LIBERTY FINANCIAL LIMITED V PINK-MARTIN HC AK CIV 2009-404-008432

LIBERTY FINANCIAL LIMITED V PINK-MARTIN HC AK CIV 2009-404-008432 31 May 2010IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV 2009-404-008432BETWEEN LIBERTY FINANCIAL LIMITED Plaintiff AND ADAM PETER PINK-MARTIN Defendant Hearing: 31 May 2010 Counsel: M Pascariu for plaintiff Judgment: 31 May 2010 at 12:30pm(ORAL) JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application for summary judgment]Solicitors: MinterEllisonRuddWatts, PO Box 3798, Auckland for plaintiff And To: AP Pink-Martin, 1/1 Watene Crescent, Orakei, defendantThe application[1] The plaintiff applies for summary judgment. It seeks specifically an order that the defendant yield up and give vacant possession of a property at 649 Huia Road, Parau, Waitakere. I shall refer to that property as "the property" in this judgment.Background[2] The defendant was, and still is, the registered proprietor of the property. [3] The defendant was adjudicated bankrupt in the High Court at Auckland on 21 April 2009. The Official Assignee gave notice pursuant to the Insolvency Act 2006, s 117 that the Official Assignee disclaimed the property. The consequence of such an order is set out in the Insolvency Act 2006, s 118. The effect of the disclaimer is to bring to an end, at the date of the disclaimer, the rights and interests and liabilities of the assignee and the bankrupt in relation to the property disclaimed. [4] Pursuant to a mortgage loan agreement dated 9 October 2006 in which the plaintiff is lender and the defendant is borrower, the plaintiff advanced to the defendant the sum of $450,000 for the purpose of purchasing the property. The plaintiff was given, and there is registered, a first ranking mortgage over the property. [5] As at June 2009 the defendant was in default and a payment then due of $8,745.23 had not been paid. The plaintiff arranged service of a Property Law Act notice under the Property Law Act 2007, s 119 upon the defendant. That notice required the payment to be made by 23 July 2009. The notice expired unremedied. [6] In March 2009 solicitors acting for Derrick and Ray Lind wrote to the plaintiff. They claimed that the Linds were the occupiers and beneficial owners of the property. The Linds, in fact, have registered a caveat against the subject title.[7] A Property Law Act notice dated 15 June 2009 was served on the defendant on 17 June 2009. He acknowledges this in correspondence which has been exhibited to the affidavits filed on this application. A copy of the Property Law Act notice was sent by registered post to the Linds' solicitors. The notice served on the defendant is the notice that the plaintiff now relies upon. It remains unremedied.The notice of opposition[8] A notice of opposition signed by the defendant and dated 3 March 2009 was filed on 3 March 2010. I will shortly refer to the matters of substance raised allegedly in opposition in that notice.Allocation of a fixture[9] The plaintiff's application was called before Associate Judge Christiansen on 5 March 2010. His Honour minuted the file as follows:Mr Pascariu for plaintiff No appearance by the defendant Defendant instructed counsel yesterday. Any amended pleadings and affidavits to be filed and served by defendant by 26/3/10. Any reply to be filed and served by 9/4. Adjourned for a ½ day fixture at 31/5/10 at 10am. Plaintiff/applicant shall file and serve by 21/5 submissions in support, plus copies of all authorities referred to and an indexed and paginated casebook of the pleadings, application, notice of opposition and all affidavits. Defendant/respondent shall file and serve by 26/5 submissions in opposition plus copies of all authorities referred to.[10] No amended pleadings or affidavits in opposition have been filed on the defendant's behalf. A reply affidavit was filed on behalf of the plaintiff on 12 April 2010.Preparation for the fixture[11] On 26 May 2010 I issued a minute as follows:(emailed & posted – 26/5)1. The plaintiff's application for summary judgment is scheduled to be heard before me at 10:00am on 31 May 2010. 2. I note the plaintiff has filed a synopsis of argument and a bundle of authorities and a bundle of documents. 3. Associate Judge Christiansen, when allocating the fixture, ordered that in addition to the documents I have mentioned that there would be prepared and filed by the plaintiff/applicant by 21 May 2010: An indexed and paginated casebook of the pleadings, application, notice of opposition and affidavits. 4. That does not appear to have been done. The plaintiff's counsel must attend to that forthwith and ensure that a copy of the casebook is made available to the defendant. 5. Associate Judge Christiansen also ordered that the defendant/respondent file and serve his submissions in opposition by 26 May 2010. At the time of issue of this minute those submissions have not been received.