Liberty Financial Limited v Lomu HC Auckland CIV 2008-404-001394

[2008] NZHC 2584

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2008-404-001394

UNDER  the Property Law Act 2007

BETWEEN  LIBERTY FINANCIAL LIMITED Plaintiff

ANDOFA JUNIOR LOMU, HESEKAIA LOMU, AND FINAU LOMU Defendant

Appearances: T Faasili for Plaintiff

No Appearance of Defendants

Judgment:      18 September 2008 at 5pm

JUDGMENT OF ASSOCIATE JUDGE ROBINSON

This judgment was delivered by me on 18 September 2008 at 5 pm, Pursuant to Rule 540(4) of the High Court Rules

Registrar/Deputy Registrar

Date……

Solicitors:           Lowndes Associates, PO Box 7311, Auckland

LIBERTY FINANCIAL LIMITED V OFA JUNIOR LOMU, HESEKAIA LOMU, AND FINAU LOMU HC AK CIV 2008-404-001394  18 September 2008

[1]      When this matter came on for hearing on 11 September 2008, there being no appearance on behalf of the defendant, I made an order granting the plaintiff possession of the property owned by the defendant. On making the order for possession, I stated that the reasons for making the order would be provided at a later date. The following are my reasons for granting the application:

[2]      The plaintiff applies by way of summary judgment for possession of property owned by the defendants, judgment for the sum of $415,806.80 being the amount then outstanding under a mortgage executed by the defendants and registered against the title to their property, interest thereon at 14.25% per annum in terms of the mortgage and costs. The evidence in support of the application is contained in the affidavit of Mr Ursprung who is employed as the asset realisation officer of the plaintiff.

[3]      According to Mr Ursprung’s evidence on 7 November 2006, the plaintiff agreed to advance to the defendants the sum of $377,235 pursuant to the terms and conditions contained in a loan agreement dated 22 November 2006. As required by that loan agreement, the defendants executed a first mortgage over their property at 3

Idlewild Avenue, Mangere. On 24 November 2006 the plaintiff advanced the sum of

$373,057  to  the  defendants  being the  amount  of  the  loan  in  terms  of  the  loan agreement less costs.

[4]      The terms and conditions of the loan agreement include the following:

a)       Interest  is  charged  at  the  rate  of  11.25%  per  annum  initially  but subject to change in accordance with the agreement.

b)Interest is calculated daily and payable monthly on the advance or on so much thereof as shall for the time being remain unpaid from the date of the advance until repayment.

c)       The principle sum and all other amounts payable by the defendants under the loan agreement are payable on demand.

d)       If default occurs:

i)        All outstanding money becomes immediately due and payable;

and

ii)       The plaintiff can enforce the security for the loan.

e)       In the event of default, the defendants agree to pay default interest at the rate of 3% per annum in addition to the agreed interest rate of

11.25% per annum.

f)        The defendants agreed to indemnify the plaintiff for all costs, losses and other liabilities incurred by the plaintiff in relation to the loan agreement and in exercising any right to recover money that is due under the loan agreement.

g)        The  defendants  executed  the  mortgage  over  their  property  at  3

Idlewild  Avenue,  Mangere  to  secure  payment  of  money  due  and payable under the loan agreement.

[5]      The defendants are in default of their obligations under the loan agreement in that they failed to pay instalments totalling $11,175.33 due on 24 May 2007, 24 June

2007, 24 July 2007 and 24 August 2007.

[6]      On 12 September 2007, the plaintiff duly served notices on the defendants pursuant to s 92 Property Law Act 1952 requiring payment of the instalments then due and owing totalling $11,249.87 on or before 19 October 2007. Those notices also advised the defendants that if payment of the amount outstanding of $11,249.87 was not made before 19 October 2007, all money secured by the mortgage will become immediately due and payable and the plaintiff will have the right to sell the land described in the mortgage or to enter into possession of that land.

[7]      The defendants failed to pay the amounts claimed under the notices and have failed to make any payments since that date. As at 4 February 2008, in terms of the loan agreement and mortgage, the defendants are indebted to the plaintiff in the sum of $415,806.80 made up as follows:

a)        $3,847.84 being costs and interest; and

b)        $411,958.96 being the remainder of the loan.

[8]      Because  of  the  defendants  default  in  payment  of  money  due  under  the mortgage and failure to comply with the notices served on them, the plaintiff brings these proceedings for possession of the property which forms the security for the mortgage, money due under the loan agreement and mortgage, and costs. There being no valid defence to the proceedings the plaintiff seeks judgment by way of summary judgment.

[9]      As the plaintiff was unable to serve the defendants personally with these proceedings, orders were made for substituted service. Evidence in support of the applications for substituted service indicated that although the defendants were not residing on the property at 3 Idlewild Avenue, Mangere, there appeared to be occupants who claimed they had authority from the defendants to continue residing on the property.

[10]    Since the notice under s 92 Property Law Act 1952 was served on the defendants, the Property Law Act 2007 has come into force. That Act came into force on 1 January 2008. However, pursuant to s127(2) of the Property Law Act

2007, the notices issued under s 92 of the Property Law Act 1952 continue to apply as if the Property Law Act 1952 had not been repealed by the Property Law Act

2007. Thus pursuant to those notices and in terms of the mortgage, a consequence of failure to comply with the notices is that the whole principle sum now becomes due and payable. Furthermore, the plaintiff is now entitled to possession of the property and s 106 Property Law Act 1952 entitles the plaintiff to an order for possession of the property.

[11]     Consequently, for the reasons I have set forth in this decision, I ordered on 11

September 2008 that the defendants do forthwith vacate and deliver up vacant possession of the property contained and described in certificate of title NA8B/434 (North Auckland Registry).

[12]     The plaintiff is also entitled to judgment for the sum of $415,806.80 together with interest thereon at 14.25% per annum from 7 February 2008 until the date of judgment. Counsel should provide details of the amount of interest payable in terms of this judgment.

[13]     The plaintiff is also entitled to costs and disbursements on a solicitor and client  basis  in  terms  of  the  mortgage  and  loan  agreement.  Those  costs  and

disbursements total $20,188.93 in accordance with the schedule prepared by counsel.

Associate Judge Robinson