Wallace v Bank of New Zealand

[2012] NZHC 2695

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-3534 [2012] NZHC 2695

BETWEEN  JANINE ANN WALLACE Plaintiff

ANDBANK OF NEW ZEALAND Defendant

Hearing:         15 October 2012

Counsel:         No appearance for plaintiff

T G J Allan for Defendant

Judgment:      15 October 2012

(ORAL) JUDGMENT OF LANG J [on counterclaim]

JANINE ANN WALLACE V BANK OF NEW ZEALAND HC AK CIV-2009-404-3534 [15 October 2012]

[1]      The plaintiff in this proceeding, Ms Wallace, has recently discontinued her claims against the defendant, the Bank of New Zealand (“the Bank”).   As a consequence, it remains for me to determine the counterclaim brought by the Bank in respect of outstanding monies allegedly owing to it by Ms Wallace.  Through her solicitors, Ms Wallace has also advised that she does not propose to contest the Bank’s counterclaim.

[2]      The Bank’s counterclaim arises out of various facilities and agreements that the Bank entered into with Ms Wallace.   The advances made pursuant to these facilities and agreements were secured against three properties.  In or about February

2008,  Ms  Wallace  began  to  fall  into  arrears  with  her  commitments  under  the facilities.    Between  February  2008  and  March  2009,  further  defaults  occurred. During this period, the Bank was also on occasion required to pay rates on one or more of the mortgaged properties because Ms Wallace had failed to pay the same.

[3]      The Bank responded to the defaults by notifying Ms Wallace of them and also, on occasion, by serving notices on her pursuant to s 119, 120 and 121 of the Property Law Act 2007.

[4]      Matters came to a head in March 2009.   By that stage Ms Wallace was in arrears with her commitments in the sum of $67,684.70, and she had  failed to comply with a Property Law Act notice served on her on 28 January 2009.

[5]      On 11 March 2009, the Bank issued notices of demand calling up all the loans it had made to Ms Wallace.  At that stage, Ms Wallace owed the Bank a total sum of $2,661.411.00.

[6]      The Bank subsequently took steps to sell the three properties over which it held security in respect of the loans.  That process was not without difficulties, but it is not necessary for present purposes to go into detail regarding these.

[7]      Following the sale of all three properties, the sum of $774,396.66 remained outstanding by way of principal as at 31 July 2012.  Interest at a default rate of 8.99 per cent on that sum amounted to $163,550.52.  The total amount outstanding as at

31 July 2012 was therefore $937,947.18.

[8]      Having read the documentation and the evidence adduced on behalf of the Bank, I am satisfied that Ms Wallace has no defence to the Bank’s claim for the outstanding monies and I enter judgment in favour of the Bank for the sum of

$937,947.18 accordingly.

[9]      I record that the Bank does not seek judgment in respect of interest accruing after 1 August 2012.

Costs

[10]     This leaves the issue of costs.   Under the contractual arrangement between the Bank and Ms Wallace, Ms Wallace has agreed to meet the Bank’s reasonable costs in relation to any enforcement action that the Bank might be required to take as a result of default on her part.   The Bank has incurred legal costs totalling approximately $142,000.00.   Of that sum, it has already charged the sum of approximately $67,000.00 to Ms Wallace’s accounts as it is entitled to do as a matter of contract.  It now seeks judgment in the sum of $78,219.07 in respect of legal costs it has incurred since 31 August 2011.

[11]     Having considered the various bills of costs that relate to this period, I am satisfied that the legal costs in respect of which the Bank seeks judgment are reasonable.

[12]     I therefore enter judgment in favour of the Bank in relation to the legal costs that it has incurred since 31 August 2011 amounting to $78,219.07.

Security for costs

[13]     Ms Wallace has paid the sum of $24,000.00 into Court by way of security for

the Bank’s costs.  I direct that the Registrar is to pay that sum forthwith to the Bank’s

solicitors.

Lang J

Solicitors:

Grove Darlow & Partners, Auckland

Copy to:

J A Wallace