Bank of New Zealand v Muir
[2014] NZHC 1973
•21 August 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV 2014-404-000234 [2014] NZHC 1973
BETWEEN BANK OF NEW ZEALAND
Plaintiff
AND
GARRY ALBERT MUIR First Defendant
JUSTITIAE TRUSTEE COMPANY LIMITED
Second Defendant
JUSTITIAE TRUSTEE COMPANY LIMITED
Third Defendant
Hearing: 18 August 2014 Appearances:
J Toebes for the Plaintiff
M Hinde for the DefendantsJudgment:
21 August 2014
JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN
This judgment was delivered by me on
21.08.14 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date……………
BANK OF NEW ZEALAND v G A MUIR AND JUSTITIAE TRUSTEE COMPANY LIMITED [2014] NZHC
1973 [21 August 2014]
The proceeding
[1] The plaintiff, (the Bank) seeks judgment against the second defendant Justitiae Trustee Company Limited (JTCL) as trustee of Carbon Trust for the debit balance in its current account with the Bank, being the sum of $161,086.78 as at 3
September 2013 plus accruing interest thereon at 17.80%. [2] The Bank also seeks:
(a) judgment against the same company as trustee of the Ismail Trust as guarantor of Carbon Trust; and
(b)judgment against the first defendant Mr Muir who personally guaranteed the obligations of Carbon Trust to the Bank.
[3] The second and third defendants are the same company, an entity controlled throughout by Mr Muir.
[4] The Bank, as lender, provided Carbon Trust as borrower with an overdraft facility on its current account.
[5] The overdraft agreement provided for a credit limit of $150,000. The Bank also provided Mr Muir with an overdraft facility on his current account with the Bank. By a deed of guarantee Mr Muir and the Ismail Trust jointly and severally guaranteed Carbon Trust’s debt to the Bank.
Applicant for summary judgment
[6] It was in respect of those obligations that on 28 January 2014 the Bank filed summary judgment proceedings against the defendants seeking payment of
$161,086.78. At that time Ms Ramsay filed an affidavit on behalf of the Bank.
[7] In opposition to the Bank’s summary judgment application Mr Muir filed an affidavit claiming Carbon Trust had no liability in excess of the value of its assets
that were available to meet its liability, and that it had no net assets of any value and likewise it had no liability under any guarantee.
[8] Likewise and upon the same grounds the third defendant as trustee of the
Ismail Trust filed a notice of opposition.
[9] In short and by the notice of opposition the defence focussed upon the absence of liability in any amount which exceeded assets available to meet that liability.
[10] The focus of the defence is upon the limitation of liability provided in the
Master Facility Agreement in relation to the direct borrowing by Carbon Trust.
[11] The Ismail Trust says its guarantee liability was similarly contained. Details of that liability is set out in paragraph [16] herein. However, there was no limitation of liability in the guarantee given by Mr Muir of the obligations of Carbon Trust. It is Mr Muir’s position that if the financial accounts of each of Carbon Trust and the Ismail Trust showed that they have no net value in their assets then they will have no liability to the Bank and likewise he will have no liability as a guarantor.
Background
[12] The issues about liability and responsibility for payment arise in connection with the sale of a property owned by the Ismail Trust, the proceeds of which repaid entirely the extent of the debt then owed by Carbon Trust.
[13] The focus of the Bank’s proceeding is upon claims of a debt arising subsequently and concern events by which Mr Muir arranged payments from Carbon Trust’s overdraft facility.
[14] Carbon Trust’s loan facility was fully repaid on 11 May 2012 upon sale of the Ismail Trust’s property (mortgaged to the Bank) with the accrued interest on the overdraft up to the settlement date charged and paid.
[15] At that time, and notwithstanding full repayment, Carbon Trust’s overdraft facility was not removed and within a short time thereafter Mr Muir drew upon that facility and arranged payments to himself of $145,000 in the period from 28 May to
21 June 2012.
[16] It is not in issue that the debt exists and is repayable upon demand. Rather, it is claimed there is a limitation of liability contained by the parties’ Loan Facility Master Agreement, as follows:
17.13 Trustee Liability: If a Letter of Advice specifies that you are a trustee acting in an independent capacity without any interest in any of the assets of the relevant trust (other than your interest as trustee), then you are only liable under the facility documents to the extent of the value of the assets of the trust that are available to meet your liability, plus any amount by which the value of those assets has been diminished by any breach of trust caused by your wilful default or dishonesty. You will not be acting independently without any interest in any of the assets of that trust (other than your interest as trustee) if you are a beneficiary, discretionary beneficiary, or appointor under that trust.
