Gumdigger Limited v Serepisos

[2024] NZHC 1588

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2023-485-425

[2024] NZHC 1588

UNDER

part 12 of the High Court Rules 2016

IN THE MATTER

of an application for summary judgment

BETWEEN

GUMDIGGER LIMITED

Plaintiff

AND

ELEFTHERIOS SEREPISOS

Defendant

Hearing:	22 April 2024
Appearances:	R B Hucker for Plaintiff S J Fraser for Defendant
Judgment:	17 June 2024

JUDGMENT OF ASSOCIATE JUDGE SKELTON

[1]    This is a case about a short-term loan advance made by the plaintiff (Gumdigger) to the defendant’s mother (Mrs Serepisos) at the request of the defendant (Mr Serepisos) in the total sum of approximately $150,000 (the Loan Agreement), which was guaranteed by Mr Serepisos.

[2]    Mrs Serepisos has defaulted on the loan. Gumdigger now seeks summary judgment against Mr Serepisos under the guarantee. Due to the accrual of interest on the loan, the amount sought against Mr Serepisos is $2,487,844, together with ongoing interest and costs.

GUMDIGGER LIMITED v SEREPISOS [2024] NZHC 1588 [17 June 2024]

[3]    Mr Serepisos does not dispute that the loan advances were made or that he guaranteed the loan but raises several grounds in opposition to the application for summary judgment based on the Credit Contracts and Consumer Finance Act 2003 (CCCFA) and issues around a security sharing agreement, alleged assignment of the loan and estoppel.

[4]    The issue for determination is whether Gumdigger has satisfied the Court that Mr Serepisos has no defence to its claim, so that I am left without any real doubt or uncertainty that summary judgment should be entered.

What happened?

[5]    Mr Serepisos signed the Loan Agreement on 24 August 2018, both in his capacity as power-of-attorney for his mother, and in his own capacity as guarantor. The Loan Agreement was executed by George Hunter, sole director and shareholder of Gumdigger, on 5 September 2018.

[6]    The terms of the Loan Agreement provided for a loan of $115,000. The sum of $15,000 was to be used to pay the establishment fee to Gumdigger. The remaining

$100,000 was to be disbursed  at  the  direction  of  Mrs  Serepisos  to  repay  General Finance Ltd in respect of a judgment they had obtained against her.

[7]    The repayment date was three months from the date of the Loan Agreement, or any other date agreed to by the parties in writing. Interest on the debt was to be charged at a rate of 0.165 per cent (or the default interest rate of 0.665 per cent if applicable), with such interest being calculated daily on the outstanding indebtedness and compounded, and the interest to be capitalised and repaid on the repayment date.

[8]    In both his capacity as power-of-attorney for his mother and in his personal capacity, Mr Serepisos also signed an undated Debtor’s Certificate, declaring to have been legally advised before entering into the Loan Agreement and that the credit was to be used for business or investment purposes (or both).

[9]    Mr Serepisos also executed an All Obligations Guarantee and Indemnity Deed on or around 24 August 2018 (the Guarantee), under which he guaranteed and agreed to indemnify Gumdigger in respect of any default by Mrs Serepisos.

[10]   In accordance with the terms of the Loan Agreement, Mrs Serepisos entered into a Security Sharing Deed with Gumdigger and another party, Lifestyle Loans Ltd, on or around 5 September 2018. It is apparent that Mrs Serepisos had also borrowed an amount of approximately $700,000 from Lifestyle Loans Ltd in  or  around  March 2018. The Security Sharing Deed refers to the “Security” as the second ranking mortgage over three  Miramar proprieties owned by Mrs Serepisos, being  75 Camperdown Road, 91 Nevay Road, and 28 Caledonia Street. The Security Sharing Deed states that the lenders agreed to enter into the Deed to “regulate and define between themselves the priorities of the Securities”.

