Co-Operative Bank Limited v Opai

[2024] NZHC 2286

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-243

[2024] NZHC 2286

BETWEEN

THE CO-OPERATIVE BANK LIMITED

Plaintiff

AND

MELISSA JEAN OPAI

Defendant

Hearing:	On the papers
Appearances:	RJ Gordon for the Plaintiff MJ Opai, Defendant in Person
Judgment:	20 August 2024

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 20 August 2024 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
MinterEllisonRuddWatts, Wellington

THE CO-OPERATIVE BANK LIMITED v OPAI [2024] NZHC 2286 [20 August 2024]

Introduction

[1]                 The Co-operative Bank Limited has filed an application for summary judgment against the defendant, Melissa Jean Opai, relating to an unpaid loan of $374,546. The loan agreement was entered into following the consolidation of earlier loans originally owed jointly and severally by Ms Opai and her mother as co-borrowers.

[2]                 Following her mother’s death in 2017 and several years of financial difficulties, the Bank agreed to consolidate the loans. This led to the Bank and Ms Opai entering into a new loan agreement on 20 May 2021 but in Ms Opai’s personal capacity only and not as co-borrower with her mother’s estate, as had been the case previously (May 2021 loan).

[3]                 The May 2021 loan was described as a home loan agreement but the Bank is unable to enforce the security over the intended property because Ms Opai holds the property as executor of her mother’s estate and not in her personal capacity. This has precluded the Bank from taking the more usual path of a mortgagee sale to recover the outstanding debt.

[4]                 I issued an interim judgment in December 2023 in which I determined that a number of possible defences raised by Ms Opai were not reasonably arguable.1 However, I recorded that further consideration needed to be given to the question of whether Ms Opai has a tenable defence that the Bank had breached the lender responsibility principles in the Credit Contract and Consumer Finance Act 2003 (CCCFA).

[5]                 Section 9C(3)(b) of the CCCFA requires lenders to assist borrowers to reach informed decisions as to whether to enter into an agreement and to be reasonably aware of the full implications of doing so. I questioned whether a defence was available based on a failure to comply with this and other lender responsibilities because neither the Bank nor Ms Opai appear to have been aware that the steps taken to consolidate the loans would change the position in respect of the security and so it appeared that the full implications of the May 2021 loan may not have been discussed.

1      The Co-operative Bank Ltd v Opai [2023] NZHC 1027.

[6]                 I considered that the impact on Ms Opai may be significant as previously she was a co-borrower with her mother’s estate. I recorded that Ms Opai and her mother’s estate’s liability was joint and several so the Bank may have been able to pursue only Ms Opai in any event. However, Ms Opai’s right to contribution from the estate may have been affected by entry into the May 2021 loan. I had not heard from the parties on this issue and nor had evidence been filed of the steps taken leading up to entry into the May 2021 loan.

[7]                 I did not decline summary judgment at that stage because the Bank may have had a clear basis for establishing it had complied with the lender responsibility principles. In addition, issuing the interim judgment was intended to assist Ms Opai, who is self-represented, to realistically assess her position in respect of the other defences raised and potentially allow her to reach a settlement with the Bank.

[8]                 If the matter was not able to be settled, I directed the Bank to file and serve further submissions and any affidavit evidence addressing the following questions:

(i)whether the Bank has breached the lender responsibility principles in s 9C of the CCCFA when entering into the May 2021 loan with Ms Opai only and not with her mother’s estate as a co-borrower in terms of:

1.   explaining the implications of that to Ms Opai (see s 9C(3)(b) and s 9C(3)(b)(iii) of the CCCFA);

2.   assisting Ms Opai to reach informed decisions in all subsequent dealings in relation to the agreement including by ensuring that any information provided by the Bank to Ms Opai after the May 2021 loan had been entered into was not presented in a misleading, deceptive or confusing manner (see 9C(3)(c)(ii) of the CCCFA);

3.   ensuring that:

a.the May 2021 loan agreement was not oppressive:

b.the Bank did not exercise a right or power conferred by the agreement in an oppressive manner:

c.the Bank did not induce the borrower to enter into the agreement by oppressive means; and

(ii)whether Ms Opai ought to be liable to pay for all or some of the insurance premiums in respect of the Property including evidence of the total amount of the deductions made from Ms Opai’s accounts for

insurance of the Property after 20 May 2021, including the associated overdraft fees and overdraft interest (see s 9C(3)(e)(i) to (iii)); and

(iii)costs and whether s 128 of the CCCFA should apply.

