HART & ORS V ANZ BANK NEW ZEALAND LIMITED COA CA729/2012

HART & ORS V ANZ BANK NEW ZEALAND LIMITED COA CA729/2012 [10 April 2013]IN THE COURT OF APPEAL OF NEW ZEALANDCA729/2012[2013] NZCA 94BETWEEN BARRY JOHN HARTFirst AppellantAND WOODHILL STUD LIMITEDSecond AppellantAND WOODHILL HOLDINGS LIMITEDThird AppellantAND MALORY CORPORATION LIMITEDFourth AppellantAND ANZ BANK NEW ZEALAND LIMITEDRespondentHearing: 20 March 2013Court: Ellen France, Stevens and White JJCounsel: J N Bioletti for AppellantsL A O'Gorman and A L Williams for RespondentG S Caro for Official AssigneeJudgment: 10 April 2013 at 11.00 amJUDGMENT OF THE COURTA The appeals of all appellants, having been abandoned by the Official Assignee, are no longer extant and are to be treated as terminated.B The appeals having been abandoned, the application to adjourn the hearing of the appeals is dismissed.C The application by the appellants for a stay of the High Court judgment and the order for vacant possession of the property at 1331 State Highway 16, Waimauku (the home property) is dismissed.D The respondent is hereby released from its undertaking recorded in the Minute of this Court dated 12 December 2012, that is, not to take any further steps in exercise of its power of sale arising under the mortgage in respect of the home property.E There is no order as to costs.____________________________________________________________________REASONS OF THE COURT(Given by Stevens J)Table of ContentsPara NoThe appeals are abandoned [1]Background facts [4]Proceeding giving rise to appeal [8]The bankruptcy proceeding [14]Undertakings by Mr Hart not to prevent exercise of power of sale [19]Steps taken by Official Assignee [24]Latest developments [29]Issues for determination [32]First issue – an abandonment under r 44? [33]Second and third issues – adjournment [40]The proposed appeals against decisions of Official Assignee [43]The substantive appeal point [45]Fourth issue – the Bank's undertaking [52]Result and formal orders [53]Costs [54]The appeals are abandoned[1] On 20 March 2013 the Court was due to hear appeals by the four appellants against a decision of Associate Judge Abbott in the High Court at Auckland granting summary judgment for ANZ Bank New Zealand Ltd (the Bank) as both defendant and counterclaim plaintiff in proceedings brought by the appellant.1 Since the1 Hart v ANZ National Bank Ltd [2012] NZHC 2839 [High Court decision].appeals were filed the first appellant, Barry Hart, was adjudicated bankrupt by order of the High Court at Auckland on the application of the Bank.2 Moreover, the second, third and fourth appellants were placed in liquidation on 11 March 2013, with the Official Assignee appointing himself liquidator of the three companies.[2] On the same day the Official Assignee in his capacity as assignee in bankruptcy of the first appellant and liquidator of the second to fourth appellants advised the Court that he no longer intended to prosecute the appeals by all appellants and purported to abandon all further proceedings concerning the appeals. The issue for decision concerns the effect of the notice given by the Official Assignee. A consequential issue is whether an application made on behalf of all four appellants for the adjournment of the appeals should be granted. It is also necessary to determine the fate of an application by the appellants for a stay of the High Court judgment and the order for vacant possession of the property at 1331 State Highway 16, Waimauku (the home property). Finally, the Bank seeks to be released from an undertaking given to this Court in the lead up to the intended hearing of the appeals that it would not take any further steps in exercise of its power of sale arising under the mortgage in respect of the home property.[3] For the reasons that follow we are satisfied that the appeals are no longer extant and are to be treated as terminated. The advice of the Official Assignee to the Registrar of this Court on 11 March 2013 is properly to be regarded as a notice of abandonment by all appellants compliant with r 44 of the Court of Appeal (Civil) Rules 2005 (the Rules). Its effect is decisive of the appeals and the Court may no longer determine the grounds raised. It follows that the application to adjourn the proposed hearing of the appeals must be dismissed. The application to stay the High Court judgment must also be dismissed. We therefore conclude that there is now no basis for the undertaking and the Bank is entitled to be released from it forthwith.2 ANZ Bank New Zealand Ltd v Hart [2012] NZHC 3464 [bankruptcy decision]. The Bank hadchanged its name on 29 October 2012.Background facts[4] From about March 2006 the Bank began progressively lending funds to Mr Hart and entities associated with him. Various lending facilities were put in place and by November 2008 the aggregated sums advanced exceeded $22 million. Security comprised mortgages given over various properties in the Waimauku area, west of Auckland. One of these mortgages related to the home property, where Mr Hart and his wife resided. The mortgagors defaulted in meeting their obligations to the Bank and in August 2011 the Bank made demands upon Mr Hart and others to repay an amount in excess of $26 million then owing including accumulated interest.