Harnish v Bruce

[2014] NZHC 310

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2012-404-006723 [2014] NZHC 310

BETWEEN  OWEN CECIL ERIC HARNISH Plaintiff

ANDROBERT IAN BRUCE Defendant

Hearing:                   27 February 2014

Appearances:           W Endean for the Plaintiff

A Gilchrist for the Defendant

Judgment:                27 February 2014

JUDGMENT (No. 2) OF GILBERT J

This judgment is delivered by me on 27 February 2014 at 10.30am pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

HARNISH v BRUCE (No. 2) [2014] NZHC 310 [27 February 2014]

[1]      In a judgment delivered yesterday I declined Mr Bruce’s application for a temporary  stay  of  enforcement  of  two  judgments  obtained  against  him  by Mr Harnish.1   Mr Gilchrist made an oral application this morning for relief pending appeal against my judgment to the Court of Appeal.   I declined that application. These are my brief reasons for doing so.

[2]      The debt  owed  by Mr  Bruce to  Mr  Harnish  has  been  outstanding  since September 2009.   Mr Harnish obtained summary judgment for the outstanding principal in February 2013 and a separate judgment for interest and costs in July

2013.  Numerous proposals for payment have not come to fruition because Mr Bruce has been unable to raise the funds necessary to meet these judgments which together total $1,665,785 plus interest.

[3]      On 6 December 2013 Mr Harnish’s solicitor notified Mr Bruce’s counsel that Mr Harnish had run out of patience and he had been instructed to enforce the judgments in respect of charging orders had already been obtained.   Mr Harnish obtained a sale order in January 2014.   The Sheriff of this Court has arranged to auction Mr Bruce’s principal asset, being his 50 per cent shareholding in a company that owns a property at Whitford.  The auction is scheduled to take place at 10am today.

[4]      The  ANZ  Bank  is  owed  approximately  $8,700,000  secured  against  this property.  This loan is in default and the bank is in the process of selling the property pursuant to its powers as first mortgagee. Tenders are due to close on 10 April 2014.

[5]      Mr Bruce sought a stay of enforcement of the judgments until 10 April 2014 to allow him additional time to attempt to raise funds to pay Mr Harnish.  Mr Greer, an experienced banking and finance consultant, has been trying to assist Mr Bruce to achieve this since May 2013, so far without success.   Mr Greer could say no more than that he “hoped” to be able to secure the necessary funding by 10 April 2014.

[6]      I declined to stay enforcement of the judgments, mainly because there is a real risk that Mr Harnish will be prejudiced by any stay.   If the mortgagee sale

1      Harnish v Bruce [2014] NZHC 302.

process is completed before he can enforce his judgments, he may receive nothing or face a shortfall.  I took the view that he should not be required to accept that risk and should be permitted to continue with the current enforcement process which is near completion.

[7]      I accept that Mr Bruce’s appeal rights against my judgment may be rendered nugatory unless some relief is given.  I also accept that he intends to appeal against the  judgment  and  that  his  appeal  is  bona  fide.    However,  the  problem  is  that Mr Bruce delayed until the eve of the auction to bring his application for stay of enforcement.  He must accept the consequences of this delay.  Mr Gilchrist accepts that any appeal is unlikely to be heard and determined by the Court of Appeal prior to  10 April  2014  when  tenders  close  in  the  mortgagee  sale  process.    There  is therefore now no prospect of preserving both parties’ positions pending an appeal.  If I grant relief and stop the auction from proceeding this morning, Mr Bruce will effectively obtain the stay of enforcement I declined yesterday.  This would expose Mr Harnish to the risk of loss if the mortgagee sale process is completed before he can enforce the judgments.

[8]      In these circumstances, and balancing the interests of the parties as best I can, I decline to grant interim relief pending any appeal.  The application is accordingly

dismissed.

M A Gilbert  J