[9]                 Ms Opai was then directed to file submissions in response and the Bank was given an opportunity to reply.

[10]              The parties have confirmed they have been unable to reach a settlement. Submissions have therefore been filed as directed in respect of the questions set out above.

[11]              I refer to my interim judgment for the factual background and the principles applying to summary judgment applications. The question in such applications is whether the plaintiff has established that the defendant has no defence to the claim.2

[12]              I begin this judgment by briefly discussing the relevant provisions in the CCCFA and then consider the questions on which further submissions and evidence have been filed.

Relevant provisions of the CCCFA

[13]              The lender responsibility principles are set out in s 9C of the CCCFA and are that every lender must, at all times exercise the care, diligence, and skill of a responsible lender.3 This includes before entering into a loan agreement and in all subsequent dealings with the borrower in relation to the agreement.4 Lenders must also comply with the lender responsibilities specified in subs (3), (4), and (5) of s 9C. Subsection 3 relates to agreements with borrowers, subs 4 to guarantees and subs 5 to relevant insurance contracts.

[14]              The lender responsibilities in relation to agreements with borrowers include that the lender must:5

2      High Court Rules 2016, r 12.2(1).

3      Credit Contracts and Consumer Finance Act 2003, s 9C(2)(a).

4      Section 9C(2)(a)(iii).

5      Section 9C(3).

(a)make reasonable inquiries, before entering into the agreement… so as to be satisfied that it is likely that—

(i)the credit or finance provided under the agreement will meet the borrower’s requirements and objectives; and

(ii)the borrower will make the payments under the agreement without suffering substantial hardship; and

(b)assist the borrower to reach an informed decision as to whether or not to enter into the agreement and to be reasonably aware of the full implications of entering into the agreement, including by ensuring that—

…

(ii)the terms of the agreement are expressed in plain language in a clear, concise, and intelligible manner; and

(iii)any information provided by the lender to the borrower is not presented in a manner that is, or is likely to be, misleading, deceptive, or confusing; and

…

(c)assist the borrower to reach informed decisions in all subsequent dealings in relation to the agreement, including by ensuring that—

(i)any variation to the agreement is expressed in plain language in a clear, concise, and intelligible manner; and

(ii)any information provided by the lender to the borrower after the agreement has been entered into is not presented in a manner that is, or is likely to be, misleading, deceptive, or confusing; and

…

(e)ensure, in the case of an agreement to which Part 5 applies, that—

(i)the agreement is not oppressive:

(ii)the lender does not exercise a right or power conferred by the agreement in an oppressive manner:

(iii)the lender does not induce the borrower to enter into the agreement by oppressive means; and

[15]              Section 9CA(1) requires the lender to retain records of the inquiries made by the lender under s 9C (including the results of those inquiries).

[16]              As I set out in the interim judgment, s 118 of the CCCFA defines “oppressive” as:

118     Meaning of oppressive

In this Act, oppressive means oppressive, harsh, unjustly burdensome, unconscionable, or in breach of reasonable standards of commercial practice.

[17]              The Supreme Court in GE Custodians v Bartle confirmed that the scope of oppression under the CCCFA is broader than the equitable doctrine of unconscionability (as no special disability needs to be proven) and that the words which together make up the definition of the term oppressive:6

… all contain different shades of meaning but they all contain the underlying idea that the transaction or some term of it is in contravention of reasonable standards of commercial practice.

