Curtis v Financial Investments Group Limited
[2015] NZHC 449
•12 March 2015
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2014-404-002684 [2015] NZHC 449
BETWEEN IAN ANDREW CURTIS
First Plaintiff
RAEWYN CURTIS Second Plaintiff
AND
FINANCIAL INVESTMENTS GROUP LIMITED
First Defendant
GLENN ANDREW WALKER Second Defendant
Hearing: 5 March 2015 Appearances:
Robert Hucker for the Plaintiffs
No appearance for the DefendantsJudgment:
12 March 2015
JUDGMENT OF MOORE J
This judgment was delivered by on 12 March 2015 at 4:30pm pursuant to Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar
Date:
CURTIS & ANOR v FINANCIAL INVESTMENTS GROUP LIMITED & ANOR [2015] NZHC 449 [12 March
2015]
Introduction
[1] This is a formal proof matter in which the plaintiffs seek judgment to recover from the first and second defendants amounts which have fallen due for repayment under a series of loan agreements and guarantees, together with accrued interest and costs.
[2] The second defendant, Mr Walker, was the sole director and sole shareholder of Financial Investments Group Limited (“FIGL”). Mr and Mrs Curtis claim that Mr Walker guaranteed the obligations of FIGL.
[3] FIGL was placed in liquidation on 28 November 2014 by special resolution of the shareholders. The plaintiffs, Mr and Mrs Curtis, have both filed Proofs of Debt with the liquidator sometime ago.
[4] The liquidator has not accepted and/or rejected those Proofs of Debt and the plaintiffs seek an order under s 248 of the Companies Act 2003 to allow the proceedings to continue in order that judgment is entered against both the first and/or second defendants.
The guarantee
[5] In order to establish there was an obligation on the part of Mr Walker to guarantee the obligation of FIGL the requirements of s 2(1) of the Contracts Enforcement Act 1956 need to be established. The plaintiffs need to demonstrate that:
(a) the agreement in question is a contract of guarantee; and
(b)there is a sufficient memorandum and/or note of the contract to meet the requirements of the Contracts Enforcement Act 1956.
[6] The guarantees are in the same form for each of the advances and are to be read in conjunction with each of the loan agreement contracts.
[7] For example, the written Loan Agreement Contract (“LAC”) dated 11 May
2011 records FIGL as the borrower and the lender as Ian Andrew Curtis. The amount of the loan, $20,000, is expressly stated as is the term of 30 months. The interest rate is specified at 13.5 per cent per annum. On the face of the LAC is the date for the loan repayment, 11 December 2013. Below these particulars the form records that the borrower and lender both agree to the terms as described above. At the bottom of the document is the signature of the borrower, FIGL, signed, apparently, by Mr Walker on behalf of FIGL. Mr Curtis’ signature appears in the space reserved for the lender.
[8] The corresponding document of the same date is headed up, “Agreement to Guarantee” and records the parties as Glen Andrew Walker (“the Guarantor”) and Ian Andrew Curtis (“the Lender”). The agreement then goes onto state that:
The Lender has provided a loan to Financial Investment Group Limited (“the Borrower”) under loan agreement contract dated 11 May 2011 for $20,000 maturing 11 December 2013.
The Guarantor agrees to guarantee all amounts owing under LAC 4 and acknowledges that the Lender may demand and recover from the Guarantor any amounts owing by the Borrower under LAC 4 in accordance with its terms as well as demanding payment for the Borrower.
[9] Below this appears a space reserved for the signature of the guarantor, which I was advised was Mr Walker’s signature, below which is the signature of the lender, which I was advised was Mr Curtis’. The document is dated 11 May 2011.
[10] It is plain from the face of both these documents that in respect of the loan of
11 May 2011 FIGL was borrowing from Mr Curtis the sum of $20,000 on the stipulated terms and conditions. On the same date Mr Walker was guaranteeing the loan to Mr Curtis on behalf of FIGL.
[11] That position is mirrored by agreements between FIGL and Mrs Curtis. Thus on 11 May 2011 Mrs Curtis, then known as Raewyn Cox, loaned FIGL $20,000 for
36 months at 3.5 per cent per annum. The document is signed by Mr Walker on behalf of FIGL as borrower, and signed by Mrs Curtis as lender.
[12] On the same date there is a corresponding document entitled, “Agreement to Guarantee” between Mr Walker, as guarantor, and Mrs Curtis as the lender. It relates to the same loan referred to above.
[13] There is nothing to suggest that any of the remaining advances were on different terms. The existence of the same form of documentation utilised throughout the loans demonstrates the objective intention of the parties as being advances on the same terms and conditions.
[14] Furthermore, the email address from which the loans and guarantee documentation were sent by Mr Walker to Mr and Mrs Curtis is the same. The signature on each of the documents was recognised by Mr and Mrs Curtis as being that of Mr Walker’s. The evidence of Mr and Mrs Curtis is that the loan agreements and the guarantee documents were all sent from the email address which Mr Walker used.
[15] Mr Walker also confirmed in an email exchange on 7 June 2014 he would execute the same loan agreement and the guarantee documents for the rollover of the loan and on 18 June 2014 discussed his personal circumstances and his ability to repay the monies advanced by Mr and Mrs Curtis. Indeed, there was a meeting in Waipu on 2 August 2014 at which Mr and Mrs Curtis met with Mr Walker.
[16] Furthermore, there has been no contradiction or disagreement from Mr Walker suggesting he did not sign the documents that form the guarantee documentation or that in any way he did not regard himself as bound by their terms.
