AMFL Ltd v Savill

[2020] NZHC 2112

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-000143

[2020] NZHC 2112

BETWEEN

AMFL LIMITED

Applicant

AND

SIMON LYDALL SAVILL

Respondent

Hearing:	13 August 2020
Appearances:	M J Hammer (via VMR) and C M O’Brien for Applicant D J Ballantyne for Respondent
Judgment:	20 August 2020

REASONS JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 20 August 2020 at 3.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 20 August 2020

Introduction

[1]    On the eve of New Zealand entering COVID-19 alert level 4 lockdown restrictions, I made interim injunction orders restraining AMFL Limited (AMFL) from proceeding with the mortgagee sale of a property in the Marlborough Sounds owned by Mr Simon Savill.1

1      Savill v AMFL Ltd [2020] NZHC 655.

AMFL LIMITED v SAVILL [2020] NZHC 2112 [20 August 2020]

[2]    The interim injunction was sought and made without notice given the urgency created by the imminent lockdown restrictions, and in light of the representation that AMFL was proposing to proceed with a mortgagee sale on 3 April 2020 “at any cost”. I expressed no view on the various claims raised by Mr Savill as to the validity of the Property Law Act 2007 (PLA) notices or whether AMFL’s mortgage gave it a security interest in the associated facilities to the property of a jetty, boatshed and mooring.

[3]    My (brief) decision noted that the application had been accompanied by the standard undertaking to damages and there was nothing to indicate that the mortgagee would suffer irremediable loss if the sale was deferred.2 I directed service on both AMFL and the real estate agent which was marketing the property and I reserved leave to those parties to “revert to the Court should further orders be necessary”.3

[4]    Given the asserted urgency of the situation, the application was not filed with a statement of claim. However, Mr Savill, in the application for interim injunction orders, represented that his substantive proceeding would be filed as soon as practicable.

[5]    That proved not to be the case. On 15 June 2020, and in response to communications from AMFL’s solicitors, I issued a minute directing service of the proceedings by Friday, 19 June 2020, and signalling that AMFL may, on 24 hours’ notice, seek an unless order from the Court if there was default by Mr Savill.

[6]    At the same time, AMFL signalled it would be making an application to vary or rescind the interim injunction and timetabling orders were made in respect of that application. The statement of claim now filed no longer pursues a claim of anticipatory breach of s 176 PLA as a consequence of attempting to sell the property under the restrictions imposed by the COVID-19 alert level 4 restrictions. That is understandable as those restrictions have now lifted. It does, however, assert:

2 At [4].

3 At [6].

(a)that AMFL cannot call up the principal amount due under the facility agreement or exercise any power to sell the mortgaged land unless valid notice is given to Mr Savill under s 118 PLA;

(b)the notice served under s 119 PLA dated 24 October 2019 is “void ab initio”;

(c)a second notice under s 119,  which AMFL  purported  to  serve  on Mr Savill on 25 March 2020, and which he “found” on 22 June 2020, is invalid and can not be relied on to exercise AMFL’s power to sell the mortgaged land;

(d)AMFL has no security over assets related to the property, being a jetty, boatshed, boat ramp and swing mooring and so cannot lawfully sell them.4

Relevant background

[7]    Mr Savill approached AMFL to borrow money to settle the purchase of a beachfront property in Kumutoto Bay in the Marlborough Sounds. The property was previously owned by his son-in-law. The property is  legally described  as  Lot  1  DP 8221, MB4D/1116, Kumutoto Bay, Queen Charlotte Sound, Marlborough, comprised in Certificate of Title MB4D/1116 (the property).

[8]    Mr Savill, together with his wife, in their capacity as trustees of the Shaw Savill Family Trust No. 2, also own the adjacent beachfront property in Kumutoto Bay (the Trust property).

[9]    Mr Savill also owns a boatshed, fixed jetty and slipway and floating jetty which are all located on the waterfront, not on the property. He holds resource consent U15110.1 which is a coastal permit permitting these structures to be erected “fronting Lot 1 DP 8221 in Kumutoto Bay”. Condition 10 of this permit states:

4      The statement of claim also refers to sale of a cottage on reserve land adjoining the property but that claim was not traversed in evidence or submissions so I put it to one side.

The land to which the approved structures relate is presently known as Lot 1 DP 8221 (the Land). This coastal permit must not be transferred to any person other than an owner of the Land. In the event that the Land is sold or otherwise transferred to a new owner, this coastal permit must within three months be transferred to a new owner of the Land, failing which the consent must be surrendered to the consent authority.

