Urgent Interim Relief: Sale of Perishable Property

The High Court Rules provide that a Judge may order that property, other than land, be sold if certain criteria are met.[1]  Those criteria are that the property is at issue in the proceeding, and the property is perishable or likely to deteriorate (in value) or some other good reason exists for the property to be sold.[2]  A mirror provision is found in the District Court Rules.[3]

As noted, the rule does not apply to land, which is defined to include “any estate, right, title, or interest in land”.[4] In essence, the rule can be taken to have no relevance to real property.  That makes sense as rule is aimed at property which is perishable in nature (or is otherwise experiencing a material decline in value).  Indeed, the rule is titled “Sale of perishable property before hearing”.  The rationale is that property should not be allowed to lose its value while parties squabble over who owns it.[5]  Aside from evidence as to declining value, the Court is likely to take storage and other holding costs into account in the exercise of its discretion.

For whatever reason, the rule is seldom invoked in practice.  Indeed, in their summary of the rule, the learned authors of McGechan on Procedure cite more cases from the 19th century than they do the 21st.[6]  It may be that perishable property is seldom of a value worth litigating in modern times, and if it is commercial sense presumably prevails.

[1]             High Court Rules 2016, r 7.56.

[2]             While the rule does not itself require a “good reason”, it has been held to imply such a requirement (as is largely self-evidence).  See Gibson v Stock Co Ltd HC Auckland CIV-2009-404-7120, 5 July 2010.

[3]             District Court Rules 2014, r 7.48.

[4]             High Court Rules 2016, r 1.3.

[5]             On Demand Information v Michael Gerson plc [2003] 1 AC 368 (HL) at [33].

[6]             Robert Osborne (ed) McGechan on Procedure (online ed, Thomson Reuters) at [HR 7.56].