King v ASB Bank Limited

[2013] NZHC 84

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-000561 [2013] NZHC 84

BETWEEN  BRUCE JAMES KING Plaintiff

ANDASB BANK LIMITED Defendant

Hearing:         5 February 2013

Appearances: Plaintiff in person

Judgment:      7 February 2013

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 7 February 2013 at 11.00 am

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

Solicitors:           Simpson Grierson, Private Bag 92518 Wellesley Street, Auckland 1141

Fax: [phone] – M V Robinson

Copy to:             B King, 5/5 Begbie Place, Sandringham, Auckland 1025

Email: [email protected]

KING V ASB BANK LTD HC AK CIV-2013-404-000561 [7 February 2013]

[1]      At 4.30 pm on 5 February 2013 Mr King filed proceedings against the ASB Bank Limited, together with an application for interim injunction to restrain the ASB from proceeding with a mortgagee sale by auction at 9.00 am on 7 February 2013. Mr King was unrepresented and his application was made without notice.   I saw Mr King shortly after 5.00 pm in my chambers.  At my request the Registrar attempted to contact Simpson Grierson, which was acting for the ASB on the mortgagee sale. There was no response either from the direct dial line of the legal executive who had been communicating with Mr King, nor from Simpson Grierson’s main switchboard.

[2]      Because the following day, 6 February 2013, was a public holiday and the auction was scheduled for 9.00 am on 7 February 2013 I proceeded to hear Mr King’s application. I concluded that there was a serious question to be tried and that the balance of convenience favoured Mr King. He had provided an undertaking as to damages. I granted interim relief, with directions regarding service. I record my reasons below.

[3]      Mr King is the owner of 5/5 Begbie Place, Sandringham.   The ASB has a mortgage over that property securing advances, the exact amount of which was unclear to me.  Mr King has been in arrears with his mortgage loan since mid-2012 and the arrears currently stand at over $23,000.  Late last year the ASB commenced steps to sell the property. Simpson Grierson advised Mr King by letter dated 5

December 2012 of the date and time of the auction.

[4]      Mr King advanced his application on two general bases. The first was a wide ranging complaint about the ASB’s motivation in taking steps to sell the property in the face of Mr King’s complaints to the Banking Ombudsman.   These complaints would not have warranted consideration as grounds for an interim injunction and I do not discuss them further.

[5]      The second ground was more specific, namely that the ASB had failed to properly advance the negotiations that were on foot regarding a proposal to sell a half-share in the property to a friend of Mr King’s in order to raise sufficient funds to clear the arrears.  This, I concluded, had sufficient substance to disclose a serious issue to be tried.

[6]      Although Mr King described the relevant facts in his affirmation filed in support of the application he had failed to annex the relevant correspondence.  He was,  however,  able  to  provide  me  with  the  original  correspondence  during  the hearing which I accepted.   The correspondence shows that on 21 January 2013

Mr King’s  friend,  Hamish  Reid,  recorded  a  proposal  in  which  Mr  Reid  would acquire a 50 per cent interest in the Begbie Place property and, in the first instance, would make available $50,000 for use in reducing the mortgage on the property. This proposal was conveyed to the ASB in a letter 30 January 2013 addressed to Janet Slater at the Customer Care Department.   The bank’s response came from Leslie Horsburgh later in the morning on 30 January 2013.  She advised that she had forwarded his request on to the credit recovery department for consideration.  Later that same day Ms Horsburgh advised that:

Credit Recoveries have confirmed they will withdraw your property from auction due to take place on 7 February 2013 on the condition that sufficient cleared funds are received by the ASB no later than 4.30 pm on Tuesday, 5

February 2013.

[7]      There was no reference to the specific proposal from Mr Reid.   Mr Reid, however, contacted the ASB directly; on 1 February 2013 Leslie Horsburgh emailed Mr King to say:

I have received a phone message from a Mr Hamish Reid seeking to come to some arrangement with your lending with ASB.   Mr Reid has said he is interested in entering into a partnership with you.  Unfortunately I have been in  meetings  for  much  of  yesterday  and  today  and  have  not  had  the opportunity to return Mr Reid’s call.

The bank will require your permission to discuss your financial affairs with Mr  Reid.    To  that  end  can  you  please  contact Tony  Mooney  at  Credit Recoveries on 09 301 5131 in the first instance to discuss the Bank’s requirements and your options with Mr Reid.

I will be away on annual leave until Monday 11 February 2013.

[8]      Mr King responded to that letter on 4 February 2013 by emailing Mr Mooney a letter consenting to him discussing matters with Mr Reid “for the purposes of negotiating a potential joint loan arrangement”.  It appears, however, that Mr Reid did not hear from Mr Mooney.  On 4 February 2013 Mr Mooney emailed Mr King, making no mention of Mr Reid or his proposal, but merely advising that:

In order for the Bank to withdraw the auction please refer to the conditions of the email dated Wed 30\01\13 14:55 from Leslie Horsburgh …

and then set out the terms of that email again.

[9]      Ms Horsburgh’s  email  1 February 2013 requesting permission to discuss Mr King’s financial affairs with Mr Reid was capable of being read as conveying that the bank would not proceed further until that step had been taken. I accept that Mr King viewed it that way.  However, although the bank had Mr King’s permission to discuss matters with Mr Reid it appears that it did not do so.  On the face of it, Mr Reid’s proposal would produce sufficient funds to clear the arrears but would also require some co-operation with the ASB because it would involve, not an outright sale by Mr King to a third party, but a sale of part of the property while retaining the ASB mortgage.  As a result, Mr Mooney’s advice on 4 February 2013 that the bank would  only  withdraw  the  auction  if  cleared  funds  of  $33,330.23  were  paid  by

5 February 2013 did not address Mr Reid’s proposal at all.

[10]     The balance of convenience plainly favoured Mr King.   The property at Begbie Place is not only his home but the premises from which he runs his business. On the other hand, if it transpires that Mr Reid’s proposal cannot be implemented or is unsuitable for some reason the ASB is not disadvantaged because it can simply proceed with a fresh auction.

[11]     For these reasons, I made an order restraining the ASB from proceeding with the sale of 5/5 Begbie Place until further order of this Court.  I directed Mr King to serve the ASB by sending copies of the proceedings and my order by email to Simpson Grierson and also to contact the ASB with the same advice.  The matter is

to be listed again before me at 11.45 am on Friday, 8 February 2013.

P Courtney J