As Base Limited v IMI Developments Limited
[2018] NZHC 511
•23 March 2018
IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY
I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE
CIV-2016-419-000348 [2018] NZHC 511
BETWEEN AS BASE LIMITED
First Plaintiff
SCOTT BASE LIMITED
Second PlaintiffAND
IMI DEVELOPMENTS LIMITED
First Defendant
ROTOTUNA VENTURES LIMITED
Second Defendantcont .. /2
Hearing: 7 March 2018 Appearances:
S Ma Ching for the Plaintiffs D O’Neill for the Defendants
Judgment:
23 March 2018
INTERIM JUDGMENT OF JAGOSE J
This judgment is delivered by me on 23 March 2018 at 11.00am pursuant to r 11.5 of the High Court Rules.
.....................................................
Registrar / Deputy Registrar
Solicitors/Counsel:
Lee Salmon Long, Auckland
D M O’Neill, Barrister, HamiltonRick Williams Associates, Albany, North Shore City
AS BASE LTD v IMI DEVELOPMENTS LTD & ORS [2018] NZHC 511 [23 March 2018]
…2
GRAEME MATANGI
Third Defendant
TRIG GROUP LIMITED
Fourth DefendantTRIG HOLDINGS 2014 LIMITED
Fifth DefendantTRIG DEVELOPMENTS (2011) LIMITED
Sixth Defendant
KVN DEVELOPMENTS LIMITED
Seventh Defendant3GNT LIMITED
Eighth DefendantGARY JOHN ILTON
Ninth DefendantGARY JOHN ILTON AND KAREN ILTON AS TRUSTEES OF THE ILTON BUSINESS TRUST
Tenth Defendant
GREGORY NEAL ILTON
Eleventh DefendantGREGORY NEAL ILTON AND VANESSA KAY MATANGI AS TRUSTEES OF THE G & V ILTON BUSINESS TRUST
Twelfth Defendants
GRAEME SELWYN MATANGI, MELISSA BRIDGET MATANGI AND WAIRAU TRUSTEE LIMITED AS TRUSTEES OF THE MGM TRUST
Thirteenth Defendants
Introduction
[1] The plaintiffs advanced approximately $3.8m to the defendants in connection with Waikato property developments, of which they allege approximately $1.5m (including interest) remained outstanding as at 1 December 2017, and has not since been paid.
[2] The plaintiffs seek formal proof of their claim, after the defendants’ defence was struck out, and the defendants were debarred from taking further steps to defend the proceeding, because of their failure to meet ‘unless’ orders. Nonetheless, the defendants seek leave under HCR 15.9(3) to file a statement of defence, on the ground there will or may be a miscarriage of justice if judgment by default is entered.
[3]I deal with those cross-applications in reverse order.
Defendants’ application for leave to file defence
[4]HCR 15.9 provides:
15.9 Formal proof for other claims
(a)This rule applies if, or to the extent that, the defendant does not file a statement of defence within the number of working days required by the notice of proceeding, and the plaintiff seeks judgment by default for other than a liquidated demand.
(b)The proceeding must be listed for formal proof and no notice is required to be given to the defendant.
(c)After a proceeding is listed for a formal proof hearing, no statement of defence may be filed without the leave of a Judge granted on the ground that there will or may be a miscarriage of justice if judgment by default is entered, and on such terms as to time or otherwise as the Judge thinks just.
(d)The plaintiff must, before or at the formal proof hearing, file affidavit evidence establishing, to a Judge’s satisfaction, each cause of action relied on and, if damages are sought, providing sufficient information to enable the Judge to calculate and fix the damages.
(e)If the Judge before or at the formal proof hearing considers that any deponent of an affidavit filed under subclause (4) should attend to give additional evidence, the Judge may direct accordingly and adjourn the hearing for that purpose.
