THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED V ERCEG AND ORS HC AK CIV-2008-404-004035 [2009] NZHC 826 (15 July 2009)

IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
                                                              CIV-2008-404-004035



              BETWEEN                    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 2009


               ORAL 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.



THE HONG KONG AND SHANGHAI BANKING CORPORATION LIMITED V ERCEG AND
ORS HC AK
CIV-2008-404-004035 15 July 2009

[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 in

breach 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.




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