Hart v ANZ National Bank Ltd
[2012] NZHC 2839
•29 October 2012
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2012-404-002583 [2012] NZHC 2839
BETWEEN BARRY JOHN HART
First Plaintiff/First Counterclaim Defendant
AND WOODHILL STUD LIMITED
Second Plaintiff/Second Counterclaim
Defendant
ANDWOODHILL HOLDINGS LIMITED Third Plaintiff/Third Counterclaim Defendant
ANDMALORY CORPORATION LIMITED Fourth Plaintiff/Fourth Counterclaim Defendant
ANDANZ NATIONAL BANK LIMITED Defendant/Counterclaim Plaintiff
Hearing: 15 October 2012
Appearances: B J Hart, first plaintiff/first counterclaim defendant in person M J Porner for second, third and fourth plaintiffs/counterclaim defendants
L A O'Gorman/A L Williams for defendant/counterclaim plaintiff
Judgment: 29 October 2012
JUDGMENT OF ASSOCIATE JUDGE ABBOTT
This judgment was delivered by me on 29 October 2012 at 3.45pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors:
Date……………
L A O’Gorman/A L Williams, Buddle Findlay, PO Box 1433, Auckland 1140
Counsel:
M J Porner Barrister, PO Box 47016, Ponsonby, Auckland 1044
Also to:
B J Hart, 1331 State Highway 16, Waimauku, Auckland, New Zealand
BARRY JOHN HART V ANZ NATIONAL BANK LIMITED HC AK CIV 2012-404-002583 [29 October 2012]
[1] This proceeding arises out of loans made by the defendant bank (ANZ National Bank Limited (ANZ)) to the first plaintiff, Mr B J Hart, and the fourth plaintiff, Malory Corporation Limited (Malory). The loans to Malory were guaranteed by Mr Hart and by the second and third plaintiffs. All loans were secured by “all obligations” mortgages over properties owned by the plaintiffs or Mr Hart’s family members.
[2] The total of the loans was substantial (collectively in excess of $30 million), as were the land holdings provided by Mr Hart and the related parties (10 titles together comprising a little over 970 hectares of rural land).
[3] The loans fell into arrears. After undertaking a lengthy review of the loans and the securities, ANZ made demand for arrears on fixed term loans that had not become due, and for repayment of loans that were either due for payment or were repayable on demand. The parties entered into a “stand still” arrangement to allow the plaintiffs a six month period in which to attempt to sell the security properties. Sales had not been effected by the end of that period and ANZ commenced steps to sell as mortgagee. This led to the issue of the present proceeding.
[4] This proceeding commenced with an application by the plaintiffs for an interim injunction to prevent the mortgagee sales. The plaintiffs withdrew both the initial application, and a second one brought on expanded grounds, at the hearing of those applications and before they were substantively determined. ANZ has since entered into agreements for the sale of seven of the eight security properties and, after obtaining court orders for the removal of caveats over the titles, has settled the sale of those properties. The plaintiffs have recently amended their claim to one for damages.
[5] Following the dismissal of the first application for an interim injunction, ANZ filed a statement of defence and counterclaimed for the debt due to it under the loan agreements. At the same time it applied for summary judgment (or strike out) of the plaintiffs’ claims, and for summary judgment on its counter-claims for the loan
debt and for vacant possession of one of the security properties (the property where
Mr Hart resides). This is the application now before the Court.
[6] The plaintiffs oppose all applications. They say they have an arguable defence that ANZ breached its statutory duty of care1 in relation to the mortgagee sale process (resulting in the sale prices achieved by ANZ’s tender process falling substantially short of the current market value of the properties), and breached another statutory duty2 by failing to allow Mr Hart to redeem the mortgage over the property where he lives. The plaintiffs say that they have an arguable claim for damages3 which cannot be determined by summary judgment, and that this also gives them an arguable defence to ANZ’s counter-claim.
[7] Mr Hart initially opposed the application for vacant possession4 also on the grounds that the claim was statute barred5 and on the grounds that that property was subject to an equitable lease and residential tenancy, but did not pursue those grounds in the hearing.
[8] When the plaintiffs’ initial application for injunction was dismissed, the Court made an order for costs against them. ANZ issued a bankruptcy notice against Mr Hart requiring payment of those costs. Mr Hart has applied to set aside that notice contending that his claim against ANZ affords him an equitable set off. It is common ground that that application will fail if the Court finds that Mr Hart does not have an arguable defence to the summary judgment application.
Legal principles for summary judgment
[9] ANZ’s applications are brought under r 12.2 of the High Court Rules, which permits the Court to give judgment:
1 Property Law Act 2007, s 176.
2 Property Law Act, s 97.
3 The relief initially sought was just an injunction to prevent the mortgagee sales. Following withdrawal of the injunction applications, ANZ has completed mortgagee sales of most of the security properties and the plaintiffs have filed an amended statement of claim seeking damages rather than an injunction to prevent the sale.
4 Amended notice of opposition to summary judgment dated 5 October 2012.
5 Property Law Act, s 155(3)(b).
(a) For a defendant against a plaintiff, if the Court is satisfied that none of the causes of action in the statement of claim can succeed;6 and
(b)For a plaintiff7 against a defendant8 if the Court is satisfied that the defendant has no defence to a cause of action in the statement of claim.9
[10] As will be apparent from the summary of r 12.2 just given, there is a difference in procedure between a plaintiff’s application and a defendant’s application: in the latter the defendant must satisfy the Court that the plaintiff cannot succeed on any of its causes of action.10
[11] The principles that the Court applies in such applications are well established, and were succinctly summarised by the Court of Appeal in Krukziener v Hanover Finance Ltd:11
[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3. The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as, for example, where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 341. In the end the court’s assessment of the evidence is a matter of judgment. The court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corporation Limited v Patel (1987) 1 PRNZ 84 (CA).
[12] Two further matters arising out of these general principles are of particular significance for the present case:
6 High Court Rule 12.2(2).
7 In this case a counter-claim plaintiff.
8 In this case the counter-claim defendants.9 High Court Rule 12.2(1).
10 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) at [59].11 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26], recently endorsed by the Court of Appeal in Mitchell v Trustees Executors Ltd [2011] NZCA 519, (2011) 12 NZCPR
659 at [35].
