Chen v Goodmore Investments (New Zealand) Limited - [2024] NZHC 139

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-691

[2024] NZHC 139

BETWEEN
LIYEN CHEN

First Plaintiff
First Counterclaim Defendant

LC1521319 DEVELOPMENT CO. LIMITED
Second Plaintiff
Second Counterclaim Defendant

RHC PROPERTY INVESTMENT LIMITED

Third Counterclaim Defendant

LIYUN CHEN as Trustees of the ROYALL FAMILY TRUST
Fourth Counterclaim Defendant

AND

GOODMORE INVESTMENTS (NEW ZEALAND) LIMITED

Defendant

Counterclaim Plaintiff

Hearing: 13 November 2023

Appearances:

Plaintiff is self-represented

Sean Gollin / Hannah Jacques for the Defendant

Judgment:

20 February 2024

Reissued:

22 February 2024

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Defendant’s summary judgment; summary judgment on defendant’s counterclaims against the plaintiffs]

CHEN v GOODMORE INVESTMENTS (NEW ZEALAND) LIMITED [2024] NZHC 139 [20 February 2024]

This judgment was re-issued by me on 22 February 2024 pursuant to Rule 11.10 of the High Court Rules 2016 [Correction to paragraph [121](b)(i)]

…………………………. Registrar/Deputy Registrar
TABLE OF CONTENTS

Paragraph

Introduction  [1]
Background  [2]
Goodmore’s applications  [5]

Defendant’s summary judgment [5]

Summary judgment on counterclaim [7]
Affidavit of Rongjun Zhang dated 24 May 2023 [9]

Affidavit of Rongjun Zhang dated 12 May 2023 [13]

Updating affidavit of Rongjun Zhang dated 10 November 2023 [31]

Ms Chen’s opposition [36]

Affidavit of Liyun Chen dated 11 April 2023 [39]

Affidavit of Ee Kuoh Lau dated 19 October 2023 [41]

Legal principles [47]
Defendant’s summary judgment [47]

Summary judgment on counterclaim [51]

Ms Chen’s representation at the hearing [54]

Ms Chen’s early departure from the hearing [67]

Analysis [69]
Goodmore’s summary judgment [69]

Goodmore’s counterclaim [70]

Ms Chen and DevCo’s claims and Ms Chen’s defences against Goodmore [72]

Breach of disclosure obligations under the CCCFA [73]

Conclusion in respect of breach of disclosure obligations [83]
Oppression under the CCCFA [85]

Conclusion in respect of oppression under the CCCFA [94]
Breach of mortgagee’s duty under s 176 of the PLA [95]

Conclusion in respect of mortgagee’s duty under s 176 [100]
Breach of s 10 of the Companies Act [101]

Conclusion in respect of breach of s 10 [103]

Breach of AML/CFT Act [104]
Conclusion in respect of the AML/CFT breach [108]

Duress [109]

Conclusion in respect of duress [112]
Breaches of the FTA and CGA [113]

Breach of s 55 of the CCCFA [116]

Invalid PLA notice [117]

Result [119]

Orders [121]

Costs [122]

Introduction

[1] Goodmore Investments (New Zealand) Limited (Goodmore), seeks defendant’s summary judgment against a claim by Liyun Chen (Ms Chen) and LC1521319 Development Co Limited (DevCo). Goodmore further seeks summary judgment on its counterclaim against Ms Chen personally, DevCo, RHC Property Investment Limited (RHC) and Ms Chen in her capacity as trustee of the Royall Family Trust (the Family Trust).

Background

[2] This proceeding relates to enforcement action taken by Goodmore under a loan agreement and related security (primarily by mortgage) with Ms Chen (personally and as trustee), DevCo and RHC (together, the Borrowers).

[3] Ms Chen personally and DevCo, with Ms Chen as its sole director and majority shareholder, has brought claims against Goodmore for breaches of the Credit Contracts and Consumer Finance Act 2003 (CCCFA), Property Law Act 2007 (PLA), Companies Act 1993, Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT Act), Fair Trading Act 1986 (FTA) and Consumer Guarantees Act 1993 (CGA). Goodmore seeks defendant’s summary judgment against these claims.

[4] Goodmore also counterclaims in debt against the Borrowers under a term loan agreement between Goodmore and the Borrowers, as borrowers and cross guarantors, dated 20 January 2021 (the Loan Agreement). It seeks the shortfall still owing under the Loan Agreement after mortgagee sale of the security. Goodmore seeks summary jud1gment on its counterclaim.

Goodmore’s applications

Defendant’s summary judgment

[5]Goodmore seeks orders:1

(a) granting summary judgment on Goodmore’s defences to the plaintiffs’ claim; and

(b) awarding Goodmore the costs of, and incidental to, this application and the proceeding on a full solicitor/client basis.

[6]The grounds on which the orders are sought are:2

(a) None of the plaintiffs’ causes of action against Goodmore can succeed because:

(i) from 21 January 2022, the plaintiffs were in default under a Term Loan Agreement between them (among others) and Goodmore dated 20 January 2021 (Term Loan) because they failed to repay in full to Goodmore on the expiry date of 21 January 2022, the Moneys Owed (as defined in the Term Loan);

(ii)Goodmore issued a demand dated 22 April 2022, which was served on the plaintiffs by post and by email;

(iii)although certain partial repayments were made to reduce the Moneys Owed under the Term Loan, at 21 June 2022
$3,386,813.26 remained outstanding;

(iv)on 27 June 2022, Goodmore issued the PLA notices to the plaintiffs;

(v)the PLA Notices were served on the plaintiffs by email to their solicitor on 27 June 2022 in accordance with an agreement between the parties;

(vi)Goodmore is not in breach of section 10 of the Companies Act 1993, as:

(A)it has a name (Goodmore Investments (New Zealand) Limited);

(B)it has 10,000 shares;

(C)it has one shareholder, being Rongjun Zhang, whose liability is limited in the manner set out in section 97(2) of the Companies Act 1993; and

1 Amended interlocutory application on notice for defendant summary judgment dated 11 August 2023 at [1].
2 At [2].

(D)it has one director, being Rongjun Zhang, who lives in New Zealand;

(vii)Goodmore has no obligation to provide previous financial statements to the plaintiffs under the Anti-Money Laundering and Countering Finance of Terrorism Act 2009 (AML/CFT Act);

(viii)the plaintiffs are not reporting entities for the purposes of the AML/CFT Act and are not entitled to Goodmore’s financial statements;

(ix)the plaintiffs have no standing to bring a claim against Goodmore in respect of any alleged breaches of the AML/CFT Act:

(A)only the relevant AML/CFT supervisor is permitted to bring civil proceedings against a reporting entity for breach of the AML/CFT Act;

(B)the Financial Markets Authority is the AML/CFT supervisor for Financial Services Providers, including Goodmore;

(x)Goodmore has not breached sections 118 or 120 of the Credit Contracts and Consumer Finance Act 2003 (CCCFA):

(A)there is no evidence that the plaintiffs requested a partial discharge and repayment in respect of the property at 27 Umbria Lane, Flat Bush, Auckland, either before or after expiry of the Term Loan;

(B)Goodmore was entitled to have regard to the following factors before determining whether to agree to any partial discharge request, including:

(i) the remaining balance of the Term Loan after the proposed partial repayment;

(ii)the resulting loan to value ratios for the remaining properties;

(iii)market appetite for properties and the ease with which Goodmore might sell them by way of mortgagee sale;

(C)under the loan agreement and the memorandums of mortgage, Goodmore has a right to enforce or procure the enforcement of its rights and remedies under the loan and any security in such order as it thinks fit;

(D)denial of any request to discharge the Umbria Road Property in the circumstances, would not be oppressive, harsh, unjustly burdensome, unconscionable, or in breach of reasonable standards of commercial practice;

(xi)no case is made out for Goodmore having breached the Fair Trading Act 1986 and Goodmore has not done so;

(xii)no case is made out for duress against the plaintiffs and there has been no duress;

(xiii)the Term Loan is not a consumer credit contract under the CCCFA and therefore Goodmore has not breached sections 17, 27, 48 or 55 of that Act; and

(b) appearing in the affidavits of Rongjun Zhang filed in support of Goodmore’s:

(i) application for defendant summary judgment dated 23 May 2023;

(ii)notice of opposition to an originating application brought by the first and second plaintiffs in CIV-2023-404-000789 dated 12 May 2023;

(iii)application to remove a notice of claim lodged on the title to the property at 27 Umbria Lane by the first plaintiff’s ex-partner, Ee Kuoh (Augustine) Lau, in CIV-2023-404-1528 dated 28 July 2023; and

(c) appearing in the affidavit of Charlotte Mary Wong in support of Goodmore’s applicated to remove the notice of claim in CIV-2023-404- 1528, dated 11 August 2023.

Summary judgment on counterclaim

[7]Further, Goodmore seeks the following order:3

that summary judgment be entered for the counterclaim plaintiff against each of the counterclaim defendants on the counterclaim for:

(a) judgment for the amount of $2,635,862.04, being the amount owing under the Term Loan Agreement;

(b) interest calculated on the amount owing under the Term Loan Agreement at the rate of 24.2% per annum from 1 May 2023 until the date of judgment;

(c) a declaration that interest continues to accrue on the outstanding debt on the amount owing under the Term Loan Agreement at the rate of 24.2% per annum from the date of judgment up to the date of payment; and

(d) the costs of, and incidental to this application and the proceeding on a full solicitor/client basis.