[5] The Court’s discretion to grant leave under HCR 15.9 is exercised predominantly on three considerations, namely whether:1
(a)the defendant has a substantial ground of defence;
(b)the delay is reasonably explained; and
(c)the plaintiff will not suffer irreparable injury if leave to defend is belatedly granted.
[6] It is not clear HCR 15.9 has application. Because the plaintiffs commenced the proceeding in tandem with an application for summary judgment, the notice of proceeding did not ‘require’ filing of a statement of defence (although, if one was to be filed, it was required to be filed and served “not less than three working days before the date of hearing” of the summary judgment application). Instead, if the defendants had a defence to the plaintiffs’ claims, they “should” file opposition within that period, otherwise risking default judgment on the plaintiffs’ claim. Opposition was filed, albeit nearly three months late. In the event, Associate Judge Doogue dismissed the summary judgment application on grounds the defendants had arguable defences to each of the plaintiffs’ three causes of action.2
[7] However, although the defendants’ application was brought formally under HCR 15.9, the defendants’ counsel, David O’Neill, accepted the defendants had first to obtain relief from the effect of the ‘unless’ order. That requires the Court to be satisfied justice in the circumstances of the case demands they be excused from their failure to meet that order.3 Otherwise, entertaining the defendants’ formal application would have the effect of undermining the order striking out and debarring their defence.4
[8] After their summary judgment application was dismissed, the plaintiffs – against a background of the defendants’ chronic failure to meet timetable
1 Shoye Venture Ltd v Wilson [2013] NZHC 2339 at [11]-[13].
2 AS Base Ltd v IMI Developments Ltd [2017] NZHC 1017.
3 SM v LFDB [2014] NZCA 326, [2014] 3 NZLR 494 at [31](d).
4 LFDB v SM [2016] NZCA 295 at [32].
requirements, and the defendants’ solicitors’ desire to withdraw as being without instruction – sought an order in the following terms:
Unless the defendants … file and serve an affidavit of documents by 5pm on 12 October 2017, providing standard discovery in accordance with the Court’s direction of 22 August 2017:
(i)the statement of defence … filed in this proceeding shall be struck out and the defendants … shall be prevented from taking further steps to defend this proceeding; [and]
(ii)the plaintiffs’ claims shall be set down by the Registrar for a formal proof hearing at the next available date in consultation with counsel for the plaintiffs.
[9]Associate Judge Doogue considered the order “appropriate and justified”:5
There have been delays with provision of the affidavit of documents by the defendants and by 12 October 2017 (which is the date proposed for compliance by the plaintiffs) more than adequate time for filing affidavits will have expired. That provides the justification, in my view, for making the orders sought ….
[10] Mr O’Neill emphasised the defendants were caught in a “vicious circle”. They lacked funds to engage legal advice, and the plaintiffs had lodged caveats over property that may have provided security for such funding. They were trying to respond to technical litigation procedural requirements, without understanding the differences between the plaintiffs’ request for further and better particulars, and the Court’s order for discovery. They provided the Court with a response to the particulars request at or about the original date for completion of discovery.
[11] But all that predated Associate Judge Doogue’s ‘unless’ order. It is plain from the Associate Judge’s minute of 19 September 2017 he was concerned by the defendants’ timetable failures, particularly once without legal representation. He explained “It is their responsibility personally to comply with the directions of the Court”, and emphasised only the individual defendants were entitled to represent themselves.6
5 Minute dated 19 September 2017 at [3].
6 At [7].
[12] The plaintiffs’ counsel, Steven Ma Ching, pointed out the defendants were not entirely without recourse to legal advice. The thirteenth defendants’ professional trustee’s sole director – Wairau Trustee Limited’s Rick Williams – had become solicitor on the record for all defendants. Although, because of Mr Williams’ prospective position as a relevant witness, his formal role was unlikely to be sustainable if the defendants were permitted to defend the proceeding, he could at least advise the defendants of their immediate obligations, and facilitate their performance. But there was no evidence of his contribution, the defendants preferring to rely on the third defendant’s pleas of unfamiliarity with litigation process.
