King v ASB Bank Limited - [2013] NZHC 676

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-561 [2013] NZHC 676

BETWEEN BRUCE JAMES KING Plaintiff

ANDASB BANK LIMITED Defendant

Hearing: 2 April 2013

Counsel: Plaintiff in person
P Shackleton for defendant

Judgment: 2 April 2013

(ORAL) JUDGMENT OF LANG J [on application for interim injunction]

BRUCE JAMES KING V ASB BANK LIMITED HC AK CIV-2013-404-561 [2 April 2013]

[1] Mr King is the owner of a property situated at 5/5 Begbie Place, Sandringham. He has obtained advances from ASB Bank Limited (“the bank”) secured by way of a mortgage over the property. Mr King has been in arrears with his obligations to the bank since some point in mid-2012. As at February 2013, the arrears stood at approximately $23,000.

[2] In order to protect its position, the ASB served a notice under the Property Law Act 2007 on Mr King. Once that expired unremedied, the bank took steps to sell the property. It arranged for the property to be sold by way of public auction at
9 am on 7 February 2013.

[3] On 5 February 2013, Mr King applied on a without notice basis for an injunction preventing the bank from continuing with the auction. Because
6 February 2013 was a public holiday, it was necessary for the Court to deal with the application immediately and without hearing from the bank.

[4] After hearing submissions from Mr King, Courtney J issued an injunction restraining the bank from proceeding with the sale of Mr King’s property until further order of the Court.1 The Judge then listed the matter for mention before her on Friday 8 February 2013.

[5] When the matter came before the Judge again on 8 February 2013, she adjourned it further at the bank’s request until 21 February 2013. When the proceeding was called before Ellis J on that date, the Judge made an order that the interim injunction was to be lifted.2 Her Honour took that step because she was satisfied that the grounds on which Courtney J had granted the interim injunction had
fallen away.

1 King v ASB Bank Ltd HC Auckland CIV-2013-404-000561, 7 February 2013.
2 King v ASB Bank Ltd HC Auckland –CIV-2013-404-000561, 21 February 2013 (Minute).

[6] The bank has now arranged another auction, and this is due to be held at 9 am on Wednesday 3 April 2013. On 28 March 2013, Mr King applied for another injunction. Because the Easter Break was about to occur, I directed that the application be served immediately and set down for hearing before me this morning.

Background

[7] In order to understand the issues that the present application raises, it is necessary to consider the background to the application.

[8] When Mr King applied for the interim injunction before Courtney J, he was able to show that a friend, Mr Hamish Reid, had indicated a willingness to acquire a half-share in his property. In return he would make available the sum of $50,000 to pay outstanding arrears and to reduce…

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: [2013] NZHC 676
Decision Date: 2 April 2013

CaseChat Overview and Summary

Bruce James King sought an injunction to prevent ASB Bank Limited from proceeding with the auction sale of his property at 5/5 Begbie Place, Sandringham. The property was subject to a mortgage with the bank, and Mr King had fallen into arrears amounting to approximately $23,000 by February 2013. After the bank served a notice under the Property Law Act 2007 and the period for remedy lapsed, it arranged for the property to be sold by public auction on 7 February 2013. Mr King applied for an injunction on 5 February 2013 to prevent the bank from proceeding with the auction sale. The court had to decide whether the bank should be restrained from selling the property until the substantive issues between the parties were resolved.

The court determined that the bank’s failure to engage with Mr King and his proposed investor, Mr Hamish Reid, was sufficient to warrant the grant of an interim injunction. However, the court later lifted the injunction when it found that the sole ground on which it was granted had fallen away. Mr King now sought another injunction to prevent the bank from proceeding with a new auction scheduled for 3 April 2013. The court considered Mr King’s argument that the earlier injunction should have remained in force until the substantive issues were tried. The court rejected this argument and found that the balance of convenience now favoured the bank. The bank had a contractual right to sell the property to recover the amount owed by Mr King, and there was a risk of a shortfall from the sale of the property. Allowing the matter to proceed to a substantive trial would increase interest and legal costs appreciably. The court therefore declined to grant the injunction and ordered that the auction proceed as scheduled.

The court made no order as to costs, as the bank had a contractual entitlement to recover legal and enforcement costs from Mr King.

Orders