THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED V ERCEG AND ORS HC AK CIV-2008-404-004035

THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED V ERCEG AND ORS HC AK CIV-2008-404-004035 15 July 2009IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY CIV-2008-404-004035BETWEEN THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED Plaintiff AND IVAN VLADIMIR JOSEPH ERCEG First Defendant AND SENSATION YACHTS LIMITED Second Defendant AND SENSATION NEW ZEALAND LIMITED Third Defendant Hearing: 15 July 2009 Appearances: J Burt for Plaintiff No appearance for Defendants Judgment: 15 July 2009ORAL JUDGMENT OF HON. JUSTICE FRENCH[1] Prior to the determination of a summary judgment application for possession of a mortgaged property, the plaintiff is seeking an interim injunction requiring the first defendant to provide to it a copy of a lease agreement and information about the amounts due under any such lease. [2] The background as set out in the affidavit evidence is as follows. [3] The plaintiff bank, as mortgagee, is seeking possession of a commercial property situated in Henderson.[4] The first defendant, Mr Erceg, is the mortgagor and registered proprietor of the property. He is also the sole shareholder and director of the other two defendants. [5] The bank and Mr Erceg are parties to a facility loan agreement dated 3 May 2007. It was a condition of the loan that Mr Erceg provide the bank, within 12 months of the drawdown, a copy of the deed of lease between Mr Erceg and his company, Sensation Yachts limited, as the tenant of the property. The bank was to review that deed of lease, and only if the bank were satisfied with it in all respects would the facility continue to be available. [6] Mr Erceg has however never provided a copy of any such deed of lease, and instead the bank say that he and his solicitor have made conflicting statements as to who occupies the property. [7] On 4 September 2008, the bank served a notice under s 119 of the Property Law Act 2007 which expired without remedy. Since then there has been a failed injunction application trying to stop the mortgagee sale process. Negotiations, and agreement between the parties then followed. However Mr Erceg has not performed the agreement, so the bank now wishes to enforce its rights, including its right to possession. [8] The application for the injunction seeking the information was served by way of substituted service on Mr Erceg's solicitors, an Associate Judge having made an order to that effect. The order also directed that any notice of opposition to the injunction application was to be filed and served the day before the hearing date allocated. [9] This morning I have been provided with a statement from a process server, advising that the solicitors were served last week on Thursday 9 July 2009. [10] I am satisfied that it is appropriate for the injunction to be granted, no notice of opposition having been filed. Although it is a mandatory injunction, it is a situation where damages would be inadequate, and the injury complained of is inbreach of an express agreement. The bank is prejudiced as a result of uncertainty as to who is occupying the property and on what legal basis. The injunction sought merely requires the provision of information, being information that Mr Erceg has already agreed to provide. [11] There will accordingly be orders in terms of the application for the interim injunction. There will also be orders that service of the injunction can be effected by way of substituted service in terms of the Associate Judge's previous order. [12] Because an affidavit of service has not yet been filed, this order is however to lie in Court until such time as the affidavit of service is filed. _________________________________