Haines v Memelink

[2018] NZHC 3373

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2018-485-962

[2018] NZHC 3373

IN THE MATTER OF

Mortgage 10757448.4

BETWEEN

QUENTIN STOBART HAINES

First Applicant

AND

BPE TRUSTEES (NO 1) LIMITED

Second Applicant

AND

HARRY MEMELINK

Respondent

AND

LYNX TRUSTEES LIMITED

Second Respondent

Hearing:	On the papers
Counsel:	C Robertson for Applicants
Judgment:	19 December 2018

JUDGMENT OF GRICE J

(Application for without notice interlocutory application for injunction)

[1]    Mr Haines and BPE Trustees (No 1) Ltd own a property registered on the Record of Title Identifier 435936 (Wellington Land Registration District).

[2]    Mr Haines says he and BPE Trustees (No 1) Ltd own the property as trustees of a family trust. He says the property is a life style property located at 3\97 Honi Taipua Street, Manakau, Levin which he lives in.

[3]    The property has two mortgages registered against it, the first to Basecorp Finance Ltd and the second to Fico Finance Ltd. Both were registered on 1 May 2017, the same date as the transfer to Mr Haines and BPE Trustees (No 1) Ltd. The title also

QUENTIN STOBART HAINES v BPE TRUSTEES (NO 1) LIMITED [2018] NZHC 3373 [19 December 2018]

shows a caveat by Johang Ltd registered on 1 August 2018. Mr Haines does not refer to that caveat in his affidavit in support.

[4]    Mr Haines first borrowed money from Fico Finance Ltd in late 2016 when he borrowed $75,000. He said his former client, Mr Memelink, and his trust, Link No 1 Trust, acted as guarantors of that loan. The second loan with Fico Finance Ltd was for $250,000. This was when the mortgage was registered. Other properties also secure this mortgage. Mr Haines says a further loan was obtained in February 2017 from Bright Enterprises Ltd for approximately $250,000 and this was guaranteed by Mr Memelink and his trust.

[5]    Mr Memelink subsequently used the second Fico loan to purchase a boat known as the Katherine Johnston. Mr Haines also says that he lent Mr Memelink

$93,425.59 so Mr Memelink could pay his body corporate levies and make his mortgage payments to first mortgage trust, the mortgagee on another property.

[6]    Subsequently Mr Haines, who had been acting as Mr Memelink’s lawyer in various pieces of litigation, pleaded guilty to a number of charges under the Prostitution Reform Act 2003. Mr Haines says he ceased practicing as a lawyer on 23 August 2018.

[7]    Before he ceased practicing, Mr Haines had undertaken substantial amounts of litigation and legal work for Mr Memelink. He says Mr Memelink was a very active litigant. He says Mr Memelink owes substantial legal fees (the first claim for unpaid legal fees for $1.15 million and the second is for $93,425.59). Mr Memelink presently denies those fees are owing and has made complaints to the Law Society relating to Mr Haines’ failing to ensure Mr Memelink had independent advice on various loans. That matter is yet to be resolved.

[8]    Subsequently, Mr Memelink was adjudicated bankrupt. He has filed an application for annulment of the bankruptcy. Mr Memelink has apparently provided, together with the trustees of his trust the Link No 1 Trust,1 undertakings to the Court

1      Lynx Trustees Ltd (the second respondent) is said to be a trustee with the first respondent of the Link No 1 Trust.

not to deal with the assets of the Link No 1 Trust without the express written permission  of  the   Official   Assignee.   Mr Haines   has   made   claims   against Mr Memelink’s bankrupt estate and lodged them with the Official Assignee.

[9]    The issue that arises, and the basis for the without notice application for interim injunction, is that Mr Memelink has apparently now purchased and taken assignment of the Fico Finance Ltd loan and mortgage. Mr Haines is unable to provide any details in relation to the loans, balances or alleged transfer, because he says that Fico Finance Ltd will not respond to his queries. He says he is unable to determine the quantum of any residuary liability that he and his family trust may have to Fico Finance Ltd.    Mr Haines says the transfer has been lodged but does not yet appear on the title.

[10]   Mr Haines says Mr Memelink has contacted his probation officer and the Ministry of Justice saying that he is the new owner of the property and is going to remove Mr Haines from the property at 3\97 Honi Taipua Street, Manakau. Mr Haines has written to the Official Assignee setting out his issues. He said to the Official Assignee he feels very vulnerable by  the  constant  threats  and  harassment  from Mr Memelink. It appears the without notice application for injunction has been precipitated by the uncertainty that he considers surrounds Mr Memelink’s status and that of his trust and the mortgage.

[11]   Mr Haines sought the assistance of the Official Assignee to obtain undertakings from Mr Memelink and his co-trustee that they would not take any steps to enforce the relevant mortgage or realise the security of his trust property until his claims against Mr Memelink had been resolved, and there is determination as to the quantum of the loan, the status of Mr Memelink’s Link No 1 Trust2 and the appeal/annulment application of Mr Memelink’s bankruptcy.

These proceedings

[12]   Mr Haines has filed a draft statement of claim which seeks relief by way of a final injunction on the basis the respondents have failed provide any accounting or reconciliation information as to the Fico Loans as required under the Property Law

2      Whether it was an alter ego of Mr Memelink.

Act 2007 and the Fico loan agreement. Further causes of action are based on failure to account and a claim that the Link Trust is an alter ego of Mr Memelink. Mr Haines seeks an offset of the obligations between Mr Haines and BPE Trustees (No 1) Ltd on the one hand and Mr Memelink and Lynx Trustees Ltd on the other.

Determination

[13]   There was no memorandum filed in support of the without notice interlocutory application for an injunction. Nevertheless, the principles relating to interlocutory without notice applications are well known. To decide whether an application should proceed without notice, I must be satisfied that:3

(a)      requiring the applicant to proceed on notice would cause undue delay or prejudice to the applicant; or

(b)the application affects only the applicant; or

(c)the application relates to a routine matter; or

(d)       an enactment expressly permits the application to be made without serving notice of the application; or

(e)      the interests of justice require the application to be determined without serving notice of the application.

[14]   The material before me does not indicate the matter has the required degree of urgency. Mr Haines indicated in his supporting affidavit that he heard second hand of Mr Memelink’s intentions. Mr Memelink is at present an undischarged bankrupt. He has limited ability to realise the property given his assets are administered by the Official Assignee. In addition, Mr Haines understands Mr Memelink has given undertakings to the Court that neither he nor Link No 1 Trust will deal with the assets of the Link No 1 Trust without the Official Assignee’s permission.

[15]   I am not satisfied that there is the required information before me upon which I could decide this matter without notice.

[16]   I direct the proceedings (together with the required notices and this judgment) be served on the mortgagees, caveator, Official Assignee and respondents, together

3      High Court Rules 2016, r 7.46(3).

with any other parties having an interest in the property. The matter will then proceed on an on notice basis in the usual manner. The Registrar will allocate the date for the matter to be called in the new year.

Grice J

Solicitors:
Brittens Lawyers, Palmerston North