[5] Mr Hart attempted to injunct the Bank from exercising its powers of sale under the mortgages. Steps taken by Mr Hart included lodging caveats which for a time prevented the Bank from selling the mortgaged properties. Extensive litigation followed in the High Court. The Bank defended the injunction applications, sought removal of the caveats and applied for summary judgment against Mr Hart and other mortgagors on their personal covenants to repay.[6] Following an unsuccessful application for an interim judgment to restrain the Bank from proceeding with a mortgagee sale of various securities, the Bank applied for costs. On 13 July 2012 the High Court entered judgment for the Bank against Mr Hart for costs in the sum of $34,689.52.3 Mr Hart did not appeal against that judgment.[7] The Bank then issued a bankruptcy notice against Mr Hart on 23 August 2012 for payment of the costs order. Mr Hart responded on 19 September 2012 with an application to set aside the bankruptcy notice. The grounds relied upon included:(a) that the costs order was interlocutory only; and(b) Mr Hart had filed a claim against the Bank seeking damages in an unspecified amount for various alleged breaches arising from its sale of properties under the securities.3 Hart v ANZ National Bank Ltd [2012] NZHC 1705.Proceeding giving rise to appeal[8] With respect to the latter claim, the background in summary is as follows.After the loans fell into arrears, a six month "stand still" arrangement was negotiatedto allow the appellants time to make attempts to sell the properties in the hope that a sum in the region of $30 million would be realised to repay the Bank in full. One of the terms of this arrangement was an undertaking from Mr Hart that if the properties remained unsold, he would cooperate fully with the mortgagee sale process. When the properties were unsold at the conclusion of that period, the Bank completed service of Property Law Act 2007 (PLA) notices. The Bank then proceeded with mortgagee sales of the properties. The marketing campaign started on 24 March 2012, with a tender closing date of 3 May 2012 and a tender acceptance date of 14 May 2012.[9] While the proceeding to which the present appeal relates commenced as an application to restrain the mortgagee sales, by October 2012, when the matter came before Associate Judge Abbott, the Bank had already settled the sale of seven of the eight security properties. For that reason, the appellants amended their claim to one for damages. The only unsold security was the home property.[10] The appellants pleaded two causes of action in the High Court. The first was that the Bank failed to take reasonable care in the course of the mortgagee sale process to obtain the best price reasonably obtainable at the time of sale, in breach of s 176 of the PLA. The second was that Mr Hart had offered to redeem the mortgageover the home property, but that the Bank had refused to give him an "individual redemption sum" in breach of s 97 of the PLA.[11] In response, the Bank filed a statement of defence and counterclaimed for the debt due to it under the loan agreements. The Bank applied for summary judgment in respect of the damages claims and the counter-claims. The Bank sought an order for vacant possession in respect of the home property.[12] On 29 October 2012 the High Court entered summary judgment in favour of the Bank against Mr Hart for the sum of $20,543,951.92 and the second to fourthappellants for the sum of $16,170,727.11.4 Associate Judge Abbott found that Mr Hart's claim for damages against the Bank was unarguable. Moreover, he had no arguable defence to the Bank's claims. An order for vacant possession of the homeproperty was made.5 The Associate Judge also dismissed Mr Hart's application toset aside the bankruptcy notice issued by the Bank.6[13] It was against this judgment that Mr Hart and the other appellants appealed. The appeal was due to be heard by this Court on 20 March 2013.The bankruptcy proceeding[14] On 8 November 2012 the Bank filed an application to have Mr Hart adjudicated bankrupt on the ground of his failure to comply with the bankruptcy notice based on the costs order for $34,689.52. The application came before Associate Judge Sargisson, who was required to consider whether the Bank had satisfied the requirements for an order for adjudication under s 13 of the Insolvency Act 2006.[15] The Associate Judge concluded that all of the requirements under s 13 had been met and that it was not appropriate to grant an adjournment. She therefore made an order on 17 December 2012 that Mr Hart be adjudicated bankrupt.7 On the same day Mr Hart filed a notice of appeal against the order for adjudication. A priority fixture was made for the appeal which was heard by this Court on 13 February 2013.