[13] The third defendant, Graeme Matangi, also contended the defendants’ appointment of counsel meant “it will be more likely that there will be compliance with processes and time frames”. Nonetheless, there has been no belated attempt by the defendants to meet the various outstanding discovery and pleading requirements. Mr O’Neill suggested that could not forcefully be held against the defendants: given they were debarred from defending the proceeding, such compliance would have been premature.
[14] Mr O’Neill responsibly acknowledged – unless the defendants could obtain access to funds, by the plaintiffs releasing some of the properties presently subject to their caveats – it was unlikely the defendants could participate meaningfully in the proceeding in any event. Mr Ma Ching responded the caveats provided the plaintiffs with some security for the defendants’ contended liability. Inferentially, the plaintiffs would not be waiving that to enable the defendants’ resistance. In reply, Mr O’Neill said that was “the end” of the defendants’ prospects to obtain further legal advice and representation in the proceeding.
[15] Instead, Mr O’Neill relied on Associate Judge Doogue’s finding the defendants had arguable defences as substance for the miscarriage of justice that would be occasioned by the default judgment now sought by the plaintiffs. But Mr Ma Ching explained those arguable defences would be overcome by the evidence on the formal proof application. That included evidence arising out of discovery, not before Associate Judge Doogue at the earlier stage of summary judgment application.
[16] Viewed overall, I do not consider justice demands the defendants be excused from their failures to meet Associate Judge Doogue’s ‘unless’ order. These are parties engaged in multi-million dollar financing for property developments, from which the prospect of disputes arising and being litigated can at least be contemplated as an ordinary incident of business, and for which provision should have been made. I see nothing unjust about holding the defendants to the consequence of their failures to meet ordinary steps in litigation.
[17] Belated compliance, however late, may have advanced the defendants’ case for some indulgence. But the proceeding would continue to be complicated by their lack of legal representation, and their disinclination materially to engage with the proceeding. Whether their identified defences are arguable can be considered on the plaintiffs’ formal proof application, to which I now turn. At his request, Mr O’Neill was excused from appearance on that application.
Plaintiffs’ application for formal proof
[18]As has been seen, HCR 15.9(4) provides:
The plaintiff must, before or at the formal proof hearing, file affidavit evidence establishing, to a Judge’s satisfaction, each cause of action relied on and, if damages are sought, providing sufficient information to enable the Judge to calculate and fix the damages.
[19] The plaintiffs raise three causes of action, each on a separate loan facility alleged to have been extended to some combination of the defendants, secured by guarantees and indemnities in other combination, and not repaid in full.
—background
[20] Tony Scott, the plaintiffs’ director, deposed he was introduced to Graeme Matangi, and to the ninth and eleventh defendants (respectively, Gary and Gregory Ilton), in late 2012. Graeme Matangi, and Gary and Gregory Ilton, own the first, second, and seventh defendant property development companies (respectively, “IMI”, “RVL”, and “KVM”). They owned KVM jointly with Mr Scott, through their fourth to sixth defendant companies (“TGL”).
[21] Through the first plaintiff (“AS Base”), Mr Scott funded IMI’s residential development in Massey Street, Hamilton. Mr Scott, Mr Matangi, and Gary and Gregory Ilton later combined their interests in a joint venture to develop retail units and office spaces for sale as the Rototuna Shopping Centre in Hamilton, to which Mr Scott also provided funding to RVL. In the wake of that successful development, through the second plaintiff (“Scott Base”), Mr Scott provided funding also to KVM, to secure land for another prospective joint venture, this time in Cambridge. And, in the meantime, also through Scott Base, Mr Scott provided funding directly to Mr Matangi, to assist in resolution of a dispute over RVL’s legal fees.