[11]   In accordance with the Loan Agreement, on or around 24 August 2018, Gumdigger advanced the $115,000 sum to Mr Serepisos. On or around 2 November 2018, Gumdigger advanced Mrs Serepisos a further sum of $37,500.

[12]   Mrs Serepisos failed to make a payment to Gumdigger of any amount by the repayment date or at any other time. She was subsequently adjudicated bankrupt on  4 February 2020 and was automatically discharged from bankruptcy on 26 February 2023.

[13]   Gumdigger says Mr Serepisos, as guarantor, is now liable to make payment of all amounts owing under the Loan Agreement. The amount currently outstanding is said to be $2,487,844, consisting of the amounts advanced and interest accrued at the daily interest rate of 0.165 percent, calculated to 30 April 2023. Gumdigger also says that the legal costs it has incurred in pursuing the amounts owed under the Loan Agreement are also payable by Mr Serepisos pursuant to the Loan Agreement and the Guarantee.

What does Gumdigger have to establish to obtain summary judgment?

[14]Rule 12.2(1) of the High Court Rules 2016 (HCR) provides:

12.2 Judgment when there is no defence or when no cause of action can succeed

(1)The court may give judgment against a defendant if the plaintiff  satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.

[15]   The principles that govern summary judgment are now very well settled. In Krukziener v Hanover Finance Ltd, the Court of Appeal summarised the principles as follows:1

[26]      … The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: … The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated:

… The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: … In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: …

[27]      Under r 141A [of the previous iteration of the High Court Rules; now r 12.10] the defendant need not file a statement of defence. The onus remains on the plaintiff, and summary judgment will be denied if on the hearing of the application it appears that there is an issue worthy of trial.

[16]   In Pemberton v Chappell, Somers J observed (in regard to the predecessor to r 12.2) that:2

R 136 requires the plaintiff “satisfies the Court that a defendant has no defence”. In this context the words “no defence” have reference to the absence of any real question to be tried. That notion has been expressed in a variety of ways, as for example, no bona fide defence, no reasonable ground of defence, no fairly arguable defence … On this the plaintiff is to satisfy the Court; he has the persuasive burden. Satisfaction here indicates that the Court is confident, sure, convinced, is persuaded to the point of belief, is left without any real doubt or uncertainty.

1      Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 (citations omitted).

2      Pemberton v Chappell [1987] NZLR 1 (CA) at 3–4.

[17]Somers J also stated:3

Where the defence raises questions of fact upon which the outcome of the case may turn it will not often be right to enter summary judgment. There may however be cases in which the Court can be confident – that is to say, satisfied

– that the defendant’s statements as to matters of fact are baseless. The need to scrutinise affidavits, to see that they pass the threshold of credibility is referred to in Eng Mee Yong v Letchumanan [1980] AC 331, 341 and in A-G v Rakiura Holdings Ltd (1986) 1 PRNZ 12.

Mr Serepisos’ grounds of opposition

[18]Mr Serepisos raises four grounds of opposition:

(a)He contends that the Loan Agreement is a “consumer credit contract” under the Credit Contracts and Consumer Finance Act 2003 (CCCFA). He contends that Gumdigger failed to comply with the disclosure requirements under the CCCFA regarding consumer credit contracts and therefore the Loan Agreement is unenforceable.4 Mr Serepisos also contends that, whether or not the Loan Agreement was a consumer credit contract, at the time of the loan in 2018, s 99B(1)(a) of the CCCFA stipulated that Gumdigger was not able to enforce any right in relation to the costs of borrowing due to it not be registered under pt 2 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008. Further, Mr  Serepisos  contends  that  the  Loan Agreement should in any event be re-opened because is it “oppressive” under ss 118 and 120 of the CCCFA.

(b)He contends that there is an issue as to why the loan was not satisfied under the Security Sharing Deed, given there have been mortgagee sales of the properties owned by Mrs Serepisos, and that this needs to be investigated.

