The High Court allowed Heartland Bank to chase down part of a $910,000 debt otherwise statute-barred as being more than six years overdue because delays arose from the Bank’s generosity in allowing Taranaki debtors Caroline and Calvin Campbell extra time to offer an acceptable repayment plan.
The High Court was told $910,000 remained owing from a 2012 commercial transaction in which the Campbells and their family trust borrowed $780,000 to purchase a commercial property on Port View Crescent in New Plymouth. They stood as guarantors. Funds were borrowed in the name of a company controlled by Ms Campbell.
This venture into commercial property was not a success. Two tenants left. There was insufficient cash to service the Heartland Bank loan.
Evidence was given of Heartland calling up the loan in 2017.
A subsequent forced sale of Port View did not cover the full debt.
Heartland Bank issued a charging order over the Campbells’ New Plymouth home; first step to having Heartland sell their home to recover the guaranteed shortfall.
Charging order enforcement was delayed several years while the Campbells first made a complaint to the Banking Ombudsman about manner of the Port View forced sale and then continued their ultimately unsuccessful discussions with Heartland about settling the outstanding debt.
Heartland pressed the Campbells to sell their home. They entertained plans to subdivide before sale.
For Heartland, time ran out.
A Limitation Act six year rule meant the remaining debt was no longer recoverable; it was time-barred.
The charging order lapsed.
Back in the High Court, Justice Gardiner gave approval for Heartland Bank to resume its charging order sale of the Campbells’ family home to recover the remaining debt, now calculated at $417,400.
Refusing approval would discourage banks from continuing to negotiate with customers as the six year time limit approached, she said.
The amount Heartland Bank is allowed to recover was reduced, in part, by the Bank deciding to lower the interest rate compounding on unpaid arrears from eighteen per cent to five per cent.
Heartland Bank Ltd v. Campbell – High Court (9.12.25)
26.044