Mooney v Small Car World Ltd

[2025] NZHC 20

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-713

[2025] NZHC 20

BETWEEN

JOHN WILLIAM SPENCER MOONEY, REBECCA GOLDING SMITH (aka) MOONEY
Plaintiffs

AND

SMALL CAR WORLD LTD

Defendant

Hearing:	17 January 2025 via teleconference
Appearances:	H A Evans for Plaintiffs/Applicants A V Foote for Defendant/Respondent
Judgment:	17 January 2025

ORAL JUDGMENT OF EATON J

This judgment was delivered by me on …….. at ……… pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

MOONEY v SMALL CAR WORLD LTD [2025] NZHC 20 [17 January 2025]

Introduction

[1]    After 5.00 pm on 16 January 2025, the plaintiffs filed an urgent application that in effect sought an order that the settlement of the sale of the plaintiff’s property at West Melton, be deferred for five working days. As duty judge, I convened a telephone conference at 9.30 am this morning. I heard from counsel for both parties.

[2]    At the conclusion of the conference, I dismissed the application. Brief reasons now follow.

Background

[3]    Very briefly summarised, the plaintiffs own a property in West Melton (the property). They had been working on a subdivision of that land. In November 2022 the plaintiffs refinanced with the defendant to obtain $200,000 to finance the subdivision. The subdivision was met with obstacles. The mortgage was due to be repaid in full on 9 November 2023. The plaintiffs defaulted. A notice of demand was issued on 14 March 2024.  A Property Law Act  notice was issued in  June 2024.   Mr Mooney had been unsuccessful in seeking refinancing options. The defendant proposed  to  sell  the   property  in   a  mortgagee  sale  by  way  of  auction  on     12 December 2024, but agreed to defer that until 11 January 2025 on certain conditions. The plaintiffs defaulted on those conditions and the property was relisted for auction on 23 December 2024.

[4]    On the morning of 23 December 2024, Mr Mooney, on behalf of himself and Ms Smith, filed an application for an interim injunction seeking to restrain the defendant from proceeding with the mortgagee sale. The injunction sought to delay the auction to a date no earlier than 1 February 2025.

[5]    The application was served on the defendant and considered at a telephone conference convened by Dunningham J at 11.40 am on 23 December 2024. Having heard from Mr Mooney in person for the plaintiffs and counsel for the defendant, the application was declined. In a minute, Dunningham J indicated that she had hoped to get a results judgment out on the day but, absent associate support, was unable to do so. The Judge indicated that full reasons would be available in the new year.

What then happened?

[6]    Very shortly before 5 pm on 16 January 2025, Mr Evans, now instructed on behalf of the plaintiffs, contacted the High Court Registry seeking an urgent hearing. His email to the registrar observed that Dunningham J had declined the application for interim relief, understanding the decision was due to Mr Mooney and his partner lacking  finance  to  repay  the  outstanding  mortgage.  The  email  recorded  that  Mr Mooney has now obtained finance but cannot draw down the funds until next week. It recorded  that  settlement  of the sale of the property  was  to  proceed  on  17 January and that Mr Mooney sought  an  extension  of five working days  until  24 January to repay the mortgage in full.

The application

[7]    In a memorandum filed after 5 pm on 16 January 2025, Mr Evans, again referred to Mr Mooney’s understanding that the basis upon which Dunningham J declined the application for interim relief was that Mr Mooney had been unable to secure a refinancing package in order to settle the Property Law Act notice. The memorandum records that Mr Mooney has now secured sufficient finance to remedy that  default  and   seeks   “a   five-working-day   extension   of   time   to   Friday   24 February 2025 to draw down the loan…”.

[8]    An unsworn affidavit from Mr Mooney deposes that at the 23 December hearing, he overlooked asking Dunningham J to defer the settlement date of any sale of the property to 31 January 2025. His affidavit says that on 15 January, the plaintiffs received and accepted an offer of finance, which he considers sufficient to repay the defendant in full and records that as “a matter of practicality” five working days are required to complete the documentation and draw down the funds.

[9]    Mr Mooney deposes that he has spoken to one of the four persons who purchased the property at auction on 23 December, seeking a one-week extension of the settlement of the sale. Mr Mooney says the party he spoke with expressed his agreement to an extension but confirmed that his partners were not.

[10]   Mr Smith, for  the  defendant  tells  me  that  on  6  January  and  again  on  16 January 2025 he spoke with the purchasers, exploring the possibility of a deferred settlement. The advice of the purchasers was clear, they are not agreeable. He says he has reviewed the loan offer made to the plaintiffs and has real doubts whether there is sufficient funding available to settle the amount due under the mortgage.

