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Robertson v ASB Bank Ltd

Robertson v ASB Bank Ltd

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA616/2013
[2014] NZCA 597

BETWEEN

CANDACE ANN ROBERTSON
First Appellant

ROSS ARTHUR ROBERTSON
Second Appellant

AND

ASB BANK LIMITED
Respondent

Hearing:	23 October 2014
Court:	Miller, Heath and Dobson JJ
Counsel:	Appellants in person NFD Moffatt and O F Newman for Respondent
Judgment:	5 December 2014 at 12.45 pm

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe orders dismissing the applications made by Mr and Mrs Robertson to set aside bankruptcy notices are quashed. In substitution, orders setting aside each of the bankruptcy notices are made.
CThe order for costs made in favour of ASB Bank Ltd in the High Court is quashed. In substitution, an order that ASB Bank Ltd pay usual disbursements to Mr and Mrs Robertson is made.
DUsual disbursements are awarded in favour of Mr and Mrs Robertson on the appeal.

____________________________________________________________________

REASONS OF THE COURT

(Given by Heath J)

TABLE OF CONTENTS

The appeal................................................................................................................. [1]
Background............................................................................................................... [2]
Legal aid considerations.......................................................................................... [6]
The applications to set aside the bankruptcy notices......................................... [12]
Legal principles...................................................................................................... [17]

(a)       Setting aside a bankruptcy notice............................................................. [17]
(b)       Onus of proof............................................................................................. [25]
(c)        The duty of a mortgagee exercising a power of sale................................. [28]

The alleged cross claim.......................................................................................... [31]

(a)       The evaluative task.................................................................................... [31]
(b)       The nature of the inquiry........................................................................... [33]
(c)        February 2011 to October 2011 – the first attempt at a mortgagee sale.. [34]
(d)       October 2011 to April 2012 – the second attempted mortgagee sale....... [45]
(e)        April 2012 to August 2012 – third attempted mortgagee sale.................. [51]

Analysis................................................................................................................... [56]
Result....................................................................................................................... [60]

The appeal

Mr and Mrs Robertson appeal against decisions made by Associate Judge Bell, in the High Court at Auckland on 16 August 2013, by which he refused their application to set aside bankruptcy notices[1] served under the Insolvency Act 2006.[2]

Background

[1]The application was made under r 24.10 of the High Court Rules.

[2]ASB Bank Ltd v Robertson [2013] NZHC 2125 [Bankruptcy notice decision].

Mr and Mrs Robertson owned a property at 710 Hibiscus Coast Highway, Hatfields Beach north of Auckland. Having borrowed money from ASB Bank Ltd (ASB) in March 2006, they granted a registered first mortgage over the property in ASB’s favour. The mortgage also secured moneys outstanding from time to time under a later revolving credit facility. By late 2010, that facility was overdrawn.
ASB demanded the outstanding amount. As a result of non-compliance, ASB began to take enforcement proceedings under its mortgage. A notice was issued under s 119 of the Property Law Act 2007, and was served on Mr and Mrs Robertson. The alleged default was not remedied within the requisite time, meaning that the bank was entitled to sell the property in order to satisfy the debt. In 2011 and 2012, real estate agents were engaged to act on behalf of ASB, with a view to selling the property. Although active steps were taken over that time, ASB did not finally sell…

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.

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Details

Case: [2014] NZCA 597
Decision Date: 5 December 2014 at 12.45 pm

CaseChat Overview and Summary

In Robertson v ASB Bank Ltd, the Court of Appeal of New Zealand was asked to consider whether the lower court's refusal to set aside bankruptcy notices against the Robertsons was justified. The Robertsons argued that they had a cross claim against the bank, ASB, that they could not raise in the proceedings in which summary judgment was entered against them. They argued that ASB had breached its statutory duty to obtain the best price reasonably obtainable when it sold the mortgaged property. The Court of Appeal allowed the appeal and set aside the bankruptcy notices. The Court held that the lower court had erred in assessing whether there was a genuine triable cross claim. The Court found that it was reasonably arguable that ASB's actions in marketing the property and dealing with offers to purchase it had compromised the sale price. The Court concluded that the lower court's findings more closely reflected views on the merits of the claim, as opposed to an assessment of whether there was enough evidence to go to trial. The Court quashed the lower court's decision not to set aside the bankruptcy notices and ordered that ASB pay the Robertsons' usual disbursements in the High Court and on the appeal.

Orders