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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[SUPREME COURT OF JUSTICE]
SCA 36 OF 2025
BETWEEN:
ALU ILA
Appellant
AND:
KINA SECURITIES LIMITED
Respondent
WAIGANI: LOGAN J, NAROKOBI J, DOWA J
17 DECEMBER 2025; 27 FEBRUARY 2026
LAND TITLES UNDER THE TORRENS SYSTEM – Mortgages, Charges and Encumbrances – appellant submits among others that proceedings by the respondent, Kina Securities Ltd to enforce rights granted by the mortgage is abuse of process and respondent lacks standing as it is not the entity to which the mortgage was transferred - s. 238 and s. 239 Companies Act 1997 – failure by appellant to raise in National Court issues flowing from the dates of the memorandum of transfer of the mortgage and the date of registration of the transfer to “Kina Bank” – ability of the whether appellant should be granted leave to raise such issues for the first time on appeal – ability of Kina Securities to claim rectification in equity of the transfer of the mortgage on the basis of common mistake and to lead supporting evidence had such issues been raised in the National Court – leave to raise such issues refused – no practical injustice to the appellant by refusal of leave given that, prima facie, Kina Securities had a claim for rectification in equity had the issue been raised by the appellant in the National Court – on the defence as raised in the National Court and related assumed factual position Kina Securities was the “successor” to Kina Bank for the purposes of enforcing on default the rights conferred by the mortgage over the subject land and recovering the appellant’s indebtedness under the loan – appeal dismissed
HELD:
Cases cited
Madge v Secretary for Lands (1985) PNGLR 387
Kina Bank Ltd v Lei [2019] PGNC 446
Carpenter Agricultural & Manufacturing Limited trading as Coconut Products v Anton (2023) N10811
International Finance Co. v KK Kingston Ltd (2019) SC1872
Atlas Corporation Ltd v Ngangan (2020) SC1995
Telikom PNG Ltd v Kopalye [2021] PGSC 66; SC3241
Nema v Yanam [2025] PGSC 43; SC2736
Elders New Zealand Ltd v PGG Wrightson Ltd [2008] NZSC 104
Carter Holt Harvey Ltd v McKernan [1998] 3 NZLR 403
R v Black and Decker Manufacturing Co Ltd [1975] 1 SCR 411
Soniawear Ltd vs. Central Electricity Board (2013) SCJ 422
O’Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310
Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1
University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481
Maralinga Pty Ltd v Major Enterprises Pty Ltd [1973] HCA 23; (1973) 128 CLR 336
Ralph v Ralph [2021] 4 WLR 128
Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560
Counsel
Mr C Zazeng, for the appellant
Mr J Kakaraya, with Mr S Fungke, for the respondent
1. BY THE COURT: The appellant, Alu Ila, is the registered proprietor on the register of titles maintained under the Land Registration Act 1981 of the State Lease over Allotment 96, Section 228, Hohola, NCD (the subject land).
2. An entry dated 23 November 2021 on the register in respect of the subject land records that Mortgage No. S.59903 (the mortgage) over it was transferred from Australia and New Zealand Banking Group (PNG) Ltd (ANZ) to “Kina Bank Limited” (Kina Bank).
3. The related transfer of mortgage records a transfer of the mortgage from ANZ to Kina Bank. That transfer was signed on behalf of “Kina Bank Ltd” on 18 December 2020. It bears a certification that it is correct for registration. It was presented for registration on 23 November 2021 and registered accordingly that day.
4. On 6 August 2020, the Acting Registrar of Companies issued a Certificate of Amalgamation under the Companies Act 1997 certifying that on 9 July 2020 an amalgamation of four companies of which Kina Bank was one took effect and that the name of the amalgamated company is the present respondent, Kina Securities Ltd (Kina Securities).
5. The loan secured by the mortgage was originally made by ANZ to the appellant. The rights and obligations conferred by that loan formed part of the assets which Kina Bank acquired from ANZ when it acquired the retail business of ANZ on 23 September 2019.
6. After then, the appellant defaulted in making repayments under the loan secured by the mortgage. The appellant failed to remedy that default after notice thereof. Accordingly, by a writ of summons issued on 27 September 2024, Kina Securities instituted proceedings in the National Court against the appellant. In those proceedings, Kina Securities sought judgment in the amount of the then outstanding balance of the loan (K857,614.74), together with vacant possession of the subject land and a related writ of possession.