[17] In this case there is no issue but that JTCL was a trustee “acting in an independent capacity without any interest in any assets of the relevant trust”.
[18] It is argued on behalf of the defendants that their liability is limited to the extent of the assets of the trust available to meet any demand at the time it was made.
Overview of issues for consideration upon the Bank’s summary judgment
application
[19] Upon the Bank’s summary judgment application it needs to convince this Court that the defendants have no arguable defence. The defendants have raised an issue of law as to construction of the guarantee as to liability, but also issues as to fact regarding the extent of assets at relevant times.
[20] It is the defendants position that both as to liability and to quantum that these require determination at trial after discovery and oral evidence with cross- examination to test conflicting statements, it is claimed, in relevant affidavits, and to determine credibility.
[21] The focus of the Court’s enquiry here is in respect of Mr Muir’s draw down of sums totalling $145,000 in the period from 28 May to 21 June 2012 after the overdraft facility of Carbon Trust was repaid.
[22] The evidence is that Mr Muir utilised Carbon Trust’s overdraft facility to pay, over a period of a few days or weeks $145,000 for the purpose, as he describes, of payment to himself.
[23] This, the Bank says, was not the intention of the loan facility obtained by Carbon Trust which had upon its application indicated the availability of means to meet an ability to pay.
[24] The summary judgment application has to an extent been distracted by issues involving the admissibility of affidavit evidence. Not until an opposition and affidavits in opposition to the summary judgment were filed, was it apparent that a defence concerning the availability of assets to meet any debt liability would provide significance.
[25] In that event a significant affidavit was filed in reply by Ms Ramsay on behalf of the Bank, and then in response by affidavits filed by Mr Muir and, for Carbon Trust, by Mr Ma an accountant.
[26] In that event Ms Hinde for the defendants has advanced claims regarding the inadmissibility/unreliability of evidence sworn in connection with issues concerning liability being limited “to the extent of the value of the assets of the Trust that are available to meet… liability”.
[27] Ms Hinde cautions the Court to be wary about the quality of the accuracy of exhibits attached to affidavits filed on behalf of the Bank noting that in successive affidavits of Ms Ramsay the same exhibit sometimes appears in a different format; that some documents exhibited have been provided in part and not whole; and that in the chronology provided on behalf of the Bank mistakes have been recorded in excerpts of documents referred to. In a general sense the Court is being invited to be
wary regarding claims of what the Bank says about documents it claims support its account.
[28] Of significance to the defence are claims about Mr Muir’s initial dealings with Mr Farrell of the Bank and about the Bank’s understanding of the business and investment purposes of the Carbon and Ismail Trusts. When a notice of opposition and affidavit in opposition was provided on behalf of the defendants the Bank then filed an affidavit of Ms Ramsay in reply to address claims by the defendants that there were no assets available from which the Bank’s debt could be paid and therefore there was no responsibility for its repayment.
[29] It is in this background of matters that Ms Hinde for the defendants urges that this Court ought, upon the Bank’s summary judgment applicant, be wary of adopting outcomes urged upon it by Mr Toebes for the plaintiff.
[30] The Court will upon its review of key documents be mindful of Ms Hinde’s concerns. Also it is not uncommon when email chains are reprinted that those might appear in a different format than previously. The difference may occur if a different printer or set-up is used.
The evidence
[31] Mr Muir’s commercial investment arrangements were complex. For present purposes the Court does not need to review any elements of complexity although comment will be made in due course regarding correspondence concerning the Bank’s demands for repayment of its facility. In the face of the Bank’s concerns about repayment Mr Muir provided information intended to assure the Bank of the security of its facility. It seems there were a number of person to person conversations initially between Mr Muir and the Bank’s Mr Farrell.
[32] The evidence is clear that loans to the defendants including the unsecured revolving credit facility to Carbon Trust of $150,000 were repaid with the sale of the Ismail Trust property in the outcome of which security was released on 11 May
2012. Beyond that date the revolving credit facility to Carbon Trust of $150,000
endured and that was not cancelled until by notice of the Bank on 7 July 2013. That notice advised that the facility would be cancelled if the facility had not been repaid in full by that date.
[33] Mr Muir’s concern is that notwithstanding the sale of the Ismail Trust
property had caused Carbon Trust’s facility to be placed in credit from about 11 May
2012 Carbon Trust was allowed to operate the account thereafter and up to the
$150,000 limit without the Bank dishonouring any draw downs.
