Home
| Databases
| WorldLII
| Search
| Feedback
High Court of New Zealand Decisions |
Last Updated: 30 April 2014
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
CIV-2013-419-914 [2014] NZHC 817
BETWEEN FM CUSTODIANS LIMITED as the custodial trustee of the AUCKLAND MORTGAGE TRUST
Plaintiff
AND SOS INVESTMENTS LIMITED Defendant
Hearing: 2 April 2014
Appearances: Ms Penman-Chambers and Mr O'Brian for Plaintiff
Mr G Wilkin for Defendant
Judgment: 17 April 2014
JUDGMENT OF ASSOCIATE JUDGE J P
DOOGUE
This judgment was delivered by me on
17.04.14 at 10 a.m., pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date...............
FM CUSTODIANS LIMITED as the custodial trustee of the AUCKLAND MORTGAGE TRUST
v SOS INVESTMENTS LIMITED [2014] NZHC 817 [17 April 2014]
[1] FM Custodians Limited (the plaintiff) has applied for summary judgment against SOS Investments Limited (the defendant), seeking judgment in the sum of
$3,131,255.51 together with an order for possession of a property secured by
a mortgage which forms the basis of the plaintiff’s
claim.
Background
[2] There were a series of advances made by the plaintiff to the
defendant dating from approximately 30 September 2005, which
is when the
defendant executed a mortgage in favour of the plaintiff over the
defendant’s property at 103 Te Awa Road, RD 3,
Hamilton (the
property).
[3] The mortgage instrument incorporated a standard-form mortgage
memorandum, the key terms of which are set out at paragraph
6 of the statement
of claim:1
(a) The defendant was to be bound by the terms and
conditions contained in the Memorandum as if they were set out
in full in any
document that resulted in the defendant borrowing money and giving a
mortgage;
(b) Upon default by the defendant, the plaintiff would be
entitled to call up the balance of secured moneys; sell, enter into possession
of or appoint a receiver of rental income of the Property; or obtain and enforce
judgment against the defendant for all of the secured
moneys (or any shortfall
between the amount realised from exercise of the plaintiff’s rights and
powers and the amount owing).
[4] The following statement of additional background matters taken from
the
plaintiff’s synopsis of submissions are not in dispute:
8. The plaintiff registered the mortgage on 11 November 2005 (“the
Mortgage”).
9. On 3 November 2005 the plaintiff advanced the sum of $1,750,000 to
the defendant. This loan was renewed on 22 November
2006 pursuant to a loan
agreement secured by the Mortgage (the First Loan). The key terms of the
First Loan are set out at paragraphs 12 to 16 of the Statement of Claim and
include the following:
1 Memorandum, clause 16 (Rasmussen, exhibit C).
(a) The defendant was required to repay the principal sum together with all other monies then outstanding on the term expiry date (being upon demand by the plaintiff, or otherwise 10 May 2007);
(b) The defendant was required to pay interest on the principal sum;
(c) The defendant was required to pay, on demand, the plaintiff’s legal
costs including costs on a solicitor-client basis;
(d) The defendant was required to comply with all of the obligations contained in every agreement between the parties;
(e) The defendant was required to comply with the terms of every security interest at any time held by the plaintiff for monies owing;
(f) Upon default by the defendant, the plaintiff would be entitled to call
up the balance of secured moneys; sell, enter into possession of or appoint a
receiver of rental income of the Property; or obtain
and enforce judgment
against the defendant for all of the secured moneys (or any shortfall
between the amount realised from
exercise of the plaintiff’s rights and
powers and the amount owing).
[5] On 22 November 2005 and 9 June 2008 the plaintiff made
additional advances of $450,000 and $300,000 respectively.
Both of the later two
advances were made on the same basis as the first advance and there is no
argument that they were secured over
the property of the defendant.
[6] The defendant defaulted under its loan arrangements and default notices were served under s 92 of the Property Law Act 1952 on 8 October 2007, 23 November
2010 and 10 September 2013. There is no dispute that the defendant remains
in default under the last mentioned default notice, leaving
aside for present
purposes whether it has an arguable defence that it is not indebted to the
plaintiff at all – a matter which
I will consider further on in this
judgment.
