Adams v ASB Bank Limited

[2013] NZHC 1117

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-002544 [2013] NZHC 1117

BETWEEN  MICHAEL GORDON ADAMS Applicant

ANDASB BANK LIMITED Respondent

Hearing:         15 May 2013

Appearances: H L Thompson for Applicant

M J Tingey and N F D Moffat for Respondent

Judgment:      16 May 2013

REASONS FOR JUDGMENT OF ELLIS J

This judgment was delivered by Justice Ellis on 16 May 2013 at 11:00 am

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date…………………………

Solicitors:           McMahon Butterworth Thompson, P O Box 106073, Auckland

Fax: [phone] – H Thompson – Email: [email protected]

Bell Gully, P O Box 4199 Shortland Street, Aucland 1140

Fax: [phone] – M Tingey / N Moffatt – Email: [email protected]

ADAMS V ASB BANK LTD HC AK CIV-2013-404-002544 [16 May 2013]

[1]      On 15 May 2013 I granted an application by Mr Adams for a without notice interim injunction preventing ASB Bank Ltd from completing the mortgagee sale of

53 Tidal Rd, Mangere.[1]    Mr Adams, his wife and Adams Trustees 1011 Ltd are the

registered proprietors of the property in their capacity as trustees of the Blue Rock Trust.  The sale had (or was about to) become unconditional, following expiry of the bank’s PLA notice. These are the reasons for that order.

[1] As described in Certificate of Title NA94B/291.

[2]     Mr Adams’ underlying claim (although no proceedings have yet been commenced) is that the sale of the property occurred in breach of the Bank’s obligation as mortgagee under s 176 of the Property Law Act 2007.  He has deposed that the Trustees have refinancing in train (and there is further evidence to support this) which would enable the mortgagors both to remedy their default of some $2m

and to repay the outstanding mortgage sum of some $4m, in full.[2]    Mr Adams says

that it will be three weeks before it will be known with certainty that the refinancing proposal will come to fruition.

[2] Mr Tingey, who appeared on a Pickwick basis for the Bank, advised that the full mortgage amount becomes owing upon expiry of the PLA notice.

[3]      Mr Thompson, who appeared before me on Mr Adams’ behalf, very properly drew my attention to the line of cases that indicate that any loss arising from a breach of s 176 is regarded as being compensable by an award of damages.  But he said that in the present case the sale was for approximately half the market value of over $5 million.   Mr Adams has annexed to his affidavit a valuation report that supports that difference.   There are also other aspects of the sale referred to by Mr Adams that might (if ultimately established) support the allegation of breach.

[4]      Perhaps more importantly (in terms of matters that might favour the grant of an interim injunction here) Mr Adams has deposed that completion of the sale will cause  considerable  damage  to  his  family’s  civil  contracting  business  which  is operated from the property.   He says that it will be very difficult to relocate that business.

[5]      As I have said, Mr Tingey (and Mr Moffatt) appeared on a Pickwick basis for the bank and advised that their instructions were not to oppose (but also not to

consent to) the interim injunction.  He said that the bank was prepared to deal with the (as yet undisclosed) purchaser of the property on that basis.

[6]      On the basis of the, admittedly limited, material before me I was prepared to grant the interim injunction for a period of one week.  On the basis of that material I was satisfied that there is a serious question to be tried and that, if Mr Adams were ultimately to be successful on that question, that damages may not be an adequate remedy.  And the absence of opposition from the bank supports a conclusion that the balance of convenience favours an injunction albeit one of very limited duration.

[7]      Accordingly I granted an interim injunction in the terms set out in paragraph

1 of Mr Adams’ without notice application.  That interim injunction will expire at 5 pm on Wednesday 22 May 2013 unless renewed by this Court on that day.   In addition:

(a)      The plaintiff is to file and serve on ASB’s solicitors a statement of claim by 5 pm, Friday 17 May2013;

(b)The  matter  is  to  be  placed  in  the  Duty  Judge  List  at  10  am, Wednesday 22 May 2013;

(c)      The ASB  is  to  provide  a  copy  of  the  statement  of  claim  to  the purchaser of the property, who may wish to appear and be heard on that day.

[8]      Costs are reserved.

Rebecca Ellis J