[34] Mr Muir deposes that the facility was a pre approved loan or overdraft which Carbon Trust could draw down without further reference to the Bank, in as many tranches as it wished without requiring the further consent of the Bank.
[35] Mr Muir’s view of the terms of the facility agreement is clear. He says Carbon Trust was only liable to repay sums in excess of the net value the assets of the Trust when the time for repayment arrived; that Carbon Trust did not undertake to maintain a minimum asset value of trust assets nor that it would have a net (positive) value at any particular time. Mr Muir claims the gross value of the assets of Carbon Trust as at 7 July 2013 was $1,020. His evidence is that six months after the loan facility was provided Carbon Trust, in February 2012 borrowed $160,000 from a Mr Pharo which reduced the net value of the right to proceeds of the sale of New Zealand Units (NZU) available to Carbon Trust by $160,000. Then he said Carbon Trust entered into an agreement on 31 March 2013 to assign the right, ceding priority to the security in favour of Pharo, in exchange for promised future payments to the beneficiaries of Carbon Trust. Mr Muir says therefore as at 31 March 2013
Carbon Trust remained liable under the security to Pharo but that the assets of Carbon Trust had been sold to Pharo on an arms-length basis. Although in that outcome Carbon Trust held certain rights to be issued with promissory notes it held, Mr Muir said that provided no security for the promised future payments.
[36] In May 2014 i.e. about two months after the Bank’s summary judgment proceeding was served, Mr Muir says the rights to the promissory notes were sold to the issuer for $1.5M of which Carbon Trust would have been nominally entitled to
$750,000 for which entitlement, Carbon Trust was required to pay the sum of
$80,000.
[37] Regarding the draw down upon the facility at various times after May 2012
Mr Muir deposes that those represented loans from him to his company GMAdvising
Limited. Regarding those, Mr Muir deposes:
35.… The plaintiff assumes all these payments out of Carbon were loans. However there is no presumption of loan, gift, distribution or whatever. They have the character of what the parties agreed they would have, and the parties agreed that they would be trust distributions to me. There is nothing in the facility preventing this. The same is also true of all other sums received by me from Carbon at the relevant times. That is why they are treated as capital or income receipt, or loaned, of or to the trust but beneficiary distributions…
[38] Later Mr Muir deposes:
41.… All net receipts to Carbon have been paid to trust beneficiaries as trust distributions. These distributions have not been made in breach of any promise to the plaintiff. They were all made either prior to the drastic fall in NZU prices, or the realisation that the value of the promissory notes was much lower than anticipated.
[39] It is clear from this statement that those distributions that Mr Muir has arranged were made at a time when there was a belief in the value of the NZU prices.
[40] Mr Muir’s purpose by this account of matters is to highlight his commitment to the belief that Carbon Trust retained assets of sufficient value as security for those payments which are at the core of this dispute - payments that were represented as loans from Mr Muir to his company.
[41] Also provided as evidence for the defendants in defence of the Bank’s summary judgment applicant is the affidavit of Mr Ma which attaches copies of draft financial statements of accounts for Carbon Trust for the years ended 31 March 2012 and 31 March 2013. It appears the purpose of these is to show Carbon Trust had no assets available to satisfy the Bank’s claim for repayment of its loan facility.
[42] The evidence of Mr Muir appears to serve a multitude of purposes including an assurance of the sufficiency of assets to support the grant of the loan facility; of
the lack of value in assets at the time the facility was withdrawn; of the existence of significant assets traded subsequently; and for the purpose of downplaying the real value of those other assets. But there is clear evidence of claims of ownership of sufficient assets.
[43] By email dated 30 August 2012 Mr Muir advised the Bank the Trust had assets of approximately $5M.
[44] By Mr Muir’s email to Mr Farrell dated 5 November 2012 he advised the Carbon and Ismail Trust assets were worth $2M each. By his email to Mr Farrell dated 1 May 2013 Mr Muir states Carbon Trust has the assets to meet its debt.
[45] Three weeks after Carbon Trust’s facility was cancelled Mr Muir responded that he expected to be in funds within days to bring the current account within limits; that that involved the conversion of forest land for diary use, involving the sale of existing trees in the outcome of which there would be sufficient funds to dispose of the Bank’s debt.
[46] At about this time in a detailed email Mr Muir describes the potential for his trust interests receiving approximately $1M per annum within two years. At that time he confirmed his preparedness to sign an agreed admission of claim as part of any accepted proposal.
