ASB Bank Limited v Lin - [2013] NZHC 2528

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-4486 [2013] NZHC 2528

BETWEEN
ASB BANK LIMITED

Plaintiff

AND

RUI YU LIN

First Defendant

AND

QIAN GUAN CHEN

Second Defendant

Hearing:	24 April 2013
Appearances:	H K MacDonald for Plaintiff A S R Kashyap for Defendants
Judgment:	26 September 2013

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 26 September 2013 at 4.30 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: ...................................

Solicitors: Bell Gully, Auckland
Aaron Kashyap, Auckland

ASB BANK LIMITED v LIN [2013] NZHC 2528 [26 September 2013]

Introduction

[1] The Plaintiff (“Bank”) seeks summary judgment against each of the Defendants, Ms Lin and Mr Chen, in the amount of $134,350.68. The Bank contends this sum is due from each Defendant pursuant to the facility agreements and guarantees referred to below. In each case the Bank also seeks interest from 11 July 2012 and costs on a solicitor/client basis.

[2] The Defendants have filed a notice of opposition to the application for summary judgment, evidence in support and a statement of defence. The Defendants accept that they are in default under the various agreements and guarantees. They submit, however, that they have a defence on grounds that:

(a)The Bank breached a duty owed to the Defendants when approving a loan to a third party, Jack’s Ventures Limited (“JVL”).

(b)The Bank failed to take reasonable security in respect of its loan to JVL and its failure to do so prejudiced the Defendants. In particular the Defendants contend that the Bank was required to take a General Security Agreement (“GSA”) in respect of JVL’s undertaking.

(c)The Bank failed to take reasonable or proper care to realise mortgaged properties at the best possible price.

[3] Having considered the submissions of all parties, I am satisfied that the Bank is entitled to summary judgment, costs and interest.

Approach to summary judgment

[4] Rule 12.2 of the High Court Rules requires a plaintiff seeking summary judgment to satisfy the Court that the defendant has no defence to the claim. In Krukziener v Hanover Finance Ltd1 guidance was given as to how the Court should
approach this issue:2

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 at 3 (CA). 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,…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2013] NZHC 2528
Decision Date: 26 September 2013

CaseChat Overview and Summary

In the High Court of New Zealand, ASB Bank Limited sought summary judgment against Rui Yu Lin and Qian Guan Chen for a sum of $134,350.68, plus interest and costs, due to their default under facility agreements and guarantees. The defendants opposed the summary judgment, claiming that the bank breached its duty by approving a loan to a third party, Jack's Ventures Limited, and failed to take reasonable security in respect of its loan to this third party. They further argued that the bank failed to take reasonable or proper care to realise mortgaged properties at the best possible price. The court found that the defendants' claims were not arguable and that the bank was entitled to summary judgment, costs, and interest. The bank's contractual provisions excluding a right of set-off were enforceable against the defendants, and there was no obligation for the bank to take a General Security Agreement over the borrower's undertaking. The bank took reasonable care to obtain the best price reasonably obtainable at the time of sale, and there was no breach of the duty under section 176 of the Property Law Act 2007. The court granted judgment for the bank in the sum of $134,350.68, with interest at the prevailing Judicature Act rate since 2 August 2012, and awarded costs on a 2B basis, together with disbursements.

Orders