[8]The grounds on which this order is sought are:4

3 Interlocutory application on notice for summary judgment dated 23 May 2023 at [1].
4 At [2].

(a) none of the counterclaim defendants has any defence to Goodmore’s claim; and

(b) appearing in the affidavits of Rongjun Zhang filed in support of this application and in support of a notice of opposition to an originating application brought by the plaintiffs in CIV-2023-404-000789.

Affidavit of Rongjun Zhang dated 24 May 2023

[9] Ms Rongjun (June) Zhang (Ms Zhang), Goodmore’s sole director and shareholder, has made an affidavit in support of Goodmore’s application.5

[10] Ms Zhang and Goodmore believe that none of Ms Chen and DevCo’s causes of action can succeed for the reasons set out in an affidavit she prepared for a related proceeding,6 which discloses no genuine claim against Goodmore, and because there are no other facts known to her or Goodmore that would support a successful cause of action.

[11] Ms Zhang confirms that as of 24 May 2023 Goodmore has not received any further payment from the Borrowers in respect of the money owed under the Loan Agreement.

[12] Ms Zhang and Goodmore further believe that the Borrowers do not have any fairly arguable defences to the counterclaim for the reasons set out in the affidavit she prepared for the related proceeding,7 which discloses no genuine defence to Goodmore’s counterclaim, and because there are no other facts known to her or Goodmore that would indicate the basis of a genuine defence.

Affidavit of Rongjun Zhang dated 12 May 2023

[13] Ms Zhang made this affidavit in support of Goodmore’s opposition to Ms Chen and DevCo’s application to set aside Goodmore’s demand and notices issued under the PLA.8 She relies on it to support Goodmore’s present applications.

5      Affidavit of Rongjun Zhang in support of Goodmore's interlocutory applications on notice for: (a) defendant summary judgment; (b) summary judgment on its counterclaims dated 24 May 2023.
6      Affidavit of Rongjun Zhang in support of notice of opposition to originating application to set aside demand and Property Law Act notice dated 12 May 2023, annexed as A to Affidavit of Rongjun Zhang, above n 5.
7      Affidavit of Rongjun Zhang, above n 6.
8      Affidavit of Rongjun Zhang, above n 6.

[14] As summary of background, Ms Zhang says Goodmore is a financial services company providing loans to construction companies and property developers. She says Goodmore provided a loan facility to Ms Chen and DevCo, among others, to refinance certain properties. Ms Chen and DevCo are said to have provided cross guarantees. Ms Zhang says numerous Borrowers, including DevCo, granted mortgages to Goodmore over various Auckland properties, being the properties the loan was intended to refinance.

[15] On the lending, Ms Zhang says on 20 January 2021 Goodmore entered into the Loan Agreement with the following Borrowers and guarantors: Ms Chen personally and as trustee, DevCo and RHC. Ms Chen is said to be the director and shareholder of the corporate Borrowers and trustee of the Family Trust. Ms Zhang says Goodmore advanced $4.54 million to the Borrowers under the Loan Agreement, which was fully drawn down (less fees and costs) on 22 January 2021. Under the Loan Agreement the interest rate was 9.2 per cent per annum with an additional 15 per cent per annum chargeable in case of default. The expiry date was specified as 12 months from first drawdown, being 21 January 2022.

[16] As to security for the lending, Ms Zhang says the Borrowers’ obligations were guaranteed by each other Borrower in their capacity as guarantor, set out in a deed of guarantee and indemnity dated 20 January 2021 (the Cross Guarantee). She says some Borrowers, including DevCo with Ms Chen as covenantor, provided general security agreements (GSAs) in Goodmore’s favour. DevCo’s GSA granted Goodmore a security interest in all DevCo’s rights, titles and interests in all present and future property to secure all monies advanced by Goodmore to DevCo and all obligations DevCo has to Goodmore. Ms Zhang says Goodmore registered DevCo’s GSA on the Personal Property Securities Register on 23 March 2021.

[17] Additionally, Ms Zhang says the Loan Agreement provided first and exclusive all obligations mortgages be given to Goodmore for the following Auckland properties:

(a)portion of allotment on Hillcrest Road, Hatfields Beach, Orewa (owned by RHC);

(b)27 Umbria Lane, Flat Bush (owned by DevCo) (the Umbria Lane Property);

(c)27 Living Stream Road, Albany Heights (owned by DevCo); and

(d)92 Jeffs Road, Flat Bush (owned by Ms Chen as trustee of the Family Trust).

Ms Zhang notes these mortgages were granted on 30 January 2021 and registered on the respective titles.

[18] As to interest payments, Ms Zhang says the Borrowers were often late making them — of 12 interest payments, seven were late. She says Goodmore charged default interest in respect of two overdue payments only, one for December 2021 and the other for January 2022.

[19] Ms Zhang says that prior to the loan’s expiry, Ms Chen’s broker sought an extension of the loan from Goodmore to allow time for refinancing with another lender. Ms Zhang says Goodmore was prepared to extend by three months with a
$5,000 extension fee, but that Ms Chen did not make the required deposit so the extension never occurred.

[20] As to discharge of the mortgage over the Umbria Lane Property, Ms Zhang says she cannot recall any request of Ms Chen to discharge that property or any others prior to the expiry of the loan, nor any request to discharge that property in advance of the others post-expiry.

[21] As to default, Ms Zhang says that on 21 January 2022 the loan expired without repayment so the principal amount due and owing was $4.54 million. She says none of the guarantors remedied the default under the Loan Agreement by paying the outstanding amount after the expiry date.

[22] As to correspondence post-expiry, Ms Zhang outlines that initially discussion occurred about a possible brief partial extension to allow full refinancing and that Ms Chen had found a refinancing offer that she ultimately declined.

On 12 March 2022, Goodmore’s brokers sent Ms Chen’s brokers a loan statement showing $4,646,646.74 owing as at 1 March 2022. That figure comprised the $4.54 million principal, $1,293.86 penalty interest for late interest instalment payments and
$105,352.88 penalty interest on the principal from the date of expiry (incorrectly noted as a few days later than the true 21 January 2022 date).

[23] Ms Zhang says Goodmore’s solicitors sent a letter of demand to the Borrowers for repayment by 9 May 2022 of the principal, other monies due under the Loan Agreement, default interest from 22 January to 22 April 2022 (totalling $273,917.47) and $1,000 legal fees for issuing the demand. She then says due to postage delays the expiry date of the letter was 11 May 2022. As no payment was forthcoming, Ms Zhang instructed issuance of notices under the PLA on 25 May 2022, although difficulties prevented initial service. There were then discussions in early June 2022 about breaking up the loan to allow partial repayment in exchange for partial discharge of security. By 6 June 2022, the outstanding statement recorded $4,926,584.38 as owing.

[24] As to the first partial repayment, Ms Zhang says on around 14 June 2022 Ms Chen confirmed she had been able to partially refinance the loan and sought release of the mortgages over the Jeffs Road and Living Stream Road properties. The formal request for discharge was made by the Borrowers’ solicitor on 15 June 2022, with Goodmore’s solicitor recording its agreement to the proposed discharge on 17 June 2022 subject to:

(a)the Borrowers’ solicitors confirming they are authorised to accept service of notices under the PLA for the Hillcrest Road and Umbria Lane properties (and other security properties); and

(b)repayment of all the balance of the loan advance after deducting the application, brokerage, interest and legal fees to be repaid in the following order: default interest, legal fees for issue and attempted service of the PLA notices, legal fees in respect of the default, principal (offset by the amount remaining after above payment).

The Borrowers’ solicitors agreed and on around 17 June 2022 Ms Chen paid
$1,609,016 to Goodmore’s solicitors trust account, leaving a balance of
$3,377,855.27. Ms Zhang then says the PLA notices in respect of the Hillcrest Road and Umbria Lane properties were served via the Borrowers’ solicitor on 27 June 2022, which the solicitor confirmed having passed on to Ms Chen.

[25] On the second partial repayment, Ms Zhang says in around July 2022 Ms Chen requested further partial repayment and discharge. An email sent on around 23 August 2022 requested discharge of Goodmore’s mortgage over the Hillcrest Road property. On around 24 August 2022, Ms Chen paid $1.27 million to Goodmore’s solicitors trust account, leaving a balance of $2,262,366.63. Goodmore discharged its mortgage on the Hillcrest Road property leaving only the Umbria Lane Property as security for the loan balance.

[26] Following expiry of the PLA notices on 26 September 2022, the parties had further discussions, but no agreement was reached. Ms Zhang says on 21 November 2022 Goodmore’s solicitors wrote to Ms Chen’s providing the final opportunity to remedy the default by 31 January 2023 or Goodmore would exercise its power of sale under the expired PLA notices.

[27] As to enforcement, Ms Zhang says as at 21 January 2023 the unpaid balance was $2,487,363.65. Ms Chen having not remedied the default, on 1 February 2023 Goodmore’s lawyers commenced mortgagee sale of the Umbria Lane Property. The details were as follows:

(a)On 14 February 2023, Goodmore engaged Barfoot & Thompson to provide a market appraisal. Also, around this date Ms Chen discussed the possibility of another part repayment, which did not eventuate.

(b)On 1 March 2023, the appraisal was received valuing the property at

$2 million and the value of mortgagee sale at $1.6 million.

(c)On 8 March 2023, Ms Zhang instructed Barfoot & Thompson to commence marketing the property for sale.

(d)On 21 March 2023, Ms Chen’s solicitors were emailed recording that Barfoot & Thompson were appointed to market the property for sale by tender, set to close at 4 pm on 18 April 2023.