(c)He contends that, in 2021, Black Robin Equity Ltd (BRE) agreed to pay the loan to Gumdigger and undertook to obtain an assignment of the debt from Gumdigger, which Gumdigger agreed to assign.

3      At 4.

4      Credit Contracts and Consumer Finance Act 2003 (CCCFA), s 99(1)(a).

(d)He raises issues of estoppel and improper purpose, based on Gumdigger having “sat on its hands” and taken no steps to enforce the Loan Agreement until now, and because it is alleged the proceedings have been issued to assist parties involved in other proceedings brought by Mr Serepisos.

[19]   In my view, the outcome of the application for summary judgment turns on unresolved factual issues and evidential gaps regarding the alleged agreement by BRE to pay the loan and assignment of the debt, the exercise of security rights under the Security Sharing Deed, and the period of time between the initial default on payment of the loan and the issue of proceedings against Mr Serepisos.

Issues regarding the agreement with BRE and assignment of the debt, the Security Sharing Deed, and lapse of time before issuing proceedings

[20]   Mr Serepisos has produced a document entitled “Term Sheet”, dated 5 May 2021, which appears to be a heads of agreement document between Black Robin Equity Limited (BRE) and Mr Serepisos and/or related entities (TS). The document provides that:

Background:

1.The Serepisos family are the prior owners of two adjoining sites, one at 75 Camperdown Road, Miramar, Wellington (“Camperdown Land”) and the other an adjoining property at 91 Nevay Road (“Serepisos Dwelling”). The properties were valued in mid 2019 at

$4.640m including GST ($2.187m for Camperdown Land and

$2.453m for the Serepisos Dwelling).

2.Approximately 2 years ago [the] Serepisos family came into financial difficulty and had borrowed money from an unscrupulous lender - Lifestyle Loans Ltd (“Lifestyle”) who mortgagee sold all of their properties. When it came to sell both of the above properties, a family friend/associate - Ian Cassel’s through his company Citiblox Limited agreed to buy these two assets for the value of the debt of circa

$2,835,000 with an agreed buyback agreement (“Buy Back Agreement”) in October 2020. This was extended (largely because of Covid) and now needs to be repaid. TS is holding the Buy Back Agreement on trust for his respective family interests.

3.Gumdigger Limited/George Hunter (“GH”) was party to the original loan with Lifestyle and was not repaid at the time of the mortgagee sale by Lifestyle and is still owed circa $200,000. BRE will repay GH under these proposed arrangements.

[21]   The document then sets out the specific arrangements agreed between the parties relating to the properties. The arrangements include reference to the “$200,000 payable to Gumdigger” and a handwritten note (initialled by both parties) that states:

BRE undertakes to obtain an assignment of the $200,000 debt from Gumdigger to TS.

[22]   The document is signed by Dave Wigmore on behalf of BRE and Mr Serepisos on behalf of the Serepisos Family/related entities.

[23]In his affidavit, dated 12 September 2023, Mr Serepisos states that:

8.This claim [the claim by the plaintiff] was filed after I filed a claim against Rowan Robinson and his company, and also had filed claim against Black Robin Equity and associated parties.

9.Mr Hunter is party to a “security sharing” agreement with Matthew Ryan - which is in his affidavit. Matthew Ryan was supposed to pay the outstanding loan as part of that agreement.5

10.Further, Mr Hunter is also aware of an agreement with Black Robin Equity Ltd (“BRE”) where BRE agreed to pay the outstanding loan. It is my understanding that Mr Hunter agreed to this assignment of the loan. …

[24]   Mr Hucker, for Gumdigger, submits that neither Gumdigger nor Mr Hunter are parties to the “Term Sheet” agreement. He submits that there is no evidence of any assignment of the debt owed to Gumdigger having occurred, and that Mr Serepisos would have to have been a party to any assignment. He also submits that an assignment of the debt would have to be in writing under s 50(1) of the Property Law Act 2007 and there is no evidential basis to suggest an equitable assignment. He notes that the Term Sheet does record Mr Serepisos acknowledging the indebtedness to Gumdigger.