[22]The contended loans are:
(a)under a term loan agreement dated 14 September 2012, from AS Base to IMI, of $1,018,000 and increased on 28 February 2013 by
$45,603.53 (the “IMI loan”);
(b)from Scott Base to KVM, comprising advances of $1,897,000 between 16 April 2015 and 11 March 2016 (the “KVM loan”); and
(c)under a term loan agreement dated 8 July 2015, from Scott Base to Mr Matangi, comprising advances of $900,000 between 10 July 2015 and 3 August 2015 (the “Matangi loan”).
[23] The plaintiffs claim in separate causes of action for outstanding balances (including interest) on those loans, calculated at 1 December 2017 as:
(a)$212,591.86 on the IMI loan;
(b)$1,146,306.38 on the KVM loan; and
(c)$152,535.48 on the Matangi loan.
—the KVM loan
[24] The essence of the dispute is whether there was a KVM loan. It is common ground – unlike the advances to IMI, RVL, or Mr Matangi – any such loan was not documented. Neither is it an identified transaction in the guarantees.
[25] The initial advance under the KVM loan was made to RVL. Mr Scott apprehended the funding would be made on a continuation or renewal of terms for the RVL funding (later fully repaid). The defendants said funds paid to KVM (including the initial payment to RVL, which predated KVL’s incorporation) were equity funding, in exchange for Mr Scott’s 25 per cent shareholding in KVM; monies paid by the defendants to the plaintiffs repaid the IMI and Matangi loans.
[26] Beyond Mr Scott’s and his solicitors’ unilateral characterisations of the advances as loans, there are several strong indications the advances from Scott Base in relation to KVM were intended jointly to be loans:
(a)Mr Matangi’s 16 July 2015 initial request of Mr Scott in relation to the Cambridge development was for “short term funding to get us past resource consent”, after which “the funds could then be paid back to you”;
(b)on 4 August 2015, in sequential text messages, Mr Matangi wrote to Mr Scott “Did you put that money for Cambridge in yet?” and “The guys have agreed to the 25% shareholding by the way”;
(c)by email of 5 August 2015, Mr Scott’s solicitors advised him on the transaction, which they summarised as “you are buying 25% of the shares in the company for $1” and “you are proposing to advance funds to [KVM]… with the initial advance today”;
(d)Mr Scott forwarded the advice – which included the observation “you wish to make the advance today without having the term loan in place”, and warned of the risk in “relying upon the directors of the company to enter into the term loan agreement after the money’s [sic] have been advanced”, and “there would be uncertainty over the terms of the loan”
– to Mr Matangi, who did not demur;
(e)in an accounting for repayment of the RVL loan from net sale proceeds in October 2015, in which Mr Scott’s solicitors had sought repayment also of the initial advance of the KVM funding, RVL’s solicitors indicated their client’s directors’ instructions “The amount of $400,000
was advanced to [KVM] (re Cambridge development) and not [RVL]. Therefore the $400,000 and any interest related to it should not form part of this statement”;
(f)Gary Ilton similarly indicated to RVL’s solicitors the initial advance should be treated as with “all Cambridge loans from Tony”;
(g)RVL’s solicitors proposed repayments to be paid to Scott Base be applied progressively to the RVL loan, the Matangi loan, and “the outstanding amounts … that were lent to [KVM] …”; and
(h)on 11 March 2016, the final KVM advance was made and accepted expressly “the funds advanced today are on the basis of existing securities”.
None of those is consistent with the defendants’ (or their solicitors’) alternative depiction of the advances as Mr Scott’s contributions to KVM’s equity. And the last acceptance is notwithstanding KVM’s solicitors earlier that day raising “without prejudice” the contention “Tony has chosen to be an investor, not a lender. If he wishes to be a lender, he should not be a shareholder”.
[27] The risk foreshadowed by Mr Scott’s solicitors has come to pass. The terms of the KVM loan are uncertain. There is no agreement on applicable interest rates. There is no agreement on a repayment date. Mr Matangi’s original proposition for repayment, on a third party’s acquisition of part of the Cambridge development for an aged care facility, was overtaken by other plans. In the end, Mr Scott’s solicitors demanded repayment by 17 June 2016.