[16] Before the hearing, security for costs was set by the Registrar at $5,880.00. Mr Hart applied unsuccessfully for a waiver of the requirement to pay security forcosts. An application to review the Registrar's decision was also unsuccessful. At the hearing counsel for Mr Hart confirmed that Mr Hart was not able to comply with4 High Court decision, above n 1, at [68(b)]–[68(d)].5 At [68(f)].6 At [69].7 Bankruptcy decision, above n 2.the order to pay security for costs. Thereupon counsel for the Bank applied orally for leave to apply for an order that the appeal be struck out.8[17] The application was heard by this Court and on 19 February 2013 an order was made granting the Bank leave to apply to strike out the appeal and striking out the appeal.9 This Court held:[14] The issue is whether the interests of justice justify striking out the appeal. The answer lies primarily in an assessment of its merits. Mr Hart'snotice of appeal alleges that the Associate Judge erred in four material respects.[15] First, Mr Hart alleges that the Associate Judge erred in finding that the s 13 jurisdictional prerequisites for an order for adjudication were satisfied. However, it was common ground before the Associate Judge that s 13 was satisfied. Mr Hart did not attempt to oppose the ANZ's applicationon this ground. In this Court Ms Murray simply made unsubstantiated assertions in support and failed to recognise that the costs judgment for $34,689.52 was for a certain amount.[16] Second, Mr Hart asserts that the Associate Judge erred in exercising her discretion under s 36 to adjudicate Mr Hart bankrupt given that the s 13 criteria were not met. We already addressed this point.[17] Third, Mr Hart contends that the Associate Judge erred in failing to exercise her discretion under s 37 to refuse the order for adjudication. However, Mr Hart has not identified any particular error. It is plain, as we have pointed out, that the Associate Judge made her decision after balancing all relevant discretionary factors.[18] Fourth, Mr Hart contends that the Associate Judge erred in failing to halt the application pursuant to ss 38 and 42. However, Mr Hart had taken no steps, as the Associate Judge specifically noted, to apply for a temporaryhalt even though he had been served with the bank's application on20 November 2012.[19] There was no evidential basis for the Associate Judge to find, as Ms Murray submits on appeal, that the ANZ had used the bankruptcy process oppressively or that the bankruptcy would have a prejudicial impact on a separate undertaking given by the bank not to exercise its rights under the mortgagee sale process until determination of an appeal. Moreover, the fact that the adjudication may possibly remove Mr Hart's right of appealagainst the summary judgment award of $20,543,951 is irrelevant. We are not in a position to assess the merits of that appeal and, in any event, if the right of appeal has any real value, it will be an asset in Mr Hart's estatewhich will vest in the Official Assignee. He will then have to decide whether to pursue the appeal.8 Under r 37 of the Court of Appeal (Civil) Rules 2005.9 Hart v ANZ Bank New Zealand Ltd [2013] NZCA 20.[18] We were told that Mr Hart had sought leave to appeal to the Supreme Court against that judgment.Undertakings by Mr Hart not to prevent exercise of power of sale[19] The context to the present applications is also informed by undertakings provided by Mr Hart during the course of the various High Court hearings. Ms O'Gorman for the Bank submitted that in light of such undertakings it wasinappropriate for the appellants to seek a stay to prevent completion of the mortgagee sale of the home property.[20] The particular undertakings in question were provided following the hearing of an application by each of the four appellants (as plaintiffs) for an interim injunction to prevent the Bank exercising its powers of sale as mortgagee. The Bank wanted the application heard on the merits; the Hart interests wanted the hearing adjourned. Venning J declined the adjournment. Mr Hart then told the Judge that heno longer opposed the Bank's position and would withdraw the application for aninterim injunction.10 The Judge recorded the situation thus:[5] Given the background to the matter, I indicated to Mr Hart that I would only be prepared to deal with the matter without hearing full argument on it if he undertook that no further application for interim injunction to prevent the bank exercising its powers of sale as mortgagee would be made. Mr Hart sought time to consider his position.[21] When Mr Hart returned to Court the Judge recorded that:[7] he was prepared to give an undertaking to the Court that he wouldnot pursue further injunctive relief against the bank to prevent the bank'smortgagee sales and also confirmed he would not oppose the application to remove the caveats in the related proceedings.