Federal Capital Limited v Simunovich - [2023] NZHC 1500

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1317

[2023] NZHC 1500

BETWEEN
FEDERAL CAPITAL LIMITED

Plaintiff/Respondent

AND

PETER JOHN SIMUNOVICH

Defendant/Applicant

Hearing: 13 March 2023

Counsel:

M Tingey for the Applicant/Defendant R Latton for the Respondent/Plaintiff

Judgment:

15 June 2023

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

Solicitors/Counsel:
Pidgeon Judd, Auckland
Fee Langstone, Auckland

M Tingey, Barrister, Auckland R Latton, Barrister, Auckland

FEDERAL CAPITAL LIMITED v PETER JOHN SIMUNOVICH [2023] NZHC 1500 [15 June 2023]

Introduction

[1] The defendant, Mr Peter Simunovich, seeks leave to appeal my judgment of 15 November 2022 declining his applications for summary judgment and/or strike out and for security for costs.1

[2] The plaintiff, Federal Capital Limited (FCL), has brought these proceedings in respect of two loans it made in 2019 to Seafish Tasmania Pty Limited (Seafish). The loans total $450,000 and are both in default. FCL says that Mr Simunovich personally guaranteed Seafish’s obligations in respect of both loans. FCL seeks recovery under its guarantee.

[3] Mr Simunovich submitted that summary judgment ought to be granted for his defence (or FCL’s claim ought to be struck out) because Mr Simunovich did not provide a written and signed guarantee in respect of either of the two loans as required by s 27(2) of the Property Law Act 2007 (PLA). Mr Simunovich said further that even if there were a guarantee, FCL did not have a right to enforce the guarantee without the consent of a third party which FCL did not have.

[4] I held that it was reasonably arguable that an agreement entered into by Mr Simunovich, FCL, and Seafish, referred to as the “Security Sharing Agreement” (SSA), included a contract of guarantee by Mr Simunovich to FCL. As it was in writing and was signed by Mr Simunovich it would comply with the requirements of s 27(2) of the PLA. However, I held that the full factual matrix needed to be understood before interpretating of the relevant provision. In addition, I held that it was reasonably arguable that FCL did have a right to enforce the guarantee without the consent of the third party and so I declined summary judgment and strike out.

[5] Mr Tingey submits that in declining summary judgment I relied on extrinsic evidence that is inadmissible because s 27(2) of the PLA together with s 7(1)(a) and
(b) of the Evidence Act 2006 either make inadmissible or exclude such evidence.

1 Federal Capital Ltd v Simunovich [2022] NZHC 2985 [Judgment].

Mr Tingey continues that the approach I adopted is inconsistent with the decision of the Supreme Court in Brougham v Regan.2

[6] In addition, Mr Tingey submits that there is insufficient evidence to support my finding that it is reasonably arguable that FCL may be able to enforce the guarantee on the basis that:

(a)FCL’s pleading did not seek to enforce the relevant guarantee by Mr Simunovich, the FE…

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.

Keep reading for free

Create a free CaseChat account to read Federal Capital Limited v Simunovich and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2023] NZHC 1500
Decision Date: 15 June 2023

CaseChat Overview and Summary

In Federal Capital Limited v Simunovich, the defendant, Mr Peter John Simunovich, sought leave to appeal the Associate Judge's decision from the High Court of New Zealand Auckland Registry, declining his applications for summary judgment and/or strike out, as well as for security for costs. The plaintiff, Federal Capital Limited, had brought proceedings in respect of two loans made to Seafish Tasmania Pty Limited, which were in default, and claimed recovery under a personal guarantee provided by Mr Simunovich. The defendant argued that the guarantee was not in writing or signed, as required by the Property Law Act 2007, and that the plaintiff could not enforce the guarantee without a third party's consent.

The court considered the principles governing applications for leave to appeal, including the need for an arguable error of law or fact, the general or public importance of the appeal, the circumstances warranting incurring further delay, and whether the interests of justice are served by granting leave. The court also assessed whether a high threshold exists before leave to appeal will be granted.

In relation to the summary judgment and/or strike out decision, the court found that there was no arguable error of law or fact, and that the appeal lacked general or public importance. Furthermore, the circumstances did not warrant incurring further delay, and the interests of justice would not be served by granting leave.

Regarding the security for costs decision, the court found that only one factor supported granting leave, while the other factors clearly outweighed that factor. The court held that the interests of justice would not be served by granting leave, as it would likely delay the resolution of the case.

As a result, the applications for leave to appeal both the summary judgment/strike out application and the security for costs application were declined. The plaintiff was entitled to costs and the parties were asked to confer to agree on the costs, with memoranda to be filed if necessary.

Orders