Issue One: Did the Judge err in holding that Deli’s revolving credit facility was secured by the unlimited guarantee of Deli’s indebtedness to the ASB which the trustees of the BFT had given the ASB on 13 May 2008?
[29]
Issue Two: Did the Judge err in dismissing, as not reasonably arguable, Mr Black’s causes of action under the Fair Trading Act 1986, the Contractual Remedies Act 1979, or upon an estoppel by deed? [45]
[45]
Issue Three: Did the Judge err in holding that the ASB was entitled to apply the proceeds of the realisation of the securities it held in respect of its lending to Deli as it chose? [46]
[46]
Issue Four: Did the Judge err in holding that the ASB neither had nor breached any relevant disclosure obligations it had to the BFT trustees?
[55]
Issue Five: Did the Judge err in entering summary judgment in favour of the ASB without first giving the BFT trustees discovery?
[65
Issue Six: Did the Judge err in awarding the ASB costs of $93,268.90
[69]
Result
[109]
Introduction
This appeal results from the business failure of a company called Deli Ca Sea Wholesale Limited (Deli). The respondent (the ASB) held securities from Deli and from two family trusts which owned Deli. The trusts were associated with the two directors of Deli, the appellant Mr Richard Black and Mr Peter Osborne. The trusts are the Black Family Trust (the BFT) and the Osborne Family Trust (the OFT) respectively. The trustees of the two family trusts (including Mr Black and Mr Osborne) also provided personal guarantees to the ASB.
The ASB was owed substantial sums by Deli as well as by Mr and Mrs Black, and Mr and Mrs Osborne, for their personal borrowings. The OFT trustees voluntarily sold the property they owned which was secured to the ASB and paid the sale proceeds to the ASB. The ASB applied most of those monies to repay the Osbornes personal borrowings. The BFT trustees then sold their property, also secured to the ASB, and accounted to the ASB for the proceeds. The ASB applied these monies first to discharge the whole of Deli’s indebtedness. Mr Black raised two principal objections to this. First, he maintained that the BFT trustees’ personal guarantee was limited to $300,000. Secondly, he argued that the proceeds of sale of the property…
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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AGLC
Black v ASB Bank Ltd [2012] NZCA 384
Case
[2012] NZCA 384
Decision Date
CaseChat Overview and Summary
The appeal was brought by Richard John Carson Black against the ASB Bank Limited, following the business failure of Deli Ca Sea Wholesale Limited (Deli). The appeal concerned the interpretation of security documents, the manner in which ASB realised its securities, ASB’s disclosure obligations to the Black Family Trust trustees, and whether the Judge was wrong to enter summary judgment without first ordering ASB to make discovery. The appeal was also brought against the costs judgment. The Court of Appeal found that the appeal against the substantive judgment was unsuccessful. The Court also found that the appeal against the costs judgment was unsuccessful, and that the appellant was to indemnify the respondent for its actual costs reasonably incurred in successfully resisting the appeal plus usual disbursements.