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High Court of New Zealand Decisions |
IN THE HIGH COURT OF NEW ZEALAND
ROTORUA REGISTRY
CIV 2008-463-542
BETWEEN FE INVESTMENTS LIMITED
Plaintiff
AND HINGARAE DEVELOPMENTS
LIMITED
First Defendant
AND G R HICKMAN
Second Defendant
AND C M HICKMAN
Third Defendant
Hearing: 25 February 2009
Appearances: Mr Arthur for plaintiff
No appearance for defendants
Judgment:
2 April 2009 at 3 p.m.
JUDGMENT OF ASSOCIATE JUDGE DOOGUE
This judgment was delivered by me on
02.04.09 at 3 pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy
Registrar
Date...............
Counsel
Chapman Tripp, P O Box 2206, Auckland
Le Pine & Company, Taupo
FE INVESTMENTS
LIMITED V HINGARAE DEVELOPMENTS LIMITED AND ORS HC ROT CIV 2008-
463-542 2 April 2009
[1] The defendant has not taken part
in the hearing of the application for
summary judgment on 25 February 2009. Instead the solicitor for the defendant, Mr
A Vayne,
filed a memorandum. I have considered that memorandum as part of the
material in the case and have taken into account its contents
in preparing my
judgment.
[2] The claim by the plaintiff is for judgment for an amount of $2,684,455.78,
being an amount owing
by way of the unpaid balance of a loan as at 15 July 2008.
In addition, the plaintiff seeks interest on that sum. The plaintiff also
seeks to obtain
judgment for $300,000 for what it describes as a `results-dependent fee' and seeks
interest on that amount as well.
The plaintiff also seeks costs on a solicitor and
client basis.
[3] The plaintiff sues the first defendant as the borrower
under a loan facility,
which was initially entered into on 28 June 2005. The second and third defendants,
Mr and Mrs Hickman, were
guarantors of the loan and they are sued in that capacity.
The loan was made to enable the first defendant to develop a property
at Taupo. The
plaintiff has sought summary judgment on the ground that the defendants have no
defence to the plaintiff's claim.
[4] The defendants have filed a notice of opposition. That document is wholly
lacking in detail. In the notice of opposition
the defendants say that they have a
defence:
That the plaintiff made representations or undertakings that give rise to an
arguable defence to the plaintiff's claim.
[5] They then set out reference to the High Court Rules and to the affidavit
of the
second defendant. I have to say that it is poor practice to file such a notice of
opposition. It would not seem to comply
with the requirements of Form G 33 which
requires a concise statement of the grounds relied upon and also requires the
respondent
to:
Specify any particular provision of an enactment, principle of law, or judicial
decision relied on.
[6]
It is not, for example, spelt out how making a representation or undertaking
could give rise to an arguable defence. Is any representation
relied upon as being a
misrepresentation inducing contract? Or is the alleged representation the ground for
an estoppel preventing
the plaintiff from enforcing its contractual rights? The
deficiencies in the defendants' documentation have not
helped the Court to
understand what the defence is. I accept, though, that the solicitor for the defendants
may well have been handicapped
in his task of preparing a defence by the
circumstances of the case.
The dealings between the parties
[7] The loan agreement
was initially entered into for a 12-month term from 28
June 2005. Over the ensuing 12 months, advances were made under the facility
totalling in excess of $1,000,000. On 1 August 2006 the
loan became due for
repayment but the first defendant requested an extension. An extension was agreed
to on 23 August 2006, with
the extended term being to 31 August 2007. The loan
amount was increased to $2,285,385. That figure did not include
the results
dependent fee ("RDF") that the deed of variation extending the loan, which the
parties entered into 23 August 2006 provided
for. The relevant part of the deed
provided:
[...] In addition to the Loan Amount the following fee shall be paid to FEI
at
the end of the term as follows:
i) In the event that the presales for the current project are not
achieved and
the land is sold in sections, a fee of $300,000
or
ii)
In the event that the land is developed in another way other than for the
current project a fee of 50% of
the project profit but not less than $300,000
or
iii) In the event that the present proposal
proceeds and FEI is repaid from
development funding, a fee of $1,350,000
[8] I will make further reference
to the RDF in a separate section of this
judgment.
[9] As 31 August 2007 approached it became clear that the first defendant
would
not be able to repay the loan by that date, and there were exchanges between the
parties about what was to occur. The upshot
of this was that on 20 December 2007,
the plaintiff offered the first defendant an extension to 31 March 2008.