(a) Summary judgment must be declined where there are genuine disputes of facts going to the essence of the plaintiff’s claim; but hypothetical defences in vague terms are insufficient to constitute an arguable defence;12 and
(b)Although the onus remains on the party applying to show that there is no arguable defence, the party defending must provide some evidential foundation for any defence that he or she raises.13
Preliminary matters
[13] The plaintiffs failed to comply with directions given on 19 July 2012 for the filing of any notice of opposition and supporting affidavits by 31 August 2012, and for the filing of submissions by 8 October 2012. Instead, they filed a notice of opposition on 2 October 2012, an amended notice of opposition on 8 October 2012, and an affidavit by Mr Hart on 15 October 2012. No written submissions were filed. Mr Hart and counsel for the corporate plaintiffs were allowed to make oral submissions.
[14] In addition, although the notices of opposition referred to an opposition on behalf of all plaintiffs, they were filed by Mr Hart (who does not hold a practising certificate as a solicitor) and there is no solicitor on the record for the corporate plaintiffs.
[15] Counsel for ANZ did not take issue with the late filing of the notices of opposition, nor oppose reading of the affidavit of Mr Hart (despite its lateness) as ANZ did not want the hearing to be adjourned. However, counsel noted that there had been no opportunity for ANZ to respond to the late affidavit, and submitted that this should be reflected in the weight to be given to any matters raised in it. As ANZ’s submissions had been filed before the notices of opposition, counsel was given leave to file a further submission in reply to new matters raised in the notices
of opposition.
12 Crown Money Corp Ltd v Parnell Residential Ltd HC Auckland CIV 2008-404-5829, 8 July 2009.
13 Australian Guarantee Corp (New Zealand) Ltd v McBeth [1992] 3 NZLR 54 (CA) at 59.
[16] Counsel for ANZ also noted that there was an irregularity in the amended statement of claim filed by the plaintiffs on 19 September 2012 in that it purported to be filed by a solicitor who had been granted an order to be removed as solicitor on the record on 6 September 2012. Counsel for ANZ accepted that the amendments were not significant (they recorded the fact that properties had been sold and changed the relief being sought from an injunction to an award of damages), and as there was no need for an amended defence, ANZ was prepared to proceed on the assumption that the claim was not a nullity.
[17] Lastly, although there is no document on file recording a solicitor acting for the corporate plaintiffs, counsel appearing for them advised that she had been instructed on the morning of the hearing by a solicitor, Mr W Simpson. In light of that advice, counsel for ANZ did not take issue with her entitlement to appear.
The plaintiffs’ claim
[18] The plaintiffs plead two causes of action. The first is that ANZ failed to take reasonable care in the course of the mortgagee sale process to obtain the best price reasonably obtainable at time of sale. The second (which relates solely to the property on which Mr Hart and his wife reside – 1331 State Highway 16 – which I will call the home block) is that Mr Hart has offered to redeem the mortgage over that property, but ANZ has refused to give him “an individual redemption sum” in breach of s 97 of the Property Law Act 2007. In each case the plaintiffs claim damages:
at a level no less than the free equity in the Farming Interests14 and to be quantified prior to trial.
[19] The plaintiffs rely on three affidavits filed by Mr Hart, an affidavit by Mr R L Davidson (who manages the farming interests on the combined holdings), and an affidavit by Mr A H Duncan (the principal of a real estate agency in Rotorua who also resides in the Waitakere area). The essence of the facts pleaded in the statement
of the claim and of the evidence provided for the plaintiffs is:
14 “Farming interests” being defined as all of the land owned by the plaintiffs that is mortgaged to
ANZ.
(a) ANZ failed to take and act upon specialised advice as to the method of sale (given the farming operations run or capable of being run on the land, and the size of the holdings).
(b)The individual agents that ANZ appointed lacked the requisite expertise in the sale of farm land, and prepared an information memorandum for the sale which failed to expose the properties sufficiently to the farming market in that it failed to provide details of the farming operations.
(c) The marketing information used the expression “mortgagee sale”
which had the inevitable consequence of inviting low offers.
(d)ANZ failed to obtain a valuation from a suitably qualified valuer specialised in valuing farm properties to guide its decision.
(e) The difference between the prices received and the current market value demonstrates a lack of reasonable care.
(f) Mr Hart’s sister has recently offered to purchase the home block for a sum that was substantially in excess of the price per hectare accepted on other properties, but ANZ has refused to consider the offer.
(g)The various properties were sold either as a whole or individually, and Mr Hart had offered to redeem the mortgage against the property where he and his wife resided by paying $25,000 over the highest tender. ANZ had refused to provide him with a sum to redeem the mortgage on that property.
[20] In their amended notice of opposition the plaintiffs rely on the claims made in the amended statement of claim, but in addition advance two further matters apparently in opposition to the application for vacant possession:
(a) ANZ’s claim that it is entitled to an order for possession to allow it to exercise its power of sale fully is barred by s 155(3)(b) of the Property Law Act; and
(b)An order for possession cannot be granted in respect of the property where Mr Hart and his wife reside because it is subject to both an equitable lease and residential tenancy.
ANZ’s defence and counter-claim
[21] ANZ brings its application for summary judgment against the plaintiffs’ claim on the grounds that it has taken all reasonable steps in the course of the mortgagee sale process to obtain the best price reasonably obtainable (it being in its own interests to do so given the very substantial short-fall), and it says that the matters advanced by the plaintiffs cannot provide them with an arguable defence. Further, it says that the facts do not support Mr Hart’s contention that it has refused his offer to redeem the mortgage over his home block, as it was no more than an indicative bid to purchase for a sum slightly greater than the best tender for that property.
[22] ANZ seeks summary judgment on its counter-claim on the grounds that the alleged defects in the mortgagee sale process are illusory (for the same reasons advanced in respect of the plaintiffs’ claims), that there can be no dispute as to the sums due to it, and that it has an unimpeachable right to vacant possession of the home block which it wishes to exercise in order to obtain the best price for that property.