[12] The plaintiff filed a casebook on 27 May 2010. [13] No submissions were filed by the defendant. However, on 28 May 2010 the defendant filed a memorandum. I now set out in full that memorandum.MAY IT PLEASE THE COURT1. This memorandum is filed to request a 20-working day delay in proceedings as council for the defendant resigned on 20 May 2010, with files returned on 21st May 2010. The reason was due to lack of financial resources on behalf of the defendant. 2. It appears that the major bundle of documents prepared by the plaintiff's lawyers was sent on the 19 th May 2010. And although I have read them, I had had no legal understanding as to a response. 3. The defendant needs to get approval from Legal Aid in the first instance, so that legal representation may be sought and fair legal representation of the facts of the case can be brought before the court. 4. The defendant has called the legal aid list of lawyers by Auckland District Law Society which lists legal aid lawyers. This list seems tobe outdated, incorrect and the response rate to calls made was poor to say the least. 5. The defendant still wants to have his day in court and the discussions undertaken with previous council, Mr Simon Foote, affirmed on 3- issues that the defendant does in fact have a legal basis of defence, to challenge the claims made by the plaintiff. (i) The amounts stated on the PLA notice are in error and this was brought to the attention of the plaintiff that the PLA was faulty. This relates to incorrect penalty fees charged and therefore subsequent errors in interest payable. (ii) As disclosed to the plaintiff, the owner of the property is the Lind Family Trust and this trust has not been party to these proceedings. (iii) The plaintiff has continued to fail to provide evidence or is ignoring the request, that the defendant has requested verification that at the time of issuance of the PLA notice, was it the plaintiff the owner of the mortgage OR were rights correctly issued/assigned to the plaintiff to allow them to proceed. 6. I know that the courts time is valuable and do not waste any time of the courts. I have also called an left messages with the High Court with no response at this time. I am still unaware who the officiating judge is. 7. My alternative if an adjournment is not granted will be either to apply to the have the judgement set aside or to have the judgement appealed. It would be foolish for me to appear in my own capacity as I am not familiar in the traditions of law or court proceedings. 8. I firmly believe that everyone has the right to fair legal representation and this should not be denied a defendant due to a lack of financial resources. 9. I will be making an appointment with the legal aid services to explain my position and the extent to the amount of work already undertaken in trying to find legal representation in an endeavour to get them to assist me in my undertaking. 10. I would also propose a meeting with the legal council for a settlement meeting either on the 31 st May 2010 or at a time convenient to see if this matter can be resolved between all three parties. 11. I thank-you ahead of time for your consideration and am contactable in the following ways: Phone: 021 300 674 Email: adampm@ihug.co.nzDetermination of the adjournment application[14] With both counsel for the plaintiff and Mr Pink-Martin present I heard submissions on the adjournment application. I announced that the application was declined. My reasons are more fully set out in this judgment. I have concluded that the defendant has no defence to the application. No useful purpose would be served by adjourning it. I gave Mr Pink-Martin the option of remaining and opposing the application for summary judgment on the merits. I explained to him that if he decided to leave I would not commence the hearing until he had left the court. He informed me that in the situation where I had declined the adjournment application he wished to leave. He did so and I then embarked on the hearing of the application.Analysis of the application[15] The correct approach to an application for summary judgment by a plaintiff was recently summarised by the Court of Appeal in Krukzeiner v Hanover Finance Ltd1 where the court said:The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried:Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court's assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).[16] The plaintiff relies on the Property Law Act 2007, s 137(1)(c). The relevant parts of that provision provide:1 Krukziener v Hanover Finance Ltd [2008] NZCA 187 at 26.137 Exercise of power to enter into possession(1) If a mortgagee becomes entitled under a mortgage, after compliance with subpart 5, to exercise a power to enter into possession of mortgaged land or goods, the mortgagee may exercise that power by— (c) applying to a court for an order for possession of the land or goods.