Bank of New Zealand v Batchelor

[2020] NZHC 2489

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-001009

[2020] NZHC 2489

BETWEEN

BANK OF NEW ZEALAND

Plaintiff

AND

ANDREW BATCHELOR

First Defendant

EXPERT CAPITAL LIMITED

Second Defendant

Appearances:

C T Ottow for Plaintiff

No appearance by or on behalf of the Defendants

Date:

23 September 2020

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Wednesday, 23 September 2020 at 3:00 pm pursuant to r 11.5 of the High Court Rules.

Solicitors:           Buddle Findlay, Auckland

BANK OF NEW ZEALAND v BATCHELOR [2020] NZHC 2489 [23 September 2020]

[1]This judgment is to be read together with my minute of 15 September 2020.

[2]        On 30 June 2020, the Bank of New Zealand (BNZ) filed a statement of claim, an interlocutory application for summary judgment, an affidavit in support of the application for summary judgment and a notice of proceeding seeking judgment in the sum of $2,529,670.66 as at 30 June 2020, together with interest and costs against the defendants.

Factual background

[3]        The first defendant, Andrew Batchelor, is the sole director of a company previously named Certified Scaffolding Auckland Limited (in liquidation) (presently named EXCSAL Limited) (CSAL). The first defendant was also the sole director of the second defendant, Expert Capital Limited (ECL) and Expert Scaffolding Limited (ESL).

[4]        On or about 13 December 2016, the defendants and ESL (as guarantors) executed an interlocking deed of guarantee and indemnity, dated 13 December 2016 under which they guaranteed to the BNZ the payment of all CSAL’s existing and future obligations to the BNZ (interlocking guarantee).

[5]On or about 6 December 2018, the BNZ (as lender) entered into a loan facility

– customised average rate loan with CSAL (as borrower) (CARL agreement). Under the CARL agreement the BNZ agreed to make available to CSAL a loan facility of

$3,399,710.00 (facility amount). The facility amount was to be used to repay existing amounts owing to the BNZ by CSAL. On or about 17 December 2018, CSAL drew down the facility amount under the CARL agreement.

[6]        On or about 6 December 2018, the BNZ (as lender) and CSAL (as borrower) entered into an overdraft facility (overdraft agreement). Under the overdraft agreement, the BNZ agreed to make available to CSAL an overdraft facility of

$300,000.

[7]        Between November 2019 and February 2020, CSAL failed to pay amounts due on 20 November 2019, 20 December 2019, 20 January 2020 and 20 February 2020

totalling $261,120.00. The failures to make such payments constituted events of default under the CARL agreement. As a consequence of the events of default, CSAL (as borrower) and the defendants (as guarantors) became obliged to repay on demand the total amount owing under the CARL agreement and the overdraft agreement (together the agreements), including principal, interest and any costs incurred by the BNZ in recovering the amounts demanded.

[8]        On 28 April 2020, the BNZ made formal demand of CSAL for payment. Despite demand, CSAL failed to pay the amounts outstanding under the agreements.

[9]        Also on 28 April 2020, the BNZ made formal demand of the defendants (as guarantors) for payment. Despite demand, the defendants failed to pay the amounts outstanding under the agreements.

[10]      On  11  May  2020,  by  special  resolution  of  the  shareholder  pursuant  to  s 241(2)(a) of the Companies Act 1993, CSAL was placed into liquidation. On or about 12 June 2020, the BNZ received $500,000 from the liquidators of CSAL, which was applied towards the amounts outstanding under the agreements.

[11]As at 30 June 2020, the amount outstanding under the agreements was

$2,529,670.66 (total debt) made up as follows:

CARL Agreement
Balance	$2,465,889.63
Accrued interest	$1,892.67
Accrued interest on arrears	$289.84
Overdraft facility
Balance	$57,208.75
Debit interest accrued	$3,688.22
Bank fees and charges	$701.55
TOTAL	$2,529,670.66

[12]The current default interest rates applicable to the agreements are:

(a)7.71 per cent per annum on amounts owed under the CARL agreement; and

(b)17.95 per cent per annum on amounts owed under the overdraft agreement.

[13]      The defendants have failed to pay the total debt outstanding under the agreement in breach of the interlocking guarantee.

Application for summary judgment

[14]      The first defendant, Andrew Batchelor, was served with a copy of the proceedings on 30 July 2020. The second defendant, ECL, was also served with the documents at its registered office on 31 July 2020. The defendants have not taken any steps to defend or dispute the claim by the BNZ. In particular, no statement of defence has been filed.

[15]      When the matter was called before me on 15 September 2020, the BNZ provided me with a memorandum of calculation setting out the amount claimed against the defendants in the statement of claim under the pleaded facilities plus interest from 1 July 2020 up to and including 15 September 2020, together with interest which would continue to accrue from 16 September 2020 up to the date of payment in full at the rates and on the amounts as set out.

[16]      I was satisfied, both that the defendants had not filed a statement of defence within the number of working days required by the notice of proceeding and also that they had no defence to the statement of claim. I, accordingly, authorised the sealing of a judgment and directed judgment against both defendants in favour of the BNZ.

[17]      In my minute of 15 September 2020, I authorised judgment in favour of the BNZ in the sum of $2,571,944.52 together with solicitor/client costs in the sum of

$4,750 and disbursements in the sum of $1,607.82. The BNZ is also entitled, in terms of its statement of claim, to orders for the payment of interest from the date of judgment to the date of payment in the following terms:

(a)On $2,465,889.63 of the judgment amount at the rate of 7.71 per cent per annum, accruing at $520.88 per day; and

(b)On $57,208.75 of the judgment amount at the rate of 17.95 per cent per annum, accruing at $28.13 per day.

[18]      The Court is directed to seal an order for summary judgment in terms of the draft provided to the Court by counsel on 18 September 2020.

Woolford J