ASAP Finance Limited v Jung HC Auckland CIV 2008-404-2087

[2008] NZHC 2278

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2008-404-2087

UNDER  Land Transfer Act 1952

IN THE MATTER OF     an application to remove caveat no.

7531622.1 pursuant to s143 of the Land
Transfer Act 1952

BETWEEN  ASAP FINANCE LIMITED Plaintiff

ANDMYUNG SUN JUNG Defendant

Hearing:         24 April 2008

Appearances: E C Gellert for Applicant

No Appearance of Respondent

Judgment:      28 April 2008 at 3.30pm

JUDGMENT OF ASSOCIATE JUDGE ROBINSON

This judgment was delivered by me on 28 April 2008 at 3.30 pm pursuant to Rule 540(4) of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:           Simpson Grierson, Private Bag 92518 Wellesley Street, Auckland

ASAP FINANCE LIMITED V MYUNG SUN JUNG HC AK CIV 2008-404-2087  28 April 2008

[1]      The applicant ASAP Finance Ltd applies for an order under s 143 Land Transfer Act   1952 for the removal of a  caveat. There is no opposition to  the application.

[2]      The property affected by the caveat is contained in two titles. The registered proprietor  of  the  property  is  Godzone  Holdings  Ltd.  ASAP  Finance  claims  an interest in the property under mortgage 727148.7  registered against the title to both properties on 12 March 2007.

[3]      The respondent Myung Sun Jung claims an interest in the property as cestui que trust which he claims arises out of his interest as purchaser under an agreement for sale and purchase of the properties with the registered proprietor Godzone Holdings. Mr Jung’s caveat was registered on 6 September 2007 some six months after the registration of the mortgage in favour of ASAP Finance.

[4]      ASAP Finance claim that Godzone Holdings is in default of its obligations under the mortgage. Consequently ASAP Finance caused a notice under the Property Law Act to be served on Godzone Holdings on 29 January 2008. In that notice, it was pointed out that Godzone Holdings was in default in that it had failed to pay the principle sum due for payment on 15 November 2007 amounting to $2,238,513.96. In addition interest and fees now payable by Godzone Holdings Ltd resulted in a balance of $2,367,907.58 being due and payable in January 2008.

[5]      According to ASAP Finance the amount owing under the mortgage including interest and costs as at 11 April 2008 amounts to $2,542,570.18.

[6]      Because of Godzone Holdings default under the mortgage and exercise of the power of sale, ASAP Finance has entered into an unconditional sale and purchase agreement for the sale of the property for a purchase price of $2,550,000 plus GST. Settlement of that sale is scheduled to take place on 29 April 2008.

[7]      ASAP Finance has requested Myung Jung to withdraw his caveat. As Myung

Jung has failed to withdraw the caveat, ASAP Finance brings this application.

[8]      In support of the application to remove the caveat, counsel for the applicant has  referred  me  to  the  decision  of  National  Mutual  Finance  1988  Limited  v Berryman   McGechan J, HC Auckland M no: 451/91, date of hearing 2 October

1991. In that case the mortgagee successfully applied for an order removing a caveat lodged by a person claiming under a long term agreement for sale and purchase. That agreement for sale and purchase followed registration of the mortgage. As the mortgagor was in default the mortgagee exercised the power of sale contained in the mortgage. It was held that the sale by the mortgagee in those circumstances defeated the right of the caveator to an interest in the property and accordingly an order was made removing the caveat.

[9]      In the circumstances of this case, I am satisfied that the interest of ASAP Finance as mortgagee and the purchasers of the property following the exercise of ASAP’s power of sale must take precedence over the interest of Myung Jung. Consequently there  will  be  an  order  removing the  caveat  no  7531622.1  lodged against certificates of title 73172 and 73173 (South Auckland Registry).

[10]     As the applicant has been successful and as the costs of these proceedings could have been avoided had the caveator  signed a withdrawal of the caveat, it is only appropriate that Myung Jung pay a reasonable contribution to ASAP’s costs. In the  circumstances  I  direct  that  ASAP  be  entitled  to  costs  on  a  2B  basis  with

disbursements as fixed by the registrar.

Associate Judge Robinson