MBG Limited v Joyce - [2020] NZHC 750

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2019-470-000094

[2020] NZHC 750

UNDER the Land Transfer Act 2017, s 143(6)

BETWEEN

MBG LIMITED

Applicant/Respondent

AND

JAN JOYCE, LENAIRE ANNE JOYCE and

GRAEME KENNETH BEAVER as trustees and guarantors of the RE JOYCE TRUST Respondents/Applicants

Hearing: 31 March 2020

Appearances:

N J M Devery for Applicant/Respondent Respondent/Applicant in Person (J Joyce)

Judgment:

16 April 2020

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 16 April 2020 at 2.00 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date…………………………

MBG LTD v JOYCE [2020] NZHC 750 [16 April 2020]

Introduction

[1] These are caveat proceedings relating to two properties in Tauranga, namely 356D Papamoa Beach Road (the Papamoa property) and 1/57 Tawa Street, Mount Maunganui (the Tawa Street property). The Papamoa property is the family home of the Joyce family. Both properties are encumbered with significant mortgage debt.

[2] The respondent, MBG Limited, is a fund facilitator. In October 2018 it entered into an agreement with the Re Joyce Trust (the Trust),1 whereby the Trust would borrow money from MBG Ltd and those facilities would then be secured against the two properties (the facilities agreement). The facilities were never uplifted as the Trust obtained funds from an alternative lender. However, under the facilities agreement, the Trust remained liable to MBG Ltd for costs and fees.

[3] On 14 November 2019, I made final orders that the caveats lodged against the two properties by MBG Ltd not lapse. The Trust had taken no steps to defend the proceedings which, according to an affidavit before the Court, had been served on the Trust on 14 October 2019. The basis of the caveats was an equitable mortgage held by MBG Ltd which it says arose following the Trust’s failure to pay its invoice of
$33,954.75 (the amount for costs and fees).

[4] The trustees now apply to set aside the final orders on the basis that they were never served with the proceedings and had no notice of them. They contend that the caveats prevent registering an alternative mortgage instrument and that there is a real risk that the family home at Papamoa will thereby be subject to a mortgagee sale. The trustees also say they are not liable for MBG Ltd’s fees. They claim the facilities agreement was an unconscionable bargain and/or entered into by the trustees on the basis of misleading and deceptive representations by MBG Ltd.

[5] For the reasons that follow in the first part of this judgment, I grant the trustees’ application and set aside the final orders that the caveats not lapse. In the second part

1 Jan Joyce, Lenaire Anne Joyce and Graeme Kenneth Beaver, the respondents, are the trustees of the Re Joyce Trust.

of this judgment, I consider afresh MBG Ltd’s application that the caveats not lapse pursuant to s 143 of the…

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.

Continue reading MBG Limited v Joyce

Details

AGLC: MBG Limited v Joyce [2020] NZHC 750
Case: [2020] NZHC 750
Decision Date: 16 April 2020

CaseChat Overview and Summary

In MBG Limited v Joyce, the Court considered an application to set aside a judgment and a subsequent application that two caveats not lapse over two properties. The respondents, trustees of the Re Joyce Trust, sought to set aside a final order that the caveats not lapse on the basis that they were never served with the proceedings and had no notice of them. The applicants, MBG Limited, sought to sustain the caveats over the properties, claiming an equitable mortgage for fees and costs that were allegedly owing by the trustees. The Court found that the trustees' failure to defend the proceedings was excusable due to improper service, and that they had substantial defences to the applicants' claim, including claims of unconscionable bargain and misleading and deceptive conduct. The Court also found that the applicants would not suffer irreparable injury if the judgment was set aside. In relation to the applicants' subsequent application to sustain the caveats, the Court found that the applicants had an arguable case for a beneficial interest in the properties. However, the Court exercised its discretion to lapse the caveat over the family home, finding that the risk of oppression and substantial injustice outweighed the applicants' interest in enforcing the caveat. The Court adjourned the application in relation to the second property to allow for a review.

The final orders of the Court were to set aside the previous judgment and award of costs, to lapse the caveat over the family home, and to adjourn the application in relation to the second property. The Court also found that costs should lie where they fell, meaning that each party was responsible for its own costs.

Orders