[10] I need to
say something about the circumstances that existed at the time when
the loan was extended in December 2007. At that point the first
defendant was
hopeful of getting Chinese investors to come into the project and to purchase three of
the units. It was also exploring
other sources of possible investment in the Asian
region through the offices of a broker called Alfred Lye in Singapore.
[11]
To continue, the offer which the plaintiff made to extend the loan to 31
March 2008 was accepted on 21 December 2007. Subsequent
to that acceptance, the
plaintiff advanced a further $68,496.73 to the first defendant to pay certain creditors.
The result of this
payment being made took the loan over its limit.
On the 11th March 2008 the plaintiff wrote to the first defendant advising
the
[12]
loan would shortly be repayable but also giving the first defendant a further two
weeks for it to pay the outstanding amount.
[13] On 14 April 2008 the loan had still not been repaid. The plaintiff demanded
repayment and on 22 April wrote to the first
and second defendants demanding
repayment in terms of the guarantees.
[14] On 1 May 2008 the solicitors for the first defendant
wrote requesting the
plaintiff to defer action so as not to prejudice the first defendant's attempts to re-
finance the loan. The
loan was never repaid, and on 18 August 2008 the plaintiff
commenced the present proceedings.
[15] As the plaintiff is required
to do by the Rules, it has deposed that it does not
believe that the defendants have any defence to the plaintiff's claim.
The
defence
[16] The defendants say that they have a defence on the following grounds:
a) The plaintiff was a strategic
partner, rather than a mere lender to the
first defendant;
b) The plaintiff had failed to provide a business
valuation and investment
memorandum which the first defendant could use as a basis for re-
financing
the loan;
c) The plaintiff had represented that it might be interested in re-financing
the entire facility
itself;
d) The plaintiff failed to make available some funding for a pre-sales
campaign which damaged
the developments pre-sales;
e) The plaintiff advised the first defendant that repayment was not going
to be required when due and was therefore not entitled to insist
on
repayment.
General shortcomings in the defence evidence
[17] The only affidavit which is filed for the defendant
is a relatively brief
document sworn by Mr Hickman.
[18] I agree with all of the criticisms that the plaintiff has made of Mr
Hickman's
affidavit. The affidavit is bland and generalised. It does not provide particulars of
dates when and parties between whom
various discussions were had and by whom
representations were made on behalf of the plaintiff. No documentary evidence is
provided
to support the various allegations made by Mr Hickman. Typical of the
averments contained in Mr Hickman's affidavit is the following:
The plaintiff made its advances throughout 2005-2007 to fund the pre-
construction phase of the development. As we
moved closer to the
construction phase the Plaintiff undertook to assist us with re-financing.
Initially, that was
to offer assistance to the First Defendant in preparing the
necessary documentation, later it became interested in financing
the
construction phase itself, if it was able to and depending on pre-sales
performance milestones.
[19] Mr Hickman
then deposes that because the plaintiff did not, as part of the
above arrangements, complete the business valuation and investment
memorandum
on behalf of the first defendant, the first defendant was hampered in re-financing
with another financial institution.
This was said to have happened during 2007.
[20] In my view, the above deposition is of the kind that Lord Diplock had in
mind
in the well-known passage from his speech in Eng Mee Yong v Letchumanan
[1980] AC 331, 341 that a judge is not:
'' ... bound to accept uncritically as raising a dispute of fact which calls for
further
investigation, every statement on an affidavit however equivocal,
lacking in precision, inconsistent with undisputed contemporary
documents
or other statements by the same deponent or inherently improbable in itself it
may be".
[21] Nor was the
passage I have quoted in paragraph [19] an exception. None of
the statements which are the foundations for the asserted defences
are adequately
particularised and explained.
The allegation that the plaintiff was a strategic partner of the first defendant
[22] In his affidavit Mr Hickman says:
6. Mr Shim's affidavit leaves the impression that the relationship
between the Plaintiff and the First Defendant was that of traditional
lender and customer. I consider this
is not accurate and in fact the
Plaintiff was a strategic partner of the First Defendant
[23] No elaboration is
offered of what the term "strategic partner" means. In
dealing with this as part of the defence Mr Arthur, for the plaintiff, went
through the
loan documentation in detail. He referred me to the loan agreement of 28 June 2005,
which was the initial loan transaction
that the parties entered into. As he pointed out,
the subsequent transactions represented extensions to that original loan agreement,
both as to amount and date of repayment. As Mr Arthur noted, the parties are
described in the loan agreement as `lender' and `borrower'
and the agreement in all
respects has the appearance of a conventional loan agreement. There is nothing in
the written agreement
that would justify a conclusion that the plaintiff was a
"strategic partner" of the first defendant.