[28] Ms Zhang says that on 22 March 2023 Ms Chen sent an email alleging she had not seen the PLA notices and requesting proof of service, which was replied to with the email from Ms Chen’s solicitors on 27 June 2022 that they had passed the notices to her. On 23 March 2023, Ms Chen emailed her solicitors and Ms Zhang stating there was an arrangement for the Umbria Lane Property so the PLA notice could be disregarded and asked Goodmore to stop any sale, instead offering a meeting. Ms Chen later sent an email stating that she needed to clarify the PLA notice was invalid in light of a previous repayment and an updated one needed to be issued. Goodmore’s solicitors responded, and further communication ensued. Ms Zhang says Ms Chen requested information about Goodmore for AML/CFT Act purposes, alleged breaches of the CCCFA and complained to the Financial Markets Authority, Commerce Commission and Department of Internal Affairs outlining Ms Chen’s concern about potential money laundering.

[29] On 14 April 2023, Ms Zhang was notified of this proceeding’s claims brought by Ms Chen and DevCo alleging breaches of the CCCFA, Companies Act, AML/CFT Act and Fair Trading Act, and seeking damages of over $11 million.

[30] In concluding, Ms Zhang says the tender closed on 18 April 2023 and since then she has worked with Barfoot & Thompson to see whether any tenderer would increase their offer. As at 12 May 2023 sale had not yet occurred. The outstanding loan as at 30 April 2023 was $2,635,861.68, comprising $373,495.04 of principal and
$816,759.38 of default interest.

Updating affidavit of Rongjun Zhang dated 10 November 2023

[31] Ms Zhang has made a further affidavit to update the Court on the subsequent sale of the Umbria Lane Property.9

9 Updating affidavit of Rongjun Zhang in support of Goodmore’s applications for defendant summary judgment and summary judgment on its counterclaims dated 10 November 2023.

[32] Ms Zhang outlines the Barfoot & Thompson’s marketing programme and prospective purchasers’ feedback, which led to a revised market appraisal of
$1.73 million and mortgagee sale estimate down to $1.4 million. They even advised a figure in the $1.2 million range may need to be considered to effect sale by tender.

[33] On the tenders received, Ms Zhang says by the 18 April 2023 closing date tenders were between $500,000 and $1.6 million, the highest conditional on due diligence and with no deposit until sale was unconditional. Ms Zhang being unsatisfied, Barfoot & Thompson continued to market the property.

[34] On around 9 June 2023, Goodmore received a suitable purchase offer and signed the sale and purchase agreement on 15 June 2023. Settlement was delayed from 28 July 2023 to 25 August 2023, Ms Chen’s ex-partner having unsuccessfully lodged and fought to retain a caveat over the property.

[35] Overall, Goodmore received $2,048,099.16 from the sale after real estate and legal fees and commission were removed. She confirms Goodmore has incurred
$93,449.90 in legal fees. Finally, as at 25 August 2023, the shortfall on the loan is
$808,792.16 including unrecovered legal fees or $766,282.21 excluding legal fees.

Ms Chen’s opposition

[36]Ms Chen opposes both Goodmore’s applications on the following grounds:10

1. Goodmore did not comply under section 10 companies act 1993 and all the loan agreements, Property law act notices that issued by Goodmore is not valid as per affidavit dated 20.10.2023.

2. Suyi, the manager of Goodmore advised plaintiff and Mr Lau that Ms Zhang not in New Zealand while plaintiff seek without prejudice settlement meeting back in beginning 2022 and had been informed that Ms Zhang in China all material time as the results, Suyi been appointed as manager as Mr Lau had been contacting her for few times as per Mr Lau’s affidavit dated 20.10.2023.

3. Suyi recently, in 2023 text plaintiff that she left Goodmore as Ms Zhang back to New Zealand and can run the business herself.

10 Amended notice of opposition dated 19 October 2023 at [1]–[28].

4. This information had been confirm from Suyi to Mr Lau, my property manager during 6 phone conversation between them as per affidavit by Mr Lau dated 20.10.2023.

5. Ms Zhang did not provide the movement between January 2020 to date in her affidavit, the self declaration in this allegation is not appropriate.

6. Ms Zhang as Chapter Accountant filed all her companies annual return herself under the name June Zhang.

7. For the AML/CFT Matter the email correspondence recently can reflect the actual situation of the whole pictures of Goodmore;

…

8. From the records of Company office, there are three companies that removed from Companies office looks suspicious;

a. KVB KUNLUN SECURITIES (NZ) LIMITED (5745551) (Removed)

b. CLSA PREMIUM NEW ZEALAND LIMITED (1161268) (Removed)

c. ACTRUST CHARTERED ACCOUNTANTS LIMITED (2247314) (Removed)

9. Both (i) and (ii) work as sister company under KVB Kunlun and had been determined by this court as money laundering that law suit by FMA under CIV-2020-404-000920 that determined dated 6.9.2021.

“[8] At the relevant times, the executive directors of KVB were Ms Zhang, Mr Huang, and Mr Liu. The non-executive independent directors were Mr Noakes and Mr Pearson. None of the directors are associated with KVB any longer.

[9] During the relevant period (2015 to 2018), KVB had a business relationship with between 21,000 and 37,000 customers each year. It undertook between 63,000 and 83,000 transactions annually, with a gross value of between NZD 228m and NZD 652m. Approximately 95 per cent of KVB’s customers were resident in, or had a connection with, China during this period. The remaining five per cent were predominantly Australian and New Zealand residents.

10. From the movement of the funding, Goodmore is the another company set up by 7(i) and (ii) to be in another potential money laundering tools that used plaintiffs as the tools for the money laundering.

11. Goodmore did not provide 3 years financial statement between 2017 to 2023 as Goodmore in-cooperated at 8.11.2019 on or about the date investigated by FMA against 7(i) and (ii).

12. On about January 2021, 2nd plaintiff borrowed some 6 million loan from defendant and expiring in January 2022.

13. Before the loan expiring, both plaintiffs requested defendant for partial discharge of 27 Umbria Ln to 3rd party lender.

14. Defendant refused the requested and requesting all 6 million loan must be discharged at one go.

15. Under new CCCF act that effective sometime 15.12.2021, plaintiffs cannot source any 3rd party lender able to lent some 6 million loan.

16. Defendant notified plaintiffs that 27 Umbria Ln(27) is the most valuable security and will only be discharged after all other security to be discharged.

17. The 3rd party lender willing to lend 2 million to repay the existing loan and 1 million additional subdivision loan.

18. The property, 27 had a resource consent to subdivide 6 lifestyle block with some 4ha for 5 lots and one remaining lot of some 30HA.

19. The resource consent expiring in sometime may 2022.

20. During the loan application period in year 2021, defendant aware the situation and had been told the new planning that came out in 2022 allow more subdivision lots for 27.

21. There are 1.78million and 1.75million presale lots in 27 and due to the defendant in breach section 118. 120 CCCF 2003, the property cannot be discharge and cannot be further subdivision.

22. The remaining 4 lots worth some 1.8 to 2.2 million each lots cannot be subdivided as per unreasonable policy of defendant.

23. The total value of the property to be some 11 million upon full subdivision into 6 lots.

24. After long discussion with defendant’s lawyer, the position remained the same and defendant did not provide relevant documents that requested by recent 3rd party lender that unable plaintiffs to refinance the property.

25. Defendant aware 27 is the most valuable asset of plaintiffs and try to hind plaintiffs from discharge the property from defendant in order to charge more interest and penalties against plaintiffs.

26. The caused of actions of defendant to be Duress against plaintiffs; in breach of section 118 and 120 Credit Contracts and Consumer Finance Act 2003 by not allow to claim GST on “Business” used properties as classified by defendant; In breach AML/CFT 2009 by not provide relevant information under AML/CFT 2009 that affected the refinance from 3rd party lender that required more information ; In breach of Fair Trading Act 1986 by misleading plaintiffs that the loan is a business loan and never have any business meeting or business loan manager to discuss the development of the property and not allow 27 Umbrian Pl to refinance for development funding or allow to be discharged to 3rd party lender first with additional funding for the subdivision rather waited all other properties to be discharged and having difficulties to refinance as not

provide relevant information under AML/CFT to the 3rd party lender to refinance the property.

27. Defendant did not disclose the criminal proceedings with DIA under KVBkunlun as the sister company of defendant that in breach AML/CFT before the loan drawdown.

28. The amount in the PLA notice is not correct and the funding from “criminal” action not entitled to any interest or penalty interest.

a. The defendant never disclosed any of its financial reports as part of disclosure of the company.

b. The defendant did not obtain any valuations before any of the properties were listed for mortgagee sale.

c. The registered valuation from Greenland valuers at 10.2.2022 to be 5.05million while sold under mortgagee sales of 2.15 million that less than half of the registered valuation.

d. The properties were sold significantly below the registered or capital valuation of the properties.

e. The defendant did not obtain the best obtainable price for all properties as at the time of sale.

None of the causes of action pleaded in the defendant’s counterclaim can succeed

f. The defendant did not obtain any valuations before any of the properties were listed for mortgagee sale.

g. The registered valuation from Greenland valuers at 10.2.2022 to be 5.05million while sold under mortgagee sales of 2.15million that less than half of the registered valuation.

h. The properties were sold significantly below the capital or registered valuation of the properties.

i. The defendant did not obtain the best obtainable price for all properties as at the time of sale.