[23] ANZ relies on four affidavits filed by Mr D M McKenzie (its senior manager
– lending services). The first two were filed in response to the plaintiffs’ injunction applications; the latter two were filed specifically in support of the summary judgment applications, together with an affidavit by Mr S L Bode (one of the three real estate agents employed by Bayleys Real Estate Limited to provide advice to ANZ and conduct the marketing and tender process for the sales), and affidavits from a solicitor (Mr M.J. Triggs) and a process server (Ms S.A. Walters), both of
whom were engaged in the service of notices under the Property Law Act relating to the mortgagee sales:
(a) Mr McKenzie gave evidence of:
(i) the loans and the securities provided for them;
(ii)the history of the mortgagee sale process, including details of the “stand still” period to allow the plaintiffs time to try to sell the properties voluntarily; a competitive process undertaken to select a real estate agency to advise on and conduct the sales; the calling for tenders, further negotiations in several blocks, and an auction of one block; and ANZ’s dealings with the plaintiffs throughout that process (and the two injunction applications and several applications by ANZ to remove caveats);
(iii)the factors taken into account by ANZ in deciding to enter into agreements to sell all but the one remaining security property (the home block); and
(iv)the demand made on the plaintiffs, including the issue of a second set of Property Law Act notices in May 2012 (on a without prejudice basis) after an issue was raised by the plaintiffs over the validity of notices served in 2011.
(b) Mr Bode gave evidence of:
(i)Bayleys’ experience and standing in the real estate industry, and the experience of the three acting agents in marketing to the market sectors with a possible interest in the properties (farming, lifestyle and investor/land banking);
(ii)the proposal given to ANZ for the sales process (marketing both for sale as a whole block and by individual titles to appeal
to all sectors of the potential market; sale by tender in New Zealand and overseas; and a six week marketing campaign through a wide range of media and supported by an informative memorandum); and
(iii)the steps taken to carry out that process and advise ANZ on the outcome.
(c) Mr Triggs gave evidence of the issue and service of two sets of
Property Law Act notices, the first on 9 August 2011 and 20
December 2011, and the second on 18 May 2012. Ms Walters gave additional evidence in relation to the service of the second set of notices on 18 May 2012.
The issues
[24] The following issues arise from the pleadings:
(a) Whether the bank breached its duty of care to the plaintiffs under s
176 of the Property Law Act.
(b)Whether Mr Hart sought to redeem the home block (1331 State Highway 16), and whether ANZ refused such redemption in breach of s 97 of the Property Law Act.
(c) Whether ANZ took the necessary steps to exercise its power of sale so as to have a valid right to possession.
[25] As already mentioned, the plaintiffs raised two other issues in their amended notice of opposition (that the right to possession is barred by s 155(3)(b) of the Property Law Act and that an order cannot be made because the property is subject to an equitable lease and a residential tenancy), but those grounds were not pursued in the hearing. That was an appropriate stance: s 155(3) applies only after entry into possession, the plaintiffs did not produce any evidence of any equitable lease, and
the Tenancy Tribunal on the morning of the hearing issued a declaration that there is no residential tenancy in respect of the home block.
[26] For the purpose of the present applications, the overriding issue is whether ANZ has established that the plaintiffs do not have an arguable case on the above issues.
Has ANZ taken the steps needed to exercise its power of sale?
[27] I will deal with this issue first, as it potentially underlies both of the plaintiffs’ causes of action as well as ANZ’s counter-claim for possession. Although the plaintiffs have not pleaded15 that the Property Law Act notices served on them in August and December 2011 (the first set of notices) were invalid, counsel for the corporate plaintiffs raised it in her oral submissions, submitting that the notices were invalid because they sought payment of interest from the date of the notice until date
of payment. She argued that ANZ had to rely on the second set of notices (issued on
15 May 2012), that the new notices did not validate sales already effected, and that ANZ had to commence the mortgagee sale process anew (advertising and calling for tenders) following expiry of the notices on 22 June 2012.
[28] In support of this argument, counsel relied on the decision of this Court in Propst v ANZ National Bank Ltd.16 That was an application for an interim injunction brought by Mr Hart’s sister in respect of two of the security properties in which she had a share as a tenant in common. She sought an injunction to restrain ANZ from selling those properties. The Court granted an injunction on the grounds that the notices served on Mrs Propst were invalid (amongst other reasons) because they did not supply sufficient information to enable interest after the date of the notice to be calculated, and because the interest claimed subsequent to the date of issue of the notice was not due at the date of the notice.17 The properties were later sold on an
agreed basis.
15 Neither in their amended statement of claim nor in the amended notice of opposition.
16 Propst v ANZ National Bank Ltd HC Auckland CIV 2012-404-002345, 11 May 2012.
17 At [60].
[29] The plaintiffs raised this issue with ANZ in correspondence on 14 May 2012,
following receipt of the judgment in Mrs Propst’s proceeding.
[30] ANZ continues to hold the view that the 2011 notices are valid on the grounds that the requirement for interest up to date of payment, with rates of interest stated in the notice, is in accordance with industry practice18 and with prior case law which has either upheld notices in that form or, at least, held that the defect does not on its own invalidate the notices.19 Counsel submitted that there was no uncertainty or lack of information about these matters, pointing to the fact that the plaintiffs had not raised any questions regarding the amounts and calculations nor sought to remedy the defaults, but rather (in correspondence from solicitors then acting for Mr Hart) informed ANZ’s solicitors that:20
We are not challenging the Bank’s right to action in its entirety against Barry
Hart and the associated companies.
[31] Nevertheless, and without prejudice to its position in respect to the first set of notices, ANZ issued the second set of notices (which were served on the plaintiffs on
18 May 2012)21 requiring the plaintiffs’ defaults to be remedied by 22 June 2012.
There is no issue over the fact that they have not been remedied.
[32] I propose to determine this point by reference to the second set of notices, as the position with respect to them is clear. However, and notwithstanding the conclusion reached in Propst in relation to the notices before the Court on that occasion, I take the view that the first set of notices are valid for the following reasons:
(a) Industry practice22 appears to support the practice of including a requirement for payment of interest up to date of payment in order to remedy the defect, at least where the applicable rates of interest are
18 Relying, inter alia, on Mark Hopkinson and Justin Toebes “Mortgagee Sales” (paper presented to
the New Zealand Law Society, June 2010) at 11.
19 Clyde Properties Ltd v Tasker [1970] NZLR 754 (SC) at 758-759; Baddeleys Beach Foodmarket
Ltd v Registered Securities Ltd (in liq) HC Auckland CP 130/89, 27 July 1989 at 6 and 8; Housing Corporation of New Zealand v Maori Trustee (No.2) [1988] 2 NZLR 708 (CA) at 723; Jadie Trustee Ltd v Rabobank New Zealand Ltd [2012] NZHC 773 at [6].
