Savill v AMFL Limited

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-143

[2020] NZHC 655

IN THE MATTER OF
An application for interim injunction restraining AMFL LIMITED from advertising for sale, selling, disposing or otherwise dealing with the property (contained in Certificate of Title MD/1116, Legal Description Lot 1, Deposited

Plan 8221) (the “Mortgaged land”) or any part thereof.

UNDER

Rule 7.53 of the High Court Rules and the High Court’s inherent jurisdiction

BETWEEN

SIMON LYDALL SAVILL

Applicant

AND

AMFL LIMITED

Respondent

Hearing: 25 March 2020 (On the papers)

Counsel:

C J Cousins and D J Ballantyne for the Applicant

Judgment:

25 March 2020

JUDGMENT OF JUSTICE DUNNINGHAM

This judgment was delivered by me on 25 March 2020 at 5.30pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 25 March 2020

SAVILL v AMFL LIMITED [2020] NZHC 655 [25 March 2020]

[1] I have received an urgent without notice interlocutory application for interim injunction to stop a mortgagee sale proceeding in respect of mortgaged land located in Kumutoto Bay in the Marlborough Sounds being Lot 1, Deposited Plan 8221, Certificate of Title MD/1116 (“the Mortgaged Land”). It is currently being marketed for sale by Bayleys Marlborough.

[2] Time pressures mean I cannot outline the details of the application. Suffice to say the applicant raises a number of issues which the applicant says should preclude AMFL Ltd (“AMFL”) proceeding with the mortgagee auction on 3 April 2020. It says there are serious issues to be tried in that AMFL:

(a)cannot exercise any power to sell the Mortgaged Land as no valid notice has been given to the applicant pursuant to s 118 Property Law Act 2007;

(b)cannot exercise any power to sell the Mortgaged Land as no valid notice has been given to the applicant pursuant to s 119 and s 120 Property Law Act 2007 and the applicant has been materially prejudiced;

(c)has breached its statutory duty of reasonable care to the applicant to obtain the best price reasonably obtainable as at the time of sale under s 176 Property Law Act 2007;

(d)has failed in its common law duty to:

(i)take reasonable precautions to obtain a proper price;

(ii)use its mortgagee powers for a proper purpose; and

(iii)not act in a manner which unfairly prejudices or wilfully and recklessly sacrifices the interests of the applicant;

(e)continues to market the property for sale by mortgagee auction in circumstances where New Zealand’s COVIC-19 alert level is set to increase to Level 4 at midnight, 25 March 2020 and, as a result, the

applicant, people or person(s) interested in attending the auction, Bayleys Marlborough, AMFL (as providers of non-essential services) will not be able to attend the auction without breaching the restrictions imposed by Level 4 of the COVID-19 Alert System.

[3] It is clear from the correspondence that some of these allegations are strongly disputed. However, I consider one point is unquestionably live. AMFL’s lawyers, on 17 March 2020 sought keys to the property to enable viewings, noting that they may well lead to a better sale outcome which they said “is in both clients’ respective interests”. Not only can that not occur but, in the current circumstances where the COVID-19 Alert Level has been raised to Level 4, it is impossible to see how a mortgagee sale could be held which would obtain the best price reasonably obtainable as parties can neither view the property nor attend the auction.

[4] Given the application has been accompanied by the standard undertaking as to damages and there is nothing to indicate that the mortgagee would suffer irremediable loss if the sale was deferred, I grant the application on the terms sought.

[5] The application is to be served on the lawyers identified for Bayleys and AMFL as soon as can practicably be achieved.

[6] Leave is reserved to the applicant and the affected parties to revert to the Court should further orders be necessary. However, it is anticipated that substantive proceedings, along with an application for directions as to service, will be filed as soon as practicable.

Justice Dunningham

Solicitors:
Canterbury Legal, Christchurch

Copy to counsel:
D J Ballantyne, Barrister, Christchurch

Savill v AMFL Limited is a case where Simon Lydiall Savill, the applicant, sought an interim injunction to prevent AMFL Limited from proceeding with the sale of a property in Kumutoto Bay. The dispute arose from the impending mortgagee auction on 3 April 2020, and the applicant argued that AMFL could not proceed with the sale due to several reasons, including inadequate notice given under the Property Law Act 2007, breach of statutory and common law duties, and the inability to hold a sale due to COVID-19 alert level restrictions. The applicant sought to halt the auction due to these concerns, and the matter was heard on the papers without the presence of counsel for the respondent.

The primary legal issues for the court to decide were whether AMFL could lawfully proceed with the mortgagee sale under the given circumstances, specifically considering the notice requirements under the Property Law Act 2007, the duty to obtain the best price reasonably obtainable, and the impact of the COVID-19 alert level on the ability to conduct the sale. Additionally, the court had to consider the applicant's allegations of AMFL breaching its statutory and common law duties.

Justice Dunningham found that while some of the allegations were disputed, the inability to hold a sale under the current COVID-19 alert level restrictions was indisputable. Given the standard undertaking as to damages provided by the applicant and the lack of evidence suggesting irreparable loss to the mortgagee if the sale was deferred, the court granted the application on the terms sought. The court acknowledged that with the alert level raised to Level 4, it was impossible for the mortgagee to obtain the best price reasonably obtainable as parties could neither view the property nor attend the auction. Consequently, the injunction was granted, and the sale was stayed pending further proceedings.

In summary, the court granted the interim injunction restraining AMFL Limited from proceeding with the mortgagee sale of the property due to the COVID-19 alert level restrictions. The applicant was granted leave to revert to the court if further orders were necessary, and substantive proceedings were anticipated to be filed as soon as practicable.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established

IN THE MATTER OF	An application for interim injunction restraining AMFL LIMITED from advertising for sale, selling, disposing or otherwise dealing with the property (contained in Certificate of Title MD/1116, Legal Description Lot 1, Deposited Plan 8221) (the “Mortgaged land”) or any part thereof.
UNDER	Rule 7.53 of the High Court Rules and the High Court’s inherent jurisdiction
BETWEEN	SIMON LYDALL SAVILL Applicant
AND	AMFL LIMITED Respondent

Hearing:	25 March 2020 (On the papers)
Counsel:	C J Cousins and D J Ballantyne for the Applicant
Judgment:	25 March 2020