Chapter 15: Mortgages (variation of priority and mortgagee cons Conversely, if these provisions are retained, the consequence of mortgagee consent 15.22 and the registration of the instrument consented to could be more transparent.⁶⁶² Some problems with the legislation The objective of mandatory mortgagee consent in this context is to remove any 15.23 doubt as to the fate of the subsequently registered instrument if the power of sale is exercised under that mortgage. Again, for electronic instruments, the consent is not presented to the Registrar 15.24 but the special section 164A of the LTA certification is used. The consent in written form continues to accompany paper instruments. However, the current wording could be revisited and improved where appropriate. Section 102(4) – variation of mortgage Arguably the pre-2002 version of the LTA was more accurate. There is no 15.25 statement about whether the mandatory mortgagee consent binds that party, although by implication it must do so. Now mortgagees under prior mortgages must also consent, which does not make much sense from a priority order viewpoint should power of sale be exercised under that prior mortgage. What effect does that consent have on the fate of the subsequent varied mortgage if power of sale is exercised under the prior mortgage? Was that i Section 103(3) – variation of priority of mortgages Unlike the other provisions discussed earlier there is no unequivocal statement 15.26 requiring mortgagee (in this case sub-mortgagee) consent. Rather gthe mortgage priority instrument is not effectiveh unless the sub-mortgagee has consented. Given the consequences of a failure to obtain such consent it is highly unlikely that a mortgagee would attempt to improve their ranking ahead of another mortgage that was sub-mortgaged without procuring that consent. To align this mortgagee consent requirement with the other provisions, it would be desirable to state expressly that the consent of the sub-mortgagee must b Section 116(7) – variation of lease This is a new subsection and its meaning is generally clear. However, in the 15.27 context of cross leases this has lead to debate as to what is required. Where land (meaning a parcel of land) is subject to several cross leases and one of them is being varied, if that or any other cross lease is subject to a mortgage, the mortgagee is required to consent. That is how the Registrar interprets the provision. However, more than one conveyancer has argued that gthe landh means (in the context of cross leases) only the share in the fee simple share and the lease of the building associated with it in a common composite title. In this view, if there are mortgages registered against the other cross leases, the consent 662  Extinguishment of the mortgage is not stated but is assumed by necessary implication. Compare the LTA provisions with the Resource Management Act 1991, ss 224(b)(i) and 238 and 239, which specifically set out the consequences of consent. 186 Law Commission Issues Paper