20 Letter from, Sanderson Weir to Buddle Findlay (17 April 2012) at [30].
21 That service being confirmed by the Court on 29 May 2012.
22 To the extent that it is evidenced by the seminar paper referred to in footnote 18 above.
stated (although this may vary according to the particular terms of the mortgage document).
(b)The first set of notices showed the calculation of interest up to a date around the time that they were issued, set out the variable interest rates that were applicable to the amounts owing at the date of the notices, and advised that interest continued to accrue up until the date of payment.
(c) No issue was taken by the plaintiffs over the notices ahead of the judgment in Propst, either in regard to the claim for interest after the date of issue of the notice or the plaintiffs’ ability to calculate what was due.
(d)It is always open to the party receiving the notice(s) to ask ANZ to stipulate the sum due for payment at a date on or before the date for remedying the default, which obviates any concern arising in cases of variable interest rates.
(e) Prior case law23 indicates that the focus of the statutory provision is whether the mortgagor has been adequately informed of the amount required to clear the default, and whether the party required to respond to the notice can be said to be prejudiced in that respect. The lack of any such contention, or even a challenge to the notices generally prior to receipt of judgment in Propst, indicates that there is no prejudice in this case.
(f) I accept the argument of counsel for ANZ that an inability to require payment of interest up to the date of payment so as to remedy the default completely (bearing in mind that this is likely to be penalty interest) leaves a gap which cannot be filled: the recipient of the notice could meet a demand for interest only up to the date of demand
but still be in default for failing to pay interest between the date of
23 Referred to above.
issue of the notice and the date of payment, hence requiring issue of a further Property Law Act notice (with the potential for the same to happen again).
[33] Whether or not I am correct in the above views, I find that there is no merit to the arguments in respect of the second set of notices:
(a) Section 124 of the Property Law Act provides that a mortgagee does not exercise a power to sell mortgaged land by entering into a contract to sell the land conditional on the default not being remedied by expiry of the period specified in a notice under s 119. This applies irrespective of whether the contract is entered into before or after service of the relevant notice.24
(b)Mr McKenzie has given evidence that three conditional agreements were entered into prior to 22 June 2012 for some of the properties, but these contracts included a provision that they were conditional on valid notices having expired unremedied.
(c) The notices were served on 18 May 201225 and expired, unremedied, on 22 June 2012.
(d)The advertising of an intended sale of mortgaged land is not an exercise of the power of sale.26
Is there an arguable breach of duty under s 176?
[34] The plaintiffs contend that their claim for breach of s 176 cannot be determined summarily:
24 Property Law Act, s 124(2).
25 The method of service was confirmed by order of the Court under s 347 of the Property Law Act on
29 May 2012.
26 Woods v DFC New Zealand Ltd [1990] 1 NZLR 523 (CA), cited in G W Hinde, D W McMorland, Katherine Buchanan, N R Campbell and D P Grinlinton Hinde, McMorland & Sim Land Law in New Zealand (looseleaf ed, LexisNexis) at [15.096].
(a) Mr Hart argued that it was apparent from the fact that the price at which the main farming blocks27 were sold ($8 million) was so far below a valuation of those blocks obtained in 2010 from Colliers International (Colliers) (in the order of $29 million) that something had gone wrong in the mortgagee sale process. He pointed to a number of factors (to which I will return) which he said warranted
investigation at trial, and submitted that ANZ had not shown that these matters could not provide an arguable defence.
(b)Counsel for the corporate plaintiffs supported the grounds advanced by Mr Hart, and argued that they warranted investigation at trial in order to determine whether the price obtained was a reasonable one in the circumstances.
Applicable legal principles
[35] These submissions have to be considered in the context of the statutory duty and the principles that are applied in determining whether that duty has been breached. Section 176 reads:
176 Duty of mortgagee exercising power of sale
(1) A mortgagee who exercises a power to sell mortgaged property, including exercise of the power through the Registrar under section
187, or through a court under section 200, owes a duty of reasonable care to the following persons to obtain the best price reasonably
obtainable as at the time of sale:
(a) the current mortgagor: (b) any former mortgagor: (c) any covenantor:
(d) any mortgagee under a subsequent mortgage:
(e) any holder of any other subsequent encumbrance.
(2) A mortgagee who exercises a power to sell mortgaged property may not become the purchaser of the mortgaged property except in
27 1080 State Highway 16, comprising 463 hectares (known as the former Renall farm), a holding on
State Highway 16 at Kiwitahi comprising 203 hectares (referred to as the Reweti block) and a block at
1416 State Highway 16, comprising 94 hectares.
accordance with section 196 or an order of a court made under section 200.
[36] In her written submissions, counsel for ANZ provided a helpful analysis of the general principles28 that the Court applies when determining whether there has been a breach of s 176 (or the parallel equitable duty to act in good faith). The plaintiffs did not challenge any of those principles. The principles of particular relevance to the present applications are:
(a) While a mortgagee is obliged to take reasonable care in the sales process, it does not follow that the best price reasonably obtainable will be achieved.29
(b)Where the mortgagee has taken and is acting upon independent professional advice as to the sale processes, the Court will generally not intervene.30
(c) In the normal course the proposed sale will need to be advertised with an adequate description of the property’s attributes and, within reason, widely enough to attract all possible purchasers.31
(d)There is no obligation to postpone the sale in the hope of a better price later, or to break up the assets and sell in a piecemeal manner if this can only be carried out over a substantial period or at a rise of loss.32
(e) In deciding whether a mortgagee has fallen short of the duty to take reasonable precautions in a sale, the facts must be looked at broadly
and in practical commercial terms.33 It is proper to allow some margin
28 See Land Law (looseleaf ed, Brookers) at [8.9.08] for a comprehensive summary of the principles.
29 Liddle v Bank of New Zealand HC Auckland CIV 2009-404-6189, 29 October 2009 at [19]; Land
Law, above n 28, at [8.9.06(4) and (5)].
30 Liddle, above n 29, at [20]; Taylor v Westpac Banking Corp Ltd (1996) 5 NZBLC 104,104 (CA) at
104,108-104,109; Long v ANZ National Bank Ltd [2012] NZCA 132 at [21(e)].
