Waimauri Limited v Powell Junior Limited - [2024] NZHC 852

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1694

[2024] NZHC 852

UNDER Part 18 of the High Court Rules

AND UNDER

Section 137 of the Property Law Act 2007

BETWEEN

WAIMAURI LIMITED

Plaintiff

AND

POWELL JUNIOR LIMITED

Defendant

Hearing: 15 April 2024

Counsel:

M Lenihan for the Plaintiff

J Harvey, Director for the Defendant

Judgment:

18 April 2024

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 18 April 2024 at 4 pm Pursuant to Rule 11.5 of the High Court Rules.

…………………..
Registrar/Deputy Registrar

Solicitors/Counsel:
Michael Lenihan Barrister, Auckland J Harvey

WAIMAURI LIMITED v POWELL JUNIOR LIMITED [2024] NZHC 852 [18 April 2024]

Introduction

[1] The plaintiff, Waimauri Ltd (Waimauri), is the mortgagee of a residential property at 2/35 Powell Street, Avondale, Auckland (the property), owned by Powell Junior Limited (PJL). Waimauri applies for an order for possession of the property.1

[2] The proceeding is set down for an eight-day trial commencing on 19 August 2024. Waimauri has served its briefs of evidence. PJL’s briefs of evidence are due to be served on 13 May 2024.

[3] PJL’s sole director is Jason Harvey (Mr Harvey). Mr Harvey and his family occupy the property as their family home.

[4] PJL has no right to carry on proceedings in a court except by a solicitor, without the leave of the court.2 Mr Harvey has previously been granted leave to represent PJL on a limited basis, on the ground that PJL does not have the resources to retain counsel.

[5] Waimauri applies for an “unless” order, requiring PJL to retain a solicitor, failing which PJL’s defence be struck out. Mr Harvey has been granted leave to oppose the application on behalf of PJL.

Background

[6] The factual background is set out in full in the judgment of Harland J declining Waimauri’s application for summary judgment in this proceeding.3

[7] In summary, Mr Harvey became involved in property developments promoted by his brother-in-law, Peter Chevin (Mr Chevin), through various entities controlled by Mr Chevin.

[8] One such transaction was the purchase of the property. PJL was incorporated by Mr Harvey for that purpose. Waimauri advanced funds to PJL for the purchase, secured by a mortgage (the PJL advance).

1      Under s 137(1)(c) of the Property Law Act 2007 (the PLA).
2      Re GJ Mannix Ltd [1984] 1 NZLR 309 (CA) at 310.
3      Waimauri Ltd v Powell Junior Ltd [2022] NZHC 515 at [14]–-[75].

[9] Mr Harvey also became involved in a development in Te Kauwhata financed by Waimauri.

[10] Waimauri provided finance to other entities associated with Mr Chevin, including Glenvale Holdings Ltd (GHL). The loan agreement between Waimauri and GHL included a clause which obliged GHL to repay the PJL advance on the expiry date if the PJL advance remained outstanding.

[11] When Mr Harvey ended his involvement in the Te Kauwhata development, Mr Harvey entered into an “Exit Agreement” with an entity controlled by Mr Chevin,…

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: [2024] NZHC 852
Decision Date: 18 April 2024

CaseChat Overview and Summary

Waimauri Limited, a mortgagee, has applied for an order for possession of a residential property owned by Powell Junior Limited (PJL). The property is occupied by PJL’s sole director, Jason Harvey, and his family. PJL, which lacks the resources to retain counsel, is currently represented by Mr Harvey. Waimauri seeks an “unless” order, requiring PJL to retain a solicitor by a specified date, failing which PJL’s defence be struck out. The primary legal issue the court had to decide was whether Mr Harvey should be permitted to continue representing PJL at trial, despite the general rule that a corporation must be represented by a solicitor. The court considered Waimauri’s right to an orderly conduct of the trial, and the complexity of the substantive issues for trial. The court balanced Waimauri’s interest in an orderly disposition of its claim at trial against PJL’s interest in being able to advance a defence which had previously been held to be arguable. The court granted leave to Mr Harvey to continue to represent PJL on terms that provide for on-going review, reserving leave to Waimauri to seek a review of the grant of leave after the date for service of PJL’s briefs of evidence.

The court’s decision was grounded in the general rule that a corporation must be represented by a solicitor, which is intended to ensure that the company’s interests are adequately presented and protected, and that the court can be satisfied that careful attention has been given to the validity of the proceedings. However, the court recognised that in appropriate circumstances, exceptions to this rule could be made. In this case, the court considered the interests of justice, including the potential for pre-trial applications, confusion regarding the state of the defence evidence, and the straightforward nature of the claim. The court concluded that allowing Mr Harvey to continue to represent PJL, subject to ongoing review, was in the interests of justice. This decision reflects the court’s willingness to balance the procedural rights of the plaintiff with the substantive rights of the defendant, particularly in cases where the defendant is unable to afford legal representation but may become able to do so in the future. The court also emphasised the importance of ensuring that the trial is conducted in an orderly manner, while recognising the need to provide an opportunity for the defendant to present its defence.

Orders