[10]   Mr Savill also owns a swing mooring (M714) located in Kumutoto Bay, pursuant to resource consent U15110.2. Resource consent U15110.2 contains a condition in the same terms as condition 10 for resource consent U15110.1, saying that the approved mooring relates to Lot 1, DP 8221, and in the event the land is sold or otherwise transferred to a new owner, the permit must be transferred to the new owner or surrendered.

[11]   I refer to these structures which are authorised by the two coastal permits, as “the water assets”.

[12]   On 20 December 2018, AMFL and Mr Savill entered into a loan facility agreement. Under it AMFL agreed to advance Mr Savill the amount of $850,000 and the term of the loan was for five months. The facility agreement granted AMFL a mortgage over the property being purchased. In applying for the loan, Mr Savill provided AMFL with a valuation of the property dated 23 November 2018. The valuation contained a property description which included the water assets. The valuation specified a market value of $1,250,000 (inclusive of GST, if any). It also recorded that the purpose of the valuation was “market value for mortgage lending”.

[13]   AMFL’s credit policy at the time was that the loan had to be no more than   80 per cent of the value of the security. Mr Justin Cunningham, the sole director of AMFL, says in his affidavit that if the water assets were not included as part of the security, he would not have approved the loan, as non-inclusion of these assets would have substantially diminished the value of the security.

[14]   However, Mr Savill points out that in responding to the letter offering him a commercial loan facility, he deleted the term of the offer which required a “Registered first charge General Security Agreement over all present and after acquired property of the Borrower”. He said this change was accepted by AMFL before it allowed the facility to be drawn upon. As the facility agreement defines “security property” and

“security document” to mean the mortgage, he asserts the loan is only secured by the property, and not by the water assets.

This application

[15]   AMFL filed this application to rescind or vary the interim injunction orders on 2 July 2020. The application is advanced on a range of grounds. These include:

(a)the interim injunction was granted on a without notice basis without a full hearing;

(b)The Court reserved leave to the parties to seek further orders from the Court;

(c)Mr Savill did not make full disclosure of all relevant information in his possession in making the application for an interim injunction and he made “a number of material misstatements” to the Court;

(d)Mr Savill’s undertaking as to damages in support of its application for the interim injunction has no substance;

(e)there is no serious question to be tried including:

(i)notice is not required to be served under s 118 of the PLA;

(ii)the notices served under s 119 PLA are valid;

(f)Mr Savill has not suffered any prejudice;

(g)Mr Savill no longer claims AMFL has breached its statutory or the common law duties of care of a mortgagee;

(h)AMFL has not marketed or sold any assets not subject to its security interest; and

(i)New Zealand is no longer in the COVID alert level 4 lockdown and so the alleged prejudice relied upon by Mr Savill in obtaining the interim injunction no longer exists.

[16]   In summary AMFL says that the balance of convenience favours rescission of the interim injunction or, in the alternative, the interim injunction should not have been granted on such broad terms and should be varied.

Jurisdiction to bring the application

[17]   The application was brought under rr 7.49 and 7.51 of the High Court Rules 2016 and under the High Court’s inherent jurisdiction.

[18]   Rule 7.49 provides that the Court may rescind an order or decision if it is shown to be wrong, or it subsequently emerges that the order is predicated on a misstatement or was made in the context of a material non-disclosure.5 Rule 7.51 provides that a judge may rescind any order that has been fraudulently or improperly obtained.

[19]   However, as Ms Hammer’s submissions identified, the Court also has an inherent jurisdiction to modify or revoke procedural orders, at any time before a substantive judgment determines the parties’ rights and in circumstances where those orders have become unjust.6 This includes to vary or rescind interlocutory injunction orders in the light of changing circumstances as justice requires.7 In my view, it was implicit in the purpose of the interim injunction order I made that the Court would be able to reconsider the appropriateness of it once AMFL had been served and the COVID-19 level 4 lockdown restrictions lifted.

[20]   Given I anticipated reviewing the interim injunction in those circumstances, I do not need to decide whether the grounds for rescinding the order under either r 7.49 or r 7.51 exist. That said, I consider there were important documents in the chain of correspondence between the parties that were omitted. I also consider Mr Savill

5      Jeffreys v Morgenstern [2014] NZHC 2847 at [40].

6      Ryde Holdings Ltd v Sorenson (1995) 8 PRNZ 339 (HC).

7      Foodtown Supermarkets Ltd v TSE (1987) 2 PRNZ 545 (HC); Sealegs International Ltd v Zhang

[2017] NZHC 741 at [8].

overstated the situation when he said that AMFL intended to proceed with a mortgagee sale during the lockdown “at any cost”. While AMFL had not discounted that possibility, it had also said it was taking advice on that issue, and I do not consider it was accurate to suggest it was committed to that course of action.