31 Harts Contributory Mortgagees Nominee Co Ltd v Bryers HC Auckland CP 403-IM00, 19
December 2001 at [43(d)]. This was upheld on appeal: Bryers v Harts Contributory Mortgages
Nominee Co Ltd [2002] 3 NZLR 343 (CA).
32 Harts Contributory Mortgagees Nominee Co Ltd v Bryers HC Auckland CP 403-IM00, 19
December 2001 at [43(e)].
33 Apple Fields Ltd v Damesh Holdings Ltd [2004] 1 NZLR 721(PC) at [24].
for business and risk assessment by the mortgagee in the realisation of the security.34
(f) The fact that a mortgagee has acted in good faith does not mean that it has necessarily discharged its equitable duty to take reasonable care to obtain the best price reasonably obtainable.35
(g)Conversely, in evaluating judgments made by or on behalf of the mortgagee it should not be forgotten that in the absence of bad faith, the mortgagee shares with the mortgagor and guarantor an incentive to maximise the price obtained. It is not lightly to be assumed that the mortgagee has acted in a way that was contrary to its own interests as well as the interests of others.36
(h)Mere inadequacy of price in relation to the expected value would not normally suggest a breach of the duty of good faith.37 Valuations lose much of their significance if reasonable care is taken and there has been a properly advertised and conducted sale process.38 In the end, market value will be determined by whatever price is realised at auction (or tender).39
The plaintiffs’ arguments
[37] Mr Hart’s first contention as to the mortgagee sale process was that ANZ put the process in the hands of agents who lacked expertise in farm sales. He argued that Mr Bode, who appeared to be the lead agent of the three involved, had no direct
experience in farm sales. He relied on the evidence of Mr Duncan (as a specialist in
34 Moritzson Properties Ltd v McLachlan (2001) 9 NZCLC 262,448 at [58]; ANZ National Bank Ltd v
Claydon [2012] NZHC 788, (2012) 13 NZCPR 290 at [44].
35 Harts Contributory Mortgagees Nominee Co Ltd v Bryers HC Auckland CP 403-IM00, 19
December 2001 at [43(f)].
36 Harts Contributory Mortgagees Nominee Co Ltd v Bryers HC Auckland CP 403-IM00, 19
December 2001 at [43(h) and (i)].
37 Moritzson, above n 34, at [58]; Claydon, above n 34, at [32]-[33]; Mitchell v Trustees Executors Ltd [2011] NZCA 519, (2011) 12 NZCPR 659 at [68]. See also ASB Bank Ltd v Byrne [2012] NZHC 351 at [27] and [36] where the sale price achieved was 83% of the forced sale valuation.
38 Long, above n 30, at [21(c)].
39 Public Trust v Lum HC Auckland CIV-2009-404-2788, 7 September 2009 at [17]; Mitchell, above n
37, at [68(c)].
the sale of farms) that a competent and experienced agent would have obtained a significantly higher figure for the main farm blocks. He submitted that ANZ should have engaged an agent with specific farm experience, or at least had somebody with that expertise working with the Bayleys team.
[38] His second proposition was that Bayleys recommended the wrong strategy, and failed to market to the main target market for those properties, namely the farming community, for their potential conversion to a dairy farm. In this respect he relied on Mr Duncan’s evidence that these three blocks were capable of a relatively simple conversion, and offered both suitable dairying land and a run-off or support block for herds in the winter period. He referred to Mr Duncan’s view that this was the “only way” for those three blocks to be marketed, and that a fair forced sale value on that basis was between $16 and $20 million. In support of their proposition, in his late-filed affidavit and in oral submissions Mr Hart argued that the property had not been properly exposed to that market given that there had been no advertising in a specialist farming magazine, and noted that the proximity of the land to Auckland, and nearby access to railway transport made the land as attractive for farming as for land banking.
[39] Also in terms of the strategy adopted, Mr Hart submitted that Bayleys failed to market the properties to maximum effect by advertising them all in one package (even though allowing for bids to be made on individual lots), when the better course would have been to advertise them all (but particularly the farm blocks) separately as well as part of a package, emphasising the individual features of each.
[40] The next proposition that Mr Hart advanced was that ANZ and Bayleys failed to provide the market with all material information. He made two points. He submitted that Bayleys failed to identify the sub-divisional potential for each of the main farm blocks (having regard to the extent of bush and wetlands on them), notwithstanding that ANZ had a report from resource management consultants Terra
Nova Planning Limited which identified these possibilities.40 Further, and although
he did not develop this in his oral submissions, in his evidence Mr Hart alleged that the information memorandum lacked basic farming information to assist purchasers.
40 There is the possibility of an extra title per 5000m² of wetlands.
[41] Mr Hart’s next proposition was that ANZ and Bayleys had allowed too short a period (six weeks) for the marketing campaign, particularly having regard to the size of the project. He submitted that there was no reason that the campaign could not have gone on longer, and in particular that ANZ should have put the three main farm blocks back on the market instead of accepting $8 million for them. Although there is no evidence before the Court to this effect, he said that his sister had purchased one of the properties in which she held a part share at the forced sale value given by ANZ’s valuer (Darroch), but had resold it at nearly twice that price, and substantially in excess of Darroch’s current market value. He argued that this indicated that a better price could have been obtained if more time had been allowed.
[42] Following on from the latter point, Mr Hart submitted that ANZ’s decision to
market the properties as mortgagee sales also served to depress the price.
[43] In terms of the process adopted, Mr Hart contended that ANZ had not informed him of how it intended to market the properties, nor sought his comment. I infer from this submission that Mr Hart contends that these points would have emerged had ANZ approached him.
[44] In his late-filed affidavit, Mr Hart referred to an offer made by his sister on 11
October 2012, to purchase the home block (1331 State Highway 16), for $2,750,000
- a price per hectare that was far higher than the price obtained for the other large blocks. He argued that ANZ had acted in bad faith by not responding to that offer, and by not informing him of the valuation put on that block by Darroch or of the tenders received for that block.
[45] Lastly, Mr Hart, in his oral submissions, took issue with suggestions in ANZ’s evidence that he and the other plaintiffs had acted unreasonably in refusing access to properties. He maintained that there was a reasonable explanation for one publicised incident where a process server was rejected from his property (the person allegedly arrived with dogs and climbed a fence). Further, he noted that the farm manager had spent considerable time (although he was not required to do so) showing potential purchasers over the property.
