Mr and Mrs A owned several properties through their Family Trust. Their Queenstown property was purchased in April 2007 for $2.5m on a valuation of $2.6m. The As obtained mortgage finance of $1,875,000 from Cressida Capital Investment Limited. A clause in the agreement provided that the full amount of the loan would become repayable if, among other things, the property suffered a "material reduction in value".

The Trust failed to meet interest payments for December 2007. This default prompted Cressida to obtain a new valuation, which came in at $2,250,000.

Cressida issued the first of three Property Law Act (PLA) notices in February 2008. The Trust remedied the default by paying the interest.

Meanwhile, though, the Trust was also issued with PLA notices in respect of another property owned on Waiheke Island.

In April 2008 Cressida issued another PLA notice in respect of the Queenstown property, but did not allege any default under the loan agreement, even though it had the valuation showing reduction by then.

The Trust paid all the money necessary under the second notice.

In May 2008, however, Cressida issued a third PLA notice. This one covered the material reduction in value of the Queenstown property, and referred to the defaults on the Waiheke Island property in alleging a material change in the Trust's financial position. It also alleged unpaid rates.

The Trust paid the rates, and met interest payments, but Cressida nevertheless sought a mortgagee sale.

The Trust applied to the High Court for an interim injention, alleging:

• breach of contract, and
• harsh and oppressive conduct.

The Court ruled:

1. The terms of the contract were quite clear, and Cressida was entitled to rely on the valuation in finding that there had been a material reduction in the value of the property.
   
2. The As were on slightly stronger ground in relation to their allegations of oppressive conduct, and it was arguable that failing to raise the valuation point until the third PLA notice was oppressive.
   
3. It was, however, difficult to argue that there was any oppression in issuing the third notice raising the defaults in relation to the Waiheke Island property.
   
4. In any event, the Court was not in a position to make an informed decision as to what was oppressive or not from the stand point of commercial dealing.
   

5. Evidence as to "objective standards of commercial practice" was necessary before the Court could be satisfied that there was a serious question to be tried.