[25]   The background section of the Term Sheet raises an issue as to whether the mortgagee sale of the properties by Lifestyle Loans Ltd was the purported enforcement of security rights under the Security Sharing Deed. Clause 2.2 of the Security Sharing Deed provides that:

5      Matthew Ryan is the sole director of Lifestyle Loans Ltd (footnote added).

2.2After Enforcement the Proceeds shall be applied by the Lenders as follows:

(a)First, in payment or reimbursement of any costs incurred in connection with each enforcement action;

(b)Secondly, in payment of all Preferential Payments;

(c)Thirdly, an amount of $710,000 (plus any applicable penalty interest) will be paid towards Lifestyle Loans as repayment of amounts owing under the Loan Agreement between Lifestyle Loans and the Borrower;

(d)Fourthly, an amount of $115,000 will be paid towards Gumdigger  as   repayment   of   principal   under   the   Loan Agreement between Gumdigger and the Borrower;

(e)Fifthly, in or towards payment to each Lender of that Lender’s Secured Indebtedness in the Participating Interests; and

(f)Finally, any residue shall be paid to the Borrower or the persons entitled thereto.

[26]Clause 3.2 provides that:

3.2Each Lender agrees for the benefit only of each other Lender that:

(a)It is to promptly notify the other Lender of:

(i)the occurrence of any material breach by the Borrower in the due performance of its obligations under the Loan Agreements and/or Securities; and

(ii)the occurrence of any event giving rise to Enforcement,

of which the Lender has actual notice or knowledge.

(b)If a Lender wishes to exercise any Security Rights it is to immediately inform the other Lender of its intention and endeavour to agree with them on the method by which the Security will be enforced or such rights exercised. The Lenders are to consult with a view to agreeing upon the method of enforcement or of exercising rights and where appropriate upon a suitable person to be appointed receiver or agent … and are to co-operate with each other in realising the assets secured to them and in ensuring that the proceeds are paid in accordance with the provisions of this Deed.

[27]   In this regard, Mr Hucker refers to cl 6 of the Security Sharing Deed which provides:

6.1 Nothing in this Deed is to detract  from the rights of each  Lender  against  the  Borrower  as  set  out  in  the  Security   and   each  Loan Agreement. Each Lender is and will remain entitled to exercise all such rights to which it may be entitled under the Securities and Loan Agreements. However, as between each Lender those rights may only be exercised as provided by this Deed.

…

6.3 The Borrower joins in this Deed for the purpose of acknowledging the priorities and arrangements recorded in it. The Borrower undertakes with each of the Lenders to observe the provisions of this Deed at all times and not in any way to prejudice or affect the enforcement of such provisions or to do or suffer anything which would be a breach of the terms of the Deed.

[28]   Mr Hucker submits that the Security Sharing Deed does not prevent Gumdigger from pursuing Mr Serepisos for the debt. He submits that any breach of the Security Sharing Deed only leads to causes of action as between the lenders.

Assessment

[29]   Mr Serepisos’ evidence, including the Term Sheet, raises issues regarding the apparent agreement by BRE in 2021 to pay the Gumdigger loan and to obtain an assignment of the debt from Gumdigger to Mr Serepisos. The evidence also raises issues as to the apparent enforcement of the Security Sharing Deed by Lifestyle Loans Ltd and why proceeds of sale were not used to repay the loan which Gumdigger is now seeking to enforce against Mr Serepisos.

[30]   Neither Gumdigger nor Mr Hunter are parties to the Term Sheet agreement and there is no documentary evidence of any assignment. However, Mr Serepisos states in his affidavit that Mr Hunter is aware of the agreement with BRE whereby BRE agreed to pay the outstanding loan, and it is his understanding that Mr Hunter agreed to the assignment of the loan.