—interest on KVM loan
[28] The plaintiffs’ counsel, Steven Ma Ching, claimed consistent terms for the KVM loan with the preceding RVL and succeeding Matangi loans, pre-eminently being a 25 per cent annual interest rate, reducing to 15 per cent for timely repayments, but in oral argument sought interest “at Judicature Act rates”.
[29] Schedule 1, cl 1 of the Interest on Money Claims Act 2016 – which came into force on 1 January 2018 – provides s 87 of the Judicature Act 1908, although repealed by s 182(1) of the Senior Courts Act 2016, “continues to apply to every civil proceeding commenced before this clause comes into force”.
[30] This proceeding was commenced in 2016. Section 87(1) continues to apply. I thus have discretion to order included in the judgment sum:
… interest at such rate, not exceeding the prescribed rate, as [the Court] thinks fit on the whole or any part of the debt or damages for the whole or any part of the period between the date when the cause of action arose and the date of the judgment.
Since 1 July 2011, clause 4 of the Judicature (Prescribed Rate of Interest) Order 2011 prescribes that rate as “5.0% per year”.
[31] While not here applicable in its terms, also relevant to the exercise of my discretion is s 10(1) of the Interest on Money Claims Act 2016, which provides “In every money judgment, a court must award interest under this section as compensation for a delay in the payment of money”. While I have discretion to award interest at all, the 2016 Act illustrates a general expectation delays in payment of money will be compensated. But my discretion to award interest may not exceed 5 per cent per annum.
[32] Section 13 of the 2016 Act mandates establishment of an “Internet site calculator”, which calculates interest rates for the purposes of the Act. The site’s FAQ explains:7
The interest rate is calculated for a specific day by:
1.Taking the six most recent observations for the retail 6-month term deposit rate that have been published by the Reserve Bank of New Zealand (RBNZ), and taking an average of these six rates. The average is the base rate.
2.Adding the base rate to the premium (0.15%). The result becomes the per annum simple interest rate.
3.Converting the per annum simple interest rate into a daily effective rate. The formula for this conversion is as follows:
7 “Civil Debt Interest Calculator” Ministry of Justice < effective rate = ((1+“per annum simple interest rate as
%”/100)^(1/“Days in the year”-1) x 100
The result is the interest rate expressed as a daily effective rate for the specific day.
[33] I also take judicial notice of the Reserve Bank of New Zealand’s retail 6-month term deposit rate, which has been below 4 per cent per annum since mid-2015.8 So far as the KVM loan is concerned, I am not prepared to award interest at the maximum Judicature Act rate. To do so would be to allow the plaintiffs a meaningful premium for their failure to secure terms for the KVM lending. While I was initially attracted to simple application of the Reserve Bank of New Zealand’s retail 6-month term deposit rate, the more just calculation is in accordance with the 2016 Act’s calculator.
—repayment of loans
[34]Mr Scott deposed:
(a)the IMI loan was partially repaid by payment of $1,110,042.79 on 18 July 2013;
(b)the KVM loan was partially repaid by payment of $1,332,570.00 on 30 June 2016; and
(c)AS Base and Scott Base applied $172,402.85 in funds received “pro rata in reduction of the IMI, KVM and Matangi Loans” on 11 November 2016.
[35] However, Mr Scott’s reconciliation of the outstanding amount of three loans is affected by calculation of 25 per cent interest on the KVM loan. At the lower rate of interest, there will be less outstanding on the KVM loan, and therefore a greater pro rata reduction on the other loans. In terms of HCR 15.9(4), I have insufficient information to enable me to calculate and fix the damages. The plaintiffs must conduct another reconciliation to calculate the sums outstanding on the loans in accordance with this judgment.
8 “Interest Rates on Lending and Deposits” Reserve Bank of New Zealand < liability for repayment of outstanding sums
[36] On 8 and 9 July 2015, in consideration for the Matangi loan, the defendants each provided deeds of guarantee and indemnity to the plaintiffs.