[24] Further, the letter
which the solicitors acting for the guarantors sent to the
plaintiff's solicitors on 28 June 2005, reporting on execution of the
loan agreement
and giving required advice to the lenders and guarantors, contains nothing which
would suggest that the arrangements
between the parties were other than those
typically included in deeds of guarantee and indemnity.
[25] I accept the plaintiff's
submission that there is no evidence that would justify
the Court adopting the statement of opinion, which Mr Hickman set out in
his
affidavit, to the effect that the parties were "strategic partners".
[26] The entry into the RDF obligation (to which I refer
below) logically does not
carry with it the inference that the parties must have contemplated that their
relationship was other than
that of lender and borrower. There is a different and
more straightforward explanation, and one that does not have to accommodate
the
awkward fact (from the defendants' perspective) that the arrangement had been
elaborately documented. As a normal lender/borrower
transaction, no re-casting of
the documentation had occurred which would reflect a radically different "strategic"
relationship.
That explanation, as I explain below, is that the fee represented a
premium charged for extending the loan.
[27] Mr Arthur
referred me to the well-known principles that in resisting summary
judgment, the defendants must provide an evidential foundation
for the defences
which are raised rather than making a mere assertion that they have a good defence:
Australian Guarantee Corporation
(NZ) v McBeth [1992] 3 NZLR 54,59. He
referred to the requirement that a defendant's factual contentions `have sufficient
prima facie plausibility'
to justify investigation at trial: Eng Mee Yong v
Letchumanam [1980] AC 331 (PC). He submitted to me that I should also be guided
by the comments in Bilbie Dymock Corporation v Patel (1987) 1 PRNZ 84, 85 (CA).
[28] In my view Mr Hickman's claim to a strategic partnership cannot be the basis
of a plausible defence for three
reasons:
a) It is a statement of opinion on his part rather than stating, as the Rules
require, matters
of evidence;
b) It is unparticularised and vague; and
c) It is inconsistent with both the
loan documentation and
contemporaneous documents.
Allegation that plaintiff was obliged to assist with
valuation, information
memorandum and refinancing
[29] In his affidavit Mr Hickman says the following:
8. As we
moved closer to the construction phase the Plaintiff undertook
to assist us with re-financing. Initially, that was
to offer assistance
to the First Defendant in preparing the necessary documentation,
later it became
interested in financing the construction phase itself, if
it was able to and depending on pre-sales performance milestones.
9. Because of the Plaintiff, during 2007, the First Defendant put on
hold or stalled approaches to banks
such as ANZ and Macquarrie
more traditional lenders of the sorts of sums the First Defendant
would
be seeking. The First Defendant did not or could not re-
finance with another financial institution because of actions
of the
Plaintiff for example:
(a) The Plaintiff undertook to complete the Business Valuation and
the Investment Memorandum on behalf of the First Defendant.
Those documents are crucial to enable
the First Defendant to
refinance they are complex technical documents and the
Plaintiff's on-going
delays with respect to these documents
resulted in the First Defendant not being in a position to
refinance;
(b) The Plaintiff assured me that if the Business Valuation, the
Investment
Memorandum and other matters such as pre-sales
stacked up and the plaintiff was able to do, it would offer the
First Defendant the finance itself and deal with the banks on my
behalf to arrange construction
finance;
(c) The Plaintiff represented to us that if we got two or three pre-
sales then that
would be sufficient for its purposes to offer
further significant finance itself. A drawdown was agreed at a
meeting on 16 December 2007 to fund our pre-sales campaign.
The Plaintiff paid approximately
50% of the agreed funds but
then continually made excuses as why the remaining funds
could
not be drawn down.... The Plaintiff's failure to fund the
pre-sales campaign impacted adversely on the First
Defendant
being in a position to approach other lenders.
[30] As a preliminary comment, I again note that
these statements are very
generalised and unparticularised.
[31] It is apparently suggested that because of the plaintiff having
made
representations concerning matters which did not occur, or having made promises
which it did not perform in the areas indicated
in the above excerpt from Mr
Hickman's affidavit, that the first defendant is not liable to repay the amounts it
borrowed from the
plaintiff.
[32] Again, the various allegations made are entirely unparticularised as to the
date when discussions took place,
the persons with whom the discussions took place
and they are not documented by contemporaneous documents. They
do not
represent a proper answer to a claim based upon a fully documented loan advanced,
the existence of which is not disputed.