[31]   There is no reply evidence  from  Mr  Hunter  to  refute  these  statements.  Mr Hucker submits that Mr Hunter could not respond to “inadmissible evidence” and “conclusory statements” of Mr Serepisos. However, I do not consider the evidence is hearsay or inadmissible. It is the understanding or belief of Mr Serepisos which may

be accepted as evidence if it is in the interests of justice.6 While there may be an issue as to the weight to be given to the evidence, this is an application for summary judgment so the defendant’s evidence is put forward only to establish a reasonably arguable defence. Nor is it evidence which is inherently lacking in credibility or inherently improbable. The evidence is based on a contemporary document adduced by Mr Serepisos in which BRE agrees to pay the loan and undertakes to obtain an assignment of the debt from Gumdigger. Given the onus on Gumdigger to satisfy the Court that there is no defence to its claim, it seems to me that Mr Hunter could and should have replied to Mr Serepisos’ evidence.

[32]   In the absence of any direct refutation by Mr Hunter, Mr Hucker relies on an email from Mr Hunter to Rowan Robinson, copied to Jon Baker and Paul Bublitz,7 dated 21 August 2023, after these proceedings were issued. The email is an exhibit to the affidavit of Mr Serepisos. It states:

I don’t know what Terry [Mr Serepisos] has showed you but I had a top barrister look at my claim and on his advice I took action. This action was taken solely to protect you, Jon and Black Robin as Terry had a case against all of you.

I am aware that Terry probably has no money and also numerous cases against him however I did it to assist you guys

I am not involved between Terry and Bublitz and if you believe that Terry could transfer his obligation to me by doing a deal with Bublitz and not even having the manners or curtesy [sic] to tell me then I have held you in far more respect than I should have.

Terry wants his cake and eat it as well. He wants to keep his case against you and delay it till 1st September and wants me to remove my claim against him.

I rang and spoke to Terry who said he was disappointed that I would put a claim against him. Never once did he approach me after failing to pay me back anything when I lent him the funds. He never paid the lawyer for drawing up our loan–which he promised that he would. I requested that he supply me through his lawyer financial information on Matt Ryan and this he didn’t do.

I am not going to release Terry of his obligation solely on the basis it is why should I–he owes me the money. Get him to release you of everything you owe him and I might consider it.

During our conversation Terry said that there was no point in meeting. This the barrister confirmed as been true.

6      High Court Rules 2016, r 7.30(1)(c).

7      There is no further evidence before the Court as to how these people are involved in the dealings between Gumdigger and Mr Serepisos.

I have principles and will not deal with people who have lied and now think they can bribe me–they have everything to gain and I have nothing.

The choice is not mine but Terry’s and if he thinks you can raise the money then he will go with you.

I will not enforce my claim on the proviso that I get my house released– that is between you two not me.

I also have some major family issues at present and if you recall I paid the money for your daughters [sic] 16th birthday party. You said that you had a cash flow company and that you would help me– not one dollar for either you or Jon–so what do you expect.

[33]   The email records Mr Hunter’s view as at 21 August 2023 that Mr Serepisos has an obligation to the pay the loan and owes the money, which is not surprising, as proceedings had already been issued against Mr Serepisos. However, the email does not directly address the issue of  the  Term  Sheet  agreement  between  BRE  and  Mr Serepisos, nor the issue of assignment of the debt under that agreement. Further, the email raises issues as to Gumdigger’s motivation for bringing the proceedings against  Mr Serepisos, as Mr Hunter states that proceedings were issued against     Mr Serepisos “solely to protect you, Jon and Black Robin as Terry had a case against all of you”. This may also indicate that Mr Hunter is aware of the Term Sheet agreement with BRE as stated by Mr Serepisos in his affidavit.

