Hannon v Senior Trust Capital Ltd - [2023] NZHC 16

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2022-404-002442

[2023] NZHC 16

BETWEEN
CATHERINE PHYLLIS HANNON

First Applicant

CATHERINE PHYLLIS HANNON and TOMPKINS WAKE TRUSTEES 2019 LIMITED
Second Applicant

AND

SENIOR TRUST CAPITAL LIMITED

Respondent

Hearing: 16 January 2023

Appearances:

B J Burt for the Applicants

M J Tingey & C Morrison for the Respondent

Judgment:

19 January 2023

JUDGMENT OF TAHANA J

(Application for Interim Injunction)

This judgment was delivered by me on 19 January 2023 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
James Burt, Barrister, Auckland Murray Tingey, Barrister, Auckland
Couch Harlowe Kovacevich, Auckland TWA Legal, Auckland

HANNON v SENIOR TRUST CAPITAL LIMITED (Application for interim injunction) [2023] NZHC 16 [19 January 2023]

Introduction

[1] The applicants (Ms Catherine Hannon in her personal capacity and as trustee of the Catherine Hannon Investment Trust (Investment Trust), and Tompkins Wake Trustees 2019 Limited as trustee of the Investment Trust) seek an interim injunction to prevent a mortgagee sale of a unit at Kelliher Drive, Roy’s Bay, Wānaka (Unit R4). The application is opposed by the mortgagee, Senior Trust Capital Limited (Senior Trust).

[2] Unit R4 is part of a larger development at Roy’s Bay, Wānaka that was to be developed by Roy’s Bay Estate Limited (RBEL). Ms Hannon and Mr Anthony Hannon indirectly held 50 per cent of the shares in RBEL. Ms Hannon was also director of RBEL from 9 August 2016 to 12 April 2022.

[3]On 17 July 2020 Ms Hannon entered into a limited guarantee and indemnity of

$900,000 in favour of Senior Trust to guarantee lending to RBEL (Guarantee). Ms Hannon also entered into a mortgage over Unit R4 in favour of Senior Trust with a priority sum of $900,000.

[4] On 25 August 2021 Mr and Ms Hannon borrowed $150,000 from Senior Trust to pay RBEL creditors and this loan was also secured by the mortgage over Unit R4 (the Hannon Loan).

[5]The Hannon Loan remains outstanding. As at 30 September 2022, RBEL owed

$6,664,135.28 to Senior Trust. Ms Hannon understands that this amount has since been reduced to approximately $3,000,000.

[6] In June 2022 Senior Trust issued notices under the Property Law Act 2007 (PLA) demanding payment under the Hannon Loan and the Guarantee. While Ms Hannon put Unit R4 on the market, it was subsequently withdrawn in November 2022 and Senior Trust then marketed it for mortgagee sale by auction on 20 January 2023.

[7]The applicants allege five courses of action against Senior Trust:

(a)breach of contract for failing to repay the Hannon Loan from the proceeds of sale of another property (Unit R1) owned by RBEL;

(b)misrepresentation and breach of s 9 of the Fair Trading Act 1986 (Fair Trading Act) arising from alleged representations by Senior Trust that it would use the sale proceeds from Unit R1 to repay the Hannon Loan;

(c)breach of Senior Trust’s duty under s 176 of the…

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: [2023] NZHC 16
Decision Date: 19 January 2023

CaseChat Overview and Summary

The applicants, Ms Catherine Hannon in her personal capacity and as trustee of the Catherine Hannon Investment Trust (Investment Trust), and Tompkins Wake Trustees 2019 Limited as trustee of the Investment Trust, sought an interim injunction to prevent the mortgagee sale of Unit R4 at Kelliher Drive, Roy’s Bay, Wānaka. The application was opposed by Senior Trust Capital Limited (Senior Trust). The applicants alleged five courses of action against Senior Trust: breach of contract, misrepresentation and breach of the Fair Trading Act 1986, breach of s 176 of the Property Law Act 2007, duress, and dishonestly assisting Ms Hannon in an alleged breach of trust and/or breach of fiduciary obligations. The application for an interim injunction was to be determined by considering: whether there is a serious question to be tried; whether the balance of convenience favours the granting of an injunction; and whether the overall interests of justice favour granting the interim injunction. Tāhuna J considered each of the applicants’ claims in turn and found that there was not a serious question to be tried in relation to any of the courses of action. In addition, the balance of convenience favoured Senior Trust and the overall interests of justice did not favour granting the interim injunction. The application for interim relief was dismissed. No order as to costs was made.

Orders