[33] It is correct that the plaintiff undertook to obtain a valuation of the project
property. Indeed, the defendant described what it eventually obtained as a
`proforma' valuation
from a firm called Colliers International. But no detail is given
of the undertaking. It is not clear whether the plaintiff was going
to provide the
undertaking as a favour to the first defendant i.e. that it was a gratuitous offer or
whether it is suggested
that it was a term of the contract for the extension of the loan.
Given the uncertainty surrounding the valuation, and indeed the
legal status of any
`undertaking', it is impossible to accept that the defendants have an arguable defence
arising out of this matter.
[34] Even if that conclusion were wrong, and the plaintiff did enter into a binding
legal agreement to provide a valuation, it
is difficult to understand what loss the
defendant might have sustained as a result of the failure to obtain the valuation. One
would
have thought it was always open to the defendant to go elsewhere for a
valuation if the plaintiff did not perform. It is doubts such
as these that lead me to
the view that it would be wrong to accept bland unexplained complaints as giving
rise to the defendants
having a defence, for example of set-off, that blocks the
plaintiff's route to summary judgment.
[35] Further, as the plaintiff
submits, it certainly cannot be viewed as implied into
the contract that the obligation of the first defendant to repay the loan
was
conditional upon such a valuation being obtained. In summary the defendants do not
have a reasonably arguable defence arising
from the alleged failure to obtain a
valuation.
[36] Mr Hickman also complains that the plaintiff had an obligation to provide
an
information memorandum that could be used as a basis for marketing the
development and that the plaintiff failed to produce one.
Essentially, for similar
reasons to those leading me to reject a defence based on the valuation, I also reject
this ground.
Funding
of pre-sales expenses
[37] As to the `drawdown' of pre-sales expenses, I consider that the documents
which the plaintiff has produced
make it quite clear that the sequence was as follows.
In the lead up to Christmas 2007 there was a meeting between Mr Stewart and
Mr
Hickman. Mr Hickman said that this meeting took place on 16 December 2007.
Emails that Mr Hickman exchanged with Mr Stewart show
that the meeting was
scheduled for 12 December. Mr Hickman confirmed in an email that he sent to a
third party on 14 December that
he had meet with Mr Stewart at some time prior to
the 14th. The next development was that on 22 December, Mr Hickman sent an
email
to Mr Stewart which said:
Also Claire emailed saying she has actioned 68K drawdown. Are we able
to increase this
to the $150K I detailed in the spreadsheet I sent this morning
and that will see us through to end March as discussed on the
phone this
morning?
[38] Mr Stewart has deposed that at the time when he had his meeting with Mr
Hickman, the loan was
overdue for repayment and it was over its limit. He deposed
that he also told Mr Hickman that notwithstanding that he the plaintiff
had no
obligation to do so, he would agree to extend the term of the loan and fund some, but
not all, of the money that Mr Hickman
had requested. He said that the amount of the
extra advance would depend upon Mr Hickman providing updated figures for those
debts.
This Mr Hickman did, showing a figure of $68,496.73 owing. The $68,000
approximately was approved but there never was an agreement
beyond that,
according to Mr Stewart, for any further funds to be provided. Such an agreement is
inconsistent with the email quoted
at paragraph [37].
[39] There is no evidence of an agreement that the plaintiff would fund any more
of the pre-sales expenses.
[40] The attribution of the failure of the pre-sales to the plaintiff for not approving
further pre-sale funding, therefore,
is not a matter of any substance either. On 11
March 2008 the plaintiff wrote making demand under the loan facility. Mr Hickman
then wrote to the plaintiff on 14 April 2008. He made
it clear that he was under
pressure in obtaining re-financing so that he could repay the plaintiff's loan. In his
letter of 14 April
2008 he referred to the disastrous state of the local property market
financing environment. He asked for further flexibility with
the loan demand. It is
true that in the letter he made reference to the claim that the plaintiff had not
provided the funds that
it agreed to in December 2008 matters which I have
already dealt with in discussing the meeting with Mr Stewart. But beyond that,
there
was no reference to the various matters that are now raised in defence. Mr Hickman
now claims to have been surprised that the
loan was been called up. The letter does
not suggest that was so. The main thrust of the response seems to be that the first
defendant
would find it very hard to meet the loan demand given the difficult
financial circumstances that existed, which would make re-financing
very difficult.
