Wellington property developer John Mouroukis has been ordered to leave his home and pay over $640,000 to lender TEA Custodians (Bluestone).The order follows a battle between Bluestone and second mortgagee Aztec Securities last week in the High Court in We
Wellington property developer John Mouroukis has been ordered to leave his home and pay over $640,000 to lender TEA Custodians (Bluestone).
The order follows a battle between Bluestone and second mortgagee Aztec Securities last week in the High Court in Wellington over possession of the property.
Bluestone had lent Mr Mouroukis $1.1m between 2006 and 2007, secured by mortgages over two of his properties and a personal guarantee.
Mr Mouroukis sold one of the properties – on Kastos Way in Strathmore - last year to pay off some of the debt.
Last week, Bluestone sought a possession order for the property at 2A Otaki St, Miramar, and claimed just over $942,400 against Mr Mouroukis.
But lawyers for Mr Mouroukis and Aztec, the property’s second mortgagee, argued that a recently signed tenancy agreement between the two parties prevents Bluestone from taking possession.
Aztec apparently took possession of the property on 8 October 2010, three days after the proceeding against Mr Mouroukis was first called – leading to accusations of “eleventh hour” action to delay proceedings by Bluestone.
Mr Mouroukis’s lawyer John Langford also argued that only about $640,000 plus interest is owed to Bluestone.
Associate Judge David Gendall, in a judgment released on Friday, found in favour of Bluestone on the issue of possession.
Contrary to Aztec’s argument, he found that section 58 of the Residential Tenancies Act does not override the content of the Property Law Act 2007 dealing with mortgagee possession.
“In effect, therefore, an order for possession in favour of TEA as first mortgagee operates as a withdrawal from possession by Aztec as the second mortgagee,” Judge Gendall found.
“There is no reason why Aztec should be able to retain possession of the property.”
He expressed some doubt as to whether or not Mr Mouroukis was currently living at the property as a residential tenant – but said that this did not prevent him from issuing a blanket order for possession.
Judge Gendall limited the debt against Mr Mouroukis to $640,000 plus 9.29% interest from 16 July, as Bluestone had failed to produce sufficient evidence to back up its claim of debt.
Costs were awarded to Bluestone as the “almost entirely successful party” in the dispute.