[18]              If a lender does not comply with the principles and a person has suffered loss or damage by the conduct of the lender, then the Court has the power to make orders under s 94 of the CCCFA.7   Where there has been a breach of s 9C(3)(a) to (e), the    s 94 orders available include:8

(i)an order that allows for the affordable repayment of any unpaid debt, including the amount and timing of payments;

(ii)an order that prohibits the creditor from charging further interest fees or other charges under the contract; and

(iii)any other order that the court thinks necessary to remedy the breach (which may include  any of the orders referred  to in  s 127(2) as if the Court were reopening the credit contract):

[19]              In addition to the lender responsibility principles and the powers associated with those, s 120 in pt 5 of the CCCFA empowers the Court to reopen any credit contract including if it considers that the contract is oppressive or a party has induced another party to enter the contract by oppressive means.

6      GE Custodians v Bartle [2010] NZSC 146, [2011] 2 NZLR 31 at [46].

7      Credit Contracts and Consumer Finance Act 2003, s 93(aa).

8      Section 94(1)(caa).

[20]              Section 124 of the CCCFA sets out a list of factors that the Court must have regard to in deciding whether to exercise the power to reopen a credit contract and the extent applicable in the relevant circumstances. These include:9

(i)all the circumstances relating to the making of the arrangement, or the exercise of any right or power conferred by the arrangement, or the inducement to enter into the arrangement;

(ii)whether the creditor has complied with the lender responsibility principles and the lender responsibilities (see section 9C(2));

(iii)the relative bargaining power of the parties;

(iv)whether, before entering into the arrangement, the debtor obtained independent legal advice;

(v)whether, taking account of the particular characteristics of the debtor, lessee, or occupier (for example, his or her age or physical or mental condition), that person, or the person’s representative, was reasonably able to protect that person’s interests;

(vi)whether the terms of the arrangement—

(i)allow the debtor, lessee, or transferee to be reasonably able to comply with his or her obligations under the arrangement; and

(ii)are reasonably necessary to protect the interests of the creditor, lessor, or transferee.

[21]              The Court then has broad powers under s 127, including to order that any obligation outstanding under the credit contract be extinguished and to revise or alter any term of the credit contract.

9      Credit Contracts and Consumer Finance Act 2003, s 124.

[22]              Furthermore, under s 128 of the CCCFA, the Court has the power, if it has reopened a consumer credit contract, to make an order for payment by any party of the full costs incurred in connection with the proceedings by any other party to the proceedings.

Is it arguable that the Bank has breached the lender responsibility principles in s 9C(3)(b) of the CCCFA when entering into the May 2021 loan with Ms Opai?

[23]              I start by confirming that the Bank accepts it must comply with the lender responsibility principles.10

[24]              The second relevant matter to record is that the May 2021 loan was a consolidation of existing loans. The agreement by the Bank to consolidate the loans and to agree to interest only payments initially was to allow Ms Opai time for her circumstances to improve. However, there is a special condition in the Facility Schedule to the May 2021 loan that expressly states that the Bank may not be able to assist with any further restructures or interest-only extensions at the expiry of the 12- month interest only period. In the interim judgment I held that it is not reasonably arguable that the May 2021 loan was oppressive because of the inclusion of the special condition or that the Bank acted oppressively by not agreeing to extend the interest only period. There is not therefore an arguable defence available to Ms Opai on that basis.

[25]              However, I held that a question arises whether the Bank breached the lender responsibility principles when consolidating the three loans into one loan payable only by Ms Opai, when two were previously payable jointly and severally by Ms Opai and her mother’s estate.

[26]              In its further submissions, the Bank submits that the legal implications for  Ms Opai, in terms of her liability for the debt owed, were unchanged following entry into the May 2021 loan as Ms Opai was fully liable, herself, for the entire sum of money owing to the Bank prior to 20 May 2021. The Bank submits that she is equally

10     Credit Contracts and Consumer Finance Act 2003, s 9C(1).

fully liable for the entire sum of money loaned by the Bank on 20 May 2021 recording that, again, she has the right to look to the estate for contribution.

