Green v D'Esposito - [2024] NZHC 1964

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2023-441-63

[2024] NZHC 1964

UNDER rule 12.2 of the High Court Rules 2016

IN THE MATTER

of an application for summary judgment

BETWEEN

RODNEY JOHN GREEN and

JOHN ROBERT MCCORKINDALE as
trustees of the RJG Trust Plaintiffs/Applicants

AND

GIANCARLO HAROLD D’ESPOSITO

First Defendant/Respondent

ANTONINO GIOVANNI D’ESPOSITO

Second Defendant/Respondent

Hearing: 17 May 2024

Appearances:

J V R James and N E Jirkowsky for Plaintiffs (via VMR) S Kang for First Defendant

No appearance by or for Second Defendant

Judgment:

16 July 2024

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[1] This is an application for summary judgment by Rodney John Green and John Robert McCorkindale, in their capacity as trustees of the RJG Trust (the plaintiffs), against Giancarlo Harold D’Esposito (the first defendant) and Antonino Giovanni D’Esposito (the second defendant), seeking recovery of amounts owed by the defendants in their capacity as guarantors for companies to which loans were advanced by the plaintiffs.

GREEN v D’ESPOSITO [2024] NZHC 1964 [16 July 2024]

[2] The first defendant opposes the plaintiffs’ application. There is no dispute as to the obligation under the guarantee. However, the first defendant raises issues as to breach by the plaintiffs of their duties with regard to sale of assets owned by the debtor companies. The first defendant contends that if the plaintiffs had complied with their duties the outstanding loan balance would have been substantially reduced or fully paid.

[3] The second defendant has not filed a notice of opposition to the application and was not represented at the hearing.

[4] The issue is whether the plaintiffs have satisfied me that the defendants have no defence to the cause of action for breach of the guarantee.

What happened?

[5] Between November 2015 and September 2020, the plaintiffs and Mr Green, in his personal capacity, advanced loans to various entities within the Hawkes Bay Seafoods Group namely Pania Seafoods Ltd, HBS Tuna Ltd, Westerner Fishing Ltd and Hawkes Bay Seafoods Ltd. The group is entirely owned or controlled by the defendants, with the directors of all entities being either both defendants or one of them, and the shareholding is held either by both defendants or one of their business trusts. It is not disputed that these loans were made.

[6]The securities granted in relation to these loans were:

(a)a general security over TFB Fishing Ltd’s vessel “Two Fold Bay” under a general security agreement dated 26 January 2017;

(b)a mortgage over Westerner’s vessel “Westerner” and a mortgage over Mutiara Fishing Ltd’s vessel “Mutiara II” under a security amendment agreement dated 28 April 2017;

(c)under a deed of variation of the loan agreement between Westerner Fishing Ltd and Mr Green dated 1 August 2017:

(i)a general security over Jeanette Fishing Ltd’s vessels “Stella B” and “Jeanette”;

(ii)a general security over Danielle Fishing Enterprises Ltd’s vessel “Danielle”;

(iii)a general security over Trial B Fishing Ltd’s vessel “Trial B”;

(iv)a general security over St Judge Fishing Ltd’s…

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 Green v D'Esposito

Details

AGLC: Green v D'Esposito [2024] NZHC 1964
Case: [2024] NZHC 1964
Decision Date: 16 July 2024

CaseChat Overview and Summary

Rodney John Green and John Robert McCorkindale, in their capacity as trustees of the RJG Trust, brought an application for summary judgment against Giancarlo Harold D’Esposito and Antonino Giovanni D’Esposito for amounts owed by the defendants as guarantors for loans advanced to companies within the Hawkes Bay Seafoods Group. The defendants opposed the application, raising issues regarding the plaintiffs' alleged breach of duty in relation to the sale of assets owned by the debtor companies. The primary issue before the court was whether the plaintiffs had satisfied the court that the defendants had no defence to the cause of action for breach of guarantee.

The court found that the duty owed by the plaintiffs when exercising the power of sale was to take reasonable care to obtain the best price reasonably obtainable at the time of sale. The court considered the evidence presented by the first defendant regarding the sale of the second quota, the vessels, and other plant, equipment, and chattels. The court found that the first defendant's evidence was lacking in precision and was largely based on his understandings and beliefs which were not substantiated or corroborated. The court held that the plaintiffs had not breached their duty with regard to the sale of the assets and that the first defendant did not have an arguable defence.

As a result, the court granted summary judgment in favour of the plaintiffs against the first and second defendants on a joint and several basis for the sum of $6,062,497.92, including interest. The court also ordered that the sums for which judgment is given continue to carry interest at the relevant contractual rates from the date judgment is entered until the judgment debt is paid in full. The court directed that costs be determined between the parties or, if necessary, by the court on the papers.

Orders