Chapman v Westpac New Zealand Limited - [2018] NZHC 1986

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2017-419-000049

[2018] NZHC 1986

UNDER Section 124 District Court Act 2016

BETWEEN

FRASER GLANVILLE BADEN CHAPMAN

Appellant

AND

WESTPAC NEW ZEALAND LIMITED

Respondent

Hearing: 30 July 2018

Appearances:

G Bradford for the Appellant

B Upton and S Hawkesworth for the Respondent

Judgment:

6 August 2018

JUDGMENT OF GORDON J

This judgment was delivered by me on 6 August 2018 at 4 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: M J Walmsley, Paeroa
Simpson Grierson, Auckland

CHAPMAN v WESTPAC NEW ZEALAND LTD [2018] NZHC 1986 [6 August 2018]

Introduction

[1] The appellant, Fraser Chapman, appeals a decision of Judge Menzies in the Hamilton District Court granting summary judgment against him for amounts owing pursuant to a guarantee.1

[2] Mr Chapman submits that the respondent, Westpac New Zealand Limited (the Bank), did not discharge its obligation of satisfying Judge Menzies that there was no arguable defence to its claim. His overall submission is that he has an arguable defence in relation to the certification on the guarantee. The District Court Judge was therefore wrong in law to grant summary judgment.

[3]The Bank opposes the appeal.

Background

[4] Mr Chapman was the majority shareholder and sole director of Edenham Developments Limited (in liquidation) (the Company).

[5] Mr Chapman guaranteed the obligations of the Company to the Bank under a guarantee and indemnity dated 17 March 1995 (the Guarantee). Mr Chapman signed the Guarantee in the presence of two bank officers of the Bank.

[6] The Guarantee contains a certification to the effect that the bank officers explained the nature, effect and obligations of the Guarantee to Mr Chapman, that Mr Chapman said he understood that explanation, and that the bank officers were satisfied that Mr Chapman understood the nature and effect of the obligations. Mr Chapman says that no such explanation was given to him.

[7] In 1996, Mr Chapman and his wife obtained a mortgage from Trust Bank New Zealand Limited over the matrimonial home which he and his wife had purchased in 1980.

1 Westpac New Zealand Ltd v Chapman [2018] NZDC 2586.

[8] On 18 April 1996, the Trust Bank New Zealand Limited mortgage vested in Westpac Banking Corporation by Court order. This followed the purchase by Westpac Banking Corporation of Trust Bank New Zealand Limited’s banking business.

[9] On 2 November 2006, the mortgage vested in the Bank by virtue of the Westpac New Zealand Act 2006. The debt of the Company is not secured by the mortgage which only secures the personal borrowing of Mr and Mrs Chapman.

[10] On 7 November 2007, the Bank advanced the sum of $42,000 to the Company under the Company’s overdraft facility.

[11] On 5 December 2015, the Company went into liquidation. The Bank sought to enforce the Guarantee against Mr Chapman by way of a summary judgment application for amounts totalling $68,742.28.

Summary judgment

[12] There is…

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 Chapman v Westpac New Zealand Limited

Details

AGLC: Chapman v Westpac New Zealand Limited [2018] NZHC 1986
Case: [2018] NZHC 1986
Decision Date: 6 August 2018

CaseChat Overview and Summary

Fraser Chapman appeals against the decision of the Hamilton District Court granting summary judgment to Westpac New Zealand Limited for amounts owed under a guarantee. The primary issue is whether the bank was required to establish the veracity of a certification in the guarantee that it had explained the nature, effect, and obligations of the guarantee to Mr Chapman. The Court held that the bank was not under an obligation to provide such an explanation, and the certification was not essential to its claim. The bank's necessary elements for enforcement of the guarantee did not include proving the accuracy of the certification. The Court found that even if the certification was incorrect, it would not provide Mr Chapman with a defence. The Court dismissed the appeal and ordered costs on a 2B basis in favour of the bank.

Orders