[37] This amended notice of opposition purports to be on behalf of all Borrowers in respect of both Goodmore’s applications.11 However, for the defendant’s summary judgment the only plaintiffs are Ms Chen and DevCo. In minutes, first by Associate Judge Brittain and then Woolford J, the Court confirmed that Ms Chen could not represent DevCo and that DevCo need be represented by counsel at this hearing.12

11 At (a) and (b).
12 Chen v Goodmore Investments (New Zealand) Ltd HC Auckland CIV-2023-404-691, 6 October 2023 (Minute of Associate Judge Brittain) at [5]; Chen v Goodmore Investments (New Zealand) Ltd HC Auckland CIV-2023-404-0691, 9 November 2023 (Minute of Woolford J) at [5].

This follows from the general principle that corporations require legal representation in court or to file documents.13 Consequently, there being no appearance of counsel for DevCo to prosecute their claim or oppose the defendant’s summary judgment, I take only Ms Chen to personally have opposed the application in filings and at the hearing.

[38] Similarly, for Goodmore’s summary judgment on its counterclaim, Ms Chen is unable to represent DevCo or RHC. Consequently, there being no appearance of counsel for DevCo or RHC opposing summary judgment on Goodmore’s counterclaim, I take only Ms Chen personally and as trustee of the Family Trust to have opposed the application in filings and at the hearing. In any event, I note that Ms Chen has extensively raised matters in her opposition that she as sole director would likely have instructed any legal representative of DevCo or RHC to present.

Affidavit of Liyun Chen dated 11 April 2023

[39] Ms Chen has made an affidavit in support of setting aside the letter of demand and the PLA notices, which is also of some relevance here.14

[40] Ms Chen says she has filed the statement of claim in this proceeding. She says Goodmore is not a competent company and has breached s 10 of the Companies Act. She further says Goodmore is not willing to provide three years of financial statements to prove the legitimate source of funds of the loan in breach of the AML/CFT Act. Finally, she says Goodmore breached ss 118 and 120 of the CCCFA when it did not allow her and DevCo to partially settle the loan in January 2022 nor permit discharge of the Umbria Lane Property first, so as not to delay the proposed subdivision of the property, which had presale arrangements that could have paid off the mortgage within about six months.

13 Re G J Mannix Ltd [1984] 1 NZLR 309 (CA) at 310–311.
14 Affidavit in support originating application to set aside letter of demand and property law act notice dated 11 April 2023.

Affidavit of Ee Kuoh Lau dated 19 October 2023

[41] Mr Ee Kuoh Lau (Mr Lau), Ms Chen’s ex-partner, has made an affidavit in support of Ms Chen’s opposition to Goodmore’s applications.15

[42] Mr Lau says he helped Ms Chen contact via telephone Goodmore’s manager after Goodmore’s director (Ms Zhang) was not in New Zealand after COVID-19.

[43] He says after the loan’s drawdown, Goodmore refused further development funding of $1 million to develop “27 Umbran Place” (presumably 27 Umbria Lane), funding which was verbally agreed to by Goodmore after Ms Chen in return verbally agreed not to claim GST on all the properties under the loan.

[44] Mr Lau says Goodmore’s manager refused the proposal to discharge “27 Umbran Lane” (again presumably 27 Umbria Lane) and 92 Jeffs Road but was open to discharging other properties first.

[45] He claims on two occasions, at the end of 2021 and in mid-2022, he invited lenders from Hong Kong and Singapore to refinance the properties. He says they were not willing to refinance from a lender whose director and shareholder was having trouble with the Department of Internal Affairs. He claims to have called Goodmore’s manager for clarification, but says she refused to disclose any information.

[46] Finally, he understands that Ms Chen was not aware of Goodmore’s poor background and says Goodmore never disclosed such background before drawdown, as the Goodmore funding came from a sister company which he says scared away the potential third party lender.

15 Affidavit of Mr Lau in support [of] amended notice of opposition dated 19 October 2023.

Legal principles

Defendant’s summary judgment

[47] Rule 12.2(2) of the High Court Rules 2016 provides that the Court may enter judgment against a plaintiff if the defendant satisfies the Court that none of the causes of action in the plaintiff’s statement of claim can succeed.

[48] The test for defendant’s summary judgment was set out by the Court of Appeal in Stephens v Barron:16

(a)The defendant has the onus of proving on the balance of probabilities that the plaintiff cannot succeed. Usually this will arise where the defendant can offer evidence which is a complete defence to the plaintiff’s claim.

(b)An application for summary judgment will be inappropriate where there are disputed issues of material fact or where material facts need to be ascertained by the Court and cannot confidently be concluded from affidavits. It may also be inappropriate where ultimate determination turns on a judgment able to be properly arrived at only after a full hearing of the evidence.

(c)The Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment is not to be arrived at on a fine balance of the available evidence as would be appropriate at a trial.

(d)The residual discretion of the Court to refuse summary judgment would be properly invoked to avoid the oppression which would otherwise result if an application by a defendant for summary judgment would pre-empt a plaintiff exercising the right to amend the pleadings.

(e)Summary judgment should not be applied for unless the substantive merits of the case are clear and capable of summary disposal.

[49]In Westpac Banking Corp v M M Kembla New Zealand Ltd, Elias CJ said:17

[63] Except in clear cases, such as a claim upon a simple debt where it is reasonable to expect proof to be immediately available, it will not be appropriate to decide by summary procedure the sufficiency of the proof of the plaintiff's claim. That would permit a defendant, perhaps more in possession of the facts than the plaintiff (as is not uncommon where a plaintiff is the victim of deceit), to force on the plaintiff's case prematurely before

16 Stephens v Barron [2014] NZCA 82 at [9] (footnotes omitted).
17 Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA).

completion of discovery or other interlocutory steps and before the plaintiff's evidence can reasonably be assembled.

[64] The defendant bears the onus of satisfying the Court that none of the claims can succeed. It is not necessary for the plaintiff to put up evidence at all although, if the defendant supplies evidence which would satisfy the Court that the claim cannot succeed, a plaintiff will usually have to respond with credible evidence of its own. Even then it is perhaps unhelpful to describe the effect as one where an onus is transferred. At the end of the day, the Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment made by the Court on interlocutory application is not one to be arrived at on a fine balance of the available evidence, such as is appropriate at trial.

[50] In Bernard v Space 2000 Ltd, Thomas J, referring to r 12.2(2)’s predecessor, described the onus on the defendant as requiring a “king hit”:18

[21] Rule 136(2), as indicated in Kembla (at 313), is only appropriate where the defendant has a “clear answer to the plaintiff which cannot be contradicted”. Summary judgment for a defendant “will arise where the defendant can offer evidence which is a complete defence to the plaintiff's claim”. (Emphasis added). The requirement that there be a clear answer which cannot be contradicted and a complete defence before judgment is entered for a defendant under r 136(2) is not to be disregarded. Examples which are given of appropriate cases for summary judgment under the subrule are where the wrong plaintiff has proceeded (Coastal Tankers Ltd v Southport NZ Ltd 17/5/99, Master Venning, HC Invercargill, CPI4/96) or where the situation is clearly one of qualified privilege (Ferrymead Tavern Ltd v Christchurch Press Ltd 11/8/99, Master Venning, HC Christchurch, CPI84/98). Thus, the subrule contemplates an answer which is clear-cut; what in colloquial language would be described by counsel as a “king hit”.

Summary judgment on counterclaim

[51]Rule 12.2(1) of the High Court Rules provides:

12.2 Judgment when there is no defence or when no cause of action can succeed

(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.

[52] The relevant principles governing a summary judgment application are well established:19

18 Bernard v Space 2000 Ltd (2001) 15 PRNZ 338 (CA).
19 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26] (citations omitted).

The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart. The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable: Eng Mee Yong v Letchumanan. In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel.

[53]The wording of r 12.2 “may give judgment” indicates a residual discretion.

Having regard to the various authorities, the position appears to be as follows:20

(a) The discretion implied by the use of the word “may” is to be restrictively applied. In a great majority of cases, once the court is satisfied the defendant has no defence, there is no room for the exercise of discretion.

(b) The residual discretion may be invoked to avoid oppression or injustice to the defendant where:

(i)The proceeding involves the actions or possible liability of a third party which is not before the court;

(ii)The proceedings are such that the opportunity should be given to allow discovery or other interlocutory applications to be concluded;

(iii)The circumstances of the case disclose very unusual features, the presence of which leads the court to conclude that the entry of summary judgment would be oppressive or unjust; or

(iv)The combination of complex issues of fact and law justify the dismissal of the application for summary judgment, either as a matter of discretion or because the court cannot be satisfied that the defendant has no defence.

(c) Even where the court is not satisfied that a defence has been made out, in exceptional circumstances the application may be adjourned to allow for other processes to be followed.

20 Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at [HR12.2.11].

Ms Chen’s representation at the hearing

[54] As both a self-represented litigant and non-native English speaker, Ms Chen’s ability to convey her claim to the Court in her written filings was somewhat impacted by the language barrier, although it now appears likely she received some assistance.

[55] At the hearing’s commencement, it became apparent that Ms Chen could not speak sufficient English to advance any oral submissions. For that reason, she sought Mr Lau, her ex-husband whom she had brought along as a support person/McKenzie friend, be appointed and permitted to make oral submissions on her behalf. It was proposed Mr Lau speak for Ms Chen, based on Ms Chen’s filed written submissions and in accordance with what Ms Chen told Mr Lau in Mandarin that she wished him to say to the Court.

[56] As a preliminary matter, Ms Chen had not arranged an interpreter for the hearing. For civil cases, there is no general entitlement to a communication assistant, such as an interpreter, unless the person is a witness, such that s 80(3) of the Evidence Act 2003 confirms an entitlement.21 But this offers no assistance here as these interlocutory applications have no live witnesses and thus interpretation would be limited to Ms Chen’s submissions.