[17] I have evidence of the service of the Property Law Act notice issued pursuant to the Property Law Act 2007, s 119. Indeed, it was acknowledged by Mr Pink- Martin. [18] Clause 17.2(c) of the mortgage loan agreement provides the plaintiff with a contractual right to enter into possession of the mortgaged property. [19] Accordingly, the plaintiff has provided a proper foundation for the relief sought, that is an order for vacant possession against Mr Pink-Martin. [20] It is next necessary to consider the pleaded defences raised in the notice of opposition filed by Mr Pink-Martin. The issues raised in that document in summary are: a) That the property has, at all material times, been held in trust by Mr Pink-Martin on behalf of the Lind Family Trust; b) That the plaintiff has a personal guarantee from Mr Pink-Martin but does not hold a guarantee from the Lind Family Trust; c) That the plaintiff has failed to provide proper accounting to Mr Pink- Martin in his capacity as trustee and personal guarantor; d) That by way of set-off or counterclaim, Mr Pink-Martin asserts that there was no response or answer to documents served on the plaintiff on 18 June 2009 and therefore the letter sent by him on 23 July 2009 calls for the Property Law Act notice to be cancelled or voided;e) That the plaintiff is misleading the court by claiming that Mr Pink- Martin is the correct party; and f) The matter should be tried at full hearing with witnesses available for cross-examination. [21] I deal briefly with the grounds advanced because, in my view, none justify the refusal to enter summary judgment in this case. [22] I deal with the first ground, namely the beneficial ownership of the subject property. [23] The Land Transfer Act 1952, s 62 provides that the registered proprietor of land, in this case Mr Pink-Martin, except, in the case of fraud and some other exceptions which need not be considered, holds the property subject to encumbrances notified on the Certificate of Title, but absolutely free of all others. [24] The Land Transfer Act 1952, s 63 protects a registered proprietor against ejectment except in certain instances, one of which is on the application of a mortgagee, where the mortgagor is in default. The interest of a mortgagee in land registered under the Land Transfer Act 1952 is for a particular purpose, namely to allow the mortgagee to have recourse to the land to satisfy obligations which are secured by a mortgage: Whenuapai Joinery (1988) Ltd v Trust Bank Central Ltd.2[25] Unless fraud is proved, on registration an indefeasible title is created: Regal Castings Ltd v Lifebody.3[26] In Frazer v Walker4 the Privy Council held that:Registration under the Land Transfer Act 1952 confers on the mortgagees as registered proprietors a title to the interest of the proprietor in fee simple which under ss. 62 and 63 of the Act (subject to exceptions not applicable here) was immune from adverse claims because of the conception of indefeasibility inherent in the system of registration under the Act.2 Whenuapai Joinery (1988) Ltd v Trust Bank Central Ltd [1994] 1 NZLR 406 at 411.3 Regal Castings Ltd v Lifebody [2008] NZSC 87, [2009] 2 NZLR 433.4 Frazer v Walker [1967] 1 AC 569; [1967] NZLR 1069.[27] I have, before me, no evidence at all which suggests that the fraud exception can apply in this case. It follows, therefore, that the registration of the mortgage has given rise to a right on the part of the plaintiff to take possession and sell the property and take the proceeds pursuant to the provisions of the Property Law Act 2007. [28] On the evidence that has been presented to me there is no basis for the proposition that the plaintiff knew at the time the money was advanced and the mortgage was executed that Mr Pink-Martin purported to purchase the property on behalf of the Lind Family Trust rather than in his personal capacity. I do not overlook the fact that a previous loan offer included a reference to Mr Pink-Martin's trust. It made no reference to any trust associated with the Linds. The first time that the plaintiff was made aware of some claim for beneficial ownership being held by another party occurred late in February 2009. What is plain, in this case, is that the indefeasible interest of the plaintiff, as mortgagee, has priority over any subsequent equitable interest in the property. Although I do not have to determine it in this proceeding, it is clear that the Linds have had notice of the mortgage default and have not done anything to redeem it. Their position seems to me, in any event, to be covered by a caveat which I shall refer to later in this judgment. [29] I conclude, therefore, that there is no foundation, on the material placed before me, to support the first ground advanced in Mr Pink-Martin's notice of opposition. [30] I have not had the benefit of any submission from Mr Pink-Martin as to precisely the basis for his second ground of opposition. I accept Mr Pascariu's submission that there is no legal basis for Mr Pink-Martin to claim that the exercise of the plaintiff's power to enter into possession and sell the property is conditional on a guarantee being provided by the Lind Family Trust. [31] I refer to the third ground in the notice of opposition. I cannot, on the material before me, see where there is any defect in the accounting that has been provided by the plaintiff. However, I accept Mr Pascariu's submission. Even if there was a defect in the computation of the sum demanded in the Property Law Actnotice, which of course the plaintiff denies, that does not invalidate the notice: Clyde Properties Ltd v Tasker. 