Monasterio v Bujak

[2014] NZHC 2620

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2008-409-1901 [2014] NZHC 2620

BETWEEN

MARCOS ERIK MONASTERIO AND

MARIA JOSE MARCOS MOYA Judgment Creditors

AND

SLAWOMIR RYSZARD BUJAK First Judgment Debtor

DANUTA ALEKSANDRA ZALWOWSKA-SPISAK Second Judgment Debtor

CIV-2014-409-629

UNDER  s 143(1) Land Transfer Act 1952

IN THE MATTER OF       an application for an order that caveat be removed

BETWEEN  MARCOS ERIK MONASTERIO AND MARIA JOSE MARCOS MOYA Applicants

ANDGRZEGORZ PECKOWSKI Respondent

Hearing:	22 October 2014
Appearances:	C R Johnstone for Judgment Creditors/Applicants No appearance by or for Judgment Debtors No appearance by or for Respondent
Judgment:	23 October 2014

JUDGMENT OF MANDER J

MONASTERIO & ANOR v BUJAK & ANOR [2014] NZHC 2620 [23 October 2014]

[1]      The judgment creditors have made the following applications:

(a)       An “on notice” application for orders varying freezing orders made on

28 August 2009, as subsequently varied.1

(b)      An originating application for removal of caveats.

[2]      These applications arise out of a protracted proceeding which culminated in judgment being entered for the judgment creditors against the first judgment debtor, Slawomir Bujak, and the second judgment debtor, Danuta Zalwowska-Spisak, by French J on 29 November 2010.2   In the course of those proceedings a freezing order was made by Fogarty J on 28 August 2009.

[3]      Alongside those proceedings was an application by the Crown for a foreign restraining order made on behalf of the government of Poland pursuant to s 56 of the Mutual Assistance in Criminal Matters Act 1992.  The foreign restraining order was cancelled on 15 November 2012.3  At that time, a fund that had hitherto been held by the Official Assignee, amounting to some $48,000 plus accrued interest, was transferred to a stakeholder. That person is Mr Kerry Smith of Buddle Findlay.

[4]      To  enforce  the  judgment,  the  judgment  creditors  obtained  final  charging orders, dated 21 January 2011 registered against two properties, 63B Huxley Street, Beckenham, and 4 Arahura Place, Cashmere.  Those charging orders were extended for two years from 4 December 2012 on 18 June 2013.   To enforce the charging orders, the judgment creditors requested a sale order which was lodged with the enforcing officer of the High Court at Christchurch on 29 August 2014.

[5]      The application for removal of the caveats relates to caveats registered by Grzegorz Peckowski against the fee simple estate of the first judgment debtor, Slawomir Bujak, in relation to both the Beckenham and Cashmere properties.  ASB

Bank Limited is the registered first mortgagee in respect of the Beckenham property.

1      The 28 August 2009 freezing orders were subsequently varied on 15 November 2012 and

27 February 2014.

2      Monasterio v Bujak HC Christchurch CIV-2008-409-1901, 29 November 2010.

3      Solicitor-General v Bujak HC Christchurch CIV-2007-448-522, 15 November 2012.

[6]      Both applications have been served in accordance with directions for service and conduct of proceedings made by Kos J on 15 September 2014.

[7]      No  communication  has  been  received  from  the  judgment  debtors,  either directly or through their contact person, Brian Palliser of Hill, Lee & Scott.   Mr Palliser has  provided written  advice of his  receipt  of the Court  documents  and confirmed he would make endeavours to bring the documents to the attention of the judgment debtors by email.  Mr Palliser has confirmed to counsel for the judgment creditors that he has not heard further from either of the judgment debtors.

[8]      No  communication  has  been  received,  either  directly  or  on  behalf  of Mr Peckowski.     Mr  Beale  of  MDS  Law,  who  has  acquired  the  business  of Mr Peckowski’s previous lawyers, Murray Withers & Associates, has confirmed to counsel that he has received no response from Mr Peckowski.

[9]      As a result of communications with the authorised representative of ASB Bank, it has been confirmed that the bank takes no position in relation to either application and specifically does not oppose the judgment creditors intention to enforce their final charging orders by effecting the sale of both properties on the terms set out in the interlocutory application to vary the freezing orders.

[10]     The stakeholder, Mr Kerry Smith of Buddle Findlay, has confirmed that he takes no position in relation to the application to vary the freezing orders.  He has confirmed that he is able, as stakeholder, to receive and hold, under the existing terms of trust, any additional sums as proceeds from the sales of the properties, as provided for in the application to vary the freezing orders.

[11]     When  these  matters  were  called  on  the  morning  of  22  October  2014, Mr Johnstone on behalf of the judgment creditors confirmed that no communication had been received on behalf of the judgment debtors or Mr Peckowski.

Removal of caveats

[12]     Removal of the caveats is required to allow the sale orders to be executed against the two properties.   Mr Peckowski’s interest as caveator, if subsequently

validated, can be protected by way of a claim against the proceeds from sale of the properties.

[13]     I am satisfied that Mr Peckowski has been served in accordance with the directions of this Court. As no steps have been taken by him to oppose the judgment creditors’ application within the directed 14 days, or subsequently, it is appropriate to grant the orders sought.

[14]     The applicants as judgment creditors hold final charging orders which are registered against the fee simple estates in both the properties.  Accordingly, they have a registered estate or interest. As I have noted, the judgment creditors have also issued a sale order pursuant to the High Court Rules.

[15]     Accordingly, I make the following orders:

(a)      That caveat 8197621.1 against the interest of Slawomir Ryszard Bujak in the fee simple estate of Lot 2, Deposited Plan 358853 being identifier 239527 (Canterbury Land Registration District) be removed.