[57] While an interpreter undoubtedly would have been of assistance to the Court, there is nothing at law limiting a civil litigant’s choice not to arrange a paid interpreter (for which disbursements may subsequently be available) and instead to seek to rely on a McKenzie friend. Such a decision may be ill-advised given the appointment and role of a McKenzie friend is discretionary, and the Court’s understandable reluctance to trust the accuracy of submissions made via a lay support person, rather than directly from the litigant through a qualified interpreter. Nevertheless, I was faced at the hearing with the consequences of a choice Ms Chen was entitled to make.

[58] Likewise, Ms Chen was entitled to decide to remain self-represented, to not instruct a lawyer, and instead seek the more limited assistance of a McKenzie friend.

21 See discussions in Zhang v King David Investments Ltd [2016] NZHC 1479; and
Li v Commissioner of Police [2016] NZHC 1383.

[59] A McKenzie friend is a support person brought along by an unrepresented civil litigant and appointed by the Court, in its inherent jurisdiction to control its proceedings, “to provide support, take notes, make suggestions and give advice”.22

[60]On the nature of McKenzie friends, Hardie Boys J in Mihaka v Police held:23

[A litigant] may have a friend to assist him but the friend may not act as an advocate. Unless the Court permits, he may act only within the limits stated in Collier v Hicks (1831) 2 B & Ad 663; 109 ER 1290…Whilst the Judge or Justice has a discretion to allow more than that, provided he exercises it in a proper manner and in the interests of justice, his decision cannot be challenged.

[61]A similar point was made by Toogood J in Craig v Slater (McKenzie Friend):24

A McKenzie friend does not have the right to take part in the proceedings as an advocate, although the Court has a discretion to allow the friend to play a greater role, such as speaking for the party, if that is thought appropriate. That discretion is exercised sparingly.

In that case Toogood J appointed Mr Craig’s McKenzie friend, a practising barrister, and even permitted, beyond the standard role, that the McKenzie friend may “in rare circumstances, and only with the further leave of the Court, address the Court”.25

[62] It is clear from the authorities that the Court may exercise its discretion to appoint a McKenzie friend, and further permit them to speak for a self-represented party if it is in the interests of justice to do so.

[63] I was of the view in the hearing that this was a case where it was in the interests of justice to appoint Mr Lau as a McKenzie friend and permit him to present oral submissions on Ms Chen’s behalf. I came to this view as the consequence of not making such an order would deprive Ms Chen of her opportunity to present any oral submissions to the Court, which, in my view, would have been contrary to the interests of justice.

22     Craig v Slater (McKenzie Friend) [2017] NHZC 874, [2017] NZAR 649 at [2], citing Mihaka v Police [1981] 1 NZLR 54 (HC); and McKenzie v McKenzie [1970] 3 WLR 472 (CA).
23     Mihaka v Police, above n 22, at 60.
24     Craig v Slater, above n 22, at [2].
25 At [5].

[64] I accept Mr Lau may not have been the most ideal candidate for the role of McKenzie friend, given his tangential relationship to the facts in this proceeding, and that he has made an affidavit in Ms Chen’s support. Mr Lau was limited to presenting submissions to the Court that it could monitor for consistency with those written and filed by Ms Chen, and from which the Court would rely solely on facts in the filed affidavits. Again, absent an interpreter or alternative McKenzie friend, the only way the Court could allow the proceeding to proceed in a manner consistent with the interest of justice was to grant Ms Chen’s application for Mr Lau to speak for her.

[65] As a result of the conclusions I have outlined at [63] and [64], at the hearing I made an order in my inherent jurisdiction appointing Mr Lau as Ms Chen’s McKenzie friend and permitting him to present oral submissions on her behalf in accordance with Ms Chen’s written submissions and her ongoing instructions to him as he presented. I note Goodmore’s counsel raised no opposition to this order at the hearing.

[66] I wish to make clear that the discretionary decision to control the Court’s proceedings made in this case is not intended to set a broader precedent extending the role of McKenzie friends generally. It is a decision confined to its facts and one that may not be repeated, even in a similar case, as the sparing exercise of this discretion will require the unique balancing of the interests of justice in a particular case.

Ms Chen’s early departure from the hearing

[67] The majority of the proceeding continued in accordance with my order with Goodmore’s counsel and Mr Lau providing oral submissions to the Court. However, Ms Chen was excused from Court early to pick up her children from school. Mr Lau subsequently made a few final submissions on Ms Chen’s behalf. In retrospect, I now consider those limited submissions after Ms Chen left to have exceeded at least the spirit, if not the express terms, of my order. They went beyond what a McKenzie friend should be permitted to do absent the person whom they support being present in the courtroom.

[68] That being the case, I disregard any submissions made by Mr Lau when Ms Chen was no longer present in Court. As those submissions did not cover

arguments of consequence to my ultimate decision on these applications, and I am able to rely on Ms Chen’s written submissions, I do not apprehend Ms Chen was denied anything of substance in disregarding these submissions. In any event, Ms Chen filed a memorandum after the hearing which essentially addresses Ms Lau’s submissions in her absence and clarifies her position on the final submissions made.26 In this context and to ensure Ms Chen was not denied an opportunity to make these submissions, I grant leave under r 11.8A of the High Court Rules to accept such post-hearing submissions and will consider them to any extent they are relevant.

Analysis

Goodmore’s summary judgment

[69] The issue to be determined in respect of Goodmore’s application for defendant’s summary judgment against Ms Chen and DevCo is whether any of their causes of action can succeed. These causes of action are:

(a)breach of the disclosure obligations under s 17 of the CCCFA, which prevents Goodmore from enforcing the Loan Agreement or claiming interest under it;

(b)oppressive conduct under ss 118 to 120 of the CCCFA, being Goodmore declining to grant a release of security over the Umbria Lane Property causing consequential losses of delayed development, which enables the Court to reopen the Loan Agreement;

(c)breach of s 176 of the PLA by failing to take reasonable care to obtain the best price reasonably obtainable for the Umbria Lane Property at mortgagee sale;27

(d)breach of s 10 of the Companies Act for failing to comply with the director residency requirements;

26 1st Plaintiff’s memorandum post hearing dated 14 November 2023.
27 This claim is not made in the amended statement of claim, but was raised in submissions and is thus addressed for completeness.

(e)breach of unspecified provisions of the AML/CFT Act for failing to provide financial statements to prove the source of loaned funds and on the basis that Goodmore’s director has previously co-directed another company, which has been found to have breached that Act;

(f)duress;

(g)breaches of unspecified provisions of the FTA and CGA;

(h)breach of s 55 of the CCCFA, which permits a debtor to apply to change a credit consumer contracts’ term on the grounds of unforeseen hardship.

Goodmore’s counterclaim

[70] Goodmore’s counterclaim is in debt against the Borrowers as borrowers under the Loan Agreement and as guarantors under the Cross Guarantee. Goodmore seeks judgment for the amounts outstanding under the Loan Agreement, and by extension the Cross Guarantee, on the basis that:

(a)as borrowers, they are in default under the Loan Agreement having failed to repay the principal on expiry and the default interest as it falls due; and

(b)as guarantors, they have failed to ensure payment by the Borrowers of amounts owing under the Loan Agreement.

[71] No statement of defence has been filed by the Borrowers/counterclaim defendants. However, a notice of opposition has been filed by Ms Chen personally and as trustee,28 which outlines that the claims made against Goodmore on which Goodmore seeks defendant’s summary judgment are effectively the defences advanced to Goodmore’s counterclaim. This is subject to one further defence Ms Chen

28 See [38] above for discussion as to non-opposition by DevCo and RHC.

raises in addition to her claims, being that the PLA notice was invalid as it recorded the incorrect amount.

Ms Chen and DevCo’s claims and Ms Chen’s defences against Goodmore

[72] I deal with each of Ms Chen and DevCo’s claims and Ms Chen’s (personally and as trustee) defences against Goodmore in turn.

Breach of disclosure obligations under the CCCFA

[73] Ms Chen and DevCo allege that Goodmore has failed to comply with the disclosure requirements under s 17 of the CCCFA, with the result that it is unable to enforce the Loan Agreement nor retain any interest charged.

[74] Mr Gollin,29 for Goodmore, submits that this argument cannot succeed because the disclosure provisions under the CCCFA relate only to consumer credit contracts and the Loan Agreement is not a consumer credit contract. He submits the definition of a “consumer credit contract” in s 11(1) of the CCCFA includes four requirements:

(a)the debtor is a natural person;

(b)the credit is to be used, or is intended to be used, wholly or predominantly for personal, domestic or household purposes;

(c)either interest charges or credit fees are or may be payable, or a security interest is or may be taken under the contract; and

(d)as to the creditor’s business practice, focused on whether it provides credit.

[75] Mr Gollin acknowledges that the requirements of ss 11(1)(c) and (d) are met. In relation to the para (a) requirement, he submits that the loan is to Ms Chen, personally and as trustee of the Family Trust, and to RHC and DevCo. Therefore, he

29 Some of the submissions on behalf of Goodmore were made by Ms Jaques, but for convenience I have referred to all submissions as being made by Mr Gollin.

contends the loan is not to natural persons and so cannot, by definition, be a consumer credit contract. He submits that the interpretation of the definition of a consumer credit contract proposed by Ms Chen would somehow allow severance of the loan in circumstances where no division of the loan amount is specified. He notes that “a credit contract under which the debtor is a trustee acting in his or her capacity as a trustee of a family trust” is not a consumer credit contract, as established by s 15(1)(c) of the CCCFA.