[8] On that basis I consider it unnecessary for Ms O'Gorman and thebank to proceed formally with the opposition to the second application for injunctive relief. However, I record that Ms O'Gorman was ready and ableto deal with the matter substantively and that the applicants, Mr Hart and the related companies, had the opportunity to put their full case in support of the interim injunction before the Court but chose not to do so.10 Hart v ANZ National Bank Ltd [2012] NZHC 1704 at [3].[9] Finally, I record the undertaking referred to above. On the basis of the matters I have referred to I formally dismiss the application for interim injunction.[22] This undertaking became relevant later in the context of an application by the appellants to the High Court for a stay of enforcement of the orders and judgments made by Associate Judge Abbott dated 29 October 2013. In the course of his judgment granting a limited stay, Lang J stated:11[13] I consider that the undertaking Mr Hart gave to the Court on 12 July 2012 is determinative of this aspect of the application. The spirit, if not the letter, of the undertaking he gave to the Court on that date was that he would not make any further attempts to prevent the bank exercising its power of sale as mortgagee. The present application therefore directly contravenes thespirit of that undertaking. If anything, the plaintiffs' position is now worsethan it was when the proceeding was before Venning J on 12 July 2012, because summary judgment has now been entered against them in respect of their substantive claims against the bank. They can no longer claim to have a good arguable case against the Bank. I consider this factor alone is sufficient to justify the Court declining this aspect of the application for stayof enforcement of the Associate Judge's judgment.[23] The final contextual aspect of this phase of the litigation occurred when the Bank sought further orders of the High Court to enable it to continue to realise the securities given by Mr Hart and others. The Bank argued that the steps being taken by Mr Hart amounted to an abuse of the processes of the Court. In granting some of the orders sought, Venning J found:12[43] In this case, the filing of the caveats on a piecemeal basis, lodged with the District Land Registrar just prior to the due settlement dates of the relevant properties; the failure to advise the Bank of the interests which the caveats represented when the interests were purportedly granted; the failure to advise the Court that further caveats had been lodged when there was an application before the Court to remove other caveats on 12 July, and, without any merit, filing an opposition to the removal of the caveats combined with the second application for an interim injunction establishes, in my judgment, that Mr Hart was acting frivolously and vexatiously and with the deliberateobject of using the processes of the Court to frustrate and thwart the Bank'slegitimate attempt to enforce its securities. To do so was a clear and deliberate abuse of the process of the Court.11 Hart v ANZ National Bank Ltd [2012] NZHC 3195 at [13].12 Hart v ANZ National Bank Ltd [2012] NZHC 2291 at [43].Steps taken by Official Assignee[24] In a Minute dated 28 February 2013 concerning this appeal, Harrison J recorded the position of the second to fourth appellants as each being an incorporated company. As such they could only be represented by counsel, unless leave is granted otherwise.13 The company appellants had not at that point been placed in liquidation. With respect to Mr Hart, Harrison J was aware that he had been adjudicated bankrupt and directed that Mr Hart could "only be heard if the Official Assignee formally assumes the conduct of his appeal".[25] The Official Assignee afforded Mr Hart an opportunity to explain why he considered the appeal should proceed. In a memorandum filed by the Official Assignee on 11 March 2013 he stated:3. The Companies Register records Mr Hart as the sole shareholder of the second, third and fourth appellants. Mr Hart was asked by the Assignee to advise whether those shares were held in trust. If he claimed that, he was required to provide evidence of that trusteeship. A deadline was given.4. Mr Hart has filed his statement of affairs with the Assignee. He declares that he is the settlor and trustee of the Watkinson Family Trust and that the only asset held in that trust is the property located at 1331 State Highway 16 Waimauku. The statement of affairs does not indicate that the shares in the second, third and fourth appellants are held in trust.5. Just outside of the deadline given, Mr Hart wrote to the Assignee stating that he is party to this appeal as trustee of the Watkinson Family Trust. He states that he holds the shares in the second, third and fourth appellant as trustee but does not say in which trust(s) the shares are held. He has provided no evidence of the existence of the Watkinson Family Trust or any other trust or that the Waimauku property is held in the Watkinson Family Trust or that the shares are held in trust. He has questioned the ability of the Assignee to require evidence that the shares are held in trust and has asked for an indication of what evidence the Assignee says is required.