MORTGAGE CASE

Otago Daily Times, Issue 26027, 15 December 1945, Page 5

MORTGAGE CASE

REGISTRATION ISSUE JUDGMENT FOR APPLICANTS Judgment was given in the Supreme Court yesterday by Mr Justice Kennedy in an action contesting a decision by the Registrar-general of Lands that a memorandum of mortgage was really two mortgages and should be registered as a second and third mortgage, and that two registration fees should be paid. The applicants were F. B. Adams and others, for whom Mr H. S. Adams appeared, and the respondent was J. Caradus, represented by Mr A. N. Haggitt. Terms of Decision His Honor gave judgment that the Registrar-general should have treated the memorandum ol mortgage as one mortgage and should .have registered it as such, and should have demanded but one registration fee. He made an order directing the district land registrar at Dunedin to register such memorandum of mortgage as a single mortgage, subject to one registration fee. His Honor said that he was asked by the parties to deal with a further question which was not the subject of actual decision by the Registrargeneral. He did not. thinly that he should deal with a matter which was not the subject of decision by the Registrar-general adverse to the applicant. The correspondence made it clear that the decision was most precisely limited to the matters mentioned. The rtiemorandum of mortgage in question was in more or less the usual form, his Honor continued. It provided that in consideration of £565 lent to the mortgagor by the mortgagees in shares, the mortgagor covenanted with the mortgagees to pay by equal monthly instalments and by a final payment on September 1, 1946, the sum of £565 with interest. Interest was calculated at one rate upon the sum of £365 and at another rate upon the sum of £2OO, but it was payable in aggregate sums to the mortgagees, being included in monthly payments. Relationship Not Altered “There is no doubt that the mortgagees a contributory mortgage in the sense that funds are provided by mortgagees in different shares,” his Honor said; “ but the covenant for repayment, is a covenant for repayment of the whole of the moneys as an aggregate sum with interest calculated in a particular way- The provision as to socalled priority is a provision which operates only as between the mortgagees, and it does not alter the relationship as between mortgagor and mortgagees There is, it was conceded, but one charge, and that charge secures repayment of the one aggregate sum to the mortgagees with interest. In operation, then, although there are several owners of the mortgage, there is but one mortgage, and the proper course was accordingly to register it as one mortgage and. to charge but one fee for the one registrable operation. It was said that the result was to make one mortgage do duty for two. The important point, however, is that the Act provides for the registration of instruments and instruments only. “In Australia it had already been held that a mortgage might be registered even though it was a contributory mortgage,” the judgment concluded. “A mortgage might also be given to mortgagees as several owners and not as joint owners, and there is nothing in the Act prohibiting the registration of such a mortgage. Similarly it has been held that a mortgage was registrable although there was added a covenant by a person not party to the mortgage guaranteeing repayment of the mortgage money.”