7. On the statement of claim endorsed on the writ, Kina Securities pleaded that it was, after amalgamation, the successor to all of the rights acquired by Kina Bank from ANZ, including the rights and obligations under the loan and the mortgage. The defence filed by the appellant put in issue that Kina Securities was entitled to sue on the loan and enforce rights conferred by the mortgage. Significantly, it was not pleaded or particularised that this was not because of some deficiency in law arising from the name of the registered mortgagee on the titles register and the date when the transfer of the mortgage had occurred.
8. Kina Securities sought summary judgment. This was granted on 5 March 2025 by the learned primary judge for reasons delivered ex tempore that day. Regard to the submissions made on behalf of the parties and to his Honour’s reasons for judgment discloses that although the ramifications of the disjunct between the plaintiff being Kina Securities and the acquiring party of the ANZ retail banking business being Kina Bank were raised, this was in the context of the standing of Kina Securities to sue on that loan and mortgage. What was not raised were the ramifications, if any, arising from the name of the registered mortgagee on the memorandum of transfer and on titles register being Kina Bank, rather than Kina Securities, given the dates of these transactions. The latter did not form part of the issues for resolution on the summary judgment application. That was so even though the transfer of mortgage from ANZ to “Kina Bank” and the State Lease title deed bearing the registered transfer of mortgage from ANZ to “Kina Bank” were in evidence.
9. The primary judge resolved the case as argued before him by applying a judgment of Hartshorn J in Kina Bank Ltd v Lei [2019] PGNC 446; N8213 concerning the meaning and effect of s 238 and s 239 of the Companies Act in relation to the rights which pass to a “successor” following a corporate amalgamation under that Act. Consistently with the views expressed by Hartshorn J in that case, the primary judge found that Kina Securities was the “successor” to Kina Bank and that it had, accordingly, succeeded to all of the rights and obligations acquired by Kina Bank from ANZ, including those conferred by the loan and the mortgage, without any need, contrary to what the appellant had submitted, for the succession to be recorded on the titles register. His Honour gave judgment for Kina Securities accordingly.
10. The appellant has now appealed against that judgment. A stay is in place of the judgment, pending the hearing and determination of the appeal.
11. As pleaded, the grounds of appeal repeat, in one way or another, the appellant’s proposition that system of title by registration for which the Land Registration Act 1981 provides required that the effect of the post-amalgamation corporate succession had to be recorded on the land titles register. The consequence of no such registration, so the appellant had submitted in the National Court and repeated in submissions on the grounds of appeal, was that Kina Securities lacked standing and could not enforce either the loan or the mortgage.
12. On the hearing of the appeal, counsel for the appellant drew attention, in a way which had not been done before the primary judge, to the dates on which the transfer of mortgage and registration of the transfer had respectively occurred and to the fact that both that transfer and the related registration on the titles deed showed that the transfer of the mortgage was from ANZ to “Kina Bank”. The submission was that, as a result of the earlier corporate amalgamation, “Kina Bank” no longer existed as a separate legal entity. The consequential submission was that, even if Kina Bank Ltd v Lei was correctly decided, it was distinguishable, because the rights and obligations there concerned ante-dated the corporate amalgamation, whereas in the present case the transfer and registration post-dated the amalgamation and, as registered, were to an entity which did not exist. The consequence, so it was submitted, was that the mortgage could not be enforced against the appellant by Kina Securities.
13. The Court raised with counsel for the appellant whether leave to raise such an issue was required, given that it had not been raised below. The appellant’s submission was that the issue was a pure point of law flowing from what was apparent on the face of the transfer and the mortgage as registered on the titles register with no attendant evidentiary embarrassment to Kina Securities. Accordingly, it was submitted that, insofar as leave was necessary, it should be granted.
14. It is convenient first to deal with the merits of the way in which the case was argued in the National Court, which concerned the intersection between the corporate amalgamation provisions of the Companies Act and the Land Registration Act and then to decide whether the appellant requires leave to raise the new issue and, if so, whether such leave should be granted. If leave is needed and granted, it will then be necessary to consider the merits of the issue.
