SIMPSON DOWSETT MACKIE LAWYERS NOMINEE COMPANY LIMITED V JASU AND JAGDISH HIRA GOVIND AND ANOR HC AK CIV-2010-404-4873

SIMPSON DOWSETT MACKIE LAWYERS NOMINEE COMPANY LIMITED V JASU AND JAGDISH HIRA GOVIND AND ANOR HC AK CIV-2010-404-4873 27 September 2010IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2010-404-4873IN THE MATTER OF s 200 of the Property Law Act 2007 BETWEEN SIMPSON DOWSETT MACKIE LAWYERS NOMINEE COMPANY LIMITED Plaintiff AND JASU AND JAGDISH HIRA GOVIND First Defendants AND CHRISTOPHER RHYS DORNAN AND B AND C CUSTODIANS LIMITED Second Defendants Hearing: 27 September 2010 Appearances: D G Collecutt for Plaintiff D Mitchell for Second Defendants Judgment: 27 September 2010 Reasons: 30 September 2010JUDGMENT OF COOPER JThis judgment was delivered by Justice Cooper on 30 September 2010 at 2.30 p.m., pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar Date: Solicitors: Simpson Dowsett Mackie, 1280 Dominion Road, Mt Roskill, Auckland Turner Hopkins, PO Box 33 237, Takapuna, Auckland Copy to: D G Collecutt, PO Box 105 270, Auckland 1143[1] This matter was called in the Duty Judge's List on Monday 27 September 2010. Having heard from Mr Collecutt and Mr Mitchell I rejected the second defendants' application for an adjournment and indicated that the plaintiff was entitled to the orders that it sought. [2] I now briefly record my reasons for doing so. [3] The plaintiff seeks an order by way of originating application under s 200 of the Property Law Act 2007. It relies on the affidavit of Neil Dowsett, which establishes that: a) The plaintiff is a solicitors nominee mortgage company which is managed by the firm, Simpson Dowsett Mackie. Clients' funds are pooled and then advanced to a borrower through the plaintiff company. The borrower in turn grants a mortgage to the plaintiff to secure repayment of the loan. b) The plaintiff made a loan to the second defendants and the first defendants contributed funds to that loan. A loan of $750,000 from the plaintiffs to the second defendants was secured by way of mortgage over a number of properties. The second defendants failed to make payments due under the mortgage. c) The plaintiff issued notices pursuant to s 119 of the Property Law Act with which the second defendants failed to comply. d) The plaintiff obtained a valuation from a registered valuer in respect of the properties. The properties were put to tender but a number of them did not attract any tenders and none attracted a tender at likely sale prices identified in the valuation. e) A subsequent valuation was obtained updating the position on 10 July 2010.f) The plaintiff now wishes the Court to authorise the first defendants, or any entity associated with either of them, to become the purchaser of any one or more of the properties subject to paying the prices stipulated in the latest valuation. [4] When the matter was initially called before Asher J on 9 September there was no appearance for the defendants. Counsel for the plaintiff advised the Court that solicitors had been briefed to act for the second defendants, but had not had an opportunity to become familiar with the file. Asher J adjourned the matter for one week to be called in the Duty Judge List on Thursday 17 September 2010. [5] On 16 September, the application was called before Lang J in the Duty Judge List. Mr Mitchell appeared for the second defendants and advised the Court that they wished to make independent inquiries to ensure that the plaintiff's valuers had attributed realistic values to them. The Judge noted that it was a matter of some urgency because of the plaintiff's desire to conclude sales of the properties prior to 1 October 2010 when the rate of GST would change. He directed that any documents in opposition to the application were to be filed and served no later than Friday 24 September 2010. He then said:The proceeding is to be listed for mention in the Duty Judge List on Monday 27 September 2010 at 10.00 a.m. In the event that the plaintiff's application is opposed, counsel will need to be ready to present concise argument to the presiding Judge in relation to the substantive application at that time or at such time later in the week as the Judge may direct.[6] A notice of opposition was filed in which the second defendant gave as the ground of opposition that the sale prices for the properties listed in the application were unreasonable and significantly below the market valuation. There was reference to an affidavit to be filed by Mr Dorman, but in the event no such affidavit was filed. [7] When he appeared on Monday 27 September, Mr Mitchell reiterated that the second defendants did not accept that the plaintiff was intending to sell the properties at a fair market value. He referred to some valuations that had been obtained in April and May 2009 for a significantly higher figure. While it was accepted thatthere had been a reduction in value, he did not accept that there had been a fall in the market of the magnitude which the plaintiff asserts. Mr Mitchell sought that the matter be adjourned so that the second defendants could obtain formal valuation evidence. However, he acknowledged that there was doubt in fact as to whether the second defendants could afford to obtain such evidence and put the application to me on the basis that a further period was required so that the second defendants could endeavour to raise the funds necessary to obtain such a valuation. [8] Having regard to the terms of Lang J's minute of 16 September 2010, the second defendants' stance was unrealistic. I rejected the application for adjournment. That meant that the only evidence before the Court justified making the orders as sought by the plaintiff. There is no proper basis to question the valuation on which the plaintiff relies and I am satisfied that sale of the properties on the basis set out in the application will result in the best net price reasonably obtainable in current market conditions. [9] I directed that there should be orders accordingly. [10] If the plaintiffs seek costs and quantum cannot be agreed, a memorandum may be filed within 10 working days. The second defendants may have a similar period to reply.