[11]   Mr Evans invites the Court to treat the application for an extension of time as part and parcel of the original application for interim relief. He maintains that on his instructions there is sufficient funds available to repay the mortgage in full. He highlights that it was always going to be difficult for the plaintiffs to arrange refinancing over the holiday period given relevant persons are on holiday. He submits that a short indulgence is now required to allow the plaintiffs to refinance.

[12]   When pressed as to the lawful basis for the court to intervene, Mr Evans points to   cl   10.1   of   the   sale   and   purchase   agreement   (the   agreement)   dated   23 December 2024.

Analysis

[13]   The application for an interim injunction has been determined. As I indicated to counsel, and although the Judge’s reasons have not been released, I have spoken to the Judge and am privy to a draft judgment. The Judge was not satisfied that there was a serious issue to be tried and was otherwise was not satisfied that the balance of convenience or overall interests of justice favoured granting relief.

[14]   I cannot adopt Mr Evan’s proposal that I treat the current application as a form of variation of the original application for interim relief. The application has been dismissed and is at an end. There is no other application that is properly before the court.

[15]   I am far from satisfied it would be appropriate for the court to make the extension order sought, given there is no substantive application before the court against which an ancillary order might be made.

[16]I nevertheless comment briefly as to the merits.

[17]   Pursuant to cl 31.1 of the agreement, the vendor (the defendant as mortgagee) has the right to cancel the agreement by notice given “at any time prior to the Settlement Date” in the event the first mortgage registered against the property is redeemed. The plaintiffs’ case is that if granted an extension, they would then seek to redeem the first mortgage and invite the vendor to exercise its right to cancel the agreement.

[18]   That proposal has no  prospect  of  success.  The  settlement  date  is  today, 17 January 2025. The vendor has not given notice under cl 31.1. It is now too late to do so unless the purchaser agrees to waive its rights under the contract. Mr Smith advised that the defendant had been awaiting confirmation of the purchasers’ position before indicating if it might exercise its right under cl 31.1 if that was a legitimate option. It is clear that the purchasers are not willing to waive those rights. The purchasers have made it clear they will not agree to any extension. Further, the defendant is not satisfied that the proposed refinancing is sufficient to meet the full sum due and owing under the mortgage, such that the defendant is unlikely to agree to cancel the contract.

[19]   Mr Evans suggests that cl 10.1 of the contract might avoid the time bar imposed by cl 31.1. Clause 10.1 provides:

10.1Should, as at the date of the auction or at any time up until settlement has been effected, there be any:

…

(2) injunction or other court order  which  would  prevent registration of an electronic instrument being a memorandum of transfer in favour of the purchaser…

then the vendor may in its discretion:

(a)by notice in writing to the purchaser cancel the contract evidenced by this agreement; or

(b)elect, by notice in writing to the purchaser, to pursue the removal or satisfaction of the matter.

[20]   In my view this clause does not assist the plaintiffs. There is no injunction, and I am satisfied there is no legal basis for any other orders to be made. Even if that were not the case, I observe that cl 10.1 merely invests in the defendant vendor the

right to exercise a discretion. Understandably, the defendant vendor is not prepared to do so on the basis of the current proposal because it is concerned that the proposed refinancing is inadequate to redeem the mortgage.

[21]   Mr Evans suggested that the purchasers “might” ultimately agree to relinquish their rights under the contract. But the purchasers, like the defendant, have made their position clear.

[22]   Mr Evans was unable to articulate any cause of action that might leave the Court to make the order sought. In my view matters have moved on significantly since the decision of Dunningham J to dismiss the application for an interim injunction. The auction proceeded on 23 December 2024. That contract confirms a settlement date of 17 January 2025. That contract is legal, binding and enforceable. The purchasers are not parties to the original proceedings and are not parties to the present application but, have a legal entitlement and obligation to settle the transaction today.

[23]   I am quite satisfied there is no legal basis upon which the Court can or should intervene. The application framed as an application to extend the settlement date of the contract to 24 January 2025 is declined.

[24]   In the circumstances, I make no order for costs. If the defendant seeks to be heard on costs, a memorandum of not  more than three pages  is to be  filed within  10 working days.

...................................................

Eaton J

Solicitors:
Duncan Cotterill, Christchurch

Counsel:
H A Evans, Barrister, Christchurch