Corporate amalgamations and the Land Registration Act
15. The starting premise for the appellant’s submissions was that the Land Registration Act creates in respect of the interests in land to which it applies a local version of the Torrens system of title by registration. The further submission was that an indefeasible legal interest in land under this system only arises upon registration: s 33, Land Registration Act; Mudge v Secretary for Lands [1985] PNGLR 387.
16. In general, and as to interests in law (as opposed to in equity), each of these propositions is correct. But they must yield to any statutory provision to the contrary.
17. Yet further, the appellants submitted that, so basal was the system of title by registration that it must take precedence over any provision in the Companies Act. From this it was said to follow that the absence of any entry on the titles register recording the succession of Kina Securities to interests in land hitherto registered to Kina Bank meant that Kina Securities had not in law succeeded to those interests and was unable to enforce them. Moreover, it was submitted that, as a consequence of the amalgamation, Kina Bank had ceased to exist as a separate legal entity as at the date of the memorandum of transfer and the registration of that transfer on the titles register.
18. At this point it is desirable to set out s 238 and s 239 of the Companies Act:
238. EFFECT OF CERTIFICATE OF AMALGAMATION.
On the date shown in a certificate of amalgamation–
(a) the amalgamation is effective; and
(b) where it is the same as a name of one of the amalgamating companies, the amalgamated company has the name specified in the amalgamation proposal; and
(c) the Registrar shall remove the amalgamating companies, other than the amalgamated company, from the register, and otherwise give effect to the amalgamation; and
(d) the amalgamated company succeeds to all the property, rights, powers, and privileges of each of the amalgamating companies; and
(e) the amalgamated company succeeds to all the liabilities and obligations of each of the amalgamating companies; and
(f) proceedings pending by, or against, an amalgamating company may be continued by, or against, the amalgamated company; and
(g) a conviction, ruling, order, or judgment in favour of, or against, an amalgamating company may be enforced by, or against, the amalgamated company; and
(h) any provisions of the amalgamation proposal that provide for the conversion of shares or rights of shareholders in the amalgamating companies have effect according to their tenor.
239. EFFECT ON REGISTERS.
(1) Where an amalgamation becomes effective, no person charged with the keeping of any books or registers shall be obliged, solely by reason of the amalgamation becoming effective, to change the name of an amalgamating company to that of the amalgamated company in those books or registers or in any documents.
(2) The presentation to any person of any instrument (whether or not comprising an instrument of transfer) by the amalgamated company–
(a) executed or purporting to be executed by the amalgamated company; and
(b) relating to any property held immediately before the amalgamation by an amalgamating company; and
(c) stating that the property has become the property of the amalgamated company by virtue of this Part,
shall, in the absence of evidence to the contrary, be sufficient evidence that the property has become the property of the amalgamated company.
(3) Without limiting Subsection (1) or (2), where any security issued by any person or any rights or interests in property of any person become, by virtue of this Part, the property of an amalgamated company, that person, on the presentation of a certificate signed on behalf of the board of the amalgamated company, stating that that security or any such rights or interests have, by virtue of this Part, become the property of the amalgamated company, shall, notwithstanding any other law or the provisions of any instrument, register the amalgamated company as the holder of that security or as the person entitled to such rights or interests, as the case may be.
(4) Except as provided in this section, nothing in this Part derogates from the provisions of the Land Registration Act 1981.
19. As viewed against the way the case was argued before the primary judge, the task is one of reconciling two statutory schemes: the scheme for title by registration; and the scheme for corporate amalgamations. Subsection 239(4) of the Companies Act offers a telling signpost that Parliament was not ignorant of this task and how that reconciliation should occur.
20. In Kina Bank Ltd v Lei, Hartshorn J considered that the effect of s 238 and s 239 of the Companies Act was such that there was no need for the name of the successor entity (a term derived from s 238(d) and s 238(e)) to appear on the titles register for it to be entitled to enforce a mortgage security registered in the name of a predecessor entity. His Honour stated, Kina Bank Ltd v Lei, at [8] to [11]:
Section 238 Companies Act provides for the effect of the certificate of amalgamation. Pursuant to s. 238(a) and (d), on the date shown in a certificate of amalgamation, the amalgamation is effective and the amalgamated company succeeds to all property, rights, powers and privileges of each of the amalgamating companies. Section 239 Companies Act provides for the effect on registers. Section 239(1) relevantly provides that where an amalgamation becomes effective, no person charged with the keeping of any books or registers shall be obliged to change the name of an amalgamating company to that of an amalgamated company in those books or registers or in any documents.