Summary judgment principles
[7] Rule 12.2(1) of the High Court Rules provides:
The court may give judgment against a defendant if the plaintiff satisfies
the court that the defendant has no defence to a cause
of action in the
statement of claim or to a particular part of any such cause of
action.
The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried; Pemberton v Chappell [1987] 1 NZLR
1; (1986) 1 PRNZ 183 (CA), at p 3; p 185. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11
PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept
uncritically evidence that is inherently lacking in credibility, as for example
where the evidence is inconsistent with undisputed contemporary documents or
other statements by the same deponent, or is inherently
improbable: Eng Mee
Yong v Letchumanan [1980] AC 331; [1979] 3 WLR 373 (PC), at p 341; p 381.
In the end the Court's assessment of the evidence is a matter of judgment.
The
Court may take a robust and realistic approach where the facts warrant it:
Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
[9] In the context of the present proceeding it is also useful to make
reference to the Court of Appeal judgment in Australian Guarantee Corporation
[NZ] Limited v McBeth:3
The summary judgment procedure is a simple expeditious way to enable a
plaintiff to obtain judgment where there is no real defence
to the claim made:
see Pemberton v Chappell [1987] 1 NZLR 1 at p 2. The essence of the
procedure is the plaintiff's own verification by affidavit of his own statement
of claim
and the allegations made in it: Harry Smith Car Sales Pty Ltd v
Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21. There has to be a
balancing between the right of the defendant to have his day in Court and to
have his proper
defences explored and the appropriate robust and realistic
approach called for by the particular facts of the case: see Bilby Dimock
Corporation Ltd v Patel (1987) 1 PRNZ 84 and Cegami Investments Ltd v AMP
Financial Corporation (NZ) Ltd [1990] 2 NZLR 308 at p 313.
Although the onus is upon the plaintiff there is upon the defendant a need to
provide some evidential
foundation for the defences which are raised. If not,
the plaintiff's verification stands unchallenged and ought to be accepted
unless it is patently wrong.
2 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].
3 Australian Guarantee Corporation (New Zealand) Ltd v McBeth [1992] 3 NZLR 54 (CA) at 58-59. The requirement for the defendant to provide an evidential foundation for their defence was accepted by the High Court in Bank of New Zealand v Chapple HC New Plymouth CIV-2011-443-
213, 23 December 2011 at [6].
[10] The plaintiff submits that it is due a sum of $3,131,255.51,
consisting of
$2,500,000 in advances made to the defendant plus interest and expenses
incurred in the intervening period.
[11] While there is no dispute as to the amount owed, as the authorities
above make clear summary judgment is only available if
the defendant has no
arguable defence to the plaintiff’s claim.
The defendant’s submissions
[12] The defendant has raised a number of defences to the summary
judgment application, the majority of which relate to an alleged
arrangement
that the plaintiff would pursue Frucom Enginerring GmbH (Frucom) for payment of
the advances made to the defendant in
lieu of suing the defendant directly or by
enforcing its security over the defendant’s property (the Frucom
arrangement).
[13] These defences can be summarised as follows:
a) The plaintiff waived its right to pursue the defendant for
repayment and its right to rely on the property as security of
the mortgage (the
waiver argument) by:
ii) entering into the Frucom arrangement.
b) If it did not waive its rights, the plaintiff is nevertheless estopped from pursuing the defendant because of its conduct in relation to the Frucom arrangement (the estoppel argument).
c) In the alternative, the Frucom arrangement was a substitute
or variation for the terms of the mortgage memorandum
(the novation
argument).
[14] The defendant also contends it disclaimed liability via a
“disclaimer document” dated 30 September 2013.
