De Leon v Bank of New Zealand

[2012] NZHC 2984

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV 2012-442-462 [2012] NZHC 2984

UNDER  the Criminal Proceeds (Recovery) Act 2009

AND UNDER                 the Property Law Act 2007

IN THE MATTER OF     an application for injunction to stay sale of land pending completion of Court of Appeal proceedings

BETWEEN  CATALINA GUINTO DE LEON Applicant

ANDBANK OF NEW ZEALAND Respondent

Hearing:         On Papers

Counsel:         R Ord for Applicant

S A Barker and E Ritchie for Respondent

Judgment:      24 October 2012

JUDGMENT OF SIMON FRANCE J

[1]      Ms de Leon makes an originating application without notice for an injunction stopping the Bank of New Zealand proceeding with a mortgagee sale tomorrow.  The papers have been served on the respondent.  A telephone conference was arranged and I heard from counsel.

[2]      Ms de Leon’s partner was convicted of drug offending.  Miller J ruled that the couple’s interest in the property be subject to forfeiture.  That decision is subject to an appeal which is to be heard in February next year. The forfeiture order recognised

the Bank’s interest in the property as mortgagee.

CATALINA GUINTO DE LEON V BANK OF NEW ZEALAND HC NEL CIV 2012-442-462 [24 October

2012]

[3]      It appears that Ms de Leon has not made payments on the mortgage for more than a year.  The bank has followed the proper processes to exercise its mortgage rights and the sale is to take place tomorrow.

[4]      The applicant seeks to have the Court injunct the sale until such time as the appeal is heard.  The theory is that if the appeal is successful, “title will revert to [Ms de Leon] and she would hope to restart payments”.  Ms de Leon says she can start to make payments of $750 now.   Mr Ord refers to the inequity involved in Ms de Leon succeeding on her forfeiture but the property would be already sold.

[5]      The  application   cannot   succeed.     The   Bank   is   exercising  its   rights independent of any forfeiture issue.  Even if the appeal succeeded, there is no reason why the Bank could not exercise its rights under the mortgage.  The two matters are unconnected.  I also observe that an unsigned undertaking as to damages cannot be given weight in such circumstances.  There would at least need to be evidence that the equity in the house (itself currently forfeit to the Crown) clearly outweighed the money owing to the Bank if the property were sold.  However, it is not necessary to

consider that further since no basis exists for the Court to interfere.

Simon France J

Solicitors:

R Ord, Barrister & Solicitor, Nelson, email:  [email protected]

S A Barker, Partner, Buddle Findlay, Wellington, email:  [email protected]