The effect of these sections is that where an amalgamation becomes effective, it is not necessary for the name of an amalgamating company to be changed to the name of the amalgamated company as the amalgamated company, in this instance Kina Bank Ltd, has from the date of the effect of the amalgamation, succeeded to all property etc. of the amalgamating companies, in this instance Kina Finance Ltd.
Section 239(4) Companies Act confirms that this is the position in regard to the registration of documents concerning Real Property by expressly providing that the provisions of the Land Registration Act are not affected, except as provided in s.239 Companies Act.
In regard to the submission that the loan and mortgage have not been transferred or assigned, it is not necessary that this occur. The operation of the sections of the Companies Act to which I have referred, have that necessary effect. As to no notice being given to the defendant, again no notice is necessary by virtue of the operation of the sections of the Companies Act to which I have referred.
21. For the reasons which follow, these statements should be accepted. They are, we note, consistent with an understanding voiced by David J in Carpenter Agricultural & Manufacturing Limited trading as Coconut Products v Anton (2023) N10811 concerning the registered proprietorship of land in circumstances of a corporate amalgamation. In that case, at [22], David J stated:
22. Pursuant to s.238(1)(d), on the date shown in a certificate of amalgamation, the amalgamated company succeeds to all the property, rights, powers, and privileges of each of the amalgamating companies. Carpenter Agricultural & Manufacturing Limited succeeded to all the property, rights, powers, and privileges of WRC Limited on 31 December 2017.
Amalgamations in selected Commonwealth jurisdictions
22. The scheme for corporate amalgamations found in the Companies Act is not unique to Papua New Guinea. Analogues are found in a number of Commonwealth countries.
23. The closest analogue is in the company law of New Zealand, the present ss 225 and 225A of the Companies Act 1993 (NZ) being in very similar terms to s 238 and s 239 respectively of the Companies Act. As is explained in a judgment of the Supreme Court of New Zealand, Elders New Zealand Ltd v PGG Wrightson Ltd [2008] NZSC 104, with reference to an earlier judgment of the New Zealand Court of Appeal, Carter Holt Harvey Ltd v McKernan [1998] 3 NZLR 403, the origins of New Zealand’s statutory scheme for corporate amalgamation may be traced to Canadian legislation which employs “continue” rather than “successor” but to no different effect.
24. In Elders, and with reference to Carter Holt Harvey, the New Zealand Supreme Court stated, at [17]:
[17] A Full Court of the Court of Appeal held that the guarantors remained liable.The effect of the statute was that following an amalgamation the amalgamated company stood in the same position as each of the amalgamating companies in respect of their rights and obligations. This reflected the statutory concept of continuance of the amalgamating companies. The Court said:
Continuance is of the corporate entities, not of the undertakings and
operations of those entities. They merge into one corporation which is to be
regarded as their equivalent or, more loosely, their successor. Section 209G
speaks of the amalgamated company succeeding to all the property, rights,
etc and all the liabilities and obligations of each of the amalgamating
companies. In a short form amalgamation involving a parent (under
s 209D(1)), the entity “succeeds” to property and liabilities which have been
its property and liabilities beforehand, as well as succeeding to those of the
other entities. But, as the parent continues and is not deemed to be dissolved,
it is clear that “succeeds”, a word used in Canadian case law though not in
the legislation in that country to which we have been referred, is not to be
read as requiring that there be a predecessor and a successor. The merged
entity succeeds to the assets and liabilities because that is where they are to
be recognised as being or remaining as a result of the continuance of all
parties to the amalgamation.
...
We discern in the legislation a parliamentary intent that the benefits and
burdens of the contracts of all merging companies are to continue in force
for all purposes. The amalgamated company is to enjoy all advantages
previously conferred on any of the amalgamating companies and to have
their liabilities. It is not to be treated as a different entity or as a new party to
the contractual arrangements. It is not the equivalent of an assignee.
Accordingly, in the case of a guarantee, neither amalgamation of the creditor
nor of the debtor will discharge the guarantor in respect of postamalgamation
advances, any more than it would discharge preamalgamation advances. The amalgamated company simply stands in the shoes of the amalgamating company.