[27]              The difficulty with this submission is that under the May 2021 loan, Ms Opai does not clearly have a right to look to the estate for contribution. It may be that she can establish that it was not intended that she take on the whole of the loan personally and that she therefore ought to have a right of contribution against the estate. But prior to the May 2021 loan both Ms Opai and her mother’s estate were jointly and severally liable for the loans and there would have been a clear right of contribution. As set out in Chitty on Contracts, the right of contribution depends on the parties being joint and several debtors.11

[28]              Counsel for the Bank refers to the above excerpt in Chitty but submits Ms Opai is still entitled to look to the estate for contribution. I do not accept that this is necessarily the case as under the May 2021 loan there are no longer joint and several debtors as referred to in Chitty but instead the loan is in Ms Opai’s personal name only. I do not therefore agree with the Bank’s submission that nothing changed when the loans were consolidated in May 2021.

[29]              Counsel for the Bank submits that the legal right of contribution that Ms Opai has against her mother’s estate is “no doubt the reason why” the Bank says Ms Opai’s advice has consistently been that her two brothers had agreed to sign over their one third shares in the property and that the documentation to give effect to this was with the lawyers.

[30]              Ms Opai disputes that she has said this consistently, but, in any event, this is supposition on the Bank’s part and does not provide sufficient evidence that the Bank complied with its lender responsibilities.

[31]              In terms of what steps the Bank did take, a further affidavit has been filed by Gregory Andis in which Mr Andis says he has gone through the Bank’s historic business records and collected together the email correspondence with Ms Opai and records from the electronic Customer Relationship Management system (CRM) up to

11     Hugh G Beale (ed) Chitty on Contracts (35th ed, Sweet & Maxwell, London, 2023) at [20-025].

August 2022. Mr Andis annexes this correspondence and the CRM records to his affidavit.

[32]              One of the records referred to by Mr Andis is a CRM record on 13 May 2019 where Mr Andis says he recorded advice from Ms Opai that the property was just in her name. However, the entry in the CRM system, whilst noting that the property has been transferred into Ms Opai’s name, refers to a letter of administration being issued and that Ms Opai would provide a copy to the Bank. There is also no detail as to the basis on which the property had been transferred. The CRM record does not therefore appear to be specific enough to exclude having been transferred into her name as executor, as opposed to being transferred personally.

[33]              Furthermore, later in the CRM records, but prior to the refinancing in May 2021, there are references to discussions with Ms Opai about her mother’s estate, noting on 9 April 2021 that everything is still with the High Court at present “but there is still things that need to be sorted before she can proceed”.

[34]              The Bank submits that it simply did not know, as at 20 May 2021, that Ms Opai held title to the Property as executor and that it is not possible for a Bank staff member to explain the implications of something they are unaware of.

[35]              The question I sought further submissions and evidence on was whether the Bank had explained the implications of entering into the May 2021 loan with Ms Opai only and not with her mother’s estate as co-borrower, in line with the lender responsibilities set out in s 9C(3)(b). The Bank says it cannot have explained the implications of something it was not aware of. However, the Bank was aware that the consolidation was changing the terms so that rather than both Ms Opai and the estate as co-borrowers, the agreement would only be with Ms Opai personally. Even if the property had been in Ms Opai’s name personally, this would have been a significant change.

[36]              In  the   directions   for   further   submissions,   I   referred   specifically   to  s 9C(3)(b)(iii) which requires lenders to ensure that “any information provided by

the lender to the borrower is not presented in a manner that is, or is likely to be, misleading, deceptive, or confusing”.

[37]              The Bank submits that it is not to be overlooked how the substantive error here arose and says that it would be wrong to visit blame for this solely onto the Bank. Counsel for the Bank refers to Ms Opai’s affidavit evidence that “[A]t no time did I ever inform the [Bank] (verbally or in writing) that I was the title-holder to the said property” as being only a half-truth. The Bank submits that it is beyond doubt that clause 5 of the May 2021 loan was prepared on the basis (and Ms Opai then duly signed and initialled that loan agreement stating) that the “security” for the May 2021 loan would be a “Registered first mortgage over the Freehold property at 14 Goodwin Drive, Rosehill, Papakura … owned by Melissa Jean Opai”. The Bank submits that Ms Opai knew this signed statement was incorrect and says why she did not say so at that time is a mystery. Furthermore, the Bank submits that it has not in any way benefitted from that error, it has been entirely to its detriment.