[34]   Further, although Mr Hunter has produced the Security Sharing Deed as an exhibit to his affidavit, he has not provided any evidence as to whether Gumdigger sought to exercise any security rights under the Deed or in relation to the apparent enforcement of security rights by Lifestyle Loans Ltd. He has not produced evidence as to why no proceeds of the mortgagee sales were applied to the Gumdigger loan as required by cls 2.2 and 3.2 of the Security Sharing Deed. It may be, as submitted by Mr Hucker, that any breach of the Security Sharing Deed does not give rise to a defence to Gumdigger’s claim against Mr Serepisos, but only to causes of action as between the lenders. However, given the evidence put forward by Mr Serepisos, including the background in the Term Sheet, it seems to me that it is relevant for the Court to understand why no proceeds of sale were applied to the loan as required by the Security Sharing Deed and, given the onus on Gumdigger, Mr Hunter should have provided some evidence in this regard at least by way of reply.

[35]   Also relevant is that there is no evidence of any demand being made for payment of the loan by Gumdigger during the nearly five-year period after the initial default in repayment of the loan on 24 November 2018 and the issue of proceedings against Mr Serepisos in August 2023.

[36]   Mr Hucker submits that Mr Serepisos has not put forward a sufficient evidential foundation to establish any reasonably arguable defence. However, I consider that the evidence before me raises the following unresolved factual issues:

(a)Why proceeds of sale from the apparent exercise of security rights under the Security Sharing Deed were not applied to the Gumdigger loan as required by the provisions of that Deed.

(b)Whether BRE became obliged to pay the loan in or around 2021 and whether there was an assignment of the debt and, if so, why the debt has not been paid by BRE.

(c)Why no demand for payment of the debt was made to Mrs Serepisos or Mr Serepisos by Gumdigger throughout the period of nearly five years between the initial default on 24 November 2018 and the commencement of proceedings in August 2023, during which time the debt has grown sixteen-fold from the initial advances totalling

$150,000 to approximately $2.5 million with ongoing interest and costs.

(d)Why no payments were made by Mr Serepisos throughout the five-year period if he considered he was exposed to liability under the Guarantee and given the very high interest rates.

[37]   Overall, I consider that there are too many unresolved factual issues and too may gaps in the evidence for me to be satisfied that Mr Serepisos has no reasonably arguable defence to Gumdigger’s claim, either on the basis that the obligation to pay

the loan was transferred to a third party, or on the basis of an estoppel arising during the period after the initial default. The requirements for estoppel are:8

(a)a belief or expectation by [A] has been created or encouraged by words or conduct by [B];

(b)to the extent an express representation is relied upon, it is clearly and unequivocally expressed;

(c)[A] reasonably relied to its detriment on the representation; and

(d)it would be unconscionable for [B] to depart from the belief or expectation.

[38]   I note that the estoppel can be founded on words or conduct which do not have to amount to an express representation. On the material before me, it seems to me to be reasonably arguable that Gumdigger has, by words or conduct, created an expectation on the part of Mr Serepisos that he was not required to pay the debt on which he has reasonably relied, and it would be unconscionable now  to require     Mr Serepisos to pay the debt which has mushroomed from a relatively minor amount to $2.5 million.

[39]   In the circumstances, I do not consider that it is appropriate for Gumdigger’s claim for $2.5 million to be determined summarily. It seems to me that proper determination of the issues identified above requires discovery, full evidence from the relevant witnesses, and testing of that evidence by cross-examination.

[40]   Ultimately, Gumdigger bears the onus of satisfying me that Mr Serepisos has no defence such that I am confident, sure, convinced, persuaded to the point of belief, and left without any real doubt or uncertainty. On the basis of the material before me, I am not so satisfied.