[37] Under the deeds, each defendant, as Guarantor, “unconditionally and irrevocably guarantee[d] to you the performance of and compliance of the Principal Obligor of its obligations to you”. The deeds relevantly identified IMI, KVM and Mr Matangi as among the ‘Principal Obligors’, and AS Base and Scott Base as ‘you’ and among the ‘Beneficiaries’.
[38] The deeds secured “All existing and future obligations of each Principal Obligor to each or any Beneficiary, including but not limited to all obligations arising under” identified transactions. The identified transactions included the IMI and Matangi loans, and addressed also the $400,000 initially paid to RVL on KVM’s account.
[39] On the face of the deeds, each defendant is jointly and severally liable to the plaintiffs for the sums outstanding on the loans.
[40] However, the thirteenth defendants’ professional trustee, Wairau Trustee Limited, did not execute either the Matangi loan documentation or the accompanying deed. Mr Scott deposed he understood Wairau Trustee Limited’s sole director – Rick Williams, an Auckland commercial lawyer – was not available to sign before the urgent initial transfer of $875,000 on 10 July 2015 under the Matangi loan.
[41] That was consistent with the solicitor’s certificate supporting the lending (while identifying the documents were to be signed by the professional trustee), which asserted “the Borrower and all Security Providers have validly executed the Documents” and “The Documents constitute legal, valid and enforceable obligations on the Security Providers and the Borrower”. Among those security providers are the thirteenth defendants, identified as ‘covenantors’ in the Matangi loan documentation.
[42]The Matangi term loan agreement relevantly provided:
13.COVENANTOR
Any person executing this contract as covenantor, covenants with the lender that:
(a)covenant to pay and comply: the covenantor will pay all the obligations and will comply with all covenants and terms on your part contained or implied in this contract;
(b)covenantor not a surety: although as between you and the covenantor, the covenantor may be a surety only, the covenantor will in relation to the lender be deemed a principal party to this contract and may be so treated in all respects by the lender;
(c)events that do not release covenantor: neither your liquidator nor the giving of time or any indulgence by the lender to you, nor the exercise or non-exercise by the lender of any of the lender’s powers, nor any release or partial release or variation of any contract or security interest or arrangement with you, without (in any of the above cases) the consent of the covenantor, will release the covenantor from liability to the lender; and
(d)not released if a surety would be released: nor will the covenantor be released by any other act or omission of the lender or any other act, matter or thing which might release one liable as a surety only.
14.TRUSTEES
(a)Representations by trustees: if any of you are entering into this contract as the trustee of a trust then you represent and warrant that:
(i)powers: you have the power under the instrument under which you hold property on trust to enter into this contract;
(ii)proper processes: the entry into this contract is for a proper purpose and for the benefit of the trust under which you hold the property;
(iii)right to be indemnified: you have the right to be indemnified from the assets of the trust and that right has not been lost or impaired by any of your actions including the entry into this contract; and
(iv)all trustees approve or assent: all of the persons who are trustees of the relevant trust have approved and have signed or assented to this contract.
(b)Trustees have full and unlimited personal liability: Unless you have been named in this contract as a limited liability trustee (in which case the provisions of clause 14(c) will apply) all of you have full and unlimited personal liability for the repayment of moneys owing and the compliance with all obligations in this contract.
(c)Limited liability trustees: if you have been named in this contract as a limited lability trustee your liability is not personal and unlimited but
will be limited to an amount equal to the value of the assets of the trust under which you have entered into this contract as a trustee that are (or, but for default would be) available to satisfy your liability or the moneys owing (the “limited amount”) unless your right as a trustee to be indemnified from the assets of the trust has been lost and, as a result, the lender is unable to recover from you the limited amount.
