General Finance Limited v Serepisos - [2017] NZHC 2367

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA
TE WHANGANUI-Ā-TARA ROHE

CIV-2016-485-835 [2017] NZHC 2367

BETWEEN
GENERAL FINANCE LIMITED

Plaintiff

AND

ALLIKI SEREPISOS Defendant

Hearing: 27 September 2017

Appearances:

S O McAnally for the Plaintiff
J C La Hatte for the Defendant

Judgment:

28 September 2017

JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] The defendant (Mrs Serepisos) applies for an order for particular discovery against the plaintiff (General Finance).

[2] General Finance held a mortgage over an apartment formerly owned by Mrs Serepisos in Tory Street, Wellington (the property), securing advances made by General Finance. There were defaults in making payments due under the mortgage and eventually General Finance sold the property at a mortgagee sale.

[3] There was a shortfall owing after the sale, and General Finance commenced this proceeding for recovery of the advances, interest and costs. It claimed a total of
$294,667.59, and it applied for summary judgment on its claims.

GENERAL FINANCE LIMITED v SEREPISOS [2017] NZHC 2367 [28 September 2017]

[4] On 13 April 2017 I gave judgment for General Finance in the sum of

$50,000, and directed that the balance of its claims were to proceed to trial. I gave directions for the filing of a statement of defence by Mrs Serepisos.

[5] The background to the dispute is fully set out in my judgment of 13 April

2017,1 and it is not necessary to repeat the full factual background as set out in that judgment. However, the principal defence raised by Mrs Serepisos in opposition to the summary judgment application was that General Finance had allegedly failed to discharge its duty as mortgagee under s 176 of the Property Law Act 2007 (the PLA) to take reasonable care to obtain the best price for the property reasonably obtainable at the time of the sale. Mrs Serepisos alleged that General Finance had negligently failed to consider the interest in the property of Mr Jason Chin, who was said to be prepared to pay up to $800,000 in cash for the property (General Finance says that it sold the property unconditionally on 3 May 2016, for $580,000).

[6] In my judgment on the summary judgment application, I was not satisfied on the evidence then produced that the question of whether General Finance had exercised reasonable care to obtain the best price on the sale of the property was beyond reasonable argument for Mrs Serepisos. I considered that the question of whether proper consideration had been given to Mr Chin’s expression of interest was a matter which should go to trial.

[7] In my judgment I went on to consider what Mrs Serepisos’ position would have been if the property had been sold to Mr Chin for $800,000. I concluded that if the property had been sold to Mr Chin in early May 2016 there would still have been a shortfall owing by Mrs Serepisos to General Finance of not less than $50,000, to which she had no defence. I…

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: [2017] NZHC 2367
Decision Date: 28 September 2017

CaseChat Overview and Summary

General Finance Limited held a mortgage over an apartment owned by Alliki Serepisos, which it sold after she defaulted on her payments. General Finance then sought to recover a shortfall of $294,667.59 from Serepisos, and applied for summary judgment on its claims. The court granted summary judgment for $50,000, but ordered that the remaining claims proceed to trial. Serepisos alleged that General Finance failed to take reasonable care to obtain the best price for the property at the time of the sale, as required by s 176 of the Property Law Act 2007. Serepisos applied for particular discovery of documents relating to the marketing and sale of the property, which General Finance opposed as a "fishing expedition". The court considered the four-stage approach in determining whether an order for particular discovery should be made, and concluded that the application failed at the first and second stages. The documents sought were not relevant to the pleaded issues, and there was no basis for believing that the documents existed. The application was refused and General Finance was awarded costs.

Orders