Court:Elias CJ, Blanchard, Tipping, McGrath and Anderson JJ
Counsel:J A Farmer QC, B J Upton and M V Robinson for Appellant
J G Miles QC, P J Dale and D W Grove for First and Second Respondents
No appearance for Third Respondent

Judgment:3 December 2010

JUDGMENT OF THE COURT

AThe appeal is allowed and the orders made by the Court of Appeal are set aside.
BThe case is remitted to the High Court for determination of issues reserved by that Court for further consideration.
CThe appellant is awarded costs in this Court against the first and second respondents of $25,000 together with its reasonable disbursements to be fixed by the Registrar.
DThe costs order made by the Court of Appeal is reversed.
REASONS
(Given by Blanchard J)

Introduction
[1]       Section 120 of the Credit Contracts and Consumer Finance Act 2003 (the CCCF Act) permits, but does not require, a court to reopen a credit contract[1] if, in any proceedings, it considers that the contract is oppressive. Section 118 defines “oppressive” as “oppressive, harsh, unjustly burdensome, unconscionable, or in breach of reasonable standards of commercial practice”.
[1]A contract under which credit is or may be provided: Credit Contracts and Consumer Finance Act 2003, s 7(1).
[2]       The central issue on this appeal is whether three loan contracts, and associated mortgages forming part of those contracts, between the first respondents, Mr and Mrs Bartle, as borrowers and the appellant, GE Custodians (GE), an unlimited company in the General Electric Corporation group, as lender, were oppressive and should be reopened in circumstances where GE says that it had no knowledge of any matter which would make any of the loan contracts oppressive or which should have put it on inquiry.
[3]       In the High Court, Randerson J dismissed the Bartles’ claim against GE, saying that he was not persuaded that there was any basis to conclude that the loan contracts were oppressive under the CCCF Act.[2] The Court of Appeal unanimously reversed that decision.[3] It declared the loan contracts oppressive and remitted the case to the High Court for consideration of the appropriate remedy.
Facts
[2]Bartle v GE Custodians HC Auckland CIV-2008-404-3460, 30 September 2009 at [343].
[3]Bartle v GE Custodians [2010] NZCA 174, [2010] 3 NZLR 601 per William Young P and Hammond and Arnold JJ.
[4]       Mr and Mrs Bartle were born in 1939 and 1940 respectively. In 2006 they owned a relatively modest unencumbered home near Whangarei. They had previously had an investment in real estate on the Gold Coast in Queensland but had not found that a happy experience and had sold out. They seem to have invested the proceeds of $65,000 with a bank on term…

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.

Continue reading GE Custodians v Bartle

Details

AGLC: GE Custodians v Bartle [2010] NZSC 146
Case: [2010] NZSC 146
Decision Date: 3 December 2010

CaseChat Overview and Summary

The appeal was brought by GE Custodians against the Bartles and Bartle Properties Limited. The issue was whether the loan contracts were oppressive and should be reopened under the Credit Contracts and Consumer Finance Act 2003. The High Court found that the loan contracts were not oppressive, but the Court of Appeal reversed this decision. The Supreme Court held that the appeal should be allowed and the orders made by the Court of Appeal were set aside. The Supreme Court found that GE had no knowledge of any matter which would make any of the loan contracts oppressive or which should have put it on inquiry. The Court held that a credit contract should not be seen as oppressive unless the lender has a basis for knowing that to be so. Since GE did not know of any matter which rendered any of the loans in breach of reasonable standards of commercial practice, the loan contracts were not oppressive. The case was remitted to the High Court for determination of issues reserved by that Court for further consideration. GE was awarded costs in this Court against the first and second respondents.

Orders