Cribb v FM Custodians Limited - [2018] NZSC 90

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI

SC 49/2018
[2018] NZSC 90

BETWEEN	ROBERT HOANI CLIFFORD CRIBB AND KAREN LYNNE STEVENS Applicants
AND	FM CUSTODIANS LIMITED Respondent

Court:	Elias CJ, Glazebrook and O’Regan JJ
Counsel:	S A McKenna for Applicants N L Penman-Chambers for Respondent
Judgment:	9 October 2018

JUDGMENT OF THE COURT

A The application for leave to appeal is dismissed.

B The applicants must pay costs of $2,500 to the respondent.
____________________________________________________________________

REASONS

The applicants, Mr Cribb and Ms Stevens, were the occupiers of a property in Hamilton. SOS Investments Ltd (SOS), a company associated with Mr Cribb, was the registered proprietor. SOS had granted a mortgage over the property to secure a loan made to SOS by the respondent, FM Custodians Ltd (FM). SOS defaulted and FM initiated proceedings in the High Court seeking an order for possession of the property on 7 November 2013. The order sought by FM was made on 17 April 2014.[1] The order was upheld on appeal.[2]
[1]FM Custodians Ltd v SOS Investments Ltd [2014] NZHC 817 at [58].
[2]SOS Investments Ltd v FM Custodians Ltd [2015] NZCA 380.
After unsuccessful attempts to come to an agreed arrangement for FM to take possession of the property, FM obtained a court order instructing the sheriff of the High Court to take possession of the property and this order was executed on 9 September 2015. The sheriff required the chattels owned by the applicants that were located at the property to be removed from the property before the possession order was executed. The chattels (apart from specified chattels that were dealt with at the instruction of Mr Cribb) were packed and moved to the premises of a house moving company, and stored at those premises. They were also insured. The applicants did not arrange for the chattels to be picked up from the house moving company for nearly 18 months, and substantial costs were incurred in the packing, moving, storing and insuring of the chattels.
FM commenced the current proceedings to recover the costs of packing, moving, storing and insuring the applicants’ chattels. The applicants resisted this claim on the basis that FM had not been entitled to remove the chattels from the property when it did so. The High Court found in favour of FM.[3] The Court of Appeal dismissed the applicants’ appeal.[4]
[3]FM Custodians Ltd v Cribb [2017] NZHC 1562 (Woolford J) [HC decision].
[4]Cribb v FM Custodians Ltd [2018] NZCA 183, [2018] NZAR 1055 (Asher, Brewer and Collins JJ) [CA decision].
The applicants seek leave to appeal to this Court.
In the High Court, Woolford J found that the applicants had committed the tort of trespass to property by failing to remove their chattels from the property. As involuntary bailee, FM was entitled to arrange for removal of the chattels from the property at the instigation of the sheriff prior to the enforcement of the possession order. The actions of…

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: [2018] NZSC 90
Decision Date: 9 October 2018

CaseChat Overview and Summary

Cribb v FM Custodians Limited is a case concerning the removal and storage of personal property by a mortgagee following an order for possession of a property. The applicants, Mr Cribb and Ms Stevens, were the occupiers of a property in Hamilton, which was owned by SOS Investments Ltd, a company associated with Mr Cribb. The respondents, FM Custodians Limited, had a mortgage over the property and sought to recover costs incurred in packing, moving, storing, and insuring the applicants' chattels after they failed to remove them from the property following a possession order. The applicants argued that the respondents were not entitled to remove the chattels as they were not in possession of the property at the time.

The key legal issues in this case were whether the respondents were entitled to remove the applicants' chattels from the property before taking physical possession, and if so, whether they were entitled to recover the costs associated with the removal, storage, and insurance of the chattels. The applicants argued that the respondents were not in possession of the property at the time they removed the chattels, and therefore could not claim to be an involuntary bailee of the chattels. They also argued that the respondents could only sue for trespass if permanent damage was done to the secured property, relying on the Court of Appeal's decision in Lockwood Buildings Ltd v Trust Bank Canterbury Ltd.

The Court found that the respondents were entitled to remove the chattels from the property as they had been granted a possession order and were therefore in possession of the property under section 139(1)(c) of the Property Law Act 2007. The Court also found that the respondents were entitled to recover the costs associated with the removal, storage, and insurance of the chattels as they were acting as involuntary bailees of the chattels due to the applicants' failure to remove them from the property. The Court rejected the applicants' argument that the respondents could only sue for trespass if permanent damage was done to the secured property, stating that this was not supported by the terms of the Property Law Act or the Court of Appeal's decision in Lockwood.

The Supreme Court dismissed the applicants' application for leave to appeal, finding that their arguments did not have sufficient prospects of success. The Court awarded costs of $2,500 to the respondents.

Orders