[38]              Ms Opai says in response that, as she said in her affidavit dated 2 May 2023, she told the Bank in May 2021 that she was not the title-holder by way of raising the letters of administration of her mother’s estate. Ms Opai says she discussed the letters of administration with her bank manager on 20 May 2021 but that the Bank only requested a copy of them 6 months after the May 2021 loan had been entered into.

[39]              Ms Opai further submits that the Bank held the knowledge that she was not the title-holder as it sent correspondence to her home, addressed to “Melissa Opai (Executor)” in 2020. I note that the fact that the Bank sent correspondence in 2020 to Ms Opai as the executor is likely to have been because the loans at that stage were in the name of the estate and Ms Opai as co‑borrowers. It does not establish that the Bank was aware that Ms Opai held the property as executor and not personally in May 2021.

[40]              But Ms Opai’s evidence is also that the Bank requested a copy of the Auckland Council Rates Assessment around the time of the May 2021 lending because the loan included an amount of $2,645.47 for rates. Ms Opai says the Rates Assessment she provided recorded the ratepayer name as “Estate of Patricia Margaret Ann Opai”.

[41]              In his reply affidavit, Mr Andis does not dispute either that the loan included an amount to pay rates or that Ms Opai provided a copy of the Rates Assessment as described. The CRM records now annexed to Mr Andis’ further affidavit appear to be consistent with Ms Opai’s evidence, recording on the day the May 2021 loan was entered into “[Loan] restructure completed, repaid 3 mortgage loans, land rates arrears, set up a/p of $65 to council ...”

[42]              In his earlier evidence, Mr Andis annexes an E-valuer report from Core Logic that he says the Bank relied on that recorded the current owner as “Melissa Jean Opai.” However, Mr Andis went on to say:

Regrettably, an updated title search of the property was not obtained at the time the Facility Agreement was entered into.

[43]              A copy of the title to the property is annexed to Mr Andis’ first affidavit and records the registered owner as “Melissa Jean Opai as Executor”.

[44]              In the circumstances of this case, for the Bank to purport to take the property as security without checking the title raises a question of whether the Bank was exercising the care, diligence and skill of a responsible lender or meeting its lender responsibilities, including to assist the borrower to be reasonably aware of the full implications of entering into the May 2021 loan. This is partly because the Bank itself appears not to have been aware of the full implications of entering into the May 2021 loan.

[45]              In addition, it appears to be arguable in terms of s 9C(3)(b)(iii) that it would have been confusing to present a loan as a home loan to Ms Opai when in fact the home could not have been security given its current ownership and the way in which the loan was structured.

[46]              As the Bank says, entering into the loan without a home has been to the Bank’s detriment but that does not mean that at the same time the Bank has not breached the lender responsibility principles. Part of the reason for the principles is the imbalance of power between lenders and borrowers. Obligations are placed on the lenders for

them to be responsible for assisting borrowers to understand the terms of a loan and its implications, as set out in s 9C(3)(b).

[47]              Mr Andis in his reply affidavit says that he has read in certain paragraphs of Ms Opai’s affidavit the complaint that she either was not aware or was not informed about “the implications of the May 2021 Loan being to her personally”. Mr Andis’ response is that under the earlier loan Ms Opai was personally liable to the Bank for the entirety of the borrowings made then and Ms Opai is still personally liable to the Bank for the entirety of the borrowings made under the May 2021 loan. But, as discussed above, the circumstances have changed because previously Ms Opai had a clear right of contribution against her mother’s estate whereas once the May 2021 loan was entered into solely with Ms Opai in her personal capacity, Ms Opai no longer has such a clear right.

[48]              To determine whether the lender responsibilities have been complied with requires consideration of the full context in which the May 2021 loan was entered into. This cannot be done in this summary judgment application.

[49]              I consider therefore that Ms Opai has a tenable defence based on a possible breach of the lender responsibilities contained in s 9C(3)(b).

Is it arguable that the Bank did not assist Ms Opai to reach informed decisions in subsequent dealings in relation to the agreement?