[21]   Those observations aside, AMFL did not disavow the possibility that it would sell the property during lockdown and nothing in the material subsequently filed suggests it was inappropriate to restrain AMFL from doing that during that period.

[22]   However, I now come to consider whether the interim injunction orders should continue given the matters now relied on the statement of claim.

The Court’s approach to interim injunction applications

[23]   The Court’s approach to interim injunctions is well settled, and whether the application is to grant an interim injunction, or to sustain it in the face of an application to rescind it, AMFL must first establish there is a serious question to be tried. That is, that his or her claim is not vexatious or frivolous. Second, the balance of convenience must be considered. This requires consideration of the impact on the parties of granting or refusing to make the order sought. Finally, an assessment of the overall justice of the position is required.8

[24]   In considering the second and third questions, the issue is whether refusing the interim injunction would be harder on an applicant who succeeds at trial, than granting it would be on an ultimately successful defendant.9 That involves the Court enquiring into the adequacy of damages as an alternative remedy, whether the status quo should be preserved, whether there are disadvantages to either party which cannot be compensated, and the relative strength of the party’s cases.10

8      New Zealand Tax Refunds Ltd v Brooks Homes Ltd [2013] NZCA 90, (2013) 13 TCLR 531 at [12]; American Cyanamid Co v Ethicon Ltd [1975] AC 396 (HL); Eng Mee Yong v Letchumanan [1980] AC 331 (PC).

9      Roman Catholic Bishop of the Diocese of Auckland v Boynton [2018] NZHC 2636 at [14].

10 Wellington International Airport Ltd v Air New Zealand Ltd HC Wellington CIV-2007-485-1756, 30 July 2008 at [6]-[14].

Is there a serious question to be tried?

Was AMFL required to serve Mr Savill with notice under s 118(2)(a) PLA?

[25]   Mr Savill argues that between 20 December 2018 and the term of AMFL’s mortgage expiring on 20 May 2019, he paid interest on the principal amount secured by the mortgage. Then, after the term of the mortgage expired, and for a period not shorter than three months, he made further payments to AMFL which were applied towards interest and penalty interest on the principal amount secured by the mortgage. He says he has also observed all covenants under the mortgage, except the covenant to repay the principal amount secured by the mortgage. As a result, s 118(2) PLA applies and AMFL has not served Mr Savill with a notice under that section.

[26]Section 118 PLA provides:

118Mortgagee accepting interest after expiry of term not to call up without notice

(1)This section applies if—

(a)the term of a mortgage over property, or any period for which the term has been renewed or extended, has expired; and

(b)the principal amount secured by the mortgage has not been repaid; and

(c)the mortgagee has, after the date of expiry, accepted interest on the principal amount (except by entering into possession of the property or appointing a receiver) for a period not shorter than 3 months after that date; and

(d)the mortgagor has observed all covenants under the mortgage instrument except the covenant to repay the principal amount on the due date.

(2)The mortgagee must not call up as payable the principal amount unless—

(a)the mortgagee has served on the current mortgagor a notice of the intention to do so at the expiry of the period specified in the notice; and

(b)that period has expired.

(3)The period specified in the notice under subsection (2) must not be shorter than 60 working days after the date of service of the notice.

(4)A notice under subsection (2) may be given in the same document as a notice under section 119 or 128.

[27]   As Ms Hammer submits, s 118 is intended to be used where a mortgage has expired and the principal amount has not been repaid, but the mortgagor continues to pay interest and has observed all other covenants under the mortgage except the covenant to repay the principal amount on the due date. It specifies a much longer notice period of 60 working days as compared with a notice served under s 119, where only 20 working days notice is required.

[28]   The key purpose of s 118 is to prevent mortgagors who have been “lulled into a sense of security” from being called upon without further notice.11 In this case, she submits that AMFL was  not required to issue  a  s 118  notice as  the  evidence of  Mr Cunningham, AMFL’s director, shows that Mr Savill had failed to observe numerous obligations under the mortgage including:

(a)failing  to  make  interest  payments   on   time   and   at   all   after   26 August 2019;

(b)failing to make payments of default interest;

(c)failing to pay the lender’s fee and the account maintenance fee;

(d)failing to comply with financial reporting obligations and provision of a statement of position when requested;

(e)failing to pay rates for the property;

(f)entering into a further agreement to a mortgage secured by the property without the consent of AMFL; and

(g)attempting to transfer the water assets subject to the mortgage.

