Herzhoff v M F Turnbull Limited

[2021] NZHC 3358

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-000554

[2021] NZHC 3358

BETWEEN

MANFRED EUGEN HUGO KARL HERZHOFF

First Plaintiff

AND

MARTINA ULRIKE HERZHOFF

Second Plaintiff

AND

M F TURNBULL LIMITED

First Defendant

AND

MURRAY FREDRICK TURNBULL

Second Defendant

AND

PERSONS UNKNOWN

Third Defendant

AND

DUNBAR SLOANE LIMITED

Fourth Defendant

Hearing:	On the papers
Appearances:	A M S Williams for Plaintiffs
Judgment:	8 December 2021

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 8 December 2021 at 3.50 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

HERZHOFF v M F TURNBULL LIMITED [2021] NZHC 3358 [8 December 2021]

[1]    This is an interlocutory application for interim injunction brought by the first and second plaintiffs, Mr and Mrs Herzhoff, to restrain the fourth defendant, Dunbar Sloane, which runs an auction house, from disposing of a Piero Fornasetti and Gio Ponti Architettura Trumeau Cabinet (the Cabinet) for sale at an auction which is advertised to commence at 5 pm tonight.

[2]    The events which have prompted this application can be summarised briefly. The plaintiffs purchased the Cabinet in 1998 for the equivalent of about NZ $85,000. When they were living in Christchurch, the Cabinet was damaged as a consequence of the earthquakes. In due course, the Cabinet and some other items were delivered to the first defendant, M F Turnbull Ltd, a company run by the second defendant, Murray Turnbull, for repair and restoration. It was indicated that restoration of the Cabinet would cost between $3,000 and $5,000.

[3]    Mr Herzhoff travelled to Germany in 2013 and became unwell. He returned to New Zealand the following year to his home in Stewart Island but did not recover until 2018. In 2018 he met with Mr Turnbull again at a dinner party in his Stewart Island home. They discussed the items which were being held by Mr Turnbull’s company for repair and restoration. Mr Herzhoff told Mr Turnbull that he had been in Germany and was unwell. He advised Mr Turnbull he was happy to pay any invoice for work done to the Cabinet, and for any storage costs. He was told by Mr Turnbull that the Cabinet had been restored, but that he would continue to store the Cabinet for the Herzhoffs until they could get to Christchurch to collect it. Mr Herzhoff says he was never told that storing the Cabinet was an issue, nor was he ever provided by  Mr Turnbull, or his company, with an invoice for the restoration work or for the storage of the Cabinet, even though Mr Turnbull knew where he lived and how to get hold of him.

[4]    In December 2021, Mr Herzhoff visited Mr Turnbull and spoke about collecting the items he held and paying any money he was owed for the repair, restoration and storage. Mr Turnbull told Mr Herzhoff that he had sold the Cabinet and other items to cover his costs.

[5]    Mr Herzhoff then learned that the Cabinet was listed for auction by Dunbar Sloane for sale at an auction commencing on 8 December 2021 at 5 pm. Although the plaintiffs wrote, through their lawyer, to Dunbar Sloane advising that the Cabinet belonged to the plaintiffs and that no-one had been given permission to sell it, Dunbar Sloane would not agree to remove the Cabinet from the auction, although the company did say it would be willing to hold any funds realised from the sale of the Cabinet.

[6]    Mr Herzhoff says the Cabinet is very important to him and his wife and would be very difficult to replace. If the Cabinet is sold at auction then it is likely to be lost. In his affidavit he provides an undertaking to comply with any order for the payment of damages to compensate any other party for damage sustained through the granting of the injunction.

[7]    Given the short timeframe in which a decision needs to be made on the application, I made enquiries as to whether the application had been served on the parties on a “Pickwick basis”. I was advised by counsel for the plaintiffs that documents were served by email on the first and second defendants, and on the fourth defendant, at around midday today, contemporaneously with filing these proceedings in the High Court.

