Ballindine Limited v Gower - [2013] NZHC 1805

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-1157 [2013] NZHC 1805

BETWEEN BALLINDINE LIMITED Plaintiff

ANDROGER HAMILTON GOWER Defendant

SEAN ROBERT JOYCE Third Party

Hearing: 1 July 2013

Appearances: Mr A Sorrell and Ms A Borchardt for Plaintiff
Mr M Pascariu for Defendant

Judgment: 23 July 2013

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
23.07.13 at 4 pm, pursuant to

Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar
Date……………

BALLINDINE LIMITED v ROGER HAMILTON GOWER [2013] NZHC 1805 [23 July 2013]

Background

[1] The plaintiff, Ballindine Limited, seeks summary judgment to compel the defendant, Mr Gower, to pay AU$339,796.21 allegedly owing pursuant to a guarantee that he signed. Ballindine also seeks payment of legal costs incurred in Australia and New Zealand, costs of this action, and interest. Mr Gower opposes summary judgment as he argues the guarantee was executed whilst he was under undue influence and failure to make demand on him within a reasonable time means it is oppressive for Ballindine to enforce the guarantee.

[2] The undisputed facts are that the defendant provided the guarantee on 23

August 2007 to secure a loan from the plaintiff to Munro Corporation Pty Limited (“Munro”) for AU$100,000. The interest rate was 20% per annum and the default interest rate was 30% per annum. The guarantee was signed by the defendant and co-guarantors, Mr Joyce and Mr Hirst. The guarantors were jointly and severally liable. Mr Joyce and Mr Hirst were the directors of Munro. Mr Gower was a shareholder. The loan agreement had been signed by Mr Hirst in Sydney which allegedly resulted in an urgent situation where Mr Gower signed the guarantee in his car on that same day.

[3] On 23 May 2008, Munro defaulted on repayment of the loan agreement. The balance of the loan and all interest became immediately due. On 19 October 2009, Ballindine obtained a default judgment against Mr Hirst in Australia. Mr Hirst entered into a deed of arrangement with his creditors and Ballindine received AU$4,890.97 in repayment of all sums owing under the loan agreement.

[4] On 12 August 2011, Mr Gower received a demand from Ballindine via email for the amount then owing, which had accrued compound interest. On 31 August
2011, demand was made on Mr Gower in accordance with the terms of the guarantee. Mr Gower denied liability and applied for leave to issue a third party notice against Mr Joyce. The application for leave is unopposed.

[5] At the time when the guarantee was signed, Mr Joyce was a partner in Jones

Young Solicitors and had acted for Mr Gower as his solicitor in the past. Mr Gower

submits that there were several facets to Mr Joyce’s involvement in the signing of the guarantee and the surrounding circumstances. He alleges that Mr Joyce was acting as the solicitor for Ballindine, that he was Mr Gower’s solicitor, a director of Munro, an investor in Munro, and a co-guarantor.

[6]…

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.

Continue reading Ballindine Limited v Gower

Details

AGLC: Ballindine Limited v Gower [2013] NZHC 1805
Case: [2013] NZHC 1805
Decision Date: 23 July 2013

CaseChat Overview and Summary

In Ballindine Limited v Gower, the plaintiff, Ballindine Limited, sought summary judgment against the defendant, Mr Roger Hamilton Gower, to compel him to pay AU$339,796.21, allegedly owed under a guarantee he signed. Mr Gower opposed the application on the grounds that the guarantee was executed under undue influence and that Ballindine’s delay in enforcing the guarantee was oppressive. The court was required to determine whether there was an arguable defence to the plaintiff's claim for summary judgment.

The court found that it was not arguable that Mr Gower was subject to undue influence. There was no evidence to suggest that Mr Joyce, who had acted as Mr Gower’s solicitor in the past, was acting as his solicitor at the relevant time or that he had misused his position of influence to bring undue influence to bear upon Mr Gower. The court held that trust and confidence is not presumed simply because a solicitor is involved in a transaction.

Further, the court held that Mr Gower had not demonstrated that Ballindine’s actions in enforcing the guarantee were oppressive. The court found that Mr Gower was an experienced businessman who had the option of obtaining his share of the required funding from other resources instead of borrowing it. The court held that it was unlikely to exercise its jurisdiction under the Credit Contracts and Consumer Finance Act 2003 to reopen the contract unless the merits of the case favoured the applicant.

Finally, the court held that there was no implied term in the guarantee that notice of default to the guarantors was to be given within a reasonable time after the borrower’s default. The court held that such a term would be inconsistent with the express terms of the contract and would be contrary to acceptable commercial standards.

In conclusion, the court granted the plaintiff's application for summary judgment. The proceeding was to be listed for mention on 8 August 2013, and the parties were to confer on the matter of quantum and costs.

Orders