ASB Bank Limited v Clark

[2023] NZHC 3301

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2706

[2023] NZHC 3301

BETWEEN

ASB BANK LIMITED

Applicant

AND

MATTHEW WILLIAM CLARK

First Respondent

ANDREW YUNG-TAI STODDARD

Second Respondent

Hearing:	On the papers
Counsel:	S C D A Gollin and S V Pike for Applicant
Judgment:	21 November 2023

JUDGMENT OF O’GORMAN J

This judgment was delivered by me on 21 November 2023 at 11 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Minter Ellison Rudd Watts, Auckland

ASB BANK LIMITED v CLARK [2023] NZHC 3301 [21 November 2023]

[1]The applicant, ASB Bank Ltd (ASB) applies for orders:

(a)dispensing with the personal service of any notice of default pursuant to ss 119, 121 and 122 of the Property Law Act 2007 (PLA Notices) on the respondents, Matthew William Clark and Andrew Yung-Tai Stoddard; and

(b)that service of the PLA Notices be affected in the manner described below.

[2]                 The  respondents  are  the  registered  proprietors  of  the  property   at   2J/160 Symonds  Street,  Eden  Terrace,  Auckland  (Secured  Property).  The Secured Property is an apartment complex that is administered by Boutique Body Corporates Ltd. On 12 October 2006, Mr Clark and Mr Stoddard granted ASB a first registered mortgage over the Secured Property, to secure loans provided to them by ASB under a term loan agreement dated 2 October 2006. The loan agreement was guaranteed by Mr Clark’s parents, Bryan Douglas Clark and Sandra Maud Clark in their capacities as trustees of the B & S Clark Family Trust.  The guarantee is dated  4 October 2006.

[3]                 The loans were restructured in or around 31 August 2007. Bryan Clark replaced  Mr  Stoddard  as  borrower  pursuant  to  a  term  loan  agreement  dated  31 August 2007. That second loan agreement was guaranteed by Mr Clark’s parents in their capacities as trustees of the B & S Family Trust. It was also guaranteed by Mr Stoddard. Mr Stoddard remained as a registered proprietor of the Secured Property.

[4]                 Following defaults under the loan agreement, on 10 October 2023, solicitors for the applicant issued notices of default pursuant to s 119 of the Property Law Act (Section 119 Notices) for service on Mr Clark and Mr Stoddard as mortgagors and registered proprietors of the secured property.

[5]                 Under s 120 of the Property Law Act, copies of the Section 119 Notices are also required to be provided to all covenantors, being the trustees and Mr Stoddard as guarantors, and Bryan Clark in his capacity as co-borrower under the loan agreement dated 31 August 2007. Section 121 of the Property Law Act 2007 requires that a notice under that section also be served on all covenantors.

[6]                 ASB have an email address on file for contacting Mr Clark and Mr Stoddard, and an address in Hong Kong at which ASB understood Mr Clark and Mr Stoddard resided.

[7]                 On or about 28 August 2023, solicitors for ASB emailed Mr Clark at that email address, asking whether he would accept service of the PLA Notices by email, or alternatively would appoint a third party to accept service on his behalf. There was no response to that email.

[8]                 On 28 August 2023 and on 31 August 2023, the solicitors for ASB tried to make contact with Mr Clark at a different email address.   Mr Clark responded on   31 August 2023 confirming that this second email address was correct. The same day, the solicitors for ASB forwarded a copy of the initial correspondence and requested a response. On 6 September 2023, Mr Clark responded asking what was required. On 11 September 2023, the solicitors for ASB responded to that email attaching  the PLA Notices and requesting that he acknowledge receipt. Mr Clark has not responded to that email.

[9]                 A similar process has  been  followed  for  getting  in  email  contact  with  Mr Stoddard. Two email addresses have been tried for Mr Stoddard. There has been no reply to those communications, other than an automatic response which indicates that the second email address was no longer active.

[10]             On or about 9 October 2023, ASB’s solicitors instructed service agents to attempt personal service of the PLA Notices on Mr Clark and Mr Stoddard at the Hong Kong address. Those attempts were unsuccessful.

[11]             On 9 October, ASB’s solicitors instructed service agents to attempt service on Mr Clark or Mr Stoddard at an address that ASB  understands is the residence of   Mr Clark’s brother, Daniel Clark. The service agent conducted an internet search and identified that the property is being sold. The real estate agent confirmed that neither of the respondents reside at that address.

[12]             Notices under ss 119 and 122 of the Property Law Act must be served in accordance with ss 353 and 359 of the Property Law Act. However, under s 357 an order may be made dispensing with or directing another  manner  of  service.  Section 357 provides as follows:

357     Orders dispensing with, or directing manner of, service

(1)In any case referred to in sections 353 to 355,—

(a)a court may, on an application for the purpose, make an order—

(i)    dispensing with service; or

(ii)     directing that a notice, cross-notice, or other document is to be given or served in a manner other than that provided for in any of those sections or in any instrument; and

(b)if the court makes an order under paragraph (a)(ii), the notice, cross-notice, or other document is adequately given or served if it is given or served in accordance with the order.

(2)This section overrides sections 353 to 355 and all other provisions of this Act, and applies despite anything to the contrary in—

(a)any other enactment; or

(b)any instrument or agreement.

[13]             I am satisfied that reasonable attempts have been made to achieve personal service on Matthew Clark and Andrew Stoddard. ASB has attempted several different methods to contact them, and has not managed to confirm where they reside, nor achieve personal service satisfying the requirements of ss 353 and 359 of the Property Law Act. In those circumstances, I accept that it is appropriate that an order be made dispensing with personal service and directing alternative means of service which will likely bring the notice to their attention.

[14]             ASB proposes that the following steps be taken to bring the PLA Notices to the attention of the respondents:

(a)Serving a copy of the PLA Notices on the first respondent’s parents at their address at 174 Tern Point, Wellsford, and either leaving it with an adult occupant (along with a letter of instruction) or affixing it together with the sealed order on the outside door (with a letter of instruction);

(b)emailing a copy of the PLA Notices to the specified email addresses for Mr Clark and Mr Stoddard;

(c)publishing one advertisement in the public notices section  of  the New Zealand Herald; and

(d)forwarding a copy of the PLA Notices to the email address of the Body Corporate administrators of Body Corporate 180450 located at 160 Symonds Street, Eden Terrace, Auckland.

[15]             I am satisfied that it is appropriate to make orders in terms of paras [1(a)–(d)] and [1(f)] of the originating application, subject to the insertion of the following words at the beginning of para [1(d)]: “if there is no change in circumstance disclosing a more appropriate method of personal service or communication”. I make those orders accordingly. Leave is reserved for any further directions that may be required.

O’Gorman J