Other grounds of opposition

[41]   Mr Serepisos has also raised other grounds of opposition to summary judgment under the CCCFA, as set out above at [18(a)]. In the circumstances, I do not need to

8      Stephen Todd and Matthew Barber  Burrows,  Finn  and  Todd  on  the  Law  of  Contract  in New Zealand (7th ed, Lexis Nexis, Wellington) at [4.6.2]; citing Wilson Parking New Zealand v Fanshawe 136 Ltd [2014] NZCA 407, [2014] 3 NZLR 567 at [44].

consider and make findings on these grounds for the purposes of the application for summary judgment. Even if I was to find that these grounds do not give rise to a reasonably arguable defence, Gumdigger has not satisfied me that there is no other reasonably arguable defence and that it is entitled to summary judgment for the reasons set out above.

Residual discretion

[42]   Rule 12.2 of the HCR provides a residual discretion in deciding whether to enter summary judgment even if the Court is satisfied that the defendant has no defence to the plaintiff’s claim. McGechan on Procedure summarises the authorities with regard to the exercise of this discretion thus:9

(a)The discretion implied by the use of the word “may” is to be restrictively applied. In a great majority of cases, once the court is satisfied the defendant has no defence, there is no room for the exercise of discretion.

(b)The residual discretion may be invoked to avoid oppression or injustice to the defendant where:

(i)The proceeding involves the actions or possible liability of a third party which is not before the court;

(ii)The proceedings are such that the opportunity should be given to allow discovery or other interlocutory applications to be concluded;

(iii)The circumstances of the case disclose very unusual features, the presence of which leads the court to conclude that the entry of summary judgment would be oppressive or unjust; or

(iv)The combination of complex issues of fact and law justify the dismissal of the application for summary judgment, either as a matter of discretion or because the court cannot be satisfied that the defendant has no defence.

(c)Even where the court is not satisfied that a defence has been made out, in exceptional circumstances the application may be adjourned to allow for other processes to be followed.

[43]   In the present case, even if I am wrong in finding that Gumdigger is not entitled to summary judgment because it has not satisfied me that Mr Serepisos has no

9      Jessica Gorman and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR12.2.11].

reasonably arguable defence, I would exercise my discretion against entering summary judgment.

[44]   On the basis of the material before me, I consider there is a risk of injustice or oppression to Mr Serepisos if summary judgment is entered on Gumdigger’s claim for

$2.5 million (together with ongoing interest and costs) because:

(a)The evidence before me raises issues as to Gumdigger’s purpose for bringing the proceeding at this stage, which seems to be a reaction to Mr Serepisos bringing claims against third parties. The 21 August 2023 email indicates that Gumdigger has brought these proceedings “solely to protect” the third parties and to “assist” them as “Terry has a case against all of [them]”. Mr Hunter seems to be prepared to withdraw the claim against Mr Serepisos if Mr Serepisos withdraws his claims against one or more of the third parties, and he also states that he will not enforce his claim “on the proviso that I get my house released”. This raises issues as to improper motive and issue of proceedings for collateral advantage, which militate against summary judgment.10

(b)As noted above, there are currently evidential gaps that mean this case is not appropriate for summary determination. Discovery and testing of evidence is required.

(c)The evidence raises issues as to the actions and potential liability of third parties, Lifestyle Loans Ltd and BRE, who are not before the Court. Mr Fraser, for Mr Serepisos, submits that it may be necessary to make an application to join these parties in the proceeding. This may be necessary in order to ensure that the issues and questions raised in the proceeding are properly determined between all relevant parties.

10     McGechan on Procedure, above n 9 at [HR15.1.05(2)(b)].

Result

[45]   Gumdigger’s application for summary judgment against Mr Serepisos is dismissed.

[46]   In the circumstances, costs should be reserved.11 However, if either party disagrees with this preliminary view, then memoranda may be filed not exceeding three pages (excluding costs schedules) and costs will be determined on the papers.

[47]   The matter is to be listed in the next Associate Judge’s chambers list in Wellington for directions to be given as to the next steps in the proceeding.

Associate Judge Skelton

Solicitors:

Molloy Hucker, Auckland for Plaintiff

Liberty Chambers, Wellington for Defendant

11     See NZI Bank Ltd v Philpott [1990] 2 NZLR 403.