The defendant’s affidavit
[15] I will now briefly summarise the evidence that Robert Cribb, director of the defendant and covenanter of the mortgage, has put forward to support the assertion that the defendant has an arguable defence. He records that “in my capacity as trustee for the Cribb Family Trust” he initiated summary judgment proceedings against Zender Minol d.o.o., Frucom Engineering GmbH and Margaret Regina
Laughrin.4
[16] Mr Cribb records that an order for summary judgment was in fact made
in the
Hamilton High Court on 21 February 2013 entering judgment in the
sum of
$33,200,000 in favour of Mr Cribb as the plaintiff for the trust.5
The first key point to be noted is that the debt of the judgment was not
obtained by the defendant in person in these proceedings
but by the Cribb Family
Trust.
[17] Mr Cribb then deposes that Frucom is a substantial Austrian company
which has the capacity to pay the judgment in full.
He also deposes that the
judgment obtained in the High Court of New Zealand was registered in the Queens
Bench division of the High
Court of England and Wales.
[18] It is Mr Cribbs further evidence that he advised Mr Rasmussen who
was the CEO of the plaintiff of all of these steps. The
following critical
passages from Mr Cribb’s evidence need to be set out in full:
14. As a consequence the plaintiff agreed to join in the
process of recovery from [Frucom] and collect direct payment
direct from
[Frucom] in order to discharge and repay the defendants loans as
4 Affidavit of Robert Clifford Hoani Cribb, at para 9.
5 Cribb v Zender Minol d.o.o & Ors, HC Hamilton CIV-2012-419-1587, 21 February 2013.
evidenced by the plaintiff’s invoice number 00000339 dated 30 June
2013 ... .
15. The plaintiff accepted and recognised the work undertaken by me as
a result of the Judgment, settlement arrangements
were made between the
plaintiff and Frucom for settlement of the debt in circumstances which relieved
the defendant from action
to sell its property in payment from that
source.
16. It is my understanding Auckland Mortgage Trust varied the
arrangement with the defendant, for payment of
the loans, by agreeing
to an alternative cause in action in accepting repayment of the loans direct
from [Frucom], being part of
the Judgment owing to the Cribb Family
Trust.
17. As a consequence the defendant has changed its position in reliance
on that understanding.
[19] Later in his affidavit he says:
19. I consider that PLA notice invalid because, by the time
it was served, Auckland Mortgage Trust had agreed to
await the outcome of the
recovery in collection from Frucom to repay the loans. Hence, on advice,
I arranged for the issue
and service of a notice of disclaimer dated 30
September 2013 ... .
20. The plaintiff’s proceedings are entirely inconsistent with
discussions and agreement I had concluded with Mr Rasmussen
as described above
and the arrangements the plaintiff made to accept payment direct from [Frucom],
none of which are referred to
in the plaintiff’s application or Mr
Rasmussen’s affidavit sworn 7 November 2013, which does nothing more than
provide
the core documents for the loans and the mortgage.
[20] Much of what Mr Cribb says is evidence that could be
described as expressing his conclusions about the effect
of arrangements that
were entered into. He appears to step around the issue of exactly what the
parties said to each other, or what
documents were exchanged between them in
order to give effect to this arrangement. I consider that such an approach is
impermissible
as the following extract from McGechan on Procedure make
clear:6
It is well established that as a general rule in determining summary judgment
applications, the Court will refrain from attempting
to resolve genuine
conflicts of evidence or to assess the credibility of the parties’
statements in their affidavits. However,
the object of the procedure would be
thwarted if spurious defences or plainly contrived factual conflicts were
permitted to prevent
judgment being obtained ... A helpful indicator as to where
the line
6 McGechan on Procedure (Thomson Reuters, online ed) at HC12.2.08.
should be drawn is found in the judgment of Greig J in A-G v Rakiura
Holdings Ltd (1986) 1 PRNZ 12 at 14:
‘In a matter such as this it would not be normal for a judge to
attempt to resolve any conflicts in evidence contained in affidavits
or to
assess the credibility or plausibility of averments in them. On the other hand,
in the words of Lord Diplock in Eng Mee Yong v Letchumanan [1980] AC 331
at 341 E, the Judge is not bound: ‘to accept uncritically, as raising a
dispute of fact which calls for further
investigation, every statement of 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] What Mr Cribb was required to do was to give evidence about factual
matters within his knowledge which would include, for
example, the discussions
he had with the other side, the factual setting for the discussions, and to
refer to and produce documents
that were exchanged between the parties. It
would then be for the court to determine what factual and legal significance was
to
be attached to the matters set out in it’s evidence. Given the absence
of evidence in Mr Cribb’s affidavit (in contravention
of r 9.76(1)(d) of
the High Court Rules) I consider that it does not pass the threshold of
credibility required to provide support
to the defendant’s claims. The
evidence of his views, in other words, is not probative of any issue that is to
be determined
in the proceeding.
