Gatfield v Harte

[2025] NZHC 2015

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2025-435-000005

[2025] NZHC 2015

UNDER

s 339 of the Property Law Act 2007

IN THE MATTER OF

An order for division of property pursuant to s 339 of the Property Law Act 2007 in respect of 69 Costley Street, Carterton being the property contained in record of title WN58C/156

BETWEEN

GRACE LORRAINE GATFIELD

Plaintiff

AND

THOMAS DAVID STEPHEN HARTE

Defendant

Hearing:	(On the papers)
Counsel:	S E Barnes and C R T Wilson for Applicant No appearance for Defendant
Judgment:	21 July 2025

JUDGMENT OF LA HOOD J

(Application for urgent interim orders)

An urgent application for sale of a property

Procedural background

[1]    This case was originally scheduled for a call in the Associate Judge’s Chambers List on 15 July 2025, but was removed from that list and referred to me as Duty Judge on 14 July 2025, as the applicant seeks urgent interim orders for sale of a property at 69 Costley Street, Carterton (the property) under s 339 of the Property Law Act 2007 (the Act).

GATFIELD v HARTE [2025] NZHC 2015 [21 July 2025]

[2]    I directed that an urgent telephone conference be arranged to consider the application. A teleconference was scheduled for 12.00 pm on 16 July 2025. As the defendant is self-represented and has filed a statement of defence (by email on 14 May 2025), the Registry gave the defendant notice of the teleconference by email, and made attempts to speak to him via a mobile phone number provided to the Registry by counsel for the plaintiff (but he did not answer). That mobile phone number was called at the time of the teleconference, but the defendant did not answer the call. I was satisfied that the defendant had been given notice of the teleconference and had decided not to participate. I was therefore comfortable to proceed in his absence.

[3]    During the teleconference, I raised with counsel for the plaintiff, Ms Barnes, issues that I considered it would be helpful for her to address in a further memorandum. I received her further memorandum on the afternoon of 16 July 2025. I raised further issues for Ms Barnes to address in a minute issued on the morning of 17 July 2025 and I received her response on the morning of 18 July 2025.

Factual background

[4]    The plaintiff and defendant were in a de facto relationship for approximately 14 years and purchased the property together in July 2018. They have one child together, a daughter born in 2013. Their relationship ended and the plaintiff moved out of the property in August 2022. The defendant remained living in the property and continues to do so. The plaintiff has been unable to make payments towards the mortgage, held by the Bank of New Zealand (BNZ), or rates or insurance, due to her financial circumstances. It does not appear to be in dispute that there are significant loan and rates arrears, and that the property is currently uninsured in breach of obligations under the mortgage.

[5]    The plaintiff submits that the situation is urgent because BNZ is taking steps to enforce the mortgage. On 16 July 2025, the BNZ’s collection agency wrote to the parties to confirm they are instructed to serve a default notice. The plaintiff submits that a mortgagee sale process will clearly disadvantage both parties.

[6]    The statement of defence confirms, at paragraph 13, that the defendant agrees that the property can be listed for sale. He appears to agree that $450,000 is an

appropriate sale price. The plaintiff notes that the registered valuation obtained by the plaintiff and produced as an exhibit to her affidavit affirmed on 28 May 2025, is a market value of $475,000.

[7]    The plaintiff submits that, as the statement of defence did not address the orders sought for the defendant to vacate the property and authorising the Registrar of the High Court to execute sale documents on the defendant’s behalf, it can be inferred that there is no opposition.

[8]    The statement of defence contains further conditions on which the defendant agrees to the sale of the property. Most of these relate to how the sale proceeds should be divided between the parties. The exception is a condition that if the property cannot be sold for more than $450,000, the defendant’s offer to buy the property for $400,000 should be accepted. The plaintiff submits that this should not be made a condition of the sale in the absence of evidence or submissions from the defendant to support it, given it would be a sale below market value. The defendant has been served with memoranda of counsel dated 28 May 2025 and 30 June 2025 setting out the urgent orders sought. He has been given the opportunity to file a response and be heard, but he has chosen not to engage with the process. In these circumstances, I agree that it should not be a condition of the sale that the property be sold to the defendant for

$400,000 if a sale price of $450,000 cannot be achieved.

[9]The urgent orders sought by the plaintiff are as follows:

(a)That the property at 69 Costley Street, Carterton, being the land in Record of Title WN58C/156 (“the property”) be listed for sale with an agent of the plaintiff’s choosing on terms acceptable to the plaintiff.

(b)That the Registrar is authorised to sign the listing agreement on the defendant’s behalf.