[76] Mr Gollin submits the loan does not meet the s 11(1)(b) requirement because it was provided, and intended to be used, for predominantly a commercial purpose. That being to refinance the properties securing the loan and release equity to complete subdivision of the Umbria Lane Property.

[77] Mr Gollin also submits the loan would not meet the “predominant test” in s 11(1A), which requires that more than 50 per cent of the credit be intended to be used for personal, domestic or household purposes (the intention being that of the borrower). He submits that of the four properties listed in the loan and over which mortgages were provided to Goodmore for security, only the Jeffs Road property is residential and, as noted previously, this is owned by Ms Chen as trustee of the Family Trust. The other three properties, including the Umbria Lane Property, are future development properties owned by the corporate borrowers. Mr Gollin submits that even if the Jeffs Road property could be said to be residential in nature, notwithstanding it is owned by the Family Trust, the Jeffs Road and Living Stream Road properties were discharged from Goodmore’s securities for $1,609,016 collectively, being less than 50 per cent of the loan’s principal.

[78] Mr Gollin submits the following further factors indicate the Loan Agreement was not a consumer credit contract:

(a)Ms Chen’s accountants record the nature of the property subject to the loan as a family home, long-term investment, and residential property development projects;

(b)Vincent Capital, the financier to whom mortgages were previously registered over the properties prior to these being refinanced by Goodmore, provides commercial loans for, among other things, property development, and like Goodmore is not registered to provide financial services under consumer credit contracts;

(c)the Loan Agreement records its purpose at cl 2.3 as:

The Loan shall be used by the Borrower for the purposes of refinancing the Properties. The Borrower shall not utilise the Loan for any other purpose without obtaining prior written consent of the Lender;

(d)the Jeffs Road and Living Stream Road properties were refinanced to Tawa Trade Finance Limited (Tawa), and in a proceeding brought against Tawa by Ms Chen as the registered proprietor, the Court found that Tawa’s loan was a commercial loan;30

(e)Ms Chen, as a party to the Loan Agreement, a trustee of the Family Trust, and a director of the corporate entities, has not deposed as to her intention when entering into the Loan Agreement nor provided any evidence as to the use to which the $4.54 million made available was put;

(f)the claim itself is inconsistent with the argument that the Loan Agreement was a consumer credit contract as it seeks damages of $11 million in reliance on the alleged development potential of the Umbria Lane Property, specifically its subdivision into six lots;

[79] Ms Chen argued that because at least part of the loan was made to her in her personal capacity and related to the Jeffs Road residential property, then at least part of the loan would qualify as a consumer credit contract under the CCCFA. Ms Chen contends that it does not matter that the Jeffs Road property is owned by her in her capacity as trustee of the Family Trust — the capacity in which Ms Chen obtained the

30 Chen v Tawa Trade Finance Ltd [2023] NZHC 1333 at [3] and [30].

loan was in her personal capacity for domestic purposes and not in her capacity as trustee.

[80] Ms Chen submits the loan would meet the “predominant test” in s 11(1A) of the CCCFA to the extent the loan was to her in her personal capacity, and 100 per cent of the loan was intended to be used for personal, domestic, or household purposes in relation to the Jeffs Road property.

[81] Ms Chen submits that the loan should not be characterised as a business loan as Goodmore is not a legitimate business lender. She points out Goodmore does not have a website and submits that there was no business plan required in relation to the loan. She contends the staff at Goodmore were not experienced in property development or business loans of the type the loans are alleged to be. She also points to the fact that Goodmore did not take any action when resource consent in respect of the Umbria Lane Property expired, whereas a normal business lender would have taken action to require the consent to be renewed or taken some other action.

[82] Ms Chen submits the fact the corporate borrowers were not registered for GST indicates the loan was not a business loan.

Conclusion in respect of breach of disclosure obligations

[83]In my view, the arguments put forward by Ms Chen are not tenable:

(a)The loan cannot be characterised as a consumer credit contract. The debtor is not a natural person, being Ms Chen, in her personal capacity and as trustee of the family trust, RHC and DevCo. If the Jeffs Road property could be classified as a residential property and Ms Chen regarded as a borrower in her personal capacity, the Jeffs Road property is owned by a family trust and therefore does not qualify under s 15(1)(c) of the CCCFA. There is no justification for splitting the loan into partially a consumer credit contract and partially a business loan, and this is clearly not contemplated by the CCCFA. This would create significant problems in application of the CCCFA, for example as to what proportion of the loan should be classified as a consumer credit

contract. Consequently, the requirements under s 11(1)(a) that the debtor is a natural person is not met.

(b)The credit was not used wholly or predominantly for personal, domestic or household purposes. The evidence suggests that the loan was used to refinance properties, including three investment properties. Under s 12 of the CCCFA, “[i]nvestment by the debtor is not a personal, domestic or household purpose”.

(c)The evidence of the amount paid on discharge of the Jeffs Road and Living Stream Road properties, even if the Jeffs Road property was regarded as residential, is less than 50 per cent of the loan amount and therefore the “predominant test” in s 11(1A) of the CCCFA is not met.

(d)The absence of GST registration by the Borrowers is not definitive evidence that the loan was not a business loan.

[84] As the Loan Agreement is not a consumer credit contract, then Ms Chen and DevCo’s claim that Goodmore has breached s 17 of the CCCFA cannot succeed. Therefore, it is unnecessary to determine if disclosure was adequate or any remedies under ss 27 and 48 as may otherwise have applied.

Oppression under the CCCFA

[85] Ms Chen and DevCo allege that Goodmore refused to discharge the Umbria Lane Property from its securities first, which was oppressive under s 118 such that the Loan Agreement and collateral contracts could be reopened under s 120 of the CCCFA. Mr Gollin submits there is no oppression under the CCCFA for these reasons:

(a)from the evidence of Ms Zhang for Goodmore, it is clear that no such request was made and that Goodmore wished to retain as security the Jeffs Road property because it would be easier to sell if that became necessary;

(b)even if there was such a request and Goodmore declined it, that is not “oppressive” for the purposes of ss 118 and 120 of the CCCFA; and

(c)the Borrowers are out of time to bring the proceedings to reopen the Loan Agreement under the CCCFA.

[86] Mr Gollin submits that no evidence has been provided of the request to release the Umbria Lane Property and this, he submits, is consistent with documentary evidence to the extent it exists. He references WeChat messages of 2 and 3 February 2022, in which Goodmore’s broker communicated to Ms Chen’s broker that Goodmore was not prepared to agree to a partial discharge of the Jeffs Road property. Mr Gollin submits it would have been inconsistent for Goodmore at the same time to have refused to discharge the Umbria Lane Property but not also refer to it in these messages.

[87] Mr Gollin submits the evidence produced by Ms Chen of a request being made, is weak, inconsistent, and/or inadmissible.

[88] Mr Gollin submits that even if the request was made, and denied, this would not be oppressive conduct under the CCCFA. He points to authorities that establish to meet the threshold of oppression there must be something more than mere unfairness, or a consequence that is generally associated with the exercise of a remedy by a creditor, referring to Bank of New Zealand Ltd v Fernando.31 He submits that exercising the power of sale as a remedy for a borrower’s default is not in itself oppressive, and in this case there are no additional circumstances that would make refusal to discharge particular security properties, in the absence of full repayment of the loan, oppressive. He submits that the lender has no obligation to release its security in any particular order unless the contract provides for that, or the borrower has engaged the right of redemption by paying all amounts secured by the mortgage.32

[89] Mr Gollin submits that the relevant considerations for reopening due to oppression in s 124 of the CCCFA support a finding that any exercise by Goodmore

31 Bank of New Zealand Ltd v Fernando [2021] NZHC 2595 at [83].
32 Property Law Act, s 97.

of its power to refuse a partial discharge over the Umbria Lane Property was not oppressive:

(a)the circumstances relating to any refusal to provide a partial discharge include that the Borrowers had been late on interest payments during the term of the loan, the loan was either nearing expiry or had expired but had not been repaid in full (depending on the precise time of the alleged request for partial discharge);

(b)the loan was not a consumer credit contract as discussed above;

(c)had the Borrowers made payments on time and repaid the loan at expiry, they would have paid interest at 9.2 per cent per annum, being
$417,680 over the 12 month term;

(d)the Borrowers had significant time to remedy their default and repay the loan in full, with accrued interest. Goodmore did not take steps to sell the Umbria Lane Property until February 2023, over a year after expiry of the loan;

(e)the obligation secured by the security interest was significant. It was not possible for Goodmore to accurately calculate the security position compared with the remaining obligations taken at the time Ms Chen says she requested the discharge of the Umbria Lane Property.

[90] Finally on this point, Mr Gollin submits that the Borrowers are out of time to ask the Court to reopen the Loan Agreement under s 125 of the CCCFA. Section 125 of the CCCFA provides that a proceeding seeking reopening of a credit contract may be commenced by a party to the contract at any time before the expiry of one year from the due date for performance of the last obligation required to be performed under the contract. He submits the one-year period begins to run from the date the contract required performance of the last obligation, typically in the case of a Loan Agreement the last payment. The last date for performance under the Loan Agreement was the expiry date when the loan was to be repaid in full, which occurred on 21 January 2022,

and so the Borrowers were required to bring proceedings before 22 January 2023. They did not, and the proceedings against Goodmore were filed in April 2023.

[91] Ms Chen submits that Goodmore’s failure to release the Umbria Lane Property was oppressive and this caused a delay in the subdivision of that property. He submits the subdivision would have allowed the subdivided lots to be sold and would have provided sufficient funds to repay the loan to Goodmore.