[26] With respect to the status and capacity of Mr Hart personally, the Official Assignee advised:13 Relying on the usual rule in Re G J Mannix Ltd [1984] 1 NZLR 309 (CA), recently applied bythis Court in Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53.6. In the circumstances, the Assignee is satisfied that Mr Hart was an appellant in his personal capacity and therefore it is for the Assignee to decide whether his appeal will proceed. In all the litigation in the High Court it was never suggested that Mr Hart held the Waimauku property as trustee of the Watkinson Family Trust. Further, there is no suggestion of that in the submissions filed in this appeal. It is also not reflected in the loan documentation with the respondent. The Assignee in bankruptcy of the property of Barry John Hart does not intend to prosecute the appeal of the first appellant further and abandons all further proceedings concerning that appeal.(Emphasis added.)[27] With respect to the second to fourth appellants the Official Assignee advised as follows:7. In terms of the shareholding in the second, third and fourth appellants, the Assignee is likewise satisfied that all the shares have vested in the Assignee. Mr Hart does not declare that trusteeship in his statement of affairs, and it was never raised in the litigation in the High Court. The Assignee has today appointed himself liquidator of the second, third and fourth appellants under section 241(2)(a) and (3)(a)(i) of the Companies Act 1993. The Assignee as liquidator of the second, third and fourth appellantsdoes not intend to prosecute the appeal of each further and abandons all further proceedings concerning those appeals.(Emphasis added.)[28] We will discuss below whether the emphasised words in each of the paragraphs quoted above comply with the requirements for the abandonment of a civil appeal in r 44 of the Rules.Latest developments[29] At the hearing Mr Bioletti told the Court that the Official Assignee'smemorandum of 11 March had been served on Mr Hart. Subsequently Mr Hart,claiming to be a "trustee", has appealed to the High Court against decisions made bythe Official Assignee resulting in the purported abandonment of the appeals by the four appellants. The proceeding relies on the powers to appeal against decisions of the Official Assignee under s 226 of the Insolvency Act and s 284 of the Companies Act 1993.[30] Following the filing of the first notice of appeal in the High Court dated 15 March 2013, Mr Hart has filed an amended notice of appeal adding to the relief sought in the appeal. Mr Bioletti said that this amended notice of appeal was not in final form and a further notice of appeal would be filed.[31] Mr Hart has also filed an interlocutory application on notice in the High Court seeking, amongst other matters, orders setting aside the appointment of the liquidator for the second to fourth appellants and preventing the Official Assigneefrom "attempting to abandon the applicant's appeal to the Court of Appeal in proceeding CA792/2012 in his capacity as trustee". The grounds upon which such relief is sought give a flavour of what Mr Hart will advance in the appeals:2. The grounds on which the interim Orders are sought are:(a) The shares in the companies Malory Corporation Limited, Woodhill Stud Limited and Woodhill Holdings Limited ("the companies") have been held in the appellant's name astrustee of certain trusts as described in the supportingaffidavit of Barry John Hart, and not in the appellant'spersonal capacity.(b) Where the appellant was adjudicated bankrupt on 17 December 2012 (which adjudication is subject to an application of leave to appeal to the Supreme Court), the shares in the companies did not vest in the first respondent because they were not the property of the appellant.(c) The first respondent acted ultra vires its jurisdiction, functions and powers when it relied on a purported vesting of the shares in it to make a special resolution of shareholders under s 241(2)(a) to appoint itself as liquidator to the companies.(d) The companies are appellants in proceedings at the Court of Appeal in CA792/2012 which is set down for hearing at 9.00 am on [20] March 2013. The first respondent in its purported capacity as liquidator has purported to abandon the proceedings. This would have a devastating effect on the companies, who are seeking to overturn the Judgement of Associate Judge Abbot [2012] NZHC 2839 which was erroneously given summarily including (but without limitation) the wrongful dismissal of a meritorious claim for substantial damage against the ANZ Bank for breach of its statutory duty of care at mortgagee sale.