The suggestion that the plaintiff was obliged to continue financing the first
defendant's development
[41] In
his affidavit Mr Hickson said in paragraph 9(b) and (c):
(b) The plaintiff assured me that if the Business Valuation,
the
Investment Memorandum and other matters such as pre-sales
stacked up and the Plaintiff was able
to, it would offer the First
Defendant the finance itself and deal with the banks on my behalf to
arrange
construction finance.
(c) The Plaintiff represented to us that if we got two or three pre-sales
then
that would be sufficient for its purposes to offer further
significant finance itself. A draw-down was agreed at a
meeting on
16 December 2007 to fund our pre-sales campaign. The Plaintiff
paid approximately 50% of
the agreed funds but then continually
made excuses as to why the remaining funds could not be drawn
down. Activities to boost our pre-sales had to be put on hold as the
remaining drawdown was not made available. This
did real damage
to the development, for example, the Plaintiff had agreed to pay the
costs of some
Chinese investors visit to New Zealand (to view the
property and attend various investor meetings to be jointly hosted
by
Hingarae and the Plaintiff) but when asked in March 2007 to provide
the funds as promised, the question
was avoided and the funds not
paid. The Plaintiff's failure to fund the pre-sales campaign impacted
adversely on the First Defendant being in a position to approach
other lenders.
[42] This averment does not provide
an arguable defence either. It suffers from
the same deficiencies as the others. The alleged arrangement is so vague it cannot
amount
to an enforceable contract. Second, the agreement is not documented and,
given the course of the parties' dealings between themselves
and their practice of
adopting formal contract documents for their loan arrangements, the absence of such
an agreement is significant.
Further, whether or not the valuation `stacked up' seem
to be a matter for the plaintiff to decide. There is no evidence before the
Court that
the plaintiff ever took the view that the valuation and information memorandum was
acceptable to the plaintiff.
[43]
Furthermore, the allegation does not fit with the context established by the
documents that have been put in evidence in the case.
No dates are given as to when
the representations and assurances were made and given. As Mr Arthur points out,
certainly as at 20
August 2007, when the first defendant wrote to the plaintiff it
sought what it described as `an extension of the loan arrangement'.
The loan was
due to expire 31 August 2007. Towards the end of the letter Mr Hickman said:
Based on this discussion and FE's requirements, I would hope to arrive
in
the short term at an agreement to extend the current loan agreement, linked
to performance milestones and with an
option in FEI's favour to exit based
on any new financing arrangements HDL secure within the new loan
agreement term.
[44] On 4 September the plaintiff wrote back to Mr Hickman discussing a number
of the planned dates by which various steps would
be taken by the defendants with
respect to the development (including achievement of pre-sales figures) and then
said:
Based on the deadlines above, we would like to review our loan structure at
the end of September and discuss our position
on extending your current
loan at that time. We note that some of the deadlines have now passed
please confirm that
these deadlines have been meet.
[45] On 3 October the plaintiff wrote granting extension of the term loan to 31
October 2007
and stating that all other loan conditions remained unchanged. The
writer of that letter recorded that the first defendant had told
it that there were some
equity participants showing interest in the property and said:
You have also explained that a number
of parties have expressed interest in
contributing equity to the project and this would result in our Loan being
repaid. Some of these proposals are preliminary but could be firmed up in
the next few weeks. Please could you set out in
writing the various
proposals you are pursuing along with timing with a view to clearing our
account.
[46] On
8 October, Mr Hickman for the defendant wrote a letter to the plaintiff
which referred to `drawdown under current facility' and `extension
of loan term'.
He now proposed an extension of the current loan to 31 December 2007. In that
letter he spoke of `the time pressures
applied by FEI's timeline to exit'. This seems,
in substance, to be a complaint that the plaintiff was expecting the loan to be repaid
on the dates that the parties had agreed in the loan documentation.
[47] Further, the consequences of breach of any such arrangement
are not spelt
out. The defendants do not, for example, claim that because of the failure of the part
of the plaintiff to provide
re-financing that they suffered some kind of loss which
they wish to set up as a counter-claim or set off against the plaintiff's
claim. Nor
have the defendants explained how such an arrangement could prevent the plaintiff
from exercising its contractual entitlement
to recover under the loan agreement. It is
not made clear whether the defendants suggest that the plaintiff will never be able to
recover the loan amount because of its failure to explore the possibility of providing
re-financing itself.