[50]              The second question I asked the parties to provide further submissions and evidence on is whether the Bank assisted Ms Opai to reach informed decisions in all subsequent dealings in relation to the agreement ensuring that any information provided by the Bank to Ms Opai was not presented in a misleading, deceptive or confusing fashion.

[51]              The Bank submits that Ms Opai’s notice of opposition does not appear to take issue with any of the Bank’s communications with her after the May 2021 loan had been advanced and that rather the complaints advanced in her affidavit appear to all be in relation to actions from before then. The Bank, for example, refers to Ms Opai’s reliance on the Property Law Act 2007 (PLA) notices when the loan repayments fell

into default and her submission that to have the threat of potentially losing your home hanging over her caused her much distress and anxiety.

[52]              As I held in the interim judgment, the PLA notices were served whilst both Ms Opai and her mother’s estate were co-borrowers, that is prior to the restructure in May 2021. The Bank was entitled to serve PLA notices on Ms Opai personally at that time because Ms Opai was jointly and severally liable for the loans at that stage together with her mother’s estate and the house was properly security for that loan. An arguable defence does not therefore arise in respect of the issue of the PLA notices.

[53]              The conduct following the May 2021 loan includes the decision not to extend the interest only period and the requirement to pay insurance premiums in respect of the property. I have discussed the decision not to extend the interest only period above. If, in fact there was no obligation on Ms Opai to insure the property because it was not security for the loan, this may be relevant to a possible breach and the appropriate remedy. These matters need to be considered in the full context of communications between the parties. It may be that if the Bank had known the property remained in the name of the estate, then the restructuring in May 2021 would simply have consolidated the loans but with both Ms Opai and her mother’s estate as co-borrowers and the property as security, as it had been previously. In that case the estate would have been obliged to insure the property under the terms of the loan.

[54]              It may be there is no sufficient breach of the lending responsibility principles in respect of subsequent behaviour to provide a basis for reopening the credit contract on its own. However, because of the view I have come to in respect of the available defence under s 9C(3)(b), I do not need to reach a separate view as to whether any subsequent dealings are sufficient to amount to an arguable defence on their own.

Is it arguable that the Bank did not ensure that the May 2021 loan agreement was not oppressive?

[55]              The Bank points to the further evidence it has now provided saying that this answers the question of whether the loan agreement was oppressive beyond doubt, submitting:

(i)As at November 2020, Ms Opai was signalling her intention to apply for still further hardship relief. She had advised the Bank that she had benefit income of $450 per week, and that she transferred $250 per week to the Bank. She wanted to consolidate the three unpaid loans that she was liable for into one, and have repayments that matched the latter amount (i.e.,

$250 per week);

(ii)The Bank was prepared to meet what Ms Opai wanted in this respect, but wanted to ensure that she could actually make this level of repayment. An interim arrangement was entered into in January 2021, which Ms Opai subsequently honoured in the months that followed – thereby evidencing that she could in fact service the debt owed at this level (i.e., $250 per week);

(iii)This led then to the May 2021 loan – as requested by Ms Opai, restructuring the three unpaid loans into one and placing them on “interest only” for a 12-month period to “give her sufficient time to heal from surgery and seek new employment.” And in the event, the repayments required here were not inconsiderably less than the $250 per week she had been meeting up to that point – now only $161.62 per week; and

(iv)Beyond that, the only other point was that which was well- known to all – which was that this was a further but still finite indulgence by the Bank. Ms Opai had another year to ‘get back on her feet’, but the loan would, at that time, have to return to normal principle and interest repayments.

(footnote omitted)

[56]              The Bank says that its repeated and ongoing forbearance towards Ms Opai here, leading up to and including the May 2021 loan, are a “million miles” away from being oppressive.

[57]              The Bank further submits that the Court plainly has sympathy at the difficult financial circumstances that Ms Opai has found herself in and that in that sense, this may well be an archetypal ‘hard case’ but counsel submits the evidence shows how the Bank has only shared that sympathy, with numerous repayment holidays and other indulgences granted, culminating in the May 2021 loan whereby it (effectively) allowed Ms Opai to set her own repayment terms for a further year while she got back on her feet. The Bank says the problem is that Ms Opai has not kept to her end of that bargain since and in May 2022 simply stopped making any repayments to the Bank whatsoever and nearly two years have now passed without a further cent being paid.