[46] As previously mentioned, counsel for the corporate plaintiffs adopted Mr Hart’s submissions on the facts to support her submission that there was an arguable case for breach of duty (an understandable position given that she was instructed so late). In addition, she submitted that there was an inconsistency in ANZ’s position in seeking now to have an order for possession in relation to the home block given that it had sold some of the properties with tenants in place. She argued that this suggested that a better price could have been obtained for the other properties if ANZ had taken time to obtain vacant possession of those properties before sale.
ANZ’s response
[47] ANZ’s response to these contentions, in summary, was:
(a) Before embarking on the sales process it undertook a competitive process to select a real estate agent with appropriate expertise to advise on the best sales strategy to obtain the optimum sales price for the properties.
(b)It selected Bayleys out of three major agencies approached: Bayleys offered exposure throughout New Zealand and overseas, and put forward a team of agents who had a range of experience in selling to all perceived target markets (farming interests, lifestyle block purchasers, land bankers with a long term view to redevelopment, Asian buyers, and special interest buyers such as neighbours).
(c) It obtained a valuation of the properties from an experienced professional valuer (Darroch) at the start of the sales process, addressing both current market value and forced sale value.
(d)It took Bayleys’ advice on the means of sale (by a competitive public tender offering the properties either in combination or individually), the optimum sales period and the marketing to be undertaken.
(e) It undertook a robust and high budget ($55,000) marketing programme which included: preparing and distributing an information memorandum about the properties to interested parties and those targeted as potential purchasers; an advertising campaign in local, national and international media over a six week period; advertising in Bayleys’ “Country” magazine that was distributed to Bayleys’ rural database (10,000) as well as in a “mini” version of the magazine sent to all rural box holders (175,000) in New Zealand; sending email information to persons on Bayley’s Country rural database , on the client database for Bayley’s local office (Westgate) and approximately
2000 persons on the personal databases of the agents in the marketing team; and placing signage on all the properties.
(f) A significant number of persons registered an interest (116). Tender documents were sent to interested parties, and tenders were received for individual properties, a combination of properties, and for all of the properties.
(g)ANZ evaluated the tenders with advice from Bayleys and by reference to the Darroch valuation before deciding whether to enter into agreements (in some cases after negotiations), or recommencing marketing where dissatisfied with the offered price.
Discussion
[48] I will start by addressing Mr Hart’s general submission that it was self- evident from the difference between the Colliers’ valuation and the prices obtained that something was wrong in the sale process. There are two answers to this point. First, the Colliers’ valuation was given two years beforehand, and gave the properties (or at least the large farm blocks) additional value for potential to subdivide into residential “hamlets”, offering at a minimum more than 100 additional titles. This potential depended on challenges to the zoning (so as to permit this form of subdivision), then underway, being successful. They were unsuccessful. Secondly, ANZ obtained an up-to-date valuation with significantly different figures (current
market value for the three blocks of $14.3 million and a forced sale value of $10.1 million). The plaintiffs have not produced valuation evidence to suggest that there are any significant flaws in the Darroch valuation, and have not had Colliers update its valuation.
[49] I do not accept that the prices obtained were so widely different from the Darroch forced sale valuation as to require an inference that something went wrong in the sale process.
[50] Turning to the specific challenges to the process:
(a) I do not accept the criticism that, by appointing Bayleys, ANZ put the sales process in the hands of an insufficiently experienced real estate agent. It selected Bayleys in a competitive process. Bayleys identified a range of possible interest groups given the nature and location of the properties (not just farming) and its agents offered expertise across that range. One of them, Mr M Bayley, had very relevant experience in the recent (and highly publicised) sale of the Crafar farms – a larger offering than this. Mr Hart criticised Mr Bode’s evidence about Bayleys’ experience, and that of the individual agents, as self-serving. However, there is no direct evidence to challenge Mr Bode’s evidence, and I have no reason to doubt it.
(b)I see no reason to criticise the strategy of marketing widely to all possible interest groups rather than focussing primarily on the farming sector and a possible conversion to dairy farming. I note Mr Duncan’s view that this was “the only way” to market the large blocks, but if ANZ had done that it would have been open to criticism for restricting the market – and the proximity to Auckland and railway transport meant they were of potential interest to investors as well as other farming possibilities. The farming sector was alerted to the sale by advertisements in national media, and Bayleys marketed extensively to its rural database. I can infer that that database would have been built up in part by its involvement in the sale of the Crafar farms. Mr
Hart did not advance his criticism of lack of advertising in a farming magazine until the late-filed affidavit, so ANZ has not had an opportunity to respond to it. If it was a significant point I would have expected it to have come out at the beginning of the proceeding. I do not consider it to be significant. There was sufficient market exposure to attract the interest of anyone in the farming community with an interest in dairy, and it was open to any such persons to make inquiries about the suitability for conversion.
(c) Similarly, I see no merit in Mr Hart’s contention that the blocks should have been marketed separately from the combined marketing. The marketing made it clear that the properties could be purchased individually. There is no evidence to suggest that separate advertising would have achieved any more than was obtained from the combined marketing. I also accept the submission of counsel for ANZ that the plaintiffs’ protestations over the approach to marketing lack credibility in light of the fact that the reports from ANZ’s agents record a lack of
co-operation by the plaintiffs over access to the properties.41
(d)I consider Mr Hart’s criticisms of the information memorandum to be unfounded. ANZ had to provide enough to inform potential bidders, but it must be a matter of judgment how much information to put into such a document: it had to be careful not to overstate or misrepresent the properties. The memorandum referred to the rural zoning and noted that although farming activities dominated land in this zone, there were opportunities for other activities, including further rural residential opportunities subject to environmental effects including effects on bush and wetlands. It also raised the future potential for development, mentioning that the land was “located within the country’s fastest growing region and will continue to experience growing pressure for a range of residential amenities”. It specifically referred to the efforts to seek a plan change for the Renall farm block
as an indication of the pressure for a range of residential amenities.
41 Liddle v Bank of New Zealand HC Auckland CIV-2009-404-6189, 29 October 2009 at [20].
This alerts prospective purchasers to the sub-divisional potential, but leaves it to them to investigate the detail, including asking for further information from Bayleys. In relation to the suggestion that the memorandum lacked basic farming information, ANZ sought descriptions of the properties from the plaintiffs ahead of preparation of the information memorandum, and although the plaintiffs (through their solicitor) said that they would provide it, they did not do so before the memorandum had to be printed (it is noteworthy that the plaintiffs’ solicitor raised a concern not to mislead when asked to provide descriptions of the properties for inclusion in the information memorandum). However, it is also doubtful whether that information would have been of much assistance given that the properties were not being farmed intensively. It is also noteworthy that Bayleys went to the extent of taking aerial photographs to get information for the memorandum.
