McLean v Paaka [2018] NZHC 3018 (21 November 2018)

Last Updated: 27 November 2018

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-744 [2018] NZHC 3018

UNDER	section 110 of the Property Law Act 2007
IN THE MATTER	of a discharge of mortgage 7402353.3 registered over the property at 18 Ashburn Road, Wainuiomata
BETWEEN	CHARMAINE HINEKURA MCLEAN and GARY MCLEAN Plaintiffs
AND	DORA JEAN TEPAEKURA PAAKA Defendant

Hearing:	20 November 2018
Counsel:	K Lawrence for plaintiffs Defendant in person
Minute:	21 November 2018

REASONS FOR JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[1] This proceeding relates to the administration of the estate of the late Wikitoria Heretengaronoa 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, is the executrix and trustee of the estate. The plaintiffs, Mr Gary and Mrs Charmaine McLean, 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 her capacity as executrix and trustee, holds a mortgage over the property which reflects monies apparently lent by the late Mrs Paaka to Mr and Mrs McLean prior to her death.

MCLEAN v PAAKA [2018] NZHC 3018 [21 November 2018]

[3] The instrument creating the mortgage is dated 18 April 2007. By that instrument, the security is limited to an amount of $38,500. The mortgage was registered 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 and

CHARMAINE HINEKURA MCLEAN pursuant to a mortgage.

[5] It is common ground that by that clause the late Mrs Paaka forgave the $38,500 debt 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 attempting to secure the discharge of this mortgage. Mrs Dora Paaka has hitherto refused to sign the necessary documentation to enable them to do so. She says that the original loan from the late Mrs Paaka to Mr and Mrs McLean was actually $88,500. She says that whilst her sister – Mrs McLean – maintains that she and Mr McLean repaid $50,000 of 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 sought on a number of occasions to engage with her sister in relation to that, including by correspondence and by arranging a family meeting, but her sister has never been prepared to demonstrate conclusively that the $50,000 was repaid. This empasse as between Mrs Dora Paaka and Mr and Mrs McLean has resulted in the commencement of this proceeding by Mr and Mrs McLean and their application for summary judgment. The originating documentation is dated 3 October 2018. It was filed shortly thereafter and served on 12 October 2018. Mrs Dora Paaka took no steps whatsoever until the day before the matter was due to be called in the commercial list when she filed and served a statement of defence and counterclaim, a notice of opposition to the application 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 establishing that 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 entering judgment for the plaintiffs on their summary judgment application and ordering that
their costs be paid on a 2B basis from the assets of the estate (as opposed to Mrs Dora Paaka personally). I indicated that I would give my reasons in writing as soon as possible and I now do so.

[9] I am not in a position to determine on this summary judgment application how much 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 her capacity as the executrix and trustee of the estate has a claim against Mr and Mrs McLean for $50,000.

[10] What is however abundantly clear from the evidence is that the only amount secured over Mr and Mrs McLean’s property as at the date of the late Mrs Paaka’s death was $38,500, and that that secured debt has been forgiven. From the papers and her presentation to me Mrs Dora Paaka appears to be asking the Court to treat any amount which remains due over and above $38,500 as also being secured by the mortgage. The Court does not have jurisdiction to elevate an unsecured debt to a secured one in that way.

[11] On any view, Mr and Mrs McLean are entitled to the orders they seek in relation to the discharge of the mortgage.

[12] If Mrs Dora Paaka is correct, and the estate is still owed $50,000 by Mr and Mrs 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 issue by her counterclaim.

[13] I make the following orders:

(a) I enter summary judgment for the plaintiffs against the defendant in terms of paras (a)–(c) of the plaintiff’s statement of claim dated 3 October 2018;

(b) I direct that the estate is to pay the plaintiffs the cost of and incidental to this proceeding down to the sealing of this order. Those costs are to
be calculated on a 2B basis. The disbursements may be set by the Registrar.

[14] The proceeding will remain extant as Mrs Dora Paaka may wish to pursue her counterclaim. To that end, I direct the Registrar to liaise with counsel and Mrs Dora Paaka as necessary with a view to arranging a case management conference as soon as conveniently possible to set the counterclaim down for trial and issue pre-trial directions.

Associate Judge Johnston

Solicitors:

Greg Kelly Law, Wellington for the plaintiffs