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AMFL Ltd v Savill

AMFL Ltd v Savill

Case [2020] NZHC 2112 20 August 2020

Mortgagee Sale

Notice Requirements

Admissibility of Evidence

Balance of Convenience

Interlocutory Orders

Property Law

Civil Litigation & Procedure

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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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading AMFL Ltd v Savill

Details

AGLC: AMFL Ltd v Savill [2020] NZHC 2112
Case: [2020] NZHC 2112
Decision Date: 20 August 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Dunningham J heard an application by AMFL Ltd to rescind or vary an interim injunction made on 25 March 2020, which restrained AMFL from selling a property owned by Mr Simon Savill. The interim injunction was made without notice due to the urgency created by the impending COVID-19 alert level 4 lockdown restrictions. The interim injunction was made in light of the representation that AMFL intended to proceed with the sale "at any cost". The court did not express a view on the validity of the Property Law Act 2007 notices or whether AMFL's mortgage gave it a security interest in the associated facilities to the property of a jetty, boatshed, and mooring.

AMFL filed this application to rescind or vary the interim injunction orders on 2 July 2020. The application was advanced on various grounds, including that the interim injunction was granted on a without notice basis without a full hearing, Mr Savill did not make full disclosure of all relevant information, and there is no serious question to be tried. In summary, AMFL argued 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.

The court found that while Mr Savill had some arguable, but unpromising claims, the balance of convenience clearly favoured AMFL. AMFL has a clear entitlement to recover the outstanding sums owed to it, and it is in neither party's interest to maintain the injunction as interest and penalty interest will continue to accrue. Furthermore, the second mortgagee has issued a PLA notice, and it is inevitable the property will be sold. The court also found that AMFL is entitled to sell the water assets as they are secured by the mortgage. 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 if the debt was not able to be repaid in full through the sale of the property without the water assets.

Accordingly, the court made orders rescinding the interim injunction orders made on 25 March 2020 and AMFL is no longer restrained from selling the property and the water assets. Costs are reserved.

Orders