(e) The applicant is also an appellant as a trustee in proceedings at the Court of Appeal in CA792/2012, and the first respondent in its capacity as [Official Assignee] haspurported to abandon the proceedings, notwithstanding that it has no jurisdiction, function or power in respect of the applicant in its capacity as a trustee. Again, such an abandonment would have a devastating effect on the beneficiaries, the trustee for whom is seeking to overturn the Judgement of Associate Judge [Abbott] [2012] NZHC 2839 which was erroneously given summarily including (but without limitation) the wrongful dismissal of a meritorious claim for substantial damage against the ANZ Bank for breach of its statutory duty of care at mortgagee sale.Issues for determination[32] Arising from the above background the specific issues for determination are:(1) What impact, if any, does the advice of the Official Assignee in his memorandum to the Court dated 11 March 2013 have on theappellants' appeals?(2) Should the hearing of the appeals be adjourned?(3) Should the application for a stay of the High Court judgment and order for vacant possession of the home property proceed?(4) Should the Bank be released from its undertaking?First issue – an abandonment under r 44?[33] Mr Caro for the Official Assignee submitted that the content of the final sentences in paragraphs six and seven of the memorandum amounted to a legally effective abandonment of the appeals by all four appellants. He stated that the wording was intended to be a formal abandonment and submitted that the requirements of r 44 of the Rules had been met. Mr Caro noted that there is no standard form contained in the Rules for an abandonment of a civil appeal and the sole question was whether the words used in the communication to the Court were responsive to the requirements of r 44.[34] The rule provides as follows:44. Abandonment of appeal by party(1) A party may, at any time, abandon an appeal brought by the party by filing in the Registry a notice advising that the party—(a) does not intend to prosecute the appeal further; and(b) abandons all further proceedings concerning that appeal.(2) The notice must be signed by—(a) the party personally; or(b) the party's solicitor or counsel.(3) The abandonment of an appeal does not affect the power of the Court to make any order as to costs in respect of the appeal.[35] Mr Bioletti did not take issue with the form of words used by the Official Assignee. His argument focussed on the nature of the proposed appeals under s 226 of the Insolvency Act and s 284 of the Companies Act. He also made submissions about the points that would arise if the substantive appeal were heard. We address these matters below.[36] We are satisfied that the notice given by the Official Assignee does meet the requirements of r 44. In each case the final sentences of paragraphs six and seven record formally that the party:(a) does not intend to prosecute the appeal further; and(b) abandons all further proceedings concerning the appealThe requirements of both r 44(1)(a) and (b) are clearly met. Further, there is no dispute that the notice was signed by counsel on behalf of the Official Assignee, thus complying with r 44(2)(b). Accordingly the formalities of the rule have all been complied with.[37] There was discussion at the hearing as to the effect of the abandonment with reference to the decision of this Court in Humphries v Carr.14 There, an issue was whether the abandonment resulted in a dismissal of the appeal. That was in the context of a later attempt to have the notice of abandonment set aside. In the event, the majority did not need to reach a final view on the effect of an abandonment under r 44. The majority of Glazebrook and Ellen France JJ said this:[14] The effect of abandonment of a civil appeal in a case like the present under the 2005 Rules does not appear to have been discussed. In WCC v Kelly CA462/95 29 May 1996 (full text not available), a case presumably decided under the Court of Appeal Rules 1955, the appeal was deemed to be dismissed where a notice of abandonment had been filed. The 1955 Rules made no reference to abandonment by a party although the Court could declare an appeal to have been abandoned for non-compliance with the Rules, under r 15.[15] There are decisions which consider the effect of abandonment in the context of r 43. Rule 43 provides that appeals are deemed to be abandoned when the case on appeal is not filed in a timely manner.