11     Savill v Damesh Holdings Ltd [2004] 2 NZLR 289 (CA) at [23].

[29]   While Mr Savill disputes some of these allegations, including whether an attempt to transfer the water assets was a breach (discussed further below), it is clear that he is in breach of the requirement to make interest payments, and default interest payments since August 2019. Accordingly, there is no requirement on AMFL to issue a notice under s 118 PLA.

[30]   This does not constitute an arguable claim which would justify sustaining the injunction.

Can AMFL rely on either of the notices served under ss 119 and 120 PLA?

[31]   AMFL  served  Mr  Savill  with  notice  under  ss  119  and  120  PLA  on   24 October 2019 (the first PLA notice). The criticism raised of the first PLA notice (should I find a s 118 notice need not be served) is that it did not provide a 20 working day notice period as required by s 120 PLA as it did not take into account the statutory holiday of Canterbury Anniversary Day.

[32]   Mr Savill also considers it does not accurately record the interest due, nor does it correctly record the charges payable. However, nothing was raised in evidence or submissions to support this limb of the claim and I do not consider it further.

[33]   On 25 March 2020 (and on the same day the interim injunction was applied for) AMFL says it served a second PLA notice on Mr Savill in circumstances which are disputed (the second PLA notice). Mr Cunningham says he effected service because Mr Savill was in the house, but did not open the door when he heard        Mr Cunningham say he was there to serve papers. Instead, Mr Savill looked out the window as Mr Cunningham waved the papers at him and said he would slide them under the  garage  door. A subsequent attempt was made by a process server Mr Verdi van Beek to serve Mr Savill that evening but he refused to come to the door saying he was going into lockdown early. The documents were also emailed to Mr Savill that evening. Mr Savill says, however, that he only found the documents on 22 June 2020 when he lifted an  appliance  in  the  garage  in  the  company of  Mr van Beek and found the papers underneath it.

[34]   It is not disputed that the first PLA notice did not provide a 20 working day notice period because it omitted to take account of Canterbury Anniversary Day. However, Ms Hammer characterises this as “a mere clerical error or technical irregularity”. She points out that the Court has previously held that such a clerical error in a notice does not invalidate it if a reasonable recipient would have understood the error.12 She also refers to the observation of Cooke P in BNZ Finance Ltd v Smith and Leuchars, where he noted:13

As I see it, the cardinal points are, first, that the protective provisions of the Property Law Act should be applied reasonably generously and not whittled down, so as to ensure that persons having a misfortune to face major liabilities should have adequate notice of the claims against them. Secondly, that creditors who have Complied with the spirit of the legislation regarding notice should not be defeated by technical defences when it is plain that liability has accrued.

[35]   Given the technical nature of the error and the lack of prejudice to Mr Savill she says the first PLA notice can be relied on by AMFL.

[36]   I accept there is a clear error in the first PLA notice as it only gives 19 working days notice to remedy the defect, not 20 and the PLA specifically requires there to be a period “being not shorter than 20 working days after the date of service, or any longer period …”.14

[37]   It is arguable, however, that this differs from the kind of clerical or technical error that does not invalidate the notice. In Byers v Harts Contributory Mortgages Nominee Co, the clerical error was that notices served on 28 January 2000 mistakenly required the recipient to remedy the defaults by 2 March 1999, the date mistakenly referred to the previous year.15 The Court held in those circumstances “the reference to 1999 was obviously an error”16 and there was no prejudice to the recipient. However, here, there is a non-compliance with an express statutory requirement and the PLA does not provide an equivalent provision to s 92(1A) of the Property Law Act 1952 which expressly provides that a variation from the prescribed form of notice will

12     Bryers v Harts Contributory Mortgages Nominee Co [2002] 3 NZLR 343 (CA) at [15].

13     BNZ Finance Ltd v Smith and Leuchars (1991) 3 NZLR 659 (CA) at 669 and 670.

14     Property Law Act 2007, s 120(1)(c).

15     Bryers v Harts Contributory Mortgages Nominee Co, above n 12.

16 At [15].

not be void unless “the variation materially prejudices the interests of the mortgagor”. In Davies & Co Solicitors Nominee Co Ltd v Yelcich, the court’s finding that a two day error in the time for compliance did not render the notice void relied on the provisions of s 92(1A), but these are no longer in force.17 Although Mr Savill can not show any prejudice arising from the defect I can not dismiss it as unarguable.