[92] Ms Chen also submits that Goodmore’s failure to provide its financial information to allay the concerns of potential lenders to the Borrowers about Goodmore being involved in money laundering was also oppressive. In answer to this submission, Mr Gollin submits:

(a)there is no evidence of potential offshore lenders to the Borrowers declining to provide finance to the Borrowers because of concerns about Goodmore being involved in money laundering; and

(b)Goodmore was under no obligation to provide any of its financial information to the Borrowers or any potential lenders.

[93] Finally, Ms Chen in her notice of opposition attempts to further ground this claim in a contention Goodmore denied her from claiming GST on properties used for what Ms Chen classified as business.

Conclusion in respect of oppression under the CCCFA

[94] I am of the view that Ms Chen and DevCo’s claim of Goodmore acting oppressively under s 118 of the CCCFA, leading to a right to have the Court reopen the Loan Agreement under s 120, cannot succeed. The reasons for this are:

(a)There is no convincing evidence of the request to have the Umbria Lane Property released having been made. Ms Chen asserts the request was made to Goodmore’s manager but there is no evidence of this. More importantly, even if a request was made, Goodmore declining it, in my view, would not have been oppressive under the CCCFA. At the time

of the request, a significant portion of the loan was owing and there is no evidence of the Borrowers offering a substantial payment for release of the Umbria Lane Property, as had been the case in respect of the release of the Jeffs Road and Living Stream Road properties.

(b)I am of the view that Goodmore, as mortgagee, was entitled to make its own assessment as to its security position and the value of the respective security properties relative to the obligations of the Borrowers remaining outstanding for under the Loan Agreement. There is no authority put forward by Ms Chen that Goodmore was under any duty to release its security in any particular manner (except if an equity of redemption was being exercised, which it was not).

(c)There is no evidence to support the allegation that Goodmore’s refusal to provide its financial information deterred potential offshore lenders to the Borrowers due to concerns about Goodmore being involved in money laundering. In any event, Goodmore was under no obligation to provide such information, and there is no oppressive conduct by Goodmore in this respect.

(d)On the face of it, the Borrowers are out of time to lodge any application for the Court to reopen the Loan Agreement under the CCCFA, even if oppression could be demonstrated.

(e)Even if there were more concrete evidence as to Ms Chen’s agreements on GST in relation to Goodmore, there does not appear to be any cognisable legal basis for any such agreement here, if it existed, to amount to oppressive conduct.

Breach of mortgagee’s duty under s 176 of the PLA

[95] Ms Chen and DevCo allege that Goodmore breached its duty under s 176 of the PLA which provides:

(1) A mortgagee who exercises a power to sell mortgaged property, including exercise of the power through the Registrar under section 187, or through a court under section 200, owes a duty of reasonable care to the following persons to obtain the best price reasonably obtainable as at the time of sale:

(a) the current mortgagor: …

[96]Mr Gollin submits the principles applicable to s 176, as set out in

Public Trust v Ottow and other relevant authorities cited therein, are as follows:33

(a)it does not matter that the time may be unpropitious and that by waiting to sell a higher price could be obtained;

(b)a mortgagee is under no obligation to improve the property or to increase its value;34

(c)the mortgagee’s sale for a price less than the current market value assessed by a valuer does not, of itself, establish a breach of duty, although a large discrepancy may indicate its failure to take reasonable care;

(d)following the service of a PLA notice, there is no duty on a mortgagee to keep a guarantor informed of sales activities;

(e)a mortgagee is not entitled to sell in a hasty way and knock-down price sufficient to pay the debt which, because of the speed of the sale, leads to a lower price than could otherwise be obtained;

(f)proper care must be taken to expose the property to the market and to obtain the best price reasonably obtainable.

[97] Mr Gollin submits that the appointment of a reputable real estate agent to market the property in a fulsome marketing campaign, among other things, indicates that a mortgagee has made reasonable efforts to obtain the best price reasonably

33 Public Trust v Ottow (2009) 10 NZCPR 879 (HC) at [17].
34 Silven Properties Ltd v Royal Bank of Scotland plc [2003] EWCA Civ 1409, [2004] 1 WLR 997 (CA) at [14].

obtainable. He submits that in the present instance Goodmore took reasonable care to obtain the best price reasonably obtainable for the Umbria Lane Property at the time of sale in June 2023 for the following reasons:

(a)It engaged Barfoot & Thompson, a reputable real estate agent with significant experience in conducting mortgagee sales to conduct the marketing and sale of the Umbria Lane Property. Barfoot & Thompson:

(i)appraised the market value of the Umbria Lane Property (inclusive of GST) as $2 million and a mortgagee sale value of
$1.6 million, when the CV was $3.4 million;

(ii)recommended the property be marketed for sale by tender in order to fully test the market as well as for other reasons set out in the marketing proposal; and

(iii)conducted a four-week intensive marketing campaign with advertisements in major hard copy and digital property publications, that resulted in 2,647 views of online advertisements, 23 inquiries, 10 respective buyers, and three viewings.

(b)Barfoot & Thompson recorded mixed feedback on the Umbria Lane Property, including various areas of concern for interested parties:

(i)according to a number of experienced developers, the probably very high cost of developing the site according to the expired resource consent, with extensive infrastructure, roading, retaining, fencing, earthworks and services, meant in the short to possibly medium term, the development was not viable;

(ii)the property is south-facing, steep and only marginally suited to residential development;

(iii)there may also be geotechnical concerns as there is a recent medium-sized slip on the site; and

(iv)holding costs and the difficulty of funding development sites in the current, very tight, lending market.

(c)during the final week of marketing, Barfoot & Thompson revised their mortgagee sale appraisal down to $1.2 million (plus GST) in the light of “the current difficult market environment in East Auckland for development sites and the fact that the property is being sold under mortgagee sale conditions”.

(d)Goodmore did not accept any of the tenders submitted ranging from
$500,000 to $1.6 million as they were not acceptable to it, and Barfoot & Thompson continued to market the property for a further period of approximately six weeks following the unsuccessful tender process, with Goodmore eventually accepting an offer of $2.15 million.

[98] Ms Chen raises the following arguments in support of the allegation that Goodmore was in breach of s 176 of the PLA:

(a)a registered valuation of the Umbria Lane Property, valuing the property at $5,050,000 in February 2022, indicates that the Umbria Lane Property was sold at an undervalue. Barfoot & Thompson’s valuations of $1.2 million to $1.7 million of the Umbria Lane Property were unprofessional valuations;

(b)the marketing campaign of four weeks for the property was too short and Barfoot & Thompson was not an international real estate agent so the Umbria Lane Property was not properly marketed to the international market;

(c)two pre-sales of the Umbria Lane Property for $1.78 million and
$1.75 million respectively and the plan to subdivide the property into

four more lots worth approximately $1.8 to $2.2 million each indicate the sale price was too low.

[99]In answer to these arguments, Mr Gollin submits as follows:

(a)referring to Southern Cross Building Society v Vuletic,35 the absence of a registered valuation did not indicate that Goodmore failed to take reasonable care;

(b)as to the $5,050,000 valuation carried out in February 2022, the valuation was not put in evidence but, even if it had been, the valuation is from a year prior to the mortgagee sale, was given at a time when the resource consent had not lapsed and exceeds the CV by a significant amount;

(c)referring to Liddle v Bank of New Zealand,36 the four-week marketing campaign was “perfectly normal” for this property;

(d)as to the criticism that Barfoot & Thompson was not an international real estate agent, he submits there is no evidence of international buyers who would have paid a higher price for the Umbria Lane Property, and in any event the property was advertised on multiple websites accessible to international buyers.

Conclusion in respect of mortgagee’s duty under s 176

[100] I am of the view that Ms Chen and DevCo’s claim that Goodmore has breached s 176 cannot succeed. The reasons for this view are:

(a)Goodmore engaged Barfoot & Thompson, an experienced and reputable real estate agent, to conduct the mortgagee sale process. From the steps taken, as set out at [97](a) to (d), the marketing

35 Southern Cross Building Society v Vuletic HC Auckland CIV-2008-404-8684, 11 August 2009 at
[22] and [23].
36 Liddle v Bank of New Zealand HC Auckland CIV-2009-404-6189, 29 October 2009 at [13].

campaign undertaken by Barfoot & Thompson was reasonable to obtain the best price reasonably obtainable. As has been noted, the length of the marketing campaign and the absence of a registered valuation are not grounds in themselves to establish a breach of s 176 by Goodmore. In any event, the Umbria Lane Property was in fact marketed for approximately 10 weeks, with marketing continuing for approximately six weeks after the tender process concluded.

(b)There is no valuation evidence put forward by Ms Chen or DevCo. In the absence of the February 2022 valuation she referred to in submissions being submitted as evidence, it cannot be given any weight by the Court.

(c)The allegation by Ms Chen that the Umbria Lane Property was not marketed properly to the international market is not supported by any evidence. There is no evidence of international buyers who would have paid a higher price than that accepted by Goodmore, and there is no evidence that international buyers were not able to access the property through websites.

(d)The marketing campaign conducted by Barfoot & Thompson resulted in a final price being achieved that significantly exceeded the assessed value of the Umbria Lane Property.

Breach of s 10 of the Companies Act

[101] Ms Chen and DevCo allege that there is a breach of s 10 of the Companies Act relating to the residency requirements of directors. Specifically, Ms Chen alleges that Ms Zhang was not in New Zealand for a period of time during the COVID-19 pandemic and accordingly was in breach of director’s residency requirements under the Companies Act.