25. Although his Honour’s attention was apparently not drawn to these New Zealand cases, the understanding of the operation of the analogue provisions revealed in them exactly coincides with the understanding of s 238 and s 239 voiced by Hartshorn J in Kina Bank Ltd v Lei.
26. In turn, and is also highlighted in Elders, at [22], the New Zealand corporate amalgamation provisions were derived from an analogous Canadian regime for corporate amalgamations.
27. In the Canadian regime, the key controlling provision uses “continue” rather than, as in s 238(d) of Papua New Guinea’s (and New Zealand’s) amalgamation regime, “succeeds”. In R v Black and Decker Manufacturing Co Ltd [1975] 1 SCR 411, at 417 in the Supreme Court of Canada, Dickson J observed of the controlling provision that it meant “to remain in existence or in its present condition” with its effect being that of “blending and continuance as one and the selfsame company”. Thus, his Honour stated, at 419, that, when two companies amalgamate, there comes into existence “an amalgamated company into which, simultaneously, two amalgamating companies have fused along with their assets and liabilities”.
28. In the same way, under the analogue regime in Papua New Guinea’s Companies Act, when two or more companies amalgamate, the amalgamated entity succeeds to the benefits and burdens of the amalgamating entities.
29. This understanding of what a “succession” by amalgamation brings with it is also evident in a judgment of the Supreme Court of Mauritius, Soniawear Ltd vs. Central Electricity Board (2013) SCJ 422. The amalgamation regime in Mauritius is, as is Papua New Guinea’s, an analogue of that of New Zealand. In that case, one of the amalgamating companies, Soniastyles Ltd, had enjoyed tariff benefits from the Central electricity Board (CEB). Soniastyles Ltd amalgamated with Soniawear Ltd with Soniawear Ltd becoming the amalgamated entity. After the amalgamation, the CEB refused to allow Soniawear Ltd to continue to enjoy the tariff benefits hitherto enjoyed by Soniastyles Ltd. The Supreme Court of Mauritius held that the effect of the amalgamation regime was that the beneficial tariff regime was a benefit to which Soniawear Ltd succeeded by the amalgamation by virtue of the corporate amalgamation provisions in the company law of Mauritius.
30. What follows from this understanding of “succeeds” in ss 238(d) and (e) of the Companies Act is that the effect of the certificate of amalgamation which issued in August 2020 was that, on and from the amalgamation date specified in that certificate, namely 9 July 2020, Kina Securities succeeded to the benefits and burdens hitherto vested in Kina Bank as a result of the acquisition by Kina Bank in 2019 of ANZ’s retail banking business.
31. The acquisition agreement was not in evidence. However, the acquisition occurred prior to the amalgamation. To perfect any legal interest in a mortgage over an interest in land hitherto enjoyed by ANZ as mortgagee, it was, at that time, necessary for a consequential memorandum of transfer to be executed by ANZ in favour of Kina Bank. In turn, at that time, in order to perfect Kina Bank’s legal interest in that mortgage as transferred to it, it was necessary for the transfer of that mortgage then to be registered on the register of titles.
32. Neither the consequential transfer nor the registration of that transfer occurred prior to amalgamation. On the issuing of the amalgamation certificate, one effect was that, on 9 July 2020, Kina Bank, as an amalgamating entity, ceased to have separate existence in law, instead being amalgamated into or with the amalgamated entity, Kina Securities: s 238(c) of the Companies Act.
33. However, the effect of ss 238(d) and (e) of the Companies Act was that Kina Securities succeeded to all of Kina Bank’s interests under the acquisition agreement with ANZ. To the extent those interests had included the transference to Kina Bank by ANZ of various mortgage securities, Kina Securities succeeded to that interest. There was no need for any variation of the acquisition agreement to record the “succession” All of that work was done by s 238(d). Thus, on and from 9 July 2020, Kina Securities had any right which hitherto Kina Bank had to require the execution of a memorandum of transfer by ANZ of its mortgage interest in the subject land.
34. Further, had there been a registration on the titles register of a transfer of mortgage from ANZ Bank to Kina Bank prior to the amalgamation, Kina Securities would not have needed to register on the titles register the corporate succession as a result of the amalgamation. That is the whole point of s 239(2) of the Companies Act. Moreover, the whole point of s 239(4) of the Companies Act is that the system of title by registration in the Land Registration Act must be read subject to the provision found in s 239, materially including s 239(2).