[38]   In respect of service of the second PLA notice, there is dispute over whether the notice was served as required under s 360 PLA. That section requires service to be effected as follows:

(a)it is handed to, and accepted by, that person; or

(b)if that person does not accept it when it is handed to him or her, it is put down in that person’s presence and brought to his or her attention; or

(c)it is otherwise received in writing by that person.

[39]   Mr Cunningham brought the second PLA notice to Mr Savill’s townhouse. He knocked on the door and Mr Savill acknowledges he answered. However, Mr Savill did not come outside once he realised it was Mr Cunningham at the door. There is a factual dispute over whether Mr Savill was then peering from the front window of his townhouse at Mr Cunningham. Mr Cunningham says Mr Savill was, although the video footage taken by Mr Cunningham’s brother does not actually show the window in question. Mr Cunningham then tells Mr Savill that he is sliding the documents under the garage door and proceeds to  do so.  He also  emailed the documents  to  Mr Savill’s email address the same day, saying “Hi Simon. Copy of the covering letter and Property law act notice served at 105 pm today, at 483a Madras street”.

[40]   To  the extent  I have a  video recording of the  purported service,  I prefer  Mr Cunningham’s version of what took place over Mr Savill’s. I think it highly likely that Mr Savill heard and then saw Mr Cunningham holding the documents and that he was made aware that they were being placed just under the garage door. It is also strongly arguable that the notice was “otherwise received in writing by that person”, as required by s 360(c)  PLA.   It was clearly sent to Mr Savill’s email address on   25 March 2020 and Mr Savill does not deny receiving the notice by email that day.

17     Davies & Co Solicitors Nominee Co Ltd v Yelcich [2013] NZHC 1344, (2013) 14 NZCPR 585.

[41]   Thus, while I make no final finding on this issue, I consider it highly likely that service has been effected in all the circumstances. Mr Savill’s claims that he has not been validly served are arguable, but not promising.

Can AMFL sell the water assets?

[42]   Mr Ballantyne’s primary argument, however, for sustaining the injunction was that the water assets comprise unencumbered items of Mr Savill’s property. This is confirmed by s 18 Marine and Coastal Area (Takutai Moana) Act 2011 which specifies that such structures are to be “regarded as personal property” and not as land or as an interest in land. Furthermore, s 18(4) provides that:

A person is presumed, unless the contrary is shown, to own a structure to which this section applies if the person holds a resource consent for the occupation of the part of the common marine and coastal area in which the structure is located.

[43]   Mr Ballantyne argues that these assets are not affixed to the land and so are not subject to the mortgage and he did not grant a charge over the water assets or the consents that authorise them, so they can not be sold by AMFL.

[44]   Mr Savill also gives evidence that the water assets have historically been used by his wider family and the adjoining land owners (i.e. his family trust) and he says they “will not be transferred to any prospective purchaser without my written agreement”. He says that he and the trustees are proposing to proceed with the legal work required to formalise the historic use. In other words, he intends approaching the Marlborough District Council to amend the conditions of the relevant coastal permits to attach the consents to both the property and the Trust property and he says the water assets can not be sold in the interim.

[45]   AMFL, on the other hand, claims that the water assets are secured by the mortgage and it is entitled to sell them with the property. The reasons given are as follows:

(a)When Mr Savill applied for the loan, he represented to AMFL in a valuation and sale and purchase agreement that the mortgage would

include   the  water  assets.     This representation was repeated in December 2019 when he provided AMFL with an updated valuation.

(b)Clause 4 of the mortgage secures all “land” and “land proceeds”. “Land proceeds” is defined to include “any resource consent issued in respect of the land”.

(c)The resource consents run with the land and can only be transferred to an owner of the land, as provided for in condition 10 of resource consent U15110.1 and U15110.12.

[46]   Ms Hammer submits that the absence of a general security agreement is of no consequence in light of the above. The consents for the water assets must be resource consents “in respect of the land” which are secured by the mortgage given the express terms on which each is granted and given Mr Savill’s representation that he was offering them as part of the security for the borrowing.

[47]   AMFL therefore submits that Mr Savill’s claims in relation to the water assets are vexatious and frivolous and are no more than an attempt to delay the mortgagee sale.