5[32] The Property Law Act notice here fairly and reasonably informed Mr Pink- Martin what he was obliged to do to rectify the default under the mortgage. It particularised the components of the default. It set out the date by which Mr Pink- Martin was required to remedy the default. It set out the rights which the plaintiff is entitled to exercise if the default was not remedied within the specified time. I reject this ground of opposition. [33] I refer to the ground advanced of set-off or counterclaim. The documents before me allege that the plaintiff has failed to respond or answer documents, which were sent to it on 18 June 2009 and that, for some reason, that invalidates the Property Law Act notice. [34] The letter refers to a bill of exchange tendered by way of payment of the amount due under the mortgage. No payment was received by the plaintiff. I am at a loss to know what the defendant is asserting here. I accept Mr Pascariu's submission that the documents referred to are blatant nonsense and cannot give rise to an arguable defence. [35] I next consider the issue of who is the correct party to this proceeding. Mr Pink-Martin is the registered proprietor of the property. He is resisting possession. There is no basis for his resisting possession. [36] I next consider whether there is any justification based on the overall discretion which the court has when considering a summary judgment application not to exercise that discretion in favour of the plaintiff. Plainly, on the analysis that I have carried out, there is no such justification for the exercise of such a general discretion. [37] Out of an abundance of caution I deal with the three matters raised in Mr Pink-Martin's memorandum of 28 May 2010.5 Clyde Properties Ltd v Tasker [1970] NZLR 754.[38] In the first place, he alleges errors in the Property Law Act notice. What the precise errors are, are not explained in the papers before me. However, for reasons which I have already analysed in this judgment, even if there are some errors in the Property Law Act notice that will not invalidate it. I cannot, on the material that I have seen, see any justification for a defence based on this ground. [39] As to the second ground referred to in the memorandum: whether the correct party is before the court, that also has already been discussed and I have found that there is no foundation for that issue. [40] The third ground advanced in the memorandum again has no evidential foundation for it and appears to be plain nonsense. It seemly reinforces the view that I had when I read this file in preparation for the special fixture, that there was, in fact, no credible basis for opposing the relief which the plaintiff seeks.The position of the Linds[41] I make it plain that, in this judgment, I am not determining the position of the Linds who have lodged a caveat against the title. Mr Pascariu acknowledged to me that it was likely that the mortgagee would make an application pursuant to the Land Transfer Act 1952, s 143 for the removal of the caveat on the presentation of appropriate documents recording a sale to a third party under the exercise of the mortgagee's power of sale. That is because, on the face of the material presented to me, the Land Transfer Act 1952, s 141 does not apply with the result that the only way to clear the title of the caveat before registration of the transfer pursuant to the power of sale is by making an application for removal pursuant to the Land Transfer Act 1952, s 143.Costs[42] I raised with Mr Pascariu whether it was appropriate that I enter judgment for costs against Mr Pink-Martin in view of the fact that he is a bankrupt. Mr Pascariu was not in a position to address me on whether the Insolvency Act 2006, s 76(1) wasa bar to the entry of costs in this case. The likely position, however, is that if quantum is determined the matter would be handled in Mr Pink-Martin's bankruptcy by the Official Assignee in any event. For that reason, I am reserving costs but, in so doing, indicate that my view is that an appropriate quantum of costs in this case would be based on Category 2 Band B in accordance with the High Court Rules.Orders[43] I enter judgment as follows: a) Adam Peter Pink-Martin shall yield up and give possession of the property at 649 Huia Road, Parua, Waitakere being all the land described in Certificate of Title NA611/22 (North Auckland Registry); b) Costs in relation to the application for summary judgment are reserved. Any application to have costs fixed and determined shall be way of memorandum which is filed and served on the defendant. In that case a memorandum in answer shall be filed and served seven days thereafter and a reply memorandum shall be filed and served within a further seven days. The file shall then be referred to me to determine costs. _____________________ JA Faire Associate Judge