Edwards v Inthayung

[2024] NZHC 286

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-208

[2024] NZHC 286

BETWEEN

HELEN MARIE EDWARDS and MARK

GRAEME KIRKLAND as Trustees of the DW Corrick Trust
Applicants

AND

MALIWAN INTHAYUNG

Respondent

Hearing:	23 February 2024 (by telephone)
Counsel:	P J Napier for Applicants G J Warren for Respondent
Judgment:	23 February 2024

JUDGMENT OF BREWER J

Solicitors/Counsel:

K3 Legal Ltd (Auckland) for Applicants Gary Warren (Auckland) for Respondent

EDWARDS and KIRKLAND as Trustees of the DW Corrick Trust v INTHAYUNG [2024] NZHC 286 [23 February 2024]

[1]        I have before me, as Duty Judge, urgent applications for orders necessary to permit the vendors of a residential property to complete an agreement for sale and purchase to which it is subject.

[2]        The case came before O’Gorman J on 31 January 2024. At that time the applicants, trustees of the DW Corrick Trust, made urgent application to grant limited access to the property for a purchaser to conduct a standard non-invasive building inspection.

[3]        The applicants are the registered proprietors of the property. The title is subject to a notice of claim pursuant to s 42(2) of the Property (Relationships) Act 1976. The notice of claim was filed by the respondent and was registered prior to the applicants being the registered proprietors.

[4]        There is a history as to how the applicants became the registered proprietors, but I do not need to go into it.

[5]        The respondent is a beneficiary of the DW Corrick Trust and currently resides in the property but does not pay any rental or contribute towards any of the costs associated with the property.

[6]        A further and significant factor is that the property is subject to a mortgage in favour of the Bank of New Zealand which secures a debt in excess of $2.4m. Property Law Act notices were issued in respect of loan amounts secured by the mortgage. Those notices expired without remedy on 22 May 2023. Since then the debt to the Bank of New Zealand has been increasing.

[7]The sale price on the now unconditional agreement for sale and purchase is

$2,940,000. Justice O’Gorman made orders permitting the purchaser to inspect the property. That order was given due effect and the agreement for sale and purchase became unconditional on 9 February 2024. The settlement date is 28 February 2024.

[8]        The urgent application before me is for removal of the notice of claim, an order that the respondent vacate the property by 5 pm on 25 February 2024 and for an

associated order that the respondent remove all her personal belongings by that date and time.

[9]        Mr Warren for the respondent submits that the notice of claim could be removed so long as the net proceeds of sale are deposited in his law firm’s trust account until the claim has been adjudicated. Mr Warren says that his client is agreeable to vacating the property but requires more time.

[10]      I have told counsel that the registry received an email this morning directly from the respondent. In it the respondent says she will withdraw the notice of claim so long as the surplus funds are forwarded to her lawyers’ trust account and that she be permitted to vacate the property on 24 March 2024. The respondent says in her email that she was not consulted at any stage as to when she could move her children and belongings out of the property.

[11]      My view is that given the financial circumstances, the application for orders is irresistible. If vacant possession is not given on the contractual date of 28 February 2024 then the applicants will be in breach and not only will penalty interest start to run (adding to the accumulating interest debt to the Bank of New Zealand) but the purchaser will be able to trigger the contract cancellation provisions. It is not overstating it to say that this would be a financial disaster for all concerned.

[12]      I am conscious of the position of the respondent. However, she should long ago have made provision to vacate the property. The sale process has been ongoing for a long time and, although the contract was made unconditional only on 9 February 2024, a prudent person in the respondent’s position would have made at least contingent arrangements. I am, however, prepared to extend the period for her to vacate the premises to the settlement date of 28 February 2024.

[13]      I note that if the respondent does not move out, and as a result the applicant is in breach of contract, then the ongoing financial consequences might well fall on the respondent.

[14]      As to the notice of claim, it seems to me that the prudent course is to preserve the respondent’s interest by directing that the surplus funds be held in the trust account of the applicants’ lawyers pending further order of the court. I expect that there will be legitimate claims by other creditors which will need to be paid out; but I cannot think of an omnibus order I can make now which would allow legitimate third party creditors to be paid without prejudicing the respondent’s position.

[15]      I grant the application. I make the orders set out in the interlocutory application dated 21 February 2024, with the following amendments:

(a)The order specified at para 1(c) will read as follows:

That the respondent vacate the property by 12 noon on Wednesday, 28 February 2024

And:

(b)The order specified at para 1(d) will read as follows:

That the respondent remove all of her personal belongings from the property by 12 noon on Wednesday, 28 February 2024

[16]      Finally, I note that the memorandum of counsel does not mention the first order specified in the interlocutory application. That order is that access be provided for a pre-settlement inspection to take place ahead of the settlement date. The opportunity to make a pre-settlement inspection is a standard provision of an agreement for sale and purchase of residential land. I therefore include it in the orders I have just made.

[17]The applicant does not seek costs and accordingly costs will lie where they fall.

[18]      For the avoidance of doubt, as discussed at [14], the nett proceeds of sale are to be held in the trust account of the applicants’ lawyers pending further order of the Court.

Brewer J