Haines v Memelink - [2019] NZHC 2802

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2018-485-952

[2019] NZHC 2802

BETWEEN
QUENTIN STOBART HAINES

First Applicant

AND

BPE TRUSTEES (NO. 1) LIMITED

Second Applicant

AND

HARRY MEMELINK

First Respondent

AND

LYNX TRUSTEES LIMITED

Second Respondent

Hearing:
18 October 2019

Further submissions 21 & 22 October 2019

Appearances:

F E Geiringer for Applicant First Respondent in Person

M L Clarke-Parker for Second Respondents (excused) P R W Chisnall for Official Assignee (excused)

Judgment:

31 October 2019

JUDGMENT OF GRICE J

(Leave to discontinue and costs/lay litigant/legal expenses)

[1] On 11 March 2019 following a defended hearing I issued an interim injunction restraining the sale of Mr Haines’ home at 3/97 Honi Taipua Street, Manakau, Levin. It was owned by Mr Haines’ family trust. The trustees are the first and second applicants (the Haines’ interests). An earlier without notice interim injunction had been granted on 21 December 2018.1

1 Haines v Memelink [2018] NZHC 3460; Haines v Memelink [2018] NZHC 3373.

HAINES v MEMELINK [2019] NZHC 2802 [31 October 2019]

[2] At that stage the respondents (the Memelink interests) were intending to sell the Manakau property as mortgagees. They were the trustees of Mr Memelink’s family trust, the Link Trust (No. 1). That trust had taken an assignment of the second mortgage over the Haines property from Fico Finance and it was attempting to exercise the mortgagee’s power of sale.

[3] It is not necessary to go into the background in any detail. It is sufficient to say the personal business and professional affairs of the Memelink and Haines trusts are entwined and complicated.

[4] Mr Haines is a former lawyer. He has surrendered his practicing certificate. Mr Haines had acted as the lawyer for Mr Memelink and his family trust. Mr Memelink and his trust, had guaranteed the Fico Finance mortgage over the Haines’ property which had left them with a liability to that financier.

[5] Mr Haines had rendered an account for legal fees to Mr Memelink and the Memelink interests in excess of $1 million. This was recorded as a debt in a declaration by Mr Memelink prepared by Mr Haines as part of a plan to stave off Mr Memelink’s bankruptcy. Mr Memelink blames Mr Haines’ legal advice and the recording of the legal bill as a debt for leading to Mr Memelink’s adjudication in bankruptcy.

[6] Mr Memelink was bankrupt at the time the interim injunction was made and has since failed in his bid to have the bankruptcy overturned. He is now appealing the bankruptcy adjudication.

[7] At the time the interim injunction was made the Memelink interests were represented by counsel, Mr Manktelow.

[8] The Official Assignee has appeared at the injunction hearings, including at this hearing. She has indicated that she abides the decision of the Court and has taken no active part in the proceedings. The Official Assignee’s position was that she neither supported nor opposed the interim injunction…

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: [2019] NZHC 2802
Decision Date: 31 October 2019

CaseChat Overview and Summary

Haines v Memelink [2019] NZHC 2802 involved an application for leave to discontinue proceedings by the applicants, Quentin Stobart Haines and BPE Trustees (No. 1) Limited, against Harry Memelink and Lynx Trustees Limited. The applicants sought to discontinue proceedings that had initially been brought to seek an interim injunction to restrain the sale of a property owned by Haines’ family trust, which was being pursued by the respondents as mortgagees. The court had previously granted an interim injunction on 11 March 2019, restraining the sale of the property. Since then, the property had been sold by the first mortgagee, Basecorp Finance, to Haines, who subsequently leased it back to himself. The second mortgage held by the respondents remained unpaid, and the respondents sought to prevent the discontinuance of the proceedings.

The legal issues before the court were whether the applicants should be granted leave to discontinue the proceedings and, if so, what costs and disbursements should be awarded. The applicants argued that the proceedings should be discontinued as they were no longer relevant, while the respondents contended that the discontinuance would be unjust given the ongoing claims against Haines and the respondents’ contention that Haines had misled the court regarding the status of the Basecorp Finance mortgage. The court found that the reasons provided by the respondents for preventing the discontinuance were insufficient. The court concluded that it was not unfair or unjust to allow the applicants to discontinue the proceedings as they were already spent, and the subject matter of the proceedings had been sold. The court also determined that the respondents were entitled to costs and disbursements for the preparation of the statement of defence, and that the applicants were liable to pay the respondents’ actual and reasonable disbursements, including any legal expenses incurred by the respondents in the course of the proceedings.

Orders