Federal Capital Limited v Simunovich

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1317

[2022] NZHC 2985

BETWEEN

FEDERAL CAPITAL LIMITED

Plaintiff

AND

PETER JOHN SIMUNOVICH

Defendant

Hearing:

8 June 2022

Appearances:

R Latton for the Plaintiff

M Tingey for the Defendant

Judgment:

15 November 2022

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 15 November 2022 at 4pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors/Counsel: Pidgeon Judd, Auckland

Fee Langstone, Auckland

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

FEDERAL CAPITAL LTD v SIMUNOVICH [2022] NZHC 2985 [15 November 2022]

Introduction

[1]                 The defendant has applied for strike out of the plaintiff’s claim or summary judgment of his defence.

[2]                 These proceedings concern two loans that the plaintiff, Federal Capital Limited, made to Seafish Tasmania Pty Ltd. The first loan of $200,000 was made in May 2019 and the second loan of $250,000 was made in June 2019.

[3]                 Both loans are in default. The plaintiff says that Mr Simunovich, the defendant, personally guaranteed Seafish’s obligations in respect of both loans. Federal seeks by this proceeding to recover the sums owed under both loans from Mr Simunovich.

[4]                 Mr Simunovich submits that the claim ought to be struck out or summary judgment awarded of his defence because Mr Simunovich did not provide a written guarantee in respect of either of the two loans as required by s 27(2) of the Property Law Act 2007 (PLA). There is therefore no basis for the plaintiff to recover from the defendant personally.

[5]                 Even if there were a guarantee by Mr Simunovich, the defendant further submits that the plaintiff does not have a right to enforce the guarantee without the consent of a third party which the plaintiff does not have.

[6]                 If the application to strike out or for summary judgment is not successful, the defendant applies for security for costs and submits that the proceedings ought to be stayed until the plaintiff has provided security.

[7]                 The security orders are sought on the basis that the plaintiff failed to pay a costs award for five weeks following demand, together with the fact that the plaintiff is a trustee in respect of the loan and has not provided sufficient evidence of the plaintiff’s assets.

[8]                 The defendant says the plaintiff’s claim lacks merit, is inconsistent with the sworn evidence previously provided and has little or no prospect of succeeding and so a security award is appropriate.

[9]                 Finally, as foreshadowed above, wasted costs are sought in respect of the plaintiff’s amendments to its pleadings.

Issues

[10]The issues are:

(a)Is it reasonably arguable that there is a written guarantee by the defendant in favour of the plaintiff in respect of the two loans as required by s 27(2) of the PLA?

(b)If so, is it reasonably arguable that the plaintiff can enforce the guarantee?

(c)If the proceedings are not struck out or summary judgment awarded to the defendant,…