Sotiropoulos – Estate Nick Angelidis [2004] NSWSC 1184

The Plaintiff was the Executor of the Estate of the late Nick Angelidis (also known as “Agelidis”). The Plaintiff sought a determination:

“… pursuant to Conveyancing Act s98(1) that all amounts due under mortgage registered number J282727 with Nick Agelidis as mortgagor and Sam Giannikis and Michael Manettas as mortgagees have been paid.”

No person was made a defendant in the proceedings.

The deceased died possessed of a property at Botany and the property was encumbered by a registered mortgage dated 18 February 1963, in favour of Savas Giannikis and Michael Manettas. The loan secured by the mortgage was £300, interest free. Clause 1 of the mortgage provided that “the mortgagor will pay to the mortgagee the principal sum, or so much thereof as shall remain unpaid, on the first day of April 1964”. Clause 19 provided that “the mortgagor shall have the right to pay the whole or any part of the principal sum at any time”.

Apparently, the deceased and the lenders were good friends, hence the interest free loan.

Mr Giannikis died in 1989. Mr Manettas died in 1995. Both died without a will. No grant of letters of administration of either of their estates had been made and no application for such a grant was foreshadowed. Their widows knew nothing about the loan nor were the solicitors who acted on the transaction discovered. Notice of intention to distribute the deceased’s estate was published in 2004. No claim on the estate was received.

Attempts were made by the Plaintiff’s solicitors to find someone amongst the next of kin on intestacy of Messrs Giannikis and Manettas willing to represent their estates for the purpose of giving a discharge of the subject mortgage. They met with no success.

In the personal goods of the deceased the Certificate of Title to the property was found, a second registered mortgage on the property and an executed discharge of that mortgage. The Court found that it was most likely this mortgage had been repaid due to its interest free nature, the friendship and the fact she was holding the COT, and had probably not bothered to obtain a discharge of the mortgage.

In any event, as the whole of the loan secured by the mortgage was repayable at the latest by 1 April 1964, recovery of the loan and enforcement of the mortgage would have become statute barred under s.42(1)(a) Limitation Act 1969 (NSW) on 1 April 1976. There is no evidence of any confirmation of the loan for the purposes of s.54 Limitation Act after 1 April 1976. There is no suggestion that the subject property was ever in the possession of the lenders so that redemption of the mortgage would be barred by s.41 Limitation Act.

Can the Plaintiff obtain relief under s.98 Conveyancing Act 1919 (NSW)?

Section 98(1) provides:

“Where land is subject to a mortgage and the person empowered to reconvey the land or, where the land is under the provisions of the Real Property Act 1900, to execute in respect thereof a discharge referred to in section 65 of that Act, is out of the jurisdiction, cannot be found or is unknown, or if it is uncertain who that person is, the court may, upon the application of the person for the time being entitled to redeem the mortgaged land, determine in such manner as the court thinks fit whether or not all amounts due under the mortgage have been paid and, if not, the amount thereof outstanding.”

 In the Application of Piromalli [1977] 1 NSWLR 39 was directly in point. In that case, Waddell J granted relief under the section ex parte in rather peculiar factual circumstances. The lender was dead. Her death certificate showed that she had married only once and had died without issue. However, evidence was tendered that she had married a second time and had ten children. That allegation had not been proved at the time the application came before Waddell J. No one had applied for grant of probate or letters of administration of the lender’s estate and no one appeared to be interested in doing so.

Justice Palmer agreed with this case and said, “where a lender is dead and no one has applied for a grant of probate or letters of administration, but it is known who are the next of kin who would be entitled to apply, it cannot be said that the identity of the person empowered to execute a discharge is unknown or uncertain, within the meaning of, and for the purposes of, s.98(1). In such a case, s.98(1) has no application”.

The critical difference between the facts of this case and the facts in Piromalli was that in Piromalli the next of kin would have been entitled to apply for administration but because of yet-unproved allegations that the deceased lender had had children by a second marriage, it could rightly be said that the identity of the person or persons entitled to apply for administration was unknown.

However, in this case, it was known for certain who was entitled to apply for letters of administration of the deceased lenders’ estates: in each case, it was the spouse of the deceased: s.63(a) Wills Probate and Administration Act 1898 (NSW). Both these spouses were still alive and their whereabouts were known. The fact that the persons entitled to apply for administration are known but are unwilling to apply does not bring the case within the provisions of s.98(1).

Here, accordingly there was no power under s.98(1) to grant the relief sought.

However, the Justice Palmer said the plaintiff would be entitled to apply to the Registrar-General under s.32(6) Real Property Act 1900 (NSW) for a cancellation of the mortgage on the title of the subject property. Section 32(6) provides:

“The Registrar-General shall have, and shall be deemed always to have had, power to cancel in such manner as the Registrar-General considers proper any recording in the Register that the Registrar-General is satisfied does not affect the land to which the recording purports to relate.”

In Scallan v Registrar-General (1988) 12 NSWLR 514, Young J held that s.32(6) empowered the Registrar-General to cancel the registration of a mortgage if satisfied that the mortgage no longer affected the title. At p.516, his Honour noted that the practice of the Registrar-General had been to cancel the registration of a mortgage where the borrower had proved repayment of the monies secured to a lender who had disappeared without executing a formal discharge. The Registrar-General also used the subsection to cancel the recording of a mortgage if the mortgagee would be barred by the Limitation Act 1969 and there was no legal personal representative of the mortgagee in New South Wales from whom a discharge could be obtained. His Honour concluded that such actions by the Registrar-General were warranted under s.32(6).

Justice Palmer said the Registrar General would be justified in making a similar decision here, although he was not bound by this decision.

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