[16] In relation to r 43, this Court in Sexton v Rice Craig [2007] NZCA 200 decided there was jurisdiction under r 29(4) of the 2005 Rules to grant leave for a new appeal in the case of a deemed abandonment: at [30]. The Court said that the discretion under r 29(4) should not be exercised in a way that undermines the objectives of r 43: at [31]. The Court continued at [31]:As a consequence, it will be rare in deemed abandonment cases that the Court will exercise its r 29(4) discretion. The case for the exercise of the discretion will need to be compelling. The Court must reach an overall assessment in the light of all relevant considerations. These will include the explanation for the delay and for the failure to apply for an extension under r 43, and the merits of the proposed appeal. Other factors will also be relevant, for example, prejudice to the respondent. The hurdle is a high one.[17] For present purposes, we do not need to reach a final view on the effect of an abandonment under r 44. It is clear that, whether or not abandonment leads to dismissal, the applicant who wishes to have his or hernotice of abandonment set aside must meet a high threshold. [38] William Young P was in the minority. He said:[27] I think it clear that the abandonment in this case is not tantamount to a dismissal of the appeal and thus does not give rise to a res judicata. Rather, it simply terminated the original appeal. On this approach the issue is whether to extend time for lodging a further appeal.14 Humphries v Carr [2009] NZCA 608.[39] We do not need to resolve the legal effect of the abandonment. For present purposes it is sufficient to say that the abandonment of the appeals by the Official Assignee means that the appeals are not extant and are therefore terminated. It is appropriate that we so declare.Second and third issues[40] These issues concern the status of the application for an adjournment and the application for a stay of the High Court judgment. It is convenient to deal with both together.[41] The short answer to each of these issues is that, as the appeals have been abandoned in accordance with the Rules and hence terminated, there can be no question of an adjournment and no prospect of a stay. However, we invited Mr Bioletti to address the Court on the assumption that the steps taken by the Official Assignee did not have the decisive effect of terminating the appeals. Mr Bioletti took the opportunity of explaining more about the proposed appeals against the decisions of the Official Assignee and about the sole point that would arise if the substantive appeal were to proceed.[42] We add that, at the hearing, Mr Caro informed the Court that he did not wish to pursue, or support, the application for a stay of the High Court orders.The proposed appeals against decisions of Official Assignee[43] As to the appeals, Mr Bioletti confirmed that Mr Hart would be advancing at the forefront of his case the proposition that he is the settlor and trustee of the property as well as the trustee of the shares in the three companies. This is the same argument as had been raised with the Official Assignee as recorded in the paragraphs of the memorandum quoted at [25] above. Mr Bioletti accepted that this suggestion had only arisen in recent times. He was not aware of any reference to such trusteeship at the time when the mortgage over the home property was entered into. Nor had it arisen during the course of the extensive litigation between the Bank and Mr Hart and his associates. Mr Bioletti agreed that Mr Hart had not provided anysupporting documentation to the Official Assignee when given the opportunity to do so. Finally, Mr Bioletti acknowledged that he was "not up to speed with the trust issue".[44] It is not appropriate for us to comment further on the appeals under s 226 of the Insolvency Act and s 284 of the Companies Act. The issues raised by Mr Hart will be matters for determination in due course by the High Court. We would only add that it was unfortunate that, if documentation supporting any form of trust were in existence, it was not made available at the hearing in this Court.The substantive appeal point[45] At the outset Mr Bioletti confirmed that the monies lent were owed to theBank. However, the appellants disputed that the monies were "secured". Further, heaccepted that Mr Hart had signed the loan documents and the guarantees. Mr Bioletti produced a document before us for the first time which purported to be part of the relevant correspondence in the process of registration of the mortgage in the context of electronic processing of documentation. Although this documentationreferred to the mortgage being registered as "all obligations", he submitted suchreference was not sufficient to mean that the provisions of the loan agreements were incorporated into the mortgage document.[46] Mr Bioletti relied as authority on the case of Westpac New Zealand Ltd v Clark.15 He cited passages from the judgment of this Court in the same case16noting that those observations needed to be read in the light of subsequent developments regarding electronic filing of Land Transfer documents. Mr Bioletti accepted that this point had not been advanced by the appellants before the High Court. Neither had the point been raised in the notice of appeal or the amended notice of appeal.