[22] I now propose to consider the defendant’s
claims.
Waiver by delay
[23] An unusual feature of the present case is that there were
significant delays on the part of the plaintiff in bringing proceedings
against
the defendant after defaults had occurred. The chronology that Mr Wilkin
provided is instructive in that regard and I now
set out some of the key dates
taken from it:
Date Event
03/11/05 First loan advanced - $1,750,000.00
22/11/06 First loan renewed - $1,750,000.00
22/11/06 Second loan - $450,000.00
01/12/06 First interest payment due on first loan default
made
01/12/06 First interest payment due on second loan
default made
10/05/07 First loan term expiry date
10/05/07 Second loan term expiry date
08/10/07 First PLA notice
09/06/08 Third loan - $300,000.00
23/11/10 Second PLA Notice
10/09/13 Third PLA Notice
[24] The other unusual feature of the business relationship between the
parties was that even after defaults had occurred under
the first and second
loans, the plaintiff was willing some 18 months later to make still further
advances to the defendant in the
form of the third loan for $300,000. As well,
the Property Law Act notices were served and then not followed up on. The
plaintiff
served three Property Law Act notices in all on the
defendant.
[25] The reasons why the plaintiff adopted this unusual approach are not of any inherent importance to the case but I have mentioned the delays because they are put forward as a separate ground for claiming that the plaintiff had lost its right to now sue on the outstanding loans. It in fact appears that towards the latter end of the parties’ relationship the plaintiff may have been staying its hand while it allowed time for recovering the unpaid money from Frucom.
[26] In answer to this proposed defence, Ms Penman-Chambers referred me
to clause 7(b) of the agreement dated 22 November 2006
renewing the term of the
loan for the first advance which provides as follows:
Delay does not affect exercise of powers: The lender’s rights
under this contract will not be affected by any delay in exercising them
(whether or not the lender knows
that they have become exercisable). The lender
may only be held to have acquiesced in or waived any matter in relation to this
clause
and if to the extent that the acquiescence or waiver is expressed in
writing.
[27] I accept the submission for the plaintiff that the clause quoted
answers the point about implied abandonment or waiver arising
from the delays in
taking steps to bring proceedings against the defendant.
Waiver, estoppel, and novation by agreement
[28] Each of these claims derive from the defendant’s allegation
that the Frucom arrangement modified the parties’
rights and liabilities
under the mortgage memorandum. The form of this agreement is not certain and it
would appear that on the face
of the evidence the following possibilities as to
its form arise.
[29] The first possibility is that the defendant wished the plaintiff to
attempt to recover the money direct from Frucom. If
it were successful in
making recovery then that would be to the advantage of the defendant who would
no longer be facing a mortgagee
sale and other recovery proceedings. This
possibility is supported by the plaintiff sending an invoice dated 30 June 2013
directly
to Frucom for the defendant’s debt. Arguably this constitutes
implicit evidence that an arrangement had been made between
the plaintiff
and the defendant to the effect that the defendant assigned its rights to
part of the alleged Frucom debt
to the plaintiff. However, it is just as likely
that the invoice could have been simply a pro-forma invoice which Frucom was
awaiting
as a precondition to making payment which it had already agreed to
do.
[30] The second possibility is that there was an agreement between the parties that the plaintiff would release the defendant from the debt in return for its agreement to allow the plaintiff to send the invoice to Frucom. In other words, in place of liability
of the defendant, the plaintiff would acquire security in respect of some
type of rights against Frucom.
[31] The third possibility is that there was a tripartite agreement under
which Frucom agreed to assume legal responsibility for
the debt of the defendant
to the plaintiff.