[102] In response to this, Mr Gollin submits that the New Zealand Companies Office Register records that Ms Zhang lived in Auckland, as do numerous affidavits she has

filed in this proceeding. He further submits that in any event a breach of s 10 of the Companies Act (if it occurred) does not invalidate the Loan Agreement or any enforcement steps Goodmore has taken. Mr Gollin also points to the fact that this Court has previously found, in the context of Ms Chen’s application for an interim injunction:37
The fact that from time to time [Ms Zhang] travels to China does not affect that position. There is no admissible evidence to support the allegations that Goodmore is in breach of s 10 of the Companies Act.

Conclusion in respect of breach of s 10

[103] In relation to this issue, I am of the view that this claim by Ms Chen and DevCo is untenable for the following reasons:

(a)there is no admissible evidence of Goodmore being in breach of s 10 of the Companies Act; and

(b)even if it was, there is no authority or evidence put forward that this would affect the Loan Agreement or any of the enforcement steps Goodmore has taken.

Breach of AML/CFT Act

[104] Ms Chen and DevCo allege that Goodmore is involved in money laundering. They allege that the suspicion of Goodmore being involved in money laundering caused potential offshore lenders to the Borrowers, who may have otherwise refinanced the loan, to refuse to deal with the Borrowers.

[105] The allegation appears to be made in reliance on a prior judgment relating to breaches of the AML/CFT Act by a company of which Ms Zhang, Goodmore’s sole director and shareholder, was one of five directors.38 Ms Chen and DevCo allege that Ms Zhang left that company and incorporated Goodmore, and that the funds obtained through that money laundering must have been funnelled into Goodmore.

37 Chen v Goodmore Investments (New Zealand) Ltd [2023] NZHC 1942 at [20].
38 Financial Markets Authority v CLSA Premium New Zealand Ltd [2021] NZHC 2325, [2021] NZCCLR 16 at [8].

[106] Ms Chen and DevCo also allege that Goodmore failed to provide certain of its own financial information to the Borrowers to establish the source of funds which was again, in the Ms Chen submission, suspicious.

[107]In response to this, Mr Gollin submits:

(a)that this is a serious allegation made against Goodmore and for which there is no evidence;

(b)that the Borrowers have no standing to bring the claim for breach of the AML/CFT Act as this is a matter for the supervisor under the Act;39

(c)that any allegation Goodmore failed to provide its own information to the Borrowers is irrelevant as Goodmore was under no obligation to provide such information; and

(d)that even if there was a money laundering issue, there is no evidence or submissions as to how this would affect the enforceability of the Loan Agreement.

Conclusion in respect of the AML/CFT breach

[108] My view in relation to this claim is that it is untenable for the following reasons:

(a)the Borrowers have no standing to bring any claim in relation to the AML/CFT Act;

(b)as noted previously in this judgment, there is no evidence of Goodmore being involved in money laundering and, in any event, there is no evidence as to how this would affect the Loan Agreement; and

(c)Goodmore was under no obligation to provide its financial information to the Borrowers and there is no evidence of potential offshore lenders,

39 Anti-Money Laundering and Countering Financing of Terrorism Act, s 130.

who may have been prepared to lend to the Borrowers, refusing to do so on the basis of suspicion of money laundering by Goodmore.

Duress

[109] Ms Chen and DevCo claim that the Borrowers were unable to complete refinancing because prospective lenders were concerned about the risk of Goodmore being involved in money laundering.

[110] Mr Gollin submits that there is no admissible evidence of potential third-party lenders refusing to lend to the Borrowers because of Goodmore’s alleged involvement in money laundering. He submits that the evidence of money laundering is entirely speculative and inadmissible hearsay.

[111] Mr Gollin submits that in any event the fact that third parties may have refused to lend to the Borrowers would not amount to duress as there was no duress when the Borrowers entered into the Loan Agreement and Cross Guarantee, and any duress complained of by the Borrowers relates to events occurring well after those agreements were made.

Conclusion in respect of duress

[112] In my view this claim by Ms Chen and DevCo is untenable for the following reasons:

(a)there is no evidence of duress by Goodmore causing potential lenders to the Borrowers to refuse to lend because of Goodmore’s alleged involvement in money laundering; and

(b)there is no evidence of duress at the time the Loan Agreement or Cross Guarantee were entered into.

Breaches of the FTA and CGA

[113] Regarding the Fair Trading Act, the only particularisation of such a claim can be drawn from Ms Chen’s reference in her notice of opposition that she was misled (presumably an implicit reference to ‘misleading and deceptive conduct’ under s 9) in the following ways:

(a)as to the status of the loan as a business loan;

(b)by not having any business meeting with a business loan manager to discuss property development;

(c)by Goodmore declining to discharge the Umbria Lane Property first to allow for its development;

(d)by Goodmore not providing relevant information under the AML/CFT Act to prospective lenders to allow for refinancing.

[114] Despite no further submissions directly touching on what I take to be a misleading and deceptive conduct claim under the FTA, I am of the view the claim is not tenable for much the same reasons as the related claims above, being:

(a)As I have already found, the evidence suggests that the loan was used to refinance properties, including three investment properties, and to two commercial entities, so there can be little dispute over this being a ‘business’ loan or of Goodmore having deceived Ms Chen as to this fact, for whatever value that title alone may add;

(b)Goodmore was under no obligation to provide a business meeting or business loan manager and there is no evidence this was ever promised for any misleading conduct to have occurred on Goodmore’s part;

(c)For the same reasons I found Goodmore’s conduct not oppressive under the CCCFA above at [94], predominately there being no evidence of the request to discharge the Umbria Lane Property or denial thereof, that

Goodmore is entitled to determine its discharge preference, and there being no evidence of overseas lenders being deterred from refinancing due to money laundering allegations;

(d)For the same reasons I found Goodmore did not breach the AML/CFT Act above at [108] in not providing information to the Borrowers or prospective lenders.

[115] Beyond that, any further FTA and CGA allegations are not particularised and there is no evidence supporting them. Consequently, there are no tenable claims advanced by Ms Chen and DevCo in this respect.

Breach of s 55 of the CCCFA

[116] This claim was not particularised in the statement of claim nor raised further in submissions. There is no evidence of any application made by any debtor to Goodmore under s 55 on any of the unforeseen hardship grounds. Consequently, and as I have already found there to be no eligible consumer credit contract,40 there is no tenable claim advanced by Ms Chen and DevCo in this respect.

Invalid PLA Notice

[117] Ms Chen raises, in defence to Goodmore’s counterclaim but not as a claim itself brought by Ms Chen and DevCo, that the PLA notice is invalid as the amount noted is not correct. This is raised at [1] and [28] of the amended notice of opposition.

[118] Dealing with this point as raised by Ms Chen at [28] of the amended notice of opposition, there is no evidence produced by Ms Chen that the amount stated in the PLA notice was incorrect. The other matters listed in [28](i) to (v) are all matters which have previously been dealt with in this judgment in Goodmore’s favour.

40 See [83](a) above.

Result

[119] As a result of the conclusions I have reached at [83], [84], [94], [100], [103], [108], [112], [114], [115], [116] and [118], I am of the view that none of Ms Chen’s and DevCo’s claims against Goodmore are tenable, and accordingly Goodmore is entitled to defendant summary judgment in respect of all claims made against it by Ms Chen and DevCo.

[120] As the claims by Ms Chen and DevCo against Goodmore were essentially the defences of Ms Chen (personally and as trustee) to Goodmore’s application for summary judgment on its counterclaim,41 and these have all been decided in favour of Goodmore, I am of the view Goodmore has overcome its burden to demonstrate all the Borrowers have no tenable defences to Goodmore’s counterclaim, such that it is entitled to summary judgment in respect of its counterclaim.

Orders

[121]I make the following orders:

(a)Defendant’s summary judgment is granted in favour of Goodmore in respect of Goodmore’s defences to claims by Ms Chen and DevCo;

(b)summary judgment is granted in favour of Goodmore in respect of Goodmore’s counterclaims against Ms Chen personally, DevCo, RHC and Ms Chen in her capacity as trustee of the Royall Family Trust as follows:

(i)judgment for the amount of $766,282.21, being the amount owing under the Loan Agreement;

41 Save the additional invalidity of the PLA notice defence, which I declined to accept and decided in Goodmore’s favour in any event.

(ii)interest calculated on the amount owing under the Loan Agreement at the rate of 24.2 per cent per annum from 1 May 2023 until the date of this judgment;

(iii)interest continues to accrue on the amount outstanding under the Loan Agreement at the rate of 24.2 per cent per annum from the date of judgment up to the date of payment.

Costs

[122] As the successful party, Goodmore is entitled to costs and disbursements as against the plaintiff. Goodmore is seeking indemnity costs pursuant to the terms of the Loan Agreement and the Cross Guarantee. Counsel for Goodmore is to submit a memorandum as to costs (not to exceed 5 pages) within 5 working days of the date of this judgment. The plaintiffs will file any reply to Goodmore’s memorandum as to costs (not to exceed 5 pages) within 5 working days of receipt of counsel for Goodmore’s memorandum. A decision on costs will then be made on the papers.

…………………………….. Associate Judge Taylor

Solicitors:
MinterEllisonRuddWatts (S Gollin/H Jacques), Auckland, for the Defendant
Copy for:
Ms Liyun Chen (Plaintiff), is self-represented

Hearing:	13 November 2023
Appearances:	Plaintiff is self-represented Sean Gollin / Hannah Jacques for the Defendant
Judgment:	20 February 2024
Reissued:	22 February 2024