[47] Ms O'Gorman pointed out that Clark was entirely distinguishable as it involved a forged loan agreement. That was not the case here where the registered15 Westpac New Zealand Ltd v Clark [2009] NZSC 73, [2010] 1 NZLR 82 at [43].16 See for example Westpac Banking Corp v Clark [2008] NZCA 346, [2009] 1 NZLR 201[54]-[62] and [90].mortgage over the home property contains the terms set out in registeredmemorandum number 2008/4255. The mortgage secures "payment of money to theBank and performance of obligations owed to the Bank". The relevant definitionsinclude:(a) "Money" is defined in clause 22 to include "all indebtedness of theCustomer (alone or with any other person) to the Bank or incurred by the Bank on behalf of or at the direction of the Customer ".(b) The term "indebtedness" includes "any obligation (present or future,actual or contingent, secured or unsecured) relating to the payment ofmoney".(c) "Customer" is defined as including the "mortgagor/registered proprietor of the Land". In the case of the 1331 Property, the mortgagor/registered proprietor is Mr Hart.(d) "Transaction Document" means "this mortgage and any agreement,arrangement or security between the Customer (whether alone or with any other person) or any other person and the Bank relating to theMoney".[48] In response to the submission based on Clark Ms O'Gorman submitted:(a) In that case, the Supreme Court acknowledged the validity of "all obligations" mortgages,17 and observed that the terms in a registered memorandum take effect as if they were set forth at length in the mortgage.18(b) Similarly, a covenant for payment in a loan agreement signed or authorised by the registered proprietor has effect as if it were set forth in full in the mortgage.1917 At [36] and [40].18 At [42].19 Ibid.(c) However, as the loan agreement in question was executed by an imposter committing fraud, the covenant to pay was not within theambit of the registered documents (in particular the word "you" wasplainly addressed to the true registered proprietor rather than the imposter).20 A registered mortgage, although indefeasible, secures nothing if the debt in respect of which it charges the land is an obligation derived from a forged and unregistered loan agreement.21(d) The qualification in subparagraph (c) above has no relevance to this case, in which Mr Hart (being the mortgagor/registered proprietor of the home property) has signed and authorised the relevant loans andguarantees and has never disputed the appellants' liability to pay thoseamounts.[49] It seems therefore that the new point Mr Hart seeks to raise concerns a technical aspect of registration of the security in an electronic filing context, in circumstances where there is no dispute that Mr Hart signed the underlying security.[50] It would be premature for us to address the merits of these submissions in any detail. We would only add that the arguments we heard as to the submissions that would be made on appeal satisfied us that our not hearing the appeal would not result in any injustice to the appellants.[51] As already indicated above, the abandonment of the appeals and the resultant termination of them means that the application for an adjournment of the appeals must be dismissed. The same applies to the application for a stay of the High Court judgment and the order for vacant possession of the home property. We formally dismiss both applications.20 At [45].21 At [9].Fourth issue – the Bank's undertaking[52] This point may be shortly dealt with. The undertaking by the Bank was given pending the determination of the appeals. As these have now been abandoned, it follows that the Bank must be released from its undertaking forthwith.Result and formal orders[53] We make the following orders:(a) The appeals of all appellants, having been abandoned by the Official Assignee, are no longer extant and are to be treated as terminated.(b) The appeals having been abandoned, the application to adjourn the hearing of the appeals is dismissed.(c) The application by the appellants for a stay of the High Court judgment and the order for vacant possession of the home property at 1331 State Highway 16, Waimauku is dismissed.(d) The respondent is hereby released from its undertaking recorded in the Minute of this Court dated 12 December 2012, that is, not to take any further steps in exercise of its power of sale arising under the mortgage in respect of the home property.Costs[54] In the normal course the Bank would be entitled to costs. Ms O'Gormansubmitted that costs should follow the event in the usual way. However she realistically accepted that even an award of solicitor and client costs under the relevant loan and security documents would be unlikely to be of any value to the Bank, given the bankruptcy and insolvency of the appellants.[55] In all the circumstances we consider that it is appropriate to make no order as to costs.Solicitors:Jeremy Bioletti Law, Auckland for AppellantsBuddle Findlay, Auckland for Respondent