(c)That the defendant must vacate the property within one (1) calendar month of the date of the sale order.

(d)That the Registrar is authorised to sign on behalf of the defendant as vendor any Agreement for Sale and Purchase of the property signed by the plaintiff as vendor provided that the sale price is no less than

$450,000.

(e)That the Registrar is authorised to sign on behalf of the defendant:

(i)an Authority and Instruction to transfer the title of the property to the purchaser pursuant to an unconditional Agreement for Sale and Purchase;

(ii)a land transfer tax statement for the purpose of effecting the sale.

(f)The proceeds of sale from any unconditional Agreement for Sale and Purchase be applied as follows:

(i)To BNZ, the balance required to discharge the mortgage.

(ii)To Carterton District Council for rates owing.

(iii)Real estate agent commission.

(iv)Legal fees and disbursements for the sale of the property on behalf of the vendors.

(v)The balance to be held on interest bearing deposit in the solicitor’s client trust account of WCM Legal Limited pending agreement in writing as between the parties or further order of the Court.

Decision

[10]   I am satisfied it is appropriate to make the urgent order for sale of the property under s 339(1)(a) of the Property Law Act 2007 given the defendant agrees that the property can be sold.

[11]   In terms of s 341(3) of the Act, I dispense with the requirement for service on the BNZ as I have been provided with correspondence confirming that it has been provided with a copy of the proceedings and does not wish to be heard as an interested party.

[12]   Section 342 of the Act contains mandatory considerations I must have regard to in deciding whether a sale order under s 339 is appropriate. The important consideration in this case is the hardship that will be caused to the plaintiff, and indeed the defendant, if the property is not sold. The mortgage and rates arrears will continue to accrue, and a mortgagee sale process will clearly not be in the parties’ best interests.

[13]   I consider the other orders sought by the plaintiff are necessary to give proper effect to the sale order under s 339.1 The fixing of a reserve price of $450,000 is appropriate having regard to the valuation obtained of $475,000.2

[14]   The orders sought authorising the Registrar to execute the documents to complete the sale are required given the defendant’s lack of meaningful engagement with the process.3 Of course, it would be preferable if the defendant signs the documents himself, but if he is unwilling or unable to do so, it is appropriate that the Registrar is authorised to sign on his behalf. I therefore make those orders subject to the Registrar being satisfied that the defendant is unable or unwilling to sign the documents.

[15]   The orders sought directing the payment of the BNZ mortgage, rates, and real estate and legal fees and disbursements are clearly appropriate.4 Likewise, it is

1      Property Law Act 2007, ss 339(4) and 343.

2      Section 343(b).

3      Section 343(g); Holland v Holland [2017] NZHC 1037 at [26]; and Thomas v Thomas [2016] NZHC 1117 at [14];

4      Section 343(c) and (d).

appropriate that the remaining proceeds of sale are held in the plaintiff’s solicitor’s trust account pending agreement as to the division of those proceeds or further order of the Court.5 Finally, the order for the defendant’s vacation of the property is necessary for the sale to be completed.6

[16] I therefore make orders sought in the terms set out at [9] above, except that the orders at (b), (d), and (e), should read “If the Registrar is satisfied that the defendant is unable or unwilling to do so, the Registrar is authorised to sign on behalf of the defendant…”.

Outstanding issues

[17]The following issues remain to be determined:

(a)The distribution of net sale proceeds (noting that the defendant and plaintiff appear to agree that equal sharing is appropriate).

(b)The quantum of occupation rent payable by the defendant (noting the defendant concedes occupation rent is payable but there is a dispute about the period of time to which this applies).

(c)The plaintiff’s application for indemnity costs.

[18]   At the teleconference, I raised with Ms Barnes whether there is a dispute about the appropriate division of the proceeds of the sale of the property, and if so, whether this should be determined by the Family Court under the Property (Relationships) Act 1976. The plaintiff’s position is that the Court can make final orders for division of the proceeds of sale under s 339 if the parties can reach agreement, or if the defendant fails to appear at any further hearing.

[19]   At this stage, I consider the appropriate course is to have the matter called again at a teleconference before me to allow the sale to take place and to see if agreement can be reached on division of the proceeds and costs.

5      Section 343(d).

6      Section 343(g); Holland v Holland, above n 3.

[20]   I direct that the Registry liaise with the parties to set an appropriate date for the teleconference. I note that if the defendant continues to not engage with the Registry, the date should be set solely by reference to Ms Barnes.

La Hood J

Solicitors:

WCM Legal, Carterton for Applicant