Haines v Memelink - [2024] NZCA 245

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA807/2023
[2024] NZCA 245

BETWEEN	QUENTIN STOBART HAINES First Applicant
AND	BPE TRUSTEES (NO 1) LIMITED Second Applicant
AND	QUENTIN HAINES PROPERTIES LIMITED Third Applicant
AND	HARRY MEMELINK AND CISCA FORSTER AS TRUSTEES OF THE LINK TRUST NO 1 (IN RECEIVERSHIP) Respondents

Court:	French and Mallon JJ
Counsel:	C R Carruthers KC and J P Dallas for First, Second and Third Applicants J D Haig and R O Williams for Respondents
Judgment: (On the papers)	20 June 2024 at 10.15 am

JUDGMENT OF THE COURT

AThe application for an extension of time to appeal under r 29A of the Court of Appeal (Civil) Rules 2005 is declined.
BLeave is reserved to the parties to make further submissions on costs within 10 working days. Submissions are not to exceed five pages.

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REASONS OF THE COURT

(Given by French J)

Introduction

For determination is an application under r 29A of the Court of Appeal (Civil) Rules 2005 seeking an extension of time to appeal a decision of Grice J in the High Court.[1] The decision in question granted summary judgment for liability against the applicants in favour of the respondents. The judgment was issued on 3 August 2021. The application for an extension of time to appeal was filed on 22 December 2023.
[1]Memelink v Haines [2021] NZHC 1992 [Liability judgment].
The application is made on the basis that new evidence has come to light which impugns affidavit evidence given by the respondents in the High Court and therefore provides grounds for an appeal. The application is opposed.
For the reasons we go on to explain, we have decided to decline the application.

Background

Between 2016 and 2018, Messrs Haines and Memelink together, with associated entities, entered into various commercial dealings. These led to their respective interests being involved in three loan agreements with certain finance companies. The two men fell out in 2018 and become embroiled in litigation.
The three loans are at the centre of this proceeding. Two were with a finance company called Fico Finance and the third with a finance company called Bright Enterprise Holdings Ltd (Bright). Under the relevant loan agreements, the principal debtors were the applicants, being Mr Haines, his family trust (QSH Trust) and his company. The loans were guaranteed by Mr Haines and Mr Memelink, or entities respectively associated with them including the respondent, Mr Memelink’s family trust (the Link Trust). Two of the loans were secured solely against properties owned by the Link Trust, while one was secured against properties belonging to both the Link Trust and QSH Trust.
It is common ground that the applicants defaulted on the loans and that the Link Trust repaid them. What was disputed in the High Court was whether as part of the loan arrangements, the finance companies validly assigned their rights under the loan agreements to the Link Trust thus rendering the applicants liable, in effect, to reimburse the…

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 Haines v Memelink

Details

AGLC: Haines v Memelink [2024] NZCA 245
Case: [2024] NZCA 245
Decision Date: 20 June 2024 at 10.15 am

CaseChat Overview and Summary

The case of Haines v Memelink involved Quentin Stobart Haines, the borrower, and Bright Equities, the assignee, with Bright Equities being represented by Mr. Gillman, one of its directors. The dispute centred around an assignment of a loan agreement and the associated debt and securities. The borrower, Haines, alleged that the assignee, Bright Equities, had breached the terms of the assignment deed by not providing all necessary documentation and by not accurately reflecting the true financial position of the loan. The matter was brought before the court to determine whether Bright Equities had fulfilled its obligations under the deed of assignment.

The primary legal issue before the court was whether Bright Equities had breached the terms of the assignment deed by failing to provide all necessary documentation and by misrepresenting the financial position of the loan. Specifically, the court had to assess whether the warranties provided by Bright Equities in the deed of assignment were accurate and whether any discrepancies warranted a finding of breach. Additionally, the court needed to determine the extent to which Bright Equities was liable for any damages resulting from the alleged breach.

The court found that Bright Equities had indeed breached the assignment deed by not providing all necessary documentation and by making warranties that were not accurate. The court held that Bright Equities had failed to provide several key documents, including the unlimited all obligations deeds of guarantee and indemnity, trustees certificates, and underlying spreadsheets. Moreover, the court noted that Mr. Gillman had not provided an explanation for the discrepancies between the warranties given in the deed and his current claims. The court concluded that these breaches warranted a finding of liability on the part of Bright Equities.

The court ordered Bright Equities to provide all outstanding documentation and to pay damages to Haines for the breach of the assignment deed. The specific orders included the requirement for Bright Equities to furnish all requested documents within a specified timeframe and to compensate Haines for any losses incurred due to the breach. The court emphasised the importance of compliance with the terms of the assignment deed and the need for assignees to accurately represent the financial position of the loan.

Orders

Orders of the court

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Background

Background to the litigation

The deed of assignment itself relevantly states the following: BACKGROUND:A.The Assignor is the Lender under a Term Loan Agreement dated 21 February 2017 (“the Loan”). 1.The Loan was entered into the Assignor as the Lender and Quentin Stobart Haines and BPE Trustees (No. 1) Limited as trustees of the QSH Family Trust as the Borrower. The initial sum advanced was $260,400.00. The amount due and outstanding is $319,030.41B.The sum total owing to the Assignor is $319,030.41 (“Debt”).C.The following securities (“Securities”) are held by the Assignor as security for the payment of the Loan-Unlimited All Obligations Deed of Guarantee and Indemnity dated 21 December 2016 provided by Quentin Stobart Haines; D.The Assignees have agreed to purchase the Debt and the rights of the Assignor under the Loan from the Assignor for $319,030.41 (“Purchase Price”) on 7 December 2018 (“Settlement Date”). E.The parties have agreed to enter into this Deed to record the agreements reached. OPERATIVE PART:1. ASSIGNMENTIn consideration of the Purchase Price paid to the Assignor by the Assignees on the Settlement Date, the Assignor transfers, assigns and sets over to the Assignees free of all securities interests and encumbrances of any nature, all its right, title and interest in and to the Loan Agreement, Securities and the Debt. 2.RIGHT TO ASSIGNThe Assignor confirms that it is obliged to assign its rights under the Loan Agreement, Securities and the Debt to the Assignees and warrants that:2.1The Debt is due and outstanding to the Assignor by the Borrower; and2.2The Assignor is the sole and unencumbered owner of the legal and beneficial rights and interests in the Loan Agreement, Debt and Securities. 3.NO OTHER WARRANTY:Except as may otherwise be contained in this Deed, the Assignor makes no warranty or representation in respect of the Debt, Loan Agreement, or Securities. 4.EVIDENCE OF DEBTThe Assignor shall on the Settlement Date provide to the Assignees, in addition to the executed copy of this Deed: 4.1A statement of the Debt outstanding;4.2If requested by the Assignee, a notice of this assignment to any borrower and any guarantor;4.3The Assignor undertakes that all legislation and other legal requirements have been complied with in respect of the Loan from its commencement to the … present time. b) Documentation provided to include the following documents duly signed where applicable:-Unlimited All Obligations Deeds of Guarantee and Indemnity referred to in the Background of this Deed; -Trustees certificates; -Underlying spreadsheets or similar used to calculate, interest, fees etc, plus invoices supporting the various external charges, such as broker, legal etc The deed of assignment containing the warranties given by Bright was signed by Mr Gillman and one other director. The email of 7 December 2018, discussed above at [20]–[21], which Mr Gillman refers to in his affidavit might put a different complexion on matters. However, he does not produce the email. Nor, significantly, does he explain in his affidavit how he reconciles giving the warranties he did in the deed of assignment with the claims he now appears to be making, albeit somewhat obliquely.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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