreed to enter into a management services agreement was not discharged on payment of $9.90 being consideration of 10 cents per annum for 99 years — whether the encumbrance could be removed before all the obligations had been performed.

The issue on appeal concerned whether the encumbrance should be discharged on payment of the full amount, or whether there were other obligations that needed to be fulfilled before discharge.

Held: The 2007 Act applied to this situation. Section 97(2) was clear that discharge was only required when all money was paid and all other obligations were performed. The purpose of paying the nominal amount was to secure the performance of the management services obligation. A discharge of the obligation would defy commonsense. Leave to appeal refused.

JUDGMENT OF THE COURT

• A The application for leave to appeal is dismissed.

• B The applicant is ordered to pay to the respondent costs of $2,500.

REASONS

1 The applicant purchased a unit in a retirement village which was subject to an encumbrance whereby, in consideration of a payment of 10 cents a year (if demanded), the encumbrancer covenanted to enter into a management services agreement with the respondent. The applicant tendered to the respondent $9.90, as the total rental payable for the remaining 99 years of the encumbrance, and sought the discharge of the encumbrance. The respondent refused to discharge it.

2 The applicant issued proceedings in the High Court seeking an order that the respondent provide a discharge. Ronald Young J so ordered, on the ground that the encumbrance was a “mortgage” for the purposes of the Property Law Act 1952.

Section 81(2) of that Act therefore entitled the applicant to a discharge on payment of the amount secured. 1

3 The respondent appealed. As in the High Court, it was in the Court of Appeal common ground between the parties that the applicable legislation was the Property Law Act 1952. The Court concluded however following the hearing that the Property Law Act 2007 applied,...