[47] Then when there was served on him a notice of demand dated 5 September
2013 Mr Muir responded that if proceedings were issued and filed and “thus becoming public”, he would not be entering into any arrangement with the Bank.
[48] In that result no admission of claim was filed.
Considerations
[49] Ms Hinde has provided submissions in length regarding the value or lack of it of the evidence of Ms Ramsay provided by way of challenge to the evidence on behalf of the defendants. Counsels’ submissions included criticism of ‘hearsay’,
‘selective summarisation’, ‘selected quotation’, ‘assertion’, ‘garbled reference’,
‘opinion’, ‘selective provision’, ‘inaccurate’, ‘unverified’, ‘selective’, ‘expressions of opinion’, and ‘statement of belief’.
[50] The Court has reviewed each of those references the subject of criticism of counsel.
[51] A primary focus of defence submissions is the apparent personal attack upon Mr Muir. It is in that respect Ms Hinde requests that large portions of Ms Ramsay’s affidavit should not be read by this Court for the purposes of the Bank’s summary judgment application. Although not heralded by its statement of claim the Bank’s summary judgment application strongly suggests wilful default or dishonesty by Mr Muir.
[52] The Bank’s position challenges Mr Muir’s claims of an entitlement to trustee liability limitation by:
(a) those payments (the borrowing of money) seven times after full repayment of the overdraft facility and distributing those to Mr Muir as beneficiary; and
(b)the Trust, on 31 March 2013, assigning its rights in a deed of assignment of debt to Mr Pharo in exchange for the promise of future payments to the beneficiaries of Carbon Trust; and
(c) the selling of Carbon Trust’s rights to Notes without payment to
Carbon Trust.
[53] Ms Hinde submits the Bank should offer no objection to the fact of Mr Muir’s payments out from Carbon Trust overdraft facility. It was a non-trading Trust that was asset rich, but which had no cash. It had been provided with an overdraft facility when it was not a trading entity. It was not appropriate therefore for the Trust to access the value of its assets for distribution of those to its beneficiaries. Carbon Trust says the Bank must have known why the facility was needed. The
defendants’ position is that the Bank’s concern about use of the facility has been
misunderstood. It is not, Mr Muir says, an underhand ploy.
[54] It is with particular reference to suggestions of wilful default/dishonesty (not pleaded but promoted upon the summary judgment applicant) that primary objection is taken by Mr Muir’s defence to the summary judgment applicant.
[55] There has been a considerable focus on behalf of the defendants upon the quality of the evidence relied upon by the Bank in support of its claims. It is for this reason the Court has primarily focussed upon the evidence provided by Mr Muir.
[56] It is the position of the defendants that with the availability of discovery full documents will be provided and proper context will be apparent. Although some of the Bank’s documents have not been provided in full text it appears those pages missing are irrelevant for the Court’s present purposes.
[57] Notwithstanding these criticisms/reservations regarding the quality of the Bank’s evidence, the Court is firmly of the view that there is sufficient evidence available to the Court to rule upon the question of liability. That review follows.
[58] On 11 May 2012 Carbon Trust’s loan facility with the Bank was cleared by
the payment received from the Ismail Trust of its property.
[59] Between 28 May and 21 June 2012 Mr Muir authorised the transfer of
$145,000 to his company GMAdvising Limited, or to himself. It is Mr Muir’s evidence that Carbon Trust borrowed these funds from the Bank in order to distribute them to him. By this it appears Mr Muir is converting an asset of Carbon Trust into a personal asset of his from lending it to another. In that outcome Mr Muir says that those advances are not repayable by Carbon Trust; that by the payment of those funds to him he has removed those assets from Carbon Trust and therefore he has no liability to repay those.
[60] In the Court’s view the fact that Mr Muir has characterised the cash transfers as distributions does not prevent those being considered as advances. The Court’s
clear view is that rather than being distributions those payments were in substance loans. The reality is that those payments were borrowings by Carbon Trust, for on lending.
[61] Clause 17.13 of Carbon Trust’s loan facility agreement provides that trustee liability is limited “to the extent of the value of the assets of the trust that are available to meet your liability, plus any amount by which the value of those assets has been diminished by any breach of trust caused by your wilful default or dishonest”.