[32] It is against that background that I consider the issues of waiver,
estoppel and novation.
Waiver and estoppel
[33] Reduced to its essentials the first ground rests on an
allegation that the Frucom agreement amounted to a waiver
on the part of the
plaintiff of its rights and its ability to rely on the mortgage security for
payment. It is also said, in support
of the waiver argument, that
“settlement arrangements” made between Frucom and the plaintiff for
settlement of the debt
amount relieved the defendant from threatened action to
sell the property and meant that the plaintiff was to obtain payment from
Frucom
rather than from the defendant.
[34] The second defence, of estoppel, argues that the conduct of the
plaintiff in sending an invoice to Frucom for the amounts
that the defendant
owed, amounted to an implied representation that the plaintiff no longer
intended to enforce its debt against
the defendant and that it would now not be
just to permit the plaintiff to go back on the representation.
[35] I agree with the following statement of law taken from the Laws of
New
Zealand which deals generally with the topics of estoppel and
waiver:7
Waiver consists of an intentional act, with knowledge, indicating either
expressly or by implication an intention to dispense with
an existing condition.
The intentional act must be such as to be clearly and
unequivocally characterised as a
waiver of rights. Waiver looks chiefly to the
conduct and position of the person who is said to have waived, whereas, in the
case
of estoppel, it is not essential that the person sought to be
estopped should have had knowledge or intention. For waiver,
a distinct
act
7 Laws of New Zealand, Equity (Lexis Nexis, online ed) at [283].
must be done so as to constitute waiver; for estoppel, conduct short of a
positive act may suffice. Waiver may be distinguished from
estoppel in that,
when a party intentionally and with knowledge chooses between one of two
inconsistent positions, he or she will
not be permitted to choose later to the
contrary.
[36] It has also been noted in the number of cases that an estoppel
depends upon, amongst others things, a clear and unequivocal
promise or
assurance by words or conduct which was intended to affect the legal relations
between the parties and to be acted on
accordingly.8
[37] In my view, if an arrangement having the legal affect that Mr Cribb
contends for was entered into, then Mr Cribb was apparently
the only person
dealing with the plaintiff in regard to it. He ought therefore to have been in
a position to produce evidence of
the specifics of the transaction that he said
lead to the waiver or estoppel that now prevents the plaintiff from enforcing
its claim.
Nowhere in the evidence though does one find any reference to a
statement of intention on the part of the plaintiff to relinquish
its rights
against the defendant. Without some evidence to support the position of the
defendant, it cannot be said that there
is an arguable defence of
waiver.
[38] The fact that the plaintiff decided to go along with an attempt to
get the money it was owed from Frucom is equivocal in
this context. It does not
make it more or less likely that the plaintiff in addressing its demand to
Frucom was waiving its claim
against the defendant. In his submissions, Mr
Wilkin said there was a necessity to hear evidence and for there to be cross
examination
of the witnesses. However, before that point is reached, it is
necessary to at least identify some factual dispute of substance which
the court
is going to have to resolve. Mr Cribb has not provided any evidence of that
kind. He relies upon inferences to be drawn
from the fact that the plaintiffs
sought payment from Frucom. Whether or not such an inference can be said to
arise can be determined
at a summary judgment stage.
[39] There is no evidence either upon which a defence in estoppel could rest. There is no clear statement by the plaintiff that it was not intending to enforce such
rights as it had against the defendant. Nor is there evidence that the
defendant relied
8 Burbery Mortgage Finance and Savings Ltd v Hindsbank Holdings Ltd [1989] 1 NZLR 356, 359.
to its detriment upon such a representation so that it would now be
unconscionable for the plaintiff to attempt to withdraw the representation.
Again, the fact that the plaintiff thought it worthwhile to try and get the
money from Frucom does not carry with it the necessary
inference that the
plaintiff no longer regarded the defendant as being responsible for the
debt.