[48]   Again, while I make no firm finding, I see little prospect of Mr Savill succeeding in his claim that the water assets were not offered as part of the security. The coastal permits authorising them are directly connected to the property and can only be held by the property owner. It is difficult to see how they are not resource consents “in respect of the land” in all the circumstances. Mr Savill cannot claim ownership which is separate and distinct from the ownership rights that arise as a consequence of holding the consents ownership of the structures is denied from the fact of holding the resource consents. If the consents must be transferred to the new property owner he has no independent property rights in the water assets. If he does not transfer the consents, they lapse and the water assets must be removed.

Conclusions

[49]   Accordingly, I have found that Mr Savill has some arguable, but distinctively unpromising claims.

Where does the balance of convenience lie?

[50]   The starting point when considering the balance of convenience is that AMFL has a clear entitlement to recover the outstanding sums owed to it. Mr Savill has not paid any of the principal, which was due for repayment in May 2019, nor has he paid any interest since November 2019. There is no evidence whatsoever to suggest that Mr Savill has an ability to pay the outstanding principal and interest. In those circumstances, as Ms Hammer submitted, it is in neither party’s interest to maintain the injunction as interest and penalty interest will continue to accrue waning each parties’ position. Furthermore, the second mortgagee has issued a PLA notice and it is inevitable the property will be sold.

[51]   In candid recognition of these circumstances, Mr Ballantyne’s arguments on the balance of convenience focused on the water assets. In his submission, it was arguable that they were not secured by the mortgage and so AMFL had no right to sell them. The prejudice to Mr Savill if they were sold was that, in his capacity as trustee, and owner of the adjacent property, he would lose the use of the water assets. That would then result in fresh litigation against AMFL and its agents by Mr Savill and the trustees. That, in Mr Savill’s submission, was not a matter which could be compensated by damages.

[52]   In response, Ms Hammer pointed out that the trust property had its own structures authorised under a separate permit, resource consent U080086. This permit authorised installation of a swing mooring, a boatshed, a boat ramp and a floating jetty on the foreshore and in the water in front of the Trust property. Furthermore, the terms on which the permit for the water assets was granted included that the public could “pass across and lawfully use the jetty and external access routes without charge”. There was no suggestion therefore, that the owners of the Trust property could not access the jetty if they so wished. In these circumstances, there was nothing to suggest they would be prejudiced in a way that could not be compensated by damages if in

fact they had some property right in the water assets. In any event, given the terms of the consent, there could be no expectation that Mr Savill in his capacity as trustee could “regularise” the asserted historical use in the way he proposes.

[53]   In my view, the balance of convenience clearly favours AMFL on this issue. It has a strong argument that it is entitled to sell the water assets. While the impact on the property’s value has not been quantified, there would be a clear reduction in value if the water assets could not be sold along with the property, and that would potentially be to AMFL’s detriment (and to Mr Savill’s detriment) if the debt was not able to be repaid in full through the sale of the property without the water assets.

[54]   Mr Savill in his capacity as a trustee of the adjacent property, continues to have access to its own swing mooring, boathouse, boat ramp and jetty. He can also access the jetty associated with the property as a member of the public. It would be difficult to see how he could claim a diminution in value for the loss of a right which has not yet even been created, but which he hopes to prospectively create. If in fact he can establish the loss of some advantage to the Trust property, I have no doubt that would be compensated in damages.

[55]   When I consider the issue of damages, I note that Mr Savill’s undertaking as to damages was said to rely on the equity he had in the property. Given his inability to repay the $850,000 loan plus interest, and the fact that a second mortgagee has issued a PLA notice, I am sceptical as to whether that undertaking has any substance. No information was provided at the hearing to assuage my concerns on that front.

[56]   Accordingly, by a large margin, I am satisfied that the balance of convenience favours AMFL.

[57]   Standing back and looking at the overall interests of justice, I consider that, too, favours AMFL.

[58]   Accordingly, for these reasons, I made orders at the hearing rescinding the interim injunction orders made on 25 March 2020 and AMFL is no longer restrained from selling the property and the water assets.

[59]Costs are reserved.

[60]   If costs cannot be agreed, I reserve leave to file submissions on costs. Unless the party seeking costs files submissions within 20 working days of the date of this decision (or such extension as is granted by the Court), costs will lie where they fall. If submissions are filed, the other party has 10 working days in which to file its submissions on costs. I will then determine costs on the papers unless I need to hear from counsel.

Solicitors:

Canterbury Legal, Christchurch Anderson Lloyd, Queenstown

Copy to:
D J Ballantyne, Barrister, Christchurch