Mooney v Small Car World - [2025] NZHC 93

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-713

[2025] NZHC 93

BETWEEN JOHN WILLIAM SPENCER MOONEY and REBECCA GOLDING SMITH
Applicants

AND

SMALL CAR WORLD LIMITED

Respondent

Hearing: 23 December 2024

Appearances:

S E Bray for Applicants

S F Whitaker and R V Smith for Respondent

Judgment:

10 February 2025

JUDGMENT OF DUNNINGHAM J

This judgment was delivered by me on 10 February 2025 at 10.30 am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

MOONEY v SMALL CAR WORLD LIMITED [2025] NZHC 93 [10 February 2025]

Introduction

[1] On the morning of 23 December 2024, an application was filed by the applicants seeking an interim injunction restraining the respondent, Small Car World Ltd, from proceeding with a mortgagee sale at noon that day.

[2] I directed that the proceedings be served on the lawyers for the respondent, and that a telephone conference be convened at 11 am that day to hear the application.

[3] At 11.40 am, after hearing from Mr Mooney on behalf of both applicants, and Mr Whitaker and Mr Smith on behalf of the respondents, I declined the application. I said my reasons would follow. This judgment contains my reasons.

Background facts

[4] The applicants, John Mooney and Rebecca Smith, own 13.28 hectares of land at 73 Finlays Road, close to West Melton township (the property).

[5] For some time now, they have been working in conjunction with their neighbours, Keith and Cathy Cowan, to complete a five-lot subdivision of the property. In July 2022, Servus Consultants were engaged to complete the subdivision consent application and surveying.

[6] In November 2022 the applicants refinanced with the defendant in order to obtain $200,000 in finance to undertake the subdivision. Although the loan agreement was not provided in evidence, there was no dispute that its key provisions were as follows:

(a)a facility to borrow $1,000,000;

(b)interest fixed at $200,000 lump sum;

(c)$800,000 of the loan facility was advanced to clear the previous mortgage;

(d)the balance was held by the respondent’s lawyers to pay subdivision costs as they arose; and

(e)in default, the interest rate was 25 per cent per annum plus $50,000.

[7] As Mr Mooney explained in his affidavit, the process of obtaining a subdivision consent was slow and met several hurdles. For example, in August 2023, the activity status of the subdivision changed to a discretionary activity under the partially operative Selwyn District Plan. This required further information to be provided to the Council on the subdivision application.

[8] Issues also arose because the land being subdivided was located adjacent to a pig farm and the owners of the pig farm required a covenant to be registered on the land being subdivided, placing certain restrictions on how it was used in order to protect the ongoing use of their land as a pig farm. Mr Mooney explained it took some 10 months to resolve matters to the satisfaction of all parties in…

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 Mooney v Small Car World

Details

AGLC: Mooney v Small Car World [2025] NZHC 93
Case: [2025] NZHC 93
Decision Date: 10 February 2025

CaseChat Overview and Summary

The High Court of New Zealand heard an application by John Mooney and Rebecca Smith seeking an interim injunction against Small Car World Ltd, a mortgagee, to prevent it from proceeding with the sale of their property by auction. The applicants had defaulted on a loan agreement with the mortgagee and the mortgagee had issued a notice of demand for the outstanding amount. Despite attempts by the applicants to refinance, the mortgagee proceeded with the auction. The applicants argued that the mortgagee had not taken reasonable care to obtain the best price for the property and had breached an implied term in a settlement agreement to provide reasonable notice before taking further action. The mortgagee argued that it had taken reasonable steps to market the property and that the applicants had breached the settlement agreement by refusing to allow access to prospective purchasers. The Court found that there was no serious question to be tried as to whether the mortgagee had breached its statutory duty under the Property Law Act 2007, as the marketing campaign had been reasonable and the use of the term "liquidation sale" in the advertising material did not prejudice the campaign. The Court also found that there was no serious question to be tried as to whether the mortgagee had breached an implied term in the settlement agreement, as the agreement was clear that the respondents reserved the right to set a new auction date in the event of a breach and there was no room for implying a term requiring the respondents to give notice before taking further action. The Court further found that the balance of convenience did not favour granting the injunction, as there was no evidence that the applicants would be able to obtain alternative finance in the next month and the mortgagee had already afforded the applicants considerable leniency. The Court declined the application for an interim injunction and reserved the issue of costs.

Orders