[40] Ms Penman-Chambers also referred me to the fact that the contents of
the second invoice dated 17 July 2013 added on to the
amounts invoiced in the
first invoice to Frucom additional items such as “insurance, rates, and
maintenance” for the
property. This would indicate on its face that the
plaintiff still had an interest in preserving the security for its debt. The
house property which had been the security for the debt would be irrelevant to
the plaintiff as it was no longer looking to the owner
of the property, the
defendant, for payment of the debt. Mr Wilkin said that the defendant acted to
its detriment by taking no steps
to pay off the mortgage and that in the interim
the value of the property had depreciated to the point where a mortgagee sale
would
result in a deficit or larger deficit owing by the defendant to the
plaintiff than would otherwise have been. He pointed to the
following passage
in the evidence that Mr Cribb gave:
I understand the property may have a current realisable value of $1.4 million
at mortgagee sale.
[41] I understand that it was Mr Wilkin’s submission that because of
the representation that was made, no steps were taken
by the defendant to pay
off the mortgage. As a result, in the intervening period the value of the
property slipped and this detriment
is therefore attributable to the alleged
representation.
[42] However, as Ms Penman-Chambers noted, there is no basis upon which
such evidence could be admitted and in fact no evidence
was provided. Mr Cribb
himself does not appear to have any qualifications that would entitle him to
give opinions about the current
value of the property. I accept that
criticism.
[43] But there are other more substantial difficulties with this ground of defence. If erosion in the value of the property was to constitute the detriment which the defendant relies upon, it would be necessary to demonstrate at least an arguable case
for asserting that there was some linkage between the alleged representation,
the resulting decision of the defendant to refrain
from some course of
action (presumably repayment of the loan) based upon the representation and the
loss or detriment that was
suffered.
[44] The defendant has not established a platform for the defence because
it would be necessary to demonstrate that there were
some substantial ground
from which the defendant could argue that:
a) the defendant could, and would have, paid the mortgage off, but for
the representation; and
b) in the period commencing from when the actions or inaction of the
defendant were first influenced by the statement
the value of the
property diminished.
[45] In regards to (a), there no evidence that the defendant would have
acted in a different way than it actually did by, for
example, paying off the
loan.
[46] In regards to (b), the date of the first invoice to Frucom is 30
June 2013. In the absence of some other date, it is to
be assumed thereon that
the defendant understood it was the intention of the plaintiff to seek payment
from Frucom. It could only
have been from around about this period that the
choices or elections which the defendant made were influenced by the
“representation”.
There is nothing in the evidence or that is
inherent in the circumstances of the case which suggests that even if there had
been
a diminishment in the value of the property, that it took place during the
period after 30 June 2013.
[47] But in the end the effect of sending those invoices is equivocal. The evidential effect of any inference that can be drawn from the sending of those invoices does not absolve the defendant from the obligation to point to some evidence of the distinct statements which are said to have given rise to the waiver and estoppel. Mr Cribbb had his opportunity to provide such information and he did not.
[48] Obviously the defendant or at least Mr Cribb on its behalf knew
about the invoice and indeed had a copy of it in its possession.
It is
inherently unlikely that the plaintiff would on its own motion and without
reference to the plaintiff take such a step. Clearly,
in the circumstances of
this case, one of the probable explanations for why the plaintiff sent the
invoice to Frucom was because
the defendant asked it to do so. Mr Cribb in his
evidence left this issue in the air.
[49] I should also note that in the affidavit in reply filed by Mr
Rasmussen agreed that the plaintiff had in fact submitted invoices
to Frucom.
He does not however accept that there was any intention to enter into any
arrangement which would have had the effect
of releasing the defendant from the
amount due.
[50] The court is required to take a practical and commercially realistic
view of the evidence that has been put forward. On
the one hand, Mr Cribb
speaks of his “understanding” that the defendant was to be excused
payment but does not provide
the supporting reasons why that was a reasonable
view. On the other hand, there is Mr Rasmussen’s express denial that
there
was any such arrangement. There is also the contents of the invoice
referring to continuing maintenance of the secured property.
That is a
contemporaneous document which points to the likelihood that, notwithstanding
the invoice made out to Frucom, the plaintiff
still considered that it had
rights against the defendant’s property which provided the reason why it
was expending its own
funds on its maintenance.