[17] In my view the background context of the agreements and the evident commitment to provide a personal guarantee satisfies me on the balance of probabilities that Mr Walker executed the documents and that the formalities required by s 2 of the Contracts Enforcement Act 1956 have been satisfied.
The agreement
[18] Next I must be satisfied that there was an agreement on the part of Mr Walker to guarantee the repayment of the advances in the event that FIGL did not.
[19] As already discussed, it is evident that the LACs and the guarantee documentation were executed by Mr Walker in two different capacities. In the first, he executed the LACs on behalf of the corporate borrower and in the second instance he executed the guarantee documents in his personal capacity as guarantor.
[20] The LACs and the guarantees were drafted by Mr Walker. Furthermore, the execution of the separate guarantee documentation by Mr Walker on every occasion there was a rollover of the loan in question plainly indicates to me that the parties agreed that there was a separate contract of guarantee.
[21] I accept that in interpreting contracts the Court is required to give effect to the bargain of the parties as objectively assessed having determined there was an agreement of some nature.1
[22] I am fully satisfied that each of the LACs in question was intended by the parties to evince an agreement between FIGL and Mr Curtis or Mrs Curtis on the terms and conditions set out on the face of the contracts. Furthermore, in relation to each loan I am satisfied on the evidence before me that Mr Walker was guaranteeing the loan to Mr Curtis or Mrs Curtis as the case may be.
Amounts sought by the Mr Curtis
[23] Mr Walker was obliged to repay the loans under the terms of the LAC, a total of $60,000. This is made up of the three loans of $20,000 each on 11 June 2014,
11 August 2014 and 11 October 2014. The LACs stipulated an interest rate at 13.5 per cent per annum.
[24] Mr Walker is obliged to repay these amounts under the guarantee.
[25] Judgment is sought in the sum of $80,166.15 as against FICL and Mr Walker.
1 Vector Gas Limited v Bay of Plenty Energy Limited [2010] NZSC 5, [2010] 2 NZLR 444.
Amount sought by Mrs Curtis
[26] FIGL was required to repay under the terms of the LACs a total of $60,000 made up of three advances each of $20,000 on 11 July 2014, 11 September 2014 and
11 November 2014. The term of the LACs allowed for interest rate at 13.5 per cent per annum.
[27] Mr Walker is required to repay these amounts under the guarantee.
[28] Mrs Curtis seeks judgment in the sum of $75,888.18 as against the FIGL and
Mr Walker.
Section 248 of the Companies Act 1993
[29] Mr and Mrs Curtis also seek an order in terms of s 248 of the Companies Act
1993 to enable judgment to be entered against FIGL.
[30] Mr Hucker for Mr and Mrs Curtis advises that despite the intimation from the liquidator that the Proofs of Debt of the plaintiffs would be accepted this has not occurred despite six months elapsing.
[31] He submits the proper approach is that which was adopted by Lang J in Nicholls v Tamariki Ltd (in liq)2 where his Honour granted leave as a useful purposes served by the continuation of the proceedings to obtaining judgment and in circumstances where there was a withdrawal immediately before trial.
[32] Mr Hucker submits that an order in terms of s 248 and entry of judgment in the terms outlined above is appropriate as against FIGL.
Conclusion
[33] I am satisfied that FIGL is indebted to Mr and Mrs Curtis for the monies advanced to it.
[34] I am satisfied that Mr Walker guaranteed these advances.
2 Nicholls v Tamariki Limited (In liquidation) (2008) 9 NZCPR 615 (HC) at [7]-[13].
[35] In these circumstances the plaintiffs are entitled to judgment against FIGL
and Mr Walker.
[36] As the Proof of Debt of the plaintiffs is yet to be accepted by the liquidator of FIGL an order under s 248 of the Companies Act is made to enable the proceedings to continue as against FIGL.
[37] Judgment is entered in favour of Mr Curtis in the sum of $86,575.78 as calculated below:
(a)
Judgment as claimed in the statement of claim (see paragraphs 9, 10, 11(a) and 15(a))
$60,000.00
(b)
Interest of the total loan advanced at $240,000 at the rate of 13.5% per annum every 28 day days (see paragraph 7.1 of the statement of claim and the LAC) being $32,400 per annum or $88.76 per diem from 22
May 2014 to 5 March 2015 being 287 days =
$25,474.12 less tax at 17.5% = $4,457.97 and less payments made by FIGL = $850.00
$20,166.15
(c)
Costs on an indemnity or on a solicitor/client basis (including GST) - $12,819.25 including disbursements of $2,509.50 as shown in the indemnity costs schedule, divided by 2
$ 6,409.63
TOTAL
$86,575.78
[38] Judgment is entered in favour of Mrs Curtis in the sum of $82,297.80 as
calculated by the table below:
(a) Judgment as claimed in the statement of claim (see paragraphs 17, 18, 19(a) and 23(a))
$60,000.00
(b) Interest of the total loan advanced at $190,000 at the rate of 13.5% per annum every 28 day days (see paragraph 7.1 of the statement of claim and the LAC) being $25,650 per annum or $70.27 per diem from
22 May 2014 to 5 March 2015 being 287 days =
$20,167.49 less tax at 17.5% = $3,529.31 and less payments made by FIGL = $750.00
$15,888.18
(c)
Costs on an indemnity or on a solicitor/client basis (including GST) - $12,819.25 including disbursements of $2,509.50 as shown in the indemnity costs schedule, divided by 2
$ 6,409.63
TOTAL
$82,297.80
[39] Costs and disbursements are ordered in the sum of $12,819.25 in accordance
with the schedule filed by Mr and Mrs Curtis.
Moore J
Solicitors:
Hucker & Associates, Auckland
0
0
0