Body Corporate 509194 v Donald

[2025] NZHC 628

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-717

[2025] NZHC 628

BETWEEN

BODY CORPORATE 509194

Applicant

AND

DIANNA JANE DONALD

Respondent

Hearing:	24 March 2025
Counsel:	M M Gray and J A Higby for Applicant
Judgment:	24 March 2025

JUDGMENT OF MANDER J

[1]                 The applicant, Body Corporate 509194 (the Body Corporate), has applied for a charging order over land on a without notice basis against the respondent, Dianna Donald.1 The Body Corporate seeks to proceed without notice on the basis that providing notice would cause undue delay or prejudice to it and that the interests of justice require the application to be determined without serving notice on Ms Donald.

Background

[2]                 The Body Corporate has applied for a final charging order over Ms Donald’s property situated at 273 Worcester Street, City Centre, Christchurch 8011 (the property), after having obtained summary judgment against Ms Donald in the Christchurch District Court on 24 September 2024.2 Judgment was entered for the Body Corporate for the sums of:

1      The application is made in reliance on High Court Rules 2016, subpart 5, rr 17.40, 17.42, 17.45 and 17.47

2      Body Corporate 509194 v Donald [2024] NZDC 23347.

BODY CORPORATE 509194 v DONALD [2025] NZHC 628 [24 March 2025]

(a)$34,663.91, being the principal of a term deposit held by the defendant on trust for the plaintiff (“Term Deposit 2”);

(b)any interest received on the principal of Term Deposit 2 at its maturity;

(c)interest under s 10 of the Interest on Money Claims Act 2016 from the maturity date of Term Deposit 2, being 12 September 2023, to the date of judgment, totalling $2,165.99;

(d)interest under s 10 of the Interest on Money Claims Act from the date of judgment, until payment; and

(e)costs and disbursements in the amount of $5,627.00.

[3]A sealed order for summary judgment was made on 2 October 2024.

[4]                 Ms Donald attended the summary judgment hearing and accepted she owed the debt to the Body Corporate. She advised the District Court that it was her intention to pay the judgment debt to the Body Corporate from then proceeds of the sale of the property.

[5]                 The District Court judgment was sent to Ms Donald’s then solicitors by the Body Corporate’s solicitors. However, neither Ms Donald nor her lawyer have made contact with the Body Corporate since the entry of summary judgment. As at the date of filing these proceedings there has been no communication from Ms Donald. The property is presently being advertised on the open market for sale. I note the Body Corporate, at the time of the hearing before the District Court, raised a similar concern regarding the lack of communication from Ms Donald.

[6]                 The Body Corporate successfully applied, on 10 December 2024, for the summary judgment to be moved to this Court and that judgment was sealed in this Court on 23 December 2024.

The application

[7]                 Ms Donald owns the land at Worcester Street as a joint tenant with a third party, a Mr Kim Williams (Mr Williams). Notwithstanding his interest in the property, the Body Corporate submits its application for a charging order is appropriate in the circumstances.   It is submitted by counsel, on behalf of the Body Corporate, that   Ms Donald has listed the property for sale without communication and has failed to engage either with it or its solicitors, regarding payment of the judgment debt since placing the property on the market. The Body Corporate’s concern is that, despite  Ms Donald’s stated intention and the sale of the property, there is a risk the judgment debt may remain unpaid in the absence of a charging order being made.

[8]                 Insofar as Mr Williams’ interest is concerned, counsel submits it is appropriate to proceed on a without notice basis notwithstanding the rules making provision for a third party such as Mr Williams to attend Court and to state the nature and detail of their interest.3 It is the Body Corporate’s position that, despite Mr Williams’ interest, should he be provided with an opportunity to be heard prior to the charging order being made, this could prejudice the Body Corporate’s ability to recover the judgment debt from Ms Donald in the event the property is sold without such an order in place. It was submitted on behalf of the Body Corporate  that no prejudice  would occur to  Mr Williams. In that regard, it is noted there is a caveat in favour of Heartland Bank Ltd registered on the title which will be required to be dealt with prior to any sale and that he will be entitled to attend Court without leave to set aside or vary the charging order after being served with it as an interested third party.4

Decision

[9]                 I am satisfied that is appropriate to grant a charging order over the property and to  do so on a without  notice basis.  I have come to  that conclusion because   Ms Donald has clearly represented that the judgment debt will be met by the sale of the property and that steps have been taken to sell the property. Notwithstanding the Body Corporate’s interest in the proceeds of any sale, neither Ms Donald, nor her representatives, have contacted the Body Corporate to inform them of these steps or

3      High Court Rules, r 17.45.

4      Rule 17.45(3)(b).

arrangements for the payment of the judgment debt upon sale of the property. The Body Corporate is entitled to secure its judgment debt against the asset that has been identified as the source of funds to pay the outstanding sums once realised. Presently, the Body Corporate is simply in the hands of Ms Donald and, in the absence of any communication from her, I consider there are good grounds for the making of a charging order in respect of the property.

[10]              Similar considerations apply in relation to the without notice nature of the application. Obviously, no issue arises as to Ms Donald’s liability to meet the debt but there is a concern that, in the absence of a charging order, the proceeds of the sale may be diverted and not used to meet the debt. Moreover, Ms Donald would be under no enforceable obligation as matters presently stand to do so, hence the need for the charging order and the concern that, if notice is given and the making of the order delayed, the property will be able to be sold on an unencumbered basis, at least so far as the Body Corporate is concerned. The interest of Mr Williams has been noted, however, in the circumstances, I am satisfied his position can be adequately provided for by his right to be heard and to have the charging order removed or varied. Counsel for the Body Corporate referred to the approach taken by Gault J in Re Hull, ex-parte Calvert, where the applicants obtained a charging order against the respondent’s interest in a block of land, notwithstanding there being several other registered proprietors of the property.5 The third parties in that case were not given the opportunity to be heard until after the charging order was granted.6

[11]              Being satisfied the charging order is necessary to protect the Body Corporate’s interests and for it to be granted without notice to Ms Donald or Mr Williams, there will be an order in the terms sought, as set out in the draft order attached to the application. For completeness, I note the Body Corporate’s manager has affirmed that none of the circumstances set out in r 17.9(2)(c)–(e), that require leave to issue an enforcement process, apply in this case.

[12]The total amount to be charged against the property is $45,034.05.

5      Re Hull, ex-parte Calvert [2019] NZHC 154 at [5].

6      At [2] and [8].

Costs

[13] The Body Corporate is entitled to its costs and disbursements incurred in obtaining this order in the sum of $1,455 which is included in the sum stated at [12].

Solicitors:
Tavendale and Partners Centre, Christchurch