[48] I also consider
that the various complaints that are now made by the
defendants are wholly inconsistent with contemporaneous documents written by
them. On 14 April 2008 Mr Hickman wrote to the plaintiffs concerning re-
financing. In his letter he agreed, amongst other things,
that re-financing had to take
place and asked for some flexibility in terms of being given more time so that
alternative sources
of finance could be explored within New Zealand or Australia.
That seems to be the true cause of the defendants' failure to repay
the loan. For
various reasons, which are adverted to in the defendants' correspondence, it was just
not possible, given the deteriorating
loan market, for the defendants to re-finance.
That, however, does not give them a defence to the present claim.
The Results Dependent
Fee
[49] The plaintiff says it is entitled to a Results Dependent Fee (RDF) and seeks
judgment for $300,000 under this heading.
[50] The background to the parties entering into the RDF was the two extensions
of the loan agreement on 18 October 2005 and
23 August 2006. The loan had
initially been advanced for 12 months from the date of the advance, made in August
2005. On 18 October 2005 the loan agreement
was varied to increase the amount by
$103,000. On 23 August 2006 the parties agreed to a further variation, which
increased the loan
amount to $2,300,000 and extended the term of the loan until 31
August 2007. As part of those arrangements, the parties agreed that
the defendant
would pay the RDF as I have set out in [4]. There is therefore no argument that
when the parties signed a deed
of variation to the loan agreement on 23 August 2006,
they agreed that the plaintiff would be entitled to an RDF in certain circumstances.
[51] In his affidavit Mr Hickman refers to the RDF. Mr Hickman says:
10. This fee was negotiated because the Plaintiff
wanted to include a
disincentive for the First Defendant to take its business elsewhere.
As we have
not re-financed I dispute the fee is payable.
11. I also comment that the conditions triggering the results-dependent
fee as set out by Mr Shim at paragraph 16 suggest a close strategic
relationship unlike a traditional
bank and customer.
[52] The plaintiff, on the other hand, says that this was a fee that was agreed to in
recognition of the risk
that extension of the loan posed for the plaintiff. The nature of
the RDF seems to have been that as part of the agreement for extension
of the date
for payment of the loan, the plaintiff became entitled to certain payments, depending
upon what alternative future contingencies
occurred. But the significant point is that
this very arrangement was contained in a Deed, which confirmed that the loan was to
be
repaid even although the date had been extended out to 31 August 2007. The
plaintiff has adduced evidence that the circumstances
leading up to the extension of
the loan, and the fact of its extension, had increased the degree of risk to the plaintiff.
This assertion
seems to me to be correct. The development at that point was not
making satisfactory progress and the first defendant had been obliged
to seek
extensions of the loan. It had no right to `roll-over' the loan.
[53] It seems likely to me that the linking of the RDF
obligation to future
occurrences probably reflected the illiquidity of the first defendant. That is, it would
have seemed likely
to the parties that the plaintiff would have to wait until a sale of
the property occurred in one form or another before the fee
would be paid. The
payment of this fee was contingent on the occurrence of one of three different
events. However, the plaintiff
has not proved that any of the contingencies upon
which the payment is conditional has actually occurred, and is therefore not entitled
to the payment. I note that paragraph [7] refers to the amount being paid `at the end
of the term' but I consider that particular
provision does not change my overall
reading of the requirements of the RDF clause. In effect, when combined with the
other provisions
it means that the fee will be paid not before the end of the loan
period and not before the occurrence of one of the contingencies
expressed in clause
4 of the Deed of Variation dated Wednesday 23 August 2006.
[54] I therefore decline to enter judgment on
this cause of action.
Result
[55] In summary, my conclusion is that none of the matters that are raised in Mr
Hickman's affidavit
amount to a reasonably arguable defence to the claim to recover
the amount advanced by way of loan, interest on the loan and legal
costs. In detail,
the plaintiff is entitled to judgment for:
a) The amount of the loan in the sum of $3,063,491.26
which includes
costs and interest to 25 February 2009.
b) Interest at 20% per annum, compounding monthly
from 26 February
to the date of payment.
c) Any additional costs on a solicitor/client basis that
it is entitled to for
services provided since 25 February 2009 as approved by the
Registrar of the High Court
at Rotorua.
[56] It is necessary to establish further directions for the conduct of the litigation
from this point if the plaintiff
is to proceed with that part of its claim which is
concerned with the Results Dependent Fee. The timetable orders I make are as
follows:
a) The Registrar is to allocate a telephone case management conference
for this matter at the earliest
possible date hereafter.
b) Counsel are to file the usual memorandum required for such
conferences.
_____________
J.P. Doogue
Associate Judge
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