(e) I do not accept the submission that the properties were marketed over too short a period, and that a better price could have been obtained if more time had been allowed. Authorities42 show that four to six weeks is an acceptable period. Bayleys’ records show that there was strong interest over the first three weeks of the campaign, but that interest tailed off after that. Bearing in mind that the plaintiffs had
had a substantial amount of time before the start of the mortgagee sale process to secure voluntary sales, that interest was accruing at a rate of $200,000 per month, and the size and nature of the holdings, I consider that the six week period was reasonable. I do not regard the assertion about Mr Hart’s sister’s sale of the Quarry block as significant: it has not been put in evidence, and it is not known whether the ultimate purchaser could have put a bid to ANZ but for that private dealing (which was not disclosed to ANZ). Mr Duncan suggested that it would have been better to have waited until
September or October to sell (as a “dairy conversion”). However,
42 Liddle, above n 41, at [13(a)]. See also ASB Bank Ltd v Byrne [2012] NZHC 351 at [34]; Taylor v
Westpac Banking Corp Ltd (1996) 5 NZBLC 104,104 (CA) at 104,108.
there is no obligation on ANZ to postpone the sale in the hope of a better price later.43
(f) ANZ was entitled to advertise the sale as a mortgagee sale – it is not improper to do so. Indeed, it has been said that this can encourage interest.44
(g)The evidence does not support Mr Hart’s submission that ANZ did not inform him of its marketing proposals. The evidence discloses that there was regular correspondence between the parties about the sales process throughout that process. In any event, there was nothing to stop the plaintiffs making suggestions. If anything, the evidence suggests that the plaintiffs were reluctant to assist ANZ despite an assurance given as part of the agreement over the stand-still period that Mr Hart would cooperate with the mortgagee sale if the plaintiffs could not secure a voluntary sale within the period: the plaintiffs continued their own sale efforts without reference back to ANZ, and such co-operation as there was appears to have been given late and begrudgingly.
(h)ANZ has not had an opportunity to give evidence in response to the allegation that it acted in bad faith by not responding to Mr Hart’s sister’s offer to purchase the home block. I am not prepared to put any weight on this point. Given the substantial shortfall between the loans and the recoveries from the security properties, it is not credible that ANZ would not accept that offer if it was higher than the tenders it has received. Additionally, I record counsel for ANZ’s statement that ANZ had received a higher offer (conditional on obtaining vacant possession), but was not in a position to disclose that offer or the
Darroch valuation, given that the property was still under negotiation.
43 Harts Contributory Mortgagees Nominee Co Ltd v Bryers HC Auckland CP 403-IM00, 19
December 2001 at [43(e)].
44 Taylor, above n 42, at 104,108; Crown Money Corp Ltd v Parnell Residential Ltd HC Auckland CIV-2008-404-5829 8 July 2009 at [52]; Land Law (looseleaf ed, Brookers) at [8.9.06(7)] and [8.9.08]; see also Long v ANZ National Bank Ltd [2012] NZCA 132 at [21(b)].
In any event, it cannot amount to a breach as ANZ has given evidence that it has not yet entered into an agreement for this property.
(i)There is nothing in the point that ANZ sold some of the other properties subject to tenancies, but is now seeking vacant possession of the home block. There is no requirement on a mortgagee to sell with vacant possession – indeed, it is conceivable that a purchaser could see value in acquiring a property with an income stream from a tenant. Further, the circumstances in relation to the home block are quite different from the other properties where there are recognised tenants in place: the Tenancy Tribunal has ruled that there is no residential tenancy in place, and Mr Hart has not produced any evidence of an alleged lease over the property.
[51] It is unsurprising that the plaintiffs take a different view to ANZ over the sales process, and contend that the prices achieved are not, in fact, the best that could have been achieved. However, that is not the test. ANZ has only to show that it has taken reasonable care to obtain the best price reasonably obtainable. Even if any of the matters raised by the plaintiffs could be said to be arguable as matters of fact, they do not call into question the steps that ANZ took.
[52] I am satisfied on the evidence that the steps that ANZ took to obtain the best prices were sufficient to meet its duty of reasonable care. It took and acted on appropriate advice by appointing a suitably experienced agent (Bayleys) to advise on and conduct the sales process, it obtained a professional valuation of the properties (from Darroch), it undertook an appropriate marketing campaign, and it took further advice on the tenders obtained as a result of that campaign before entering into the seven sale agreements, or engaging in negotiations, or undertaking further marketing before entering into agreements. The advice ANZ received prior to entering into agreements was that the prices represented the best they could achieve at the time:
(a) Although the sale price achieved for the three main farm blocks was less than the forced sale valuation, Darroch commented that discounts for forced sales are difficult to estimate and applied discounts (26% -
30%) that were less than market evidence suggested could apply (up to 40%). The actual price received was only just outside that range (44%).
(b)In any event, the Darroch valuation is overtaken by the market evidence in the form of the tenders received for those blocks (and the further negotiations to achieve the ultimate price), as is Mr Duncan’s view of the forced sale value of the properties. ANZ relied on advice from Bayleys that the combined price represented the best price reasonably obtainable at the time.
(c) In the case of the other four properties sold, the prices were at least in excess of Darroch’s forced sale value, and in two cases were at or slightly in excess of Darroch’s current market value. Regardless of that comparison, the same point applies as with the larger properties that the tenders represent the best evidence of the market values.
[53] For the reasons I have set out above, I find that the plaintiffs do not have an arguable case for their claim, nor do they have an arguable defence to ANZ’s claim. I find support for this view in the fact that ANZ will suffer a substantial loss as a result of the prices obtained and, as it seems unlikely that they will be able to recover the most part of this loss (if anything further), it can be assumed that it shared the same interest as the plaintiffs in achieving the maximum price possible for the security properties.
The claimed offer to redeem
[54] In his initial affidavit in support of the injunction application, Mr Hart claimed that on 10 May 2012 he made an offer to redeem the home block in a letter to Mr McKenzie. The material parts of the letter read:
Re: 1331 State Highway 16, Waimauku, Auckland
I write to you as the registered proprietor of NA97D/829 and NA130A/550.