(b)That caveat 8197609.1 against the interest of Slawomir Ryszard Bujak in  the  fee  simple  estate  of  Lot  2,  Deposited  Plan  36105  being identifier CB17A/682 (Canterbury Land Registration District) be removed.

(c)      An award of costs on a 2B basis to the judgment creditors on this application  in  the  sum  of  $6,567,  together  with  disbursements  of

$785, calculated in accordance with sch 3 High Court Rules, as set out in annexure A in the memorandum of counsel of 17 October 2014, being a total of $7,352.

Freezing orders

[16]     In the absence of any served party having taken steps in response to the application to vary the freezing orders made on 28 August 2009, and being satisfied that it is fair and just having regard to the circumstances of the judgment creditors

and the other parties holding an interest in the identified properties the subject of the freezing orders, it is appropriate that orders be made.

[17]     For  completeness,  I  record  that  I have  read  the  evidence  of  one  of  the judgment creditors, Dr Erik Monasterio, sworn 27 August 2014, and am satisfied as to its contents and, in particular, that there has been no change in circumstance which may affect the enforcement of the judgment entered on 29 November 2010.  Both judgment debtors were absent from New Zealand at the time judgment was entered and, to Dr Monasterio’s knowledge, have remained in Poland and not returned to New Zealand within the past four years.  Further, Dr Monasterio confirms that the judgment debtors have not made payment in respect of the judgment, nor made any indication of their intention to pay, and that the full amount of the judgment, together with accrued interest, remains due and owing.

[18]     I make the following orders:

(a)      The freezing orders made 28 August 2009 are varied, specifically paragraph 4, to authorise and direct that the properties at 63B Huxley Street, Beckenham, and 4 Arahura Place, Cashmere, be sold under orders for sale issued by the judgment creditors to enforce their final charging order registered against both properties.

(b)The land and improvements at 63B Huxley Street, Beckenham, and land at 4 Arahura Place, Cashmere, be sold under orders for sale of the Court on terms that the proceeds from the sale of one or both of the identified properties be applied by the enforcing officer to:

(i)       firstly, discharge the first registered mortgage to ASB Bank

Limited against 63B Huxley Street; and

(ii)      secondly, pay the costs and expenses of sale; and

(iii)thirdly, to pay the balance to the stakeholder for holding under the  terms  of  the  trust  set  out  in  paragraph  3  of  the  order

cancelling  the  registration  of  the  foreign  restraining  order made 20 November 2012, as varied.

Treatment of the balance of the sale proceeds

[19]     Counsel for the judgment creditors advises that as a result of inquiries made and from knowledge gained through the course of the proceeding, no additional persons hold any interest or estate that will be affected by the judgment creditors’ applications.  Individual and confidential arrangements have been made with other persons  who  were  previously  involved  with  the  cancellation  of  the  foreign restraining order and their interests have been satisfied.   This resulted in their respective  caveats  registered  against  the  subject  properties  being  withdrawn. Mr Peckowski has not taken any steps in relation to either application.  Accordingly, the  Court  being  satisfied  that  there  is  no  other  party,  other  than  the  judgment creditors, entitled to relief against the judgment debtors, I direct payments to be made  from  the  funds  held  in  trust  by  the  stakeholder  in  accordance  with  the following procedure:

(a)      By  memorandum  addressed  to  the  Court  and  stakeholder,  the judgment creditors shall state their claim for the judgment sum of

$266,901 plus interest accrued from the date of judgment to anticipate a date of payment, together with any additional claims, including the costs on the application to vary the freezing orders and the originating application for removal of caveat.

(b)Upon Mr Smith, as stakeholder, approving in writing the judgment creditors’ claim as presented, payment in satisfaction is to be made to the trust account of Wynn Williams as solicitors for the judgment creditors.

(c)      At the same time, Mr Smith may deduct his costs as stakeholder for attendances in relation to receiving, holding and administering the trust funds, making distribution in accordance with the Court’s directions, and attendances in relation to the judgment creditors’ applications.   Such expenses to be recorded by invoice issued by

Buddle Findlay to the charge of the first judgment debtor and second judgment debtor (C/- Buddle Findlay) with copies to the Court, Wynn Williams for the judgment creditors, and to Mr Brian Palliser of Hill, Lee & Scott, for the judgment debtors.

(d)The balance of the trust funds, if any, should continue to be held in trust for the judgment debtors, Slawomir Ryszard Bujak and Danuta Aleksandra Zalwowska-Spisak, until instructions are received from either or both judgment debtors, whereupon Mr Palliser can make arrangements directly with Mr Smith as stakeholder for final distribution of the funds held.

(e)      If, in the intervening period, any other person entitled to relief against either or both of the first judgment debtor or the second judgment debtor approaches counsel, the stakeholder, or Mr Palliser, then their claim against the trust funds can be presented to the stakeholder and, if necessary, referred to the Court for further direction.

(f)      Upon distribution to the judgment debtors or any other person, the stakeholder shall record the final distribution by memorandum to the Court and counsel for the judgment creditors.

[20]     The judgment creditors are entitled to costs on the application to vary the freezing orders on a 2B costs category basis.  Accordingly, I award costs in the sum of $3,781, together with disbursements of $500.17, calculated in accordance with sch

3 High Court Rules, as detailed in annexure C of the memorandum of counsel of 17

October 2014, being a total of $4,281.17.

Solicitors:

Wynn Williams, Christchurch

Hill, Lee & Scott, Christchurch

Buddle Findlay, Christchurch