[62] Mr Muir’s position is that the funds in question have been borrowed by Carbon Trust and have been paid to him and therefore he has removed those assets from Carbon Trust and has no liability for repayment of them. The Bank’s position is that the fact that Mr Muir has characterised the cash transfers as distributions, does not prevent them being properly considered as advances, because in substance they were loans. Mr Toebes submits that the reality of those transactions is that Carbon Trust borrowed the funds and re-lent them to others. The Court agrees with this assessment.
[63] The issue then arises regarding the extent of liability if any which occurs as a consequence.
[64] Mr Toebes submits that calculations of the limitation of liability refer to the gross and not the net value of the borrower’s assets. The Court agrees.
[65] At the beginning of and indeed throughout this hearing Ms Hinde raised objections to the second affidavit of Ms Ramsay. The Court has already referred to criticism regarding the claims of incomplete exhibit and misstatements regarding the contents of certain exhibits. Beyond those, there was also the objection to the affidavit being read at all. In counsel’s submission the Bank should be required to proceed on the basis of Ms Ramsay’s original affidavit.
[66] The Court disagrees. It was only by the affidavit of Mr Muir that the nature of the defendants defence was sufficiently identified. The defendants having raised
the defence by its later affidavits it was appropriate the plaintiff be provided with an opportunity to respond to those to ensure the Court was fully informed for the purpose of assessing whether an arguable defence was available.
Conclusions
[67] This case is all about Carbon Trust’s overdraft facility being cleared on 11
May 2012 from the proceeds of the sale of the Ismail Trust property. Then by a series of seven transactions Mr Muir made withdrawals from that overdraft facility between 28 May and 12 June 2012. The first three were made on consecutive days and involved withdrawals of $25,000 each day. It is the Bank’s position that these payments were advances in effect by Mr Muir to himself and which have not been repaid.
[68] Mr Muir has chosen to describe the transactions as trust distributions to himself which he has largely on lent to a company of his. Therefore Mr Muir says he is converting an asset of Carbon Trust into a personal asset; and therefore that those sums are not repayable by Carbon Trust to the Bank.
[69] Mr Muir appears to be saying that because he has paid to himself the funds borrowed by Carbon Trust from the Bank he has therefore removed assets from Carbon Trust and in that result Carbon Trust has no liability to pay to the Bank those funds removed from its loan facility.
[70] The Court disagrees with that characterisation for the payments. In the Court’s view those payments can properly be described as advances or loans, and not as distributions as Mr Muir asserts. This would be so even if the records of Mr Muir indicated accounting processes supported his explanation for those payments.
[71] In the Court’s view the reality is that those payments were loans of funds
borrowed by Carbon Trust from the Bank. Therefore they are assets of Carbon Trust.
[72] As Mr Toebes submits it is clear that the reference to “assets” in clause 17.13 is a reference to gross assets and not to net assets. The question remains at what point in time an assessment of the gross asset position should be made.
[73] For the defendants it is submitted that the valuation date should be that date upon which the loan facility was cancelled i.e. 7 July 2013. The defendants say that upon cancellation the debt became due and repayable and that that was the appropriate time to value Carbon Trust’s assets for the purpose of determining the extent to which there are assets available to meet debt liability.
[74] The Bank’s position is, and the Court agrees, that the assets should be valued as at the date of the facility agreement i.e. as at about 11 August 2011. The value of Carbon Trust’s assets at that time was not less than $336,000 being its share of the proceeds of the sale of New Zealand Units [NZUs] to Fonterra.
[75] It is clear from the evidence of Mr Muir that within six months of the facility being provided Carbon Trust had assets in excess of $160,000.
[76] Mr Muir deposes Carbon Trust had entered into an agreement on 31 March
2013 to assign the right to the proceeds of the sale of NZUs in exchange for promised future payments to the beneficiaries of Carbon Trust. Mr Muir refers also to Carbon Trust holding as at 7 July 2013 certain rights to be issued with promissory notes.
[77] Mr Muir states that in May 2014 the right to the notes was sold to the issuer for $1.5M “of which Carbon would have been nominally entitled to $750,000”.
[78] It is Mr Muir’s evidence that the gross value of the assets of Carbon Trust on
7 July 2013 was $1,020.
[79] Also provided by the defendants is an affidavit of Mr Ma an accountant attaching copies of draft annual accounts. Whilst those disclose a loss position they are unhelpful because they are in draft form and because, as they say, they rely on information provided by Mr Muir.
[80] In the Court’s view the clear evidence is that those payments arranged by Mr Muir from Carbon Trust’s loan facility in May 2012 were a loan. It follows therefore that if by Mr Muir’s decision as a trustee of Carbon Trust he has acted in a manner to affect the rights of recovery by the Bank then the right to indemnity will be foregone in an amount equal to the loss that has been caused of the trustee.
