Memelink v Haines - [2024] NZHC 588

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

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

CIV-2020-485-497

[2024] NZHC 588

UNDER section 12 of the Senior Courts Act 2016

IN THE MATTER

of damages for breach of contract

BETWEEN

HARRY MEMELINK and

CISCA FORSTER as trustees of the
LINK TRUST (No.1) (in receivership) Plaintiffs

AND

QUENTIN STOBART HAINES

First Defendant

BPE TRUSTEES (No. 1) LIMITED

Second Defendant

QUENTIN HAINES PROPERTIES LIMITED

Third Defendant

Hearing: 13 and 14 February 2024

Appearances:

J D Haig for the Plaintiffs/Receivers Q S Haines in person

J D Dallas for the Second and Third Defendants (for the first day)

Judgment:

19 March 2024

JUDGMENT GRICE J

(Quantum)

MEMELINK v HAINES [2024] NZHC 588 [19 March 2024]

TABLE OF CONTENTS

Introduction [1]

Adjournment and stay applications [6]

The pleadings [9]

Amended statement of counterclaim [12]

Application to amend pleadings [18]

Res judicata [23]

Henderson estoppel [26]

The evidence [31]

Accounting Evidence [31]

Mr Gillman’s affidavit [33]

Evidence at the hearing [34]

Mr Smith’s evidence [35]

Liability judgment [39]

Conclusion with respect to liability [41]

Assignment of finance company loans to Memelink interests [44]

Failure to serve the notice of assignments [49]

Clause prohibiting assignment of the Bright loan [51]
Assignment of a loan that had already been repaid (the zero-sum loan and
nemo dat arguments) [61]

Terms of the interparty loans and payment of legal fees [68]

Equitable intervention/offset [72]

Offset of the boat advance and legal fees [75]

The legal fees [75]

Advance by finance company to Mr Memelink to purchase boat [80]

Timing of deductions [84]

Further issues raised by the Haines’ interests in submissions [91]

Clog on the equity of redemption [91]

Failure to negotiate [100]

Duress on Mr Gillman [104]

Final resolution of the claims [106]

Conclusion [107]

Interest from the date of judgment [114]

Costs [121]

Introduction

[1] Judgment on liability has been entered against the defendants in relation to various finance company loans assigned to the plaintiff trust (the liability judgment).1 That judgment was entered on an application for summary judgment. This decision deals with the quantum.2

[2] The finance company loans were initially made to the Haines’ interests and were guaranteed by Mr Memelink and the plaintiff trust. The loan agreements were dated: 22 December 2016 (the first Fico Finance Ltd loan in which the first and third defendants are debtors), 21 February 2017 (the Bright Enterprise Holdings Ltd loan in which the first and second defendants are debtors) and 21 April 2017 (the second Fico loan in which the first, second (as trustee for the QSH Family Trust) and third defendants are debtors). These loans were assigned to the plaintiff trust on 7 December 2018.

[3] Until the plaintiff trust went into receivership, Mr Memelink was the representative of the Link Trust (No. 1) (the Trust) and the trustees in all relevant dealings. The Trust’s properties were security for the loans and were the subject of default notices when the finance company loans went into arrears.…

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 Memelink v Haines

Details

AGLC: Memelink v Haines [2024] NZHC 588
Case: [2024] NZHC 588
Decision Date: 19 March 2024

CaseChat Overview and Summary

The High Court of New Zealand determined the quantum of damages for breach of contract in Memelink v Haines. The plaintiffs, Harry Memelink and Cisca Forster as trustees of the Link Trust (No. 1) (in receivership), sought damages for loans assigned to them by the defendants. The case revolved around the validity of assignments of finance company loans made to the Haines' interests, which were guaranteed by Mr Memelink and the plaintiff trust. The loans were assigned to the plaintiff trust on 7 December 2018. The court had already ruled on the liability of the defendants, and this decision dealt with the quantum of damages.

The court dismissed the defendants' arguments regarding the validity of the assignments, finding them to be either res judicata or precluded by Henderson estoppel. The defendants also argued for offsets against the finance company loans for interparty loans made by them to the Memelink interests and legal fees owed by the Memelink interests. The court rejected these arguments, noting that any offsets should be made as of the date of assignment of the finance company loans. The court further ruled that the defendants were not entitled to penalty interest on the assigned loans, as this was a matter to be determined in the receivership process.

The court calculated the total amount owing under the assigned loans as $2,387,536.13, which included interest accrued from the date of assignment. The defendants were held liable for this amount, subject to any final determination of the legal fees and other offsets in the receivership process. The court also noted that any application for costs should be made within a specified timeframe, covering not only the costs of the quantum hearing but also the costs of the counterclaim discontinuance.

Orders