ASB Bank Ltd v Robertson - [2012] NZHC 1587

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-0910 [2012] NZHC 1587

BETWEEN ASB BANK LIMITED Plaintiff

ANDROSS ARTHUR ROBERTSON First Defendant

ANDCANDACE ANN ROBERTSON Second Defendant

Hearing: 5 July 2012

Appearances: N Moffatt for Plaintiff
First and Second Defendants in Person

In attendance: MB Lawes

Judgment: 5 July 2012

ORAL JUDGMENT OF TOOGOOD J

N Moffatt, Bell Bully, Auckland: nick.moffatt@bellgully.com
R Robertson, Auckland: ross@flyingtoyz.com
LawesLaw, Orewa: murray.l@xtra.co.nz

ASB BANK LIMITED V ROBERTSON & ANOR HC AK CIV-2012-404-0910 [5 July 2012]

[1] The defendants owe the plaintiff, ASB Bank Limited (“the Bank”) just under

$2 million. They are in serious default in the payment of amounts due under two loan agreements with the Bank, which were secured by a first ranking mortgage over the defendants’ property at 710 Hibiscus Coast Highway, Hatfields Beach, Auckland (Certificate of Title NA139C/382) (“the property”).

[2] The memorandum of mortgage securing the advances provides, among other things, the right of the Bank as mortgagee to take possession of the property and sell it in the event of such default. The Bank now seeks to exercise that right in order to recover as much as it can of the outstanding debt. It has applied for summary judgment on the basis that the defendants have no defence to its claim.

[3] I record that, at the commencement of the hearing, Mr Lawes of counsel announced his attendance for the limited purpose of providing informal assistance to the defendants, who are unrepresented. Mr Lawes had been asked by the defendants to assist them but no grant of legal aid has been made. Mr Lawes was present throughout the hearing; he addressed me briefly and helpfully on some matters and both of the defendants addressed me in person.

[4] The defendants claim that the Bank and its agents have failed to take all reasonable steps to obtain the best price obtainable for the property. Their case to this effect is contained in affidavits which I admitted into evidence, despite opposition from the Bank on the grounds of delay and, in some respects, hearsay. They say that the Bank has breached its duty of care under s 176 of the Property Law Act 2007 (“the Act”) and they seek an order restraining the Bank from taking possession, on the basis that the prospects of obtaining a fair price for the property would be enhanced if they were able to remain in possession themselves until an orderly sale is completed.

[5] The defendants do not dispute the terms of the loan agreements and the mortgage. It is not denied that:

(a) they entered into the loan agreements and were advanced the sums of

$1,450,000 and $62,000 respectively under them;

(b)they granted the mortgage to the Bank on the terms set out in the memorandum of mortgage, which included the Bank’s right to take possession of the property under the security on the mortgage becoming enforceable;

(c) their account with the Bank was overdrawn by $115,406.40 on or about 24 November…

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.

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Details

Case: [2012] NZHC 1587
Decision Date: 5 July 2012

CaseChat Overview and Summary

ASB Bank Limited sought summary judgment against Ross Arthur Robertson and Candace Ann Robertson, who owed the bank approximately $2 million. The bank held a first-ranking mortgage over the Robertsons’ property at 710 Hibiscus Coast Highway, Hatfields Beach, Auckland. The Robertsons defaulted on their loan agreements, and the bank sought to exercise its right to take possession and sell the property. The Robertsons opposed the application, claiming the bank failed to obtain the best price for the property, in breach of the duty of care under section 176 of the Property Law Act 2007. The Robertsons sought an order to prevent the bank from taking possession, arguing that their continued possession would enhance the prospects of obtaining a fair price for the property.

The court had to determine whether the Robertsons had a defence to the bank’s claim for summary judgment. The key legal issue was whether the Robertsons could rely on the bank’s alleged breach of its duty of care under section 176 of the Property Law Act 2007 as a defence to the bank’s claim. The court had to consider whether the Robertsons’ allegations of the bank’s failure to obtain the best price for the property could be assessed before the property was sold, or whether such assessment could only be made after the sale. If the latter, the Robertsons’ claim could not be a defence to the bank’s claim for summary judgment.

The court held that the Robertsons’ claim of breach of the bank’s duty of care under section 176 of the Property Law Act 2007 could not be a defence to the bank’s claim for summary judgment. The court held that compliance with the duty of care could not be measured until the property was actually sold, and damages could only be awarded if the property was sold at a price lower than the best price reasonably obtainable. Since the Robertsons’ claim of breach of the bank’s duty of care could not be assessed before the sale, it could not be a defence to the bank’s claim for summary judgment. The court found that there was no arguable defence to the bank’s claim, and granted summary judgment in favour of the bank.

The court ordered that the Robertsons pay the bank the sum of $1,941,678, plus interest and costs. The court also ordered that the Robertsons vacate and deliver up possession of the property to the bank by 5:00 pm on Thursday, 19 July 2012. The Robertsons were granted two weeks to vacate the property.

Orders