[51] Finally, the scenario upon which the defences are based is one
which is inherently unlikely. It would be unusual for
a financier in the
position of the plaintiff to relinquish the mortgage security over real estate
as a security in return for
some type of informal arrangement pursuant to which
it was given authority to invoice a debtor of the defendant.
[52] My conclusion is that there is no issue to be tried between the parties on the question of whether the plaintiff lost its rights to claim against the defendant as a result of waiver or estoppel.
The novation argument
[53] The defendant’s claim that the Frucom arrangement either
varied the parties’ rights and liabilities under the
mortgage memorandum
or, alternatively, acted as a substitute for it falls the same way as the waiver
and estoppel arguments. Following
the conclusions made concerning Mr
Cribb’s affidavit evidence, Mr Cribb’s “understanding”
that the plaintiff
“varied” the arrangement with the defendant is
not admissible evidence. There is no other evidence to support the assertion
(at [12] (c) above) that the contractual terms were varied. It was Mr
Cribb’s obligation, if he wished to put forward such
a case, to give
evidence identifying facts upon which the Court could conclude that the
defendant had an arguable defence based on
such an alleged variation. He has
failed to do so.
The “disclaimer” document
[54] The defendant also submitted through counsel that it had an arguable
defence arising from a document which was described
as a
“disclaimer”. This was a document which Mr Cribb signed and which
is dated 30 September 2013. The document is
apparently addressed to the
plaintiff then so far as material reads as follows:
Auckland Mortgage Trust
Mortgage no. 6644255.2 South Auckland Registry
Secured over 103 Te Awa Road, Rd3, Tamahere, Hamilton 3283 New
Zealand
TAKE NOTICE that:
1. Notwithstanding payment or pending payment or discharge of
mortgage 6644255.2 related liability, linked to the above-mentioned
account and
property, all parties referred to in the schedule That below jointly and
severally disclaim any and all responsibility
for the said liability as $ 3.130
million as per the Invoice Statement issued to Frucom EngineeringGmbH from
Auckland Mortgage Trust
dated 30th June 2013 (copy attached)
2. Pursuant to the judgment of the New Zealand High Court in dated
2st February 2013 by His Honour Associate Judge Faire as subsequently registered by Master Fontaine on 13th April 2013 in the Queen’s Bench Division of the High Court of England, the said parties hereby jointly and severally reserve the right to take legal or
other proceedings against appropriate parties to be indemnified for any and
all loss by reason of the payment being made by them or
on their behalf.
SCHEDULE
1. Robert Hoani Cribb (as trustee for the Cribb Family Trust)
2. The Cribb Family Trust
3. Equity Management Corporation
Dated 30 September 2013
[signed]
...............
Robert H Cribb
And as trustee for and on behalf of the Cribb Family Trust and Equity
Management Corporation Limited
[55] Apart from other difficulties with this agreement, there is the
consideration that counsel for the plaintiff mentioned that
the document was
signed by Mr Cribb in his capacity of trustee of the Cribb Family Trust which is
not the debtor or the defendant
in this proceeding.
[56] It is not clear what, if any, legal effect this document has. It is
obvious that a party cannot unilaterally disclaim liability
for an obligation
that he owes to another. Whatever effect this document has, it cannot be viewed
as providing a defence to the claim
that the plaintiff has brought against the
defendant.
Conclusion
[57] For all of the foregoing reasons, I consider that the material that has been put forward by the defendant is insufficient to establish that there is an arguable defence. In other words, the net effect of the evidence that Mr Cribb has put forward fails to satisfy the requirement that the defendant must be able to point to an arguable defence to the plaintiff’s claim.
[58] I therefore order that judgment is to be entered in favour of the
plaintiff in the sum of $3,131,255.51.
[59] The parties should confer on the matter of costs and if they are unable to agree they are to file memoranda not exceeding five pages on each side within 10
working days of the date of this
judgment.
J.P. Doogue
Associate Judge
NZLII:
Copyright Policy
|
Disclaimers
|
Privacy Policy
|
Feedback
URL: http://www.nzlii.org/nz/cases/NZHC/2014/817.html