Debt Buyers Limited v Hancox - [2015] NZHC 2484

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2014-470-000185 [2015] NZHC 2484

BETWEEN
DEBT BUYERS LIMITED

Plaintiff

AND

LYNLEY JAYNE HANCOX Defendant

Hearing: 23 September 2015

Counsel:

A Cherkashina for Plaintiff
No appearance and no steps taken by Defendant

Judgment:

9 October 2015

JUDGMENT OF ASHER J

This judgment was delivered by me on Friday, 9 October 2015 at 4 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Debt Buyers Ltd, Auckland.

DEBT BUYERS LTD v HANCOX [2015] NZHC 2484 [9 October 2015]

Introduction

[1] In this proceeding the plaintiff Debt Buyers Ltd seeks judgment by way of formal proof for the outstanding amount of $552,537.14 owed by the defendant Lynley Hancox under a loan agreement and mortgage, together with interest of
$928,518.15 and costs and disbursements. The total not including costs and disbursements is $1,481,055.29.

[2] At no stage in this proceeding has Ms Hancox filed any statement of defence or taken any steps.

[3] The claim initially proceeded by way of a summary judgment application. It came before Associate Judge Bell on an undefended basis. Having raised some concerns, and further affidavits having been filed, Associate Judge Bell declined to enter summary judgment in a judgment delivered on 7 April 2015 and dismissed the
application.1 He did so because he determined that Ms Hancox had an arguable

defence based on a failure to give notice calling up the loan.

[4] Debt Buyers Ltd now seeks this formal proof judgment.

Facts

[5] Debt Buyers Ltd is suing as assignee of a debt Ms Hancox is said to owe

Propertyfinance Securities Ltd (PFSL).

[6] On 12 April 2006 Ms Hancox borrowed $871,125 from PFSL. Ms Hancox provided a mortgage over her property in Mt Maunganui as security for the loan. On or around 13 April 2006 PFSL assigned all of its rights, title and interest in regard to the loan and its associated mortgage to the New Zealand Guardian Trust Co Ltd as trustee of the Propertyfinance Securities RM 2005-1 Trust. Consequently, New Zealand Guardian Trust transferred the mortgage to its nominee company Propertyfinance Funding Nominees Ltd, who acted as a trustee of New Zealand Guardian Trust in respect of the mortgage. On 11 October 2006, at Ms Hancox’s
request, PFSL agreed to increase the loan from $871,125 to $960,750.

1 Debt Buyers Ltd v Hancox [2015] NZHC 668.

[7] By May 2008 Ms Hancox was in default under the loan agreement. On

12 May 2008 Propertyfinance Funding Nominees Ltd served on her a notice (the PLA notice) under s 119 of the Property Law Act 2007 (the PLA), requiring her to remedy the defaults by 23 June 2008. The amount required to remedy the defaults was $24,680.48 being arrears as at 8 May 2008.

[8] Ms Hancox did not remedy the defaults in time. Propertyfinance Funding Nominees Ltd sold the property under its mortgage for $556,000. It received net proceeds of sale of $525,450.94 in November 2008. After the costs and disbursements…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2015] NZHC 2484
Decision Date: 9 October 2015

CaseChat Overview and Summary

In the High Court of New Zealand, Debt Buyers Limited is pursuing Lynley Jayne Hancox for a debt of $552,537.14, together with interest, costs, and disbursements, amounting to a total of $1,481,055.29 excluding costs and disbursements. Hancox, the defendant, has not filed any statement of defense or taken any steps in response to the proceedings. The claim originated as a summary judgment application, which was dismissed by Associate Judge Bell on the grounds that Hancox had an arguable defense based on a failure to give notice calling up the loan. The primary legal issue in this case is whether the notice served under section 119 of the Property Law Act 2007 effectively accelerated the loan, as argued by Debt Buyers Limited. The court ruled that the notice did indeed accelerate the loan, contrary to Associate Judge Bell's earlier decision. The court found that the notice served complied with the statutory requirements and also had the contractual effect of calling up the principal sum contingent on the default not being remedied. The court also determined that the claim was within the limitation period, as the limitation period for recovering the principal began 12 years from when the right to receive the money accrued, while the claim for interest fell within the six-year limitation period. The court granted the formal proof judgment in favor of Debt Buyers Limited, ordering Hancox to pay the outstanding amount, interest, and disbursements.

Orders