[43]The deeds expressly provided:
7.Trustee Guarantors
7.1If any person enters into this Guarantee as trustee of a trust, then that person warrants that:
(1)that person has power to enter into this Guarantee under the terms of the trust;
(2)this guarantee is being given for the benefit of and in the interests of the trust;
(3)all of the persons who are trustees of the trust have approved entry into this Guarantee;
(4)that person has property signed this Guarantee in accordance with the terms of the trust;
(5)that person has the right to be indemnified from the assets of the trust and that right has not been lost or impaired by any action of that person including entry into this Guarantee.
7.2If that person has no right or interest to or interest in any of the assets of the trust except in that person’s capacity as trustee of the trust, that person’s liability under this deed shall not be personal and unlimited but shall be limited to an amount equal to the value of the assets of the trust that are available to meet that person’s liability unless the right of that person to be indemnified from the assets of the trust has been lost and in which case that person’s liability under this guarantee shall be personal and unlimited.
[44] Mr Ma Ching relied on these provisions as representing all thirteenth defendant trustees approved entry into the Matangi loan and guarantee, the two signing trustees having “actual or ostensible authority to enter into the guarantee on behalf of the trust such that they will be able to have recourse against the trust assets”. However, it is trite law actual or ostensible authority is created by the principal’s representation, and not the agent’s assertion, it has that authority.9 There is no evidence Wairau Trustee Limited represented the other trustees had its authority.
9 New Zealand Tenancy Bonds Ltd v Mooney [1986] 1 NZLR 280, (1986) 1 NZBLC 102,417 (CA) at 283-284, endorsed in Savill v Chase Holdings (Wellington) Ltd [1989] 1 NZLR 257, (1989) 4 NZCLC 64,908 (CA) at 305, and Pascoe Properties Ltd v Attorney-General [2014] NZCA 616, [2015] NZAR 457 (CA) at [19].
[45] Further, trustees’ obligations as covenantor to the Matangi loan only apply after “executing this contract as covenantor”. The signatory trustees’ representation and warranty all had signed is plainly their untrue representation and warranty. Under the deed, only signatory trustees warrant each trustee’s approval and execution of the deed. On those representations and warranties, the signatory trustees stand personally liable. (The professional trustee had, however, signed the IMI loan, and is jointly and severally liable with the other defendants for the sums outstanding on that loan.)
[46] Recognising that possibility, Mr Ma Ching alternatively sought an order the signatory trustees, Mr and Mrs Matangi, were personally liable under the guarantee.
Result
[47]I find the IMI, KVM, and Matangi loans proved in terms respectively of (a) to
(c) above.
[48] Under the Judicature Act 1908, I award interest, from the date of each advance under the KVM loan until its repayment, at rates calculated in accordance with the Interest on Money Claims Act 2016, but not exceeding 5 per cent per annum.
Costs
[49]The deeds of guarantee and indemnity provided:
Each Guarantor will pay on demand all costs and expenses (including all taxes and legal expenses on a solicitor/client basis) sustained or incurred by the Beneficiary as a result of the exercise of, or in protecting or enforcing or otherwise in connection with its rights under this Guarantee.
The IMI and Matangi loans also made provision for solicitor/client costs, including for costs incurred on default. (Again, Wairau Trustee Limited is liable under the IMI loan only.)
[50] The defendants are liable for the plaintiffs’ actual and reasonable costs in the proceed ing, to be calculated pro rata with their liability for the outstanding balances of each the IMI, KVM, and Matangi loans.
Next steps
[51] I direct the plaintiffs to file and serve, within 10 working days of receipt of this judgment, an affidavit exhibiting a new reconciliation of the sums outstanding on the loans, calculated in accordance with this judgment, together with draft orders for sealing.
[52] After filing of the further affidavit, judgment should issue in the plaintiffs’ favour for the outstanding balances of:
(a)the IMI loan jointly and severally against all defendants, and
(b)the KVM and Matangi loans jointly and severally against all defendants, with the exceptions of the thirteenth defendants’ Wairau Trustee Limited, and the other two thirteenth defendants being personally liable on those loans.
—Jagose J
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