[8]    At 12.57 pm a director of Dunbar Sloane telephoned counsel for the plaintiffs and confirmed that he had received the documents. He indicated that Dunbar Sloane would abide the decision of the Court and did not intend to appear or be represented at any hearing in relation to the application for an interim injunction. He also advised that he had provided the documents to the third defendant, whose identity remains unknown to the plaintiffs, and who said that they intended to seek advice. At this point, no further correspondence has been received by counsel for the plaintiffs.

[9]    At 1.29 pm Mr Murray Turnbull emailed counsel for the plaintiffs, on behalf of the first and second defendants. He confirmed receipt of the documents and indicated that he did not intend to appear or be represented at any hearing in relation to the application for an interim injunction.

[10]   In those circumstances, I am satisfied it is appropriate to determine the application on the papers without hearing from the parties. As the identity of the third defendant is unknown, it is impracticable to defer dealing with this application until that defendant can be identified. The only difficulty this raises is that I do not know the circumstances in which the third defendant acquired the Cabinet. That person may be a bone fide purchaser for value which could be an impediment to ordering the return of the Cabinet as sought in the substantive statement of claim.

[11]   However, in the circumstances the application for an interim injunction must be determined on the facts. In doing so, I have considered the accepted test of whether:

(a)there is a serious question to be tried;

(b)where the balance of convenience lies; and

(c)an assessment of the overall justice of the position.1

[12]   It is clear from the statement of claim that there is a serious question to be tried on the facts as presented by the plaintiffs. They allege that the first and second defendants had no authority to dispose of the Cabinet and had not made the Herzhoffs aware that they were planning to do so, in order to recover costs, or for any other reasons.

[13]   In terms of the balance of convenience, if the auction proceeds, the Herzhoffs will almost certainly lose the opportunity to argue the Cabinet should be returned to them. It is, on their evidence, a rare piece and one which they are attached to. This is not a case where damages would suffice because a replacement could readily be purchased. Set against that is the position of the unknown third defendant and Dunbar Sloane. There is nothing to suggest that if that transaction is deferred, while the plaintiffs’ claims are tested, that they will be detrimentally affected. Both appear to have only a financial interest in the auction proceeding. If they suffer a financial loss, then the plaintiffs have given an undertaking as to damages. In my view, the balance of convenience favours the granting of an injunction.

1      Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 140 (CA).

[14]   The last consideration is whether, standing back and making an assessment of the overall justice of the case, it is proper to make the injunction. I consider it is. The factors I have considered in weighing the balance of convenience also suggest that the overall justice is supported by the making of the orders sought.

[15]Accordingly, I make the following orders:

(a)That until further order an interim injunction is issued against the third and fourth defendants to restrain them, their servants or agents, or any of them either alone or in conjunction with anyone else from selling or otherwise disposing of the item described as a Piero Fornasetti and Gio Ponti Architettura Trumeau Cabinet (“the Cabinet”) currently for auction as Lot 0059 in the fourth defendants upcoming “Modern Design” auction which is to be held on 8 December 2021 at 5pm.

(b)The Cabinet is to remain in the possession the fourth defendant until further order of the court.

(c)The costs of the plaintiffs of and incidental to this application and order are reserved.

(d)Leave is reserved to any party to apply to amend or set aside the order for interim injunction on notice to the other parties.

[16]I also direct that:

(a)the plaintiffs are to promptly serve this judgment on the first, second and fourth defendants;

(b)the fourth defendant is to provide the plaintiffs’ lawyers with the name and contact details of the third defendant or of that person’s legal representatives. As soon as that has been supplied, the third defendant is to be served with these proceedings and this judgment.

[17]   If any party applies to set aside the interim injunction, a telephone conference is to be convened with the parties to timetable that application to hearing.

Solicitors:
Cruickshank Pryde Lawyers, Invercargill

Copy To:
A M S Williams, Barrister, Christchurch