Long v ANZ National Bank Ltd - [2012] NZCA 132

IN THE COURT OF APPEAL OF NEW ZEALAND

CA708/2011
[2012] NZCA 132

BETWEEN REGINALD ROBERT LONG
Appellant

AND ANZ NATIONAL BANK LIMITED
Respondent

Hearing: 19 March 2012

Court: Harrison, White and Asher JJ

Counsel: P A Craighead for Appellant
O J Meech and D D Watterson for Respondent

Judgment: 3 April 2012 at 11.30 am

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellant is ordered to pay reasonable indemnity costs to the respondent, together with usual disbursements.

REASONS OF THE COURT

(Given by White J)

Table of Contents

Para No

Introduction [1]
Factual background [3]
High Court judgment  [13]
Submissions for Mr Long  [15]
The relevant legal principles  [17]
Application of s 176 of the Property Law Act 2007  [22]
Result[29]

Introduction

Mr Long appeals against a summary judgment entered against him for $454,944.63.[1] Mr Long personally guaranteed the financial obligations owed by Bob Long Contracting Ltd (the Company) to the ANZ National Bank Ltd (the Bank). The amount of the judgment entered against him represents the money still owing to the Bank following a mortgagee sale of a property over which the Bank had a security, plus interest and indemnity costs.
[1] ANZ National Bank Ltd v Long HC Auckland CIV-2011-404-2741, 4 October 2011.
The appeal is brought on the ground that the High Court Judge, Brewer J, erred in accepting that the Bank had complied with its duty under s 176 of the Property Law Act 2007 to take reasonable care to obtain the best price reasonably obtainable as at the time of the mortgagee sale. Mr Craighead, counsel for Mr Long, was particularly critical of the failure of the Bank to adduce any evidence from the real estate agent responsible for the sale.

Factual background

The essential background facts are not in dispute.
Under a deed of guarantee executed in 2004 Mr Long guaranteed the obligations of the Company to the Bank. On 18 October 2007 the Company obtained a loan and overdraft facility from the Bank. Pursuant to a registered mortgage, which was executed on 24 October 2007, a farm property in Pokeno provided security for the Company’s obligations to the Bank under the 2007 loan agreement and overdraft facility. The property was an asset of the Bob Long Family Trust (the Trust). The registered proprietors of the property were the trustees of the Trust.
In October 2009, following default by the Company, Mr Long failed to comply with a demand by the Bank under the terms of the guarantee for $690,316. Subsequently the Bank took steps to sell the property at Pokeno by way of mortgagee sale.
The Bank appointed Barfoot & Thompson, a reputable real estate agent, to market the property. The Bank also obtained valuations of the property, which initially estimated the likely forced sale price as between $450,000 and $525,000. The Bank received further advice from Barfoot & Thompson during the process as to price expectations.
The property was marketed over a reasonable period of time. Barfoot &…

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: [2012] NZCA 132
Decision Date: 3 April 2012

CaseChat Overview and Summary

The appeal is brought by Reginald Robert Long against the summary judgment entered by the High Court against him for the sum of $454,944.63. Mr Long personally guaranteed the financial obligations of Bob Long Contracting Ltd (the Company) to ANZ National Bank Ltd (the Bank). The judgment represents the amount still owing to the Bank following a mortgagee sale of a property that provided security for the Company's obligations, plus interest and indemnity costs. Mr Long's appeal is based on the contention that the High Court Judge, Brewer J, erred in accepting that the Bank had complied with its duty under s 176 of the Property Law Act 2007 to take reasonable care to obtain the best price reasonably obtainable at the time of the mortgagee sale. Mr Craighead, counsel for Mr Long, particularly criticised the Bank's failure to adduce evidence from the real estate agent responsible for the sale.

Applying the well-established legal principles and the statutory duty under s 176, the Court of Appeal found that the Bank had indeed taken reasonable care to obtain the best price reasonably obtainable. The Bank had taken appropriate steps to sell the property, including retaining Barfoot & Thompson to market the property. The auction established that the best price then reasonably obtainable for the property was $340,000. The subsequent sale for $415,000 including GST was a better price than the best offer made at the auction, reflecting the maximum price the interested party was prepared to pay. The Court was satisfied that there was no need for the Bank to adduce further evidence from the real estate agent, as the undisputed facts spoke for themselves. The Court found that the Bank had taken every appropriate step to inquire about the GST position of the Trust and the Company and had received no adequate response. The appeal is therefore dismissed, and the summary judgment entered by Brewer J is upheld. Mr Long is ordered to pay reasonable indemnity costs to the Bank, together with usual disbursements.

Orders