UNLUCKY VENTURE

New Zealand Times, Volume XXXIII, Issue 7849, 11 July 1911, Page 7

UNLUCKY VENTURE

HOUSE SOLD BY MORTGAGEES. PRIORITY OE LIKIN'S. NOT AFFECTED BT ORDER OP REGISTRATION. In the Supremo Court yesterday Sir Joshua Williams delivered Ms reserved judgment in the case Easson Brothers v. Joseph Herbert Knight, a chamber matter under the Wages Protection and Contractors' Liens Act. Knight did not really enter into the action at all. Ho was the builder who had given certain liens, and as there was not sufficient money available to satisfy the claims, they asked the court to determine the order of priority in which they wore cnititled to take of such money as was available. Knight contracted to buy from one Houghton a piece of land. On one half oi this land Knight erected a house, and obtained a transfer from Houghton of the half on which the house was built, wiiicb. truusfer on August 13th, I‘JU3, was registered under the Land Transfer Act. On the same date a mort'gago from Knight to Messrs Moorhouso and Ferguson, of the land so transferred was registered. On August 20th, 1909, a lieu against the land under the Wages Protection and Contractors’ Lions Act ■claiming .£251 11s an in respect of work dune in connection with the house that hud been built on the land was registered against the bund by Messrs Easson. On August 2Jrd, I‘JO9, a second mortgage of the laud irom Knight to Hougntuii was registered. This mortgage was to secure £95, tho balance of purchase money due from Knight t to Houghton. After this, in August and September, U:'J, other liens under the Wages Protection and Contractors’ Liens Act were ■registered against tho land, some by workers for wages, others by contractors. In March or April, 1910, Messrs Moorhouse and Ferguson, the first mortgagees, sold the land under the power of sale in their mortgage. After the - first mortgagees had been paid out oi the proceeds of tho sale there remained a balance of £37, which was paid into court. ■•The question is, who is entitled to this £B7 P’’ said his Honor. "That depends upon the true construction of sections 53 and of of the Act, and of the Xc cions relating to remedies against bind Section 53 makes it clear that inu second mortgagee has no rights to it. Kasscn’o lien was registered before the second mortgage. The second mortgagee takes subject to Hasson’s lien, and as that lien would more than exhaust the fund the second mortgagee can get ■nothing. The iiissona aro entitled as 'against tho second mortgagee to the ivholo amount, whether they are or aro not entitled to it as against the subsequent lienors. The subsequent lienors can have no rights as against tho second mortgagee, but it does not follow' that they have no rights against tho Hassons. The question is only as between tho Eassoms and the other lienors, and not between them’ and tho second mortgagee.” Hia Honor then proceeded to _ discuss the questions of priority submitted to him by counsel at tho hearing. It was there urged on behalf of the plaintiffs that tho order of priority must be determined by the order of registration, but this contention his Honor did not sustain, making his award as follows —"if, therefore, no second mortgage had been registered the liens for wages would have had priority over the contractors' liens and after the wages liens had been satisfied tho balance would be divisible amongst the other lienors ratably according to their respective claims. If, apart from tiro second mortgage, the priority of the various liens would_ be governed by tho provisions of the Wages Protection and Contractors’ Liens Act, notwithstanding regisration under tho Land Transfer, Act, then, although tho intervention of tho second mortgage would give a right of priority to tho second mortgagee, the liens as between themselves would have priority as prescribed by section 54. So long as the rights which _ the second mortgagee acquired by registration are not interfered with, the rights of the various lienors are not affected by the second mortgage. I think, _ therefore, that tho sum in court is. applicable first to the payment of tho claims for wages, and that tho various lienors are entitled to tho balance in proportion to tho| ams’Sat of j-’ieir respective liens.’.! >