35. What follows is, on the issues raised before the primary judge and on the understanding of the factual position as engendered by the parties in submissions, the learned primary judge was plainly right to have granted summary judgment. Moreover, insofar as the grounds of appeal sought to impeach the conclusion of the primary judge in respect of those issues and on that factual understanding, it would have to fail.
36. The question becomes whether the appellant should be permitted to raise a new issue on different factual premises to those it chose to plead in its defence or to highlight to the primary judge?
Should leave to raise new grounds be granted?
37. In O’Brien v Komesaroff [1982] HCA 33; (1982) 150 CLR 310, at 319, Mason J, with whom Murphy, Aickin, Wilson and Brennan JJ agreed, observed:
In some cases when a question of law is raised for the first time in an ultimate court of appeal, as for example upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is expedient in the interests of justice that the question should be argued and decided ...
[Emphasis added]
38. The observation made by Mason J in O’Brien v Komesaroff was one of those cited with approval by Gibbs CJ, Wilson, Brennan and Dawson JJ in Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1, at 7 – 8, which, along with University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481, at 483, is a root authority in Australia on whether to grant leave to raise a new issue on appeal.
39. In turn, the position as stated in O’Brien v Komesaroff and approved in Coulton v Holcombe has been adopted in numerous judgments of this court as governing the circumstances in which an appellant will be permitted to raise issues not raised below on the hearing of an appeal. One underlying issue of principle is that, unless confined to pure issues of law, the forum for determination of disputes of fact and law will move from original jurisdiction of appellate jurisdiction. Another is that to permit an appellant to raise at appellate level an issue which the respondent might have addressed in the original jurisdiction by the calling of evidence is procedurally unfair to the respondent. Such principles, flowing from an adoption of Coulton v Holcombe are evident, for example, in International Finance Co. v KK Kingston Ltd (2019) SC1872 and Atlas Corporation Ltd v Ngangan (2020) SC1995, Telikom PNG Ltd v Kopalye [2021] PGSC 66; SC3241 and Nema v Yanam [2025] PGSC 43; SC2736.
40. Counsel for the appellant put that the issue did not entail any evidentiary embarrassment to Kina Securities, because the evidentiary foundation for the new grounds was apparent on the face of the memorandum of transfer of the mortgage and on the face of the entry of transfer of mortgage on the title deed in respect of the subject land.
41. As a matter of initial impression, that submission was not without attraction. However, on reflection, it does not survive scrutiny as to what Kina Securities might have done, had the appellant’s new grounds been distinctly pleaded in its defence.
42. Had the point been raised, Kina Securities might have amended its writ to claim rectification in equity of the memorandum of transfer of the mortgage on the basis of a common mistake as to the name of the transferee and led evidence accordingly.
43. In relation to rectification in equity, Mason J, with Menzies J agreeing, stated in Maralinga Pty Ltd v Major Enterprises Pty Ltd [1973] HCA 23; (1973) 128 CLR 336 at 350:
What is of importance is that the purpose of the remedy is to make the instrument conform to the true agreement of the parties where the writing by common mistake fails to express that agreement accurately.
44. More recently, the subject of rectification in equity was elaborated upon by Sir Geoffrey Vos MR, with Lord Justice Peter Jackson LJ and Lord Justice Popplewell LJ in Ralph v Ralph [2021] 4 WLR 128 ;[2021] EWCA Civ 1106, at [14] and [15]:
... As was established in Joscelyne, rectification can be ordered where a continuing common intention of the parties can be established. Leggatt LJ made clear in FSHC Group Holdings Ltd v. GLAS Trust Corpn Ltd [2020] Ch 365 that rectification "is a power to correct mistakes in recording what the parties have actually agreed" [77], and "required not only that each party to the contract had the same actual intention with regard to the relevant matter, but also that there was an outward expression of accord meaning that, as a result of communication between them, the parties understood each other to share that intention" [176],
45. In Swainland Builders Ltd v Freehold Properties Ltd [2002] EWCA Civ 560, at [32] – 34], the Court of Appeal summarised the requirements for rectification on the basis of common mistake:
“32. Before I turn to the rival contentions advanced before us, let me state the conditions which must be satisfied if the court is to order rectification in a case where it is alleged, as it is here, that there has been a mistake common to the parties.