[81] As Mr Toebes submits the other asset of Carbon Trust, notwithstanding distribution is:
(a) the right of indemnity from the trust assets by way of reimbursement or exoneration to meet the liabilities properly incurred in the borrowing from the Bank;
(b)with a lien or charge in the capital and income of the trust in relation to such right of indemnity;
(c) which lien or charge has priority over the claims of beneficiaries and third parties;
(d) the trustees’ right remains attached to the trust assets even if the trust
assets leave the possession of the trustee.
[82] The Court agrees with the submission that in this case the indemnity is easily enforced as Mr Muir is the controlling mind of the trustee, and is also the beneficiary, and has received the benefit of the cash contributions, and of future payments. He signed all and necessary documentation on behalf of a range of parties and has the requisite notice that will prevent him denying in equity the recourse arising from the right of indemnity.
[83] It is the further submission of Mr Toebes that the actions of Mr Muir in borrowing the money from the Bank on seven occasions after full repayment of the overdraft facility, and immediately distributing those to himself as beneficiary are the wilful and dishonest decisions of him as a trustee and to the extent any loss has been
caused thereby to the Bank Mr Muir is unable to take advantage of the clause 17.13 liability limitation.
[84] It is a fact that after a liability was incurred Mr Muir as trustee distributed the entire trust fund to himself the sole beneficiary and thus leaving the trustee without the funds to meet the liability incurred. Certainly it appears that the funding was obtained to enable those distributions to be made. Of course, upon summary judgment applications it is not the purpose of the Court to draw conclusions upon disputed claims of misconduct or fraud. Certainly in this case those allegations are strongly denied.
[85] In this case the Court is content to adopt the position that the trustees’ right of indemnity from the trust assets does not exclude personal liability for actions that are causative of the loss of assets available to meet Carbon Trust’s liability. Clause
17.13 does not exclude personal liability, but operates as a potential limitation of that personal liability. Carbon Trust is personally liable, but with that liability being subject to the value of the assets of the trust to meet that personal liability. In the Court’s view Carbon Trust has the assets available to satisfy the Bank’s claim and Mr Muir for himself and the Trusts is able to effect repayment.
[86] The Bank is entitled to the judgments it seeks.
Summary
[87] There is no dispute that the Bank is owed claimed in this proceeding. The dispute concerns the funds withdrawn by Mr Muir in the period 28 May to 21 June
2012 and whether the Bank can require those to be repaid by Carbon Trust as borrower, or by the Ismail Trust and Mr Muir pursuant to deeds of guarantee. It is the position of the Ismail Trust and Mr Muir that if the financial accounts of Carbon Trust and the Ismail Trust showed they have no net value in their assets then they will have no liability to the Bank, and likewise Mr Muir will have no liability as a guarantor.
[88] The Court’s clear view is that the payments in question were advances and
therefore are debts due to Carbon Trust.
[89] In the Court’s view the clear evidence is that at all relevant times Carbon
Trust had gross assets of sufficient value to pay the debt the Bank claims is due.
[90] Although Mr Muir has characterised the cash transfers as distributions this does not prevent them from being properly considered as advances because in substance they were loans.
[91] Because Carbon Trust has sufficient assets to meet payment of the Bank’s debt the trustee limitation provision does not relieve the trustee and guarantors from responsibilities for payment of the Bank’s debt.
Judgment
[92] Judgment is entered against Justitiae Trustee Company Limited as trustee of
Carbon Trust for:
(a) $161,086.78.
(b) Interest on that sum at the rate of 17.80 per cent per annum from 3
September 2013 to the date of judgment.
(c) Costs on a schedule 2B basis and disbursements as fixed by the
Registrar.
[93] Judgment is entered against Justitiae Trustee Company Limited as trustee of the Ismail Trust as a guarantor of the obligations of Carbon Trust for:
(a) $161,086.78.
(b) Interest on that sum at the rate of 17.80 per cent per annum from 3
September 2013 to the date of judgment.
(c) Costs on a schedule 2B basis and disbursements as fixed by the
Registrar.
[94] Judgment against Mr Muir as guarantor of Carbon Trust for: (a) $161,086.78.
(b) Interest on that sum at the rate of 17.80 per cent per annum from 3
September 2013 to the date of judgment.
(c) Costs on a schedule 2B basis and disbursements as fixed by the
Registrar.
Associate Judge Christiansen
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