[58]              In addition, the Bank submits that the Court will note the extensive effort that the Bank has gone to since the interim judgment to try to reach an agreed resolution directly with Ms Opai. The Bank submits that with all due respect to Ms Opai, it is hard to avoid the conclusion that deep down and despite her averments to the contrary Ms Opai is still hoping that the Court will order that the May 2021 loan will now be written off.

[59]              In Ms Opai’s submission in response she does not suggest that the loan ought to be written off. Ms Opai does refer to the fact that the entry into the loan agreement in May 2021 with her only in effect transferred her mother’s debt solely into Ms Opai’s name, thereby making her personally liable to  carry the  full  weight  of the debt.  Ms Opai submits that two of the loans were effectively loans of her mother’s which she had agreed to become a co-borrower of to support her mother in 2015 whereas the third loan brought together in the May 2021 loan restructure was related to amounts loaned to Ms Opai personally of $40,800.

[60]              I accept that there is evidence of the Bank’s repeated and ongoing forbearance but I still consider that there is a defence available that the entry into the May 2021 loan was oppressive, as that term is defined in the CCCFA. This is because of the alteration from a position where Ms Opai was co-borrower with her mother’s estate with a clear right of contribution to a position where under the May 2021 loan agreement her mother’s estate was not a co-borrower. It may be that a Court when considering all of the circumstances, including the reasonable standards of commercial practice, will determine that it was not oppressive — but this is a question that needs to be determined in a full hearing not on summary judgment.

Insurance payments and costs

[61]              Because of the view that I have come to on the first three questions I do not need to go on to consider the questions relating to the deduction of insurance payments or costs. These are matters that can be considered together with the defences above in the full hearing.

If defences are established, will it affect Ms Opai’s liability for all of the debt claimed, including the principle?

[62]              Summary judgment may in some cases be entered for payment of the principle only but not the interest or other amounts owing under a loan.

[63]              In terms of available remedy in this case, if Ms Opai establishes that there has been a breach of the lender responsibility principles or that the May 2021 loan was oppressive, the Court has broad powers under ss 94 and 127 of the CCCFA including to reopen the May 2021 loan and to order that any obligation outstanding be extinguished, revised or altered.

[64]              I recorded in the interim judgment that there is no question that the principle of the loan needs to be repaid and that Ms Opai accepts this. The question remains however whether Ms Opai ought to be held liable to repay the whole of the principle personally where there is no clear right to contribution from her mother’s estate.

[65]              Section 124 of the CCCFA sets out the factors which must be considered when determining whether to reopen credit contracts, including whether the Bank has complied with the lender responsibility principles, the relative bargaining power of the parties and the particular characteristics of the debtor, including physical and mental health. These are all matters requiring a full hearing. The question of whether the May 2021 agreement will be reopened, or whether Ms Opai’s liability will be affected, are not therefore matters that can be determined on a summary basis.

Conclusion

[66]              Whilst I accept that the Bank has made considerable effort to assist Ms Opai in difficult times, I do not accept the Bank’s submission that Ms Opai’s position did not change following entry into the May 2021 loan. The Bank has not established through its further submissions and evidence filed that Ms Opai does not have a defence available based on the lender responsibility principles and the provisions relating to oppressive credit contracts in the CCCFA.

[67]              If those defences are made out, the appropriate remedy may affect Ms Opai’s liability under the May 2021 loan. The Bank’s summary judgment application relying on the May 2021 loan agreement must therefore be declined.

Result

[68]The plaintiff’s application for summary judgment is declined.

Costs

[69]              Costs on unsuccessful summary judgment applications are usually reserved until determination of the substantive proceedings for the reasons set out in NZI Bank v Philpott.12 I consider this is particularly the case where issues arise under the CCCFA which provides the Court with broad powers in relation to costs including pursuant to s 128 of the CCCFA.

Associate Judge Sussock

12     NZI Bank v Philpott [1990] 2 NZLR 403 (CA).