Agio Trustees Company Ltd v Harts Contributory Mortgages Nominee Company Limited HC Auckland CP404/381-Sdoo

The case of Agio Trustees Company Ltd v Harts Contributory Mortgages Nominee Company Limited was heard in the High Court of New Zealand. The case involved a mortgagee sale of a property at 7/79 Shelly Beach Road, St Mary’s Bay, Auckland. The property was owned by Agio, as trustee of the Herne Bay Trust, which had borrowed $1,675,000 from Harts, the first defendant, secured by a first mortgage. After Agio defaulted, Harts decided to sell the property and entered into possession. It appointed Realty Solutions Ltd to sell the property, which it did to Mr Earwaker, the sales manager of Realty Solutions. The plaintiffs alleged that Harts breached s 103A of the Property Law Act 1952 in that it failed to properly promote and market the property to obtain the best price reasonably obtainable at the time of sale on 4 August 2000 to Mr Earwaker. The plaintiffs also alleged that Harts owed them an obligation to act in good faith in disposing of the property and it breached that obligation. The court found that Harts had not discharged the onus on it to establish that it had complied with s 103A and the duty to act in good faith. The court found that it would be inequitable to set aside the sale and awarded damages to Agio of $90,000. The court also found that Harts was entitled to judgment for the amount now owing under the mortgage, less a credit for the damages of $90,000, against Agio, and entitled to judgment against Mr Krasniqi for the same sum as guarantor.