As you maybe (sic) aware these two properties are our family home where I
live with my wife Susan. I wish to redeem the mortgages held by ANZ
National Bank Limited (Bank) over these two titles and I am prepared to pay a premium of $25,000 above the highest valid tender received by the Bank in the recent mortgagee tender programme.
I am prepared to redeem the mortgages in the same timeframe as what is allowed for in the tender that is 15 working days following acceptance by the Bank.
Please advise the settlement figures before 4pm today....
[55] In their pleading and Mr Hart’s first affidavit, the plaintiffs claimed that ANZ was required to allow the plaintiffs to redeem “on an individual title basis” (as it was selling the properties individually), and was wrong to refuse to supply a redemption sum.
[56] ANZ initially treated the letter as an indication that Mr Hart was wishing to participate in the tender process. It replied immediately to say that it was happy for Mr Hart to participate in that process on an open and transparent basis consistent with all other interested parties, but would not disclose the value of the tender bids as that would give him an undue and unjustified advantage over other tenderers. It invited him or his associates to submit his/their best bid, with information as to the intended source of funding. Subsequently, in response to a repeated request for a redemption sum, ANZ advised the total amounts then outstanding (in the order of
$31 million).
[57] Although the plaintiffs did not include this ground in their amended notice of opposition, nor present oral submissions on the point, the claim remained in the plaintiffs’ amended statement of claim, and was addressed by counsel for ANZ for completeness. I will address it for the same reason.
[58] ANZ accepted that Mr Hart (or the other plaintiffs) had a right to redeem the mortgages over these titles pursuant to s 97 of the Property Law Act. However, as the mortgages secured all indebtedness, the redemption sum was the total indebtedness. I agree with this proposition. It is not in dispute that Mr Hart did not tender that sum (or, indeed, any amount).
[59] Equally, Mr Hart cannot have any ground for complaint based on ANZ’s
refusal to supply him with the amounts of the tender bids. This kind of offer is
known as a referential bid (as an offer made by reference to another bid). The terms of tender stated:
Referential tenders (i.e. a tender expressed as an amount exceeding any other tender received by a fixed or variable amount) will not be accepted.
[60] I accept the submission of counsel for ANZ that ANZ is not obliged to accept Mr Hart’s bid, particularly given the terms of the tender process. Comprehensive reasons for rejecting such bids can be found in the decision of Lord Diplock in Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd:45
The whole business purpose of unilateral contracts inviting two or more promisees to submit sealed tenders of a purchase price for property which are not to be disclosed to any competing promisee and imposing on the promisor a legal obligation to transfer the property to the promisee whose tender specifies the highest price is that each promisee should make up his mind as to the maximum sum which he estimates the property is worth to him, not a sum of money the amount of which cannot be determined except by reference to amounts specified in sealed tenders received from other promisees of which, under the terms of the unilateral contract, he is to be denied all knowledge before the time for making his own tender has expired.
[61] I find that this cause of action is not arguable, and cannot provide a ground
for defence to ANZ’s counterclaim.
ANZ’s claim
[62] Counsel for ANZ produced at the hearing a memorandum setting out a detailed breakdown of the amount due to ANZ at the date of the hearing (allowing for all sums received from the sale of the security properties), as claimed in the statement of counterclaim and proved in the evidence of Mr McKenzie. It included a calculation of interest at the rate prescribed under the Judicature Act 1908 to avoid any argument over the application of contractual rates.
[63] The plaintiffs did not challenge the calculations. I find that ANZ is entitled to the amounts set out in that memorandum.
45 Harvela Investments Ltd v Royal Trust Co of Canada (CI) Ltd [1986] AC 207 (HL) at 225.
[64] I have already found that ANZ had an entitlement to exercise its power of sale. It follows that it has a right to vacant possession.46
Application to set aside bankruptcy notice
[65] ANZ has issued a bankruptcy application against Mr Hart seeking payment of costs of $34,689.52 awarded in this Court on 13 July 2012.
[66] Mr Hart applied to set that notice aside on the grounds that his claim in this proceeding exceeded that sum.
[67] Given my findings in respect of the plaintiffs’ claims, Mr Hart’s application
to set aside cannot succeed.
Decision
[68] For the reasons I have given, I enter summary judgment for ANZ: (a) Against the plaintiffs on their claim;
(b) Against Mr Hart on ANZ’s counterclaim for the sum of
$20,543,951.92, being the amounts outstanding on its loans to Mr Hart and due under his guarantee of the loans made to Malory, as set out in the memorandum of counsel for ANZ dated 15 October 2012;
(c) Against Woodhill Stud Limited and Woodhill Holdings Limited on ANZ’s counterclaim for the sum of $16,170,727.11, being the amounts due under their guarantees of the loans made to Malory, as set out in the memorandum of counsel for ANZ dated 15 October
2012;
46 Congregational Christian Church of Samoa Trust Board v Broadlands Finance Limited [1984] 2
NZLR 704 at 713-714; Trustees Executors Ltd v Smith HC Auckland CIV-2011-404-001377, 19 April
2011 at [6].
(d) Against Malory on ANZ’s counterclaim for the sum of
$16,170,727.11, being the amount due on its loans to Malory, as set out in the memorandum of counsel for ANZ dated 15 October 2012;
(e) For declarations that:
(i)Mr Hart is liable to pay interest on the sum of $20,543,951.92 at the Judicature Act rate of 5% per annum from the date of judgment until the date of repayment in full;
(ii)Woodhill Stud Limited, Woodhill Holdings Limited and Malory are liable to pay interest on the sum of $16,170,727.11 at the Judicature Act rate of 5% per annum from the date of judgment until the date of repayment in full;
(iii)ANZ is entitled to costs on a solicitor-client basis in accordance with clause 12.1 of the mortgages, in a sum to be determined;
(f) For an order entitling ANZ to vacant possession of the home block, which must be provided within 10 working days following service of this order on Mr Hart.
[69] Mr Hart’s application to set aside ANZ’s bankruptcy notice is dismissed. Ordinarily ANZ would be entitled to costs on that application on a scale 2B basis together with disbursements as fixed by the Registrar, but I reserve costs in case
ANZ wishes to pursue a claim for them under the terms of the mortgages.
Associate Judge Abbott
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