33. The party seeking rectification must show that:
(1) the parties had a common continuing intention, whether or not amounting to an agreement, in respect of a particular matter in the instrument to be rectified;
(2) there was an outward expression of accord;
(3) the intention continued at the time of the execution of the instrument sought to be rectified;
(4) by mistake the instrument did not reflect that common intention.
34. I would add the following points derived from the authorities:
(1) The standard of proof required if the court is to order rectification is the ordinary standard of the balance of probabilities. "But as the alleged common intention ex hypothesi contradicts the written instrument, convincing proof is required in order to counteract the cogent evidence of the parties' intention displayed by the instrument itself": Thomas Bates and Sons Ltd v. Wyndham's (Lingerie) Ltd [1980] EWCA Civ 3; [1981] 1 WLR 505 at page 521 per Brightman LJ.
(2) Whilst it must be shown what was the common intention, the exact form of words in which the common intention is to be expressed is immaterial if in substance and in detail the common intention can be ascertained: Cooperative Insurance Society Ltd v. Centremoor Ltd [1983] 2 EGLR 52 at page 54, per Dillon LJ, with whom Kerr and Eveleigh LJJ agreed.
(3) The fact that a party intends a particular form of words in the mistaken belief that it is achieving his intention does not prevent the court giving effect to the true common intention: see Centremoor at page 55 A-B and Re Butlin's Settlement Trusts [1976] Ch 251 at page 260 per Brightman J.”
46. Insofar as facts were revealed before the primary judge, that, before amalgamation, there had been an acquisition of the retail banking business of ANZ by the then Kina Bank was clear and uncontroversial. Also inferentially clear to the point of demonstration, even in the absence of the acquisition agreement, was the fact that the memorandum of transfer of the mortgage in respect of the subject land was a sequel and intended to give effect to that acquisition agreement but, as it happened was a step taken after the amalgamation had taken effect. That Kina Securities was a “successor” to Kina Bank’s rights under the acquisition agreement would, for reasons given above, have been incontrovertible. Prima facie, any claim by Kina Securities to rectification in equity of the memorandum of transfer of the mortgage on the basis that the reference to Kina Bank was a common mistake as between it and ANZ looks to be one capable of being evidenced and proved.
47. Moreover, s 108 of the Land Registration Act would not have denied the National Court jurisdiction to grant such equitable rectification. That section provides:
108. SAVING OF JURISDICTION.
(1) This Act does not take away or affect the legal or equitable jurisdiction of a court to grant relief–
(a) on the ground of fraud; or
(b) over contracts or agreements for the sale or other disposition of land; or
(c) over equitable interests generally.
(2) Notwithstanding–
(a) the provisions of Section 104; or
(b) the powers of disposition or other powers conferred by this Act on proprietors of an estate, interest or security,
but subject to Subsection (3), the intention of this Act is that equities may be enforced against proprietors in respect of their estate, interest or security in the same manner as if this Act had not been passed.
(3) Subject to Section 33 no unregistered estate, interest, security, contract or agreement prevails against the title of a subsequent purchaser for valuable consideration duly registered under this Act.
48. As rectified, Kina Securities might have enforced against the appellant the rights conferred by the mortgage as a consequence of the appellant’s failure to remedy the default. Kina Securities could also have relied on its position as “successor” to Kina Bank to recover the amount outstanding by the appellant under the loan.
49. For these reasons, not only do we consider that the appellant should be refused leave to raise the new grounds, because that would truly occasion embarrassment and a related injustice to Kina Securities, but we also consider that so doing visits no practical injustice on the appellant.
50. What follows from this refusal of leave is that, for reasons already given, the appeal should be dismissed.
51. For completeness and as to the entry on the titles register recording that the transfer of the mortgage was from ANZ to “Kina Bank”, as presently advised, it appears to us that, having regard to s 161 of the Land Registration Act and upon furnishing evidence by statutory declaration and related supporting documents to the Registrar of Titles, it would be open to the Registrar to correct the entry on the titles register in respect of the transfer of the mortgage to record that the transfer was from ANZ to the amalgamated entity, Kina Securities as “successor” to Kina Bank.
52. Costs should follow the event of dismissal of the appeal.
Orders:
__________________________________________________________________________
Lawyers for appellant: Nexus Legal Group
Lawyers for respondent: O’Briens
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