Mortgage Holding Trust Company Limited v Mainwaring HC Hamilton CIV 2010-419-645

[2010] NZHC 1435

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV 2010-419-000645

UNDER  Part 12 of the High Court Rules

IN THE MATTER OF     an application for summary judgment

BETWEEN  MORTGAGE HOLDING TRUST COMPANY LIMITED

Plaintiff

ANDANNE GEORGINA MAINWARING Defendant

Hearing:         16 August 2010

Counsel:         AL Bowater for plaintiff

Judgment:      17 August 2010 at 11:00am

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application for summary judgment]

This judgment was delivered by me on 17 August 2010 at 11:00am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Simpson Grierson, Private Bag 92 518, Auckland

And To:             AG Mainwaring, 84 Alfred Street, Hamilton

MORTGAGE HOLDING TRUST CO LTD V MAINWARING HC HAM CIV 2010-419-000645  17 August

2010

The application

[1]      The plaintiff applies for summary judgment against the defendant.

[2]      There are five causes of action.  Four relate to personal borrowing under four separate  loan  agreements.    The  fifth  arises  from  the  defendant  entering  into  a contract  of  guarantee  in  respect  of  two  separate  loan  agreements  involving AJM Hedged Investments Ltd.

[3]      The plaintiff seeks the amount advanced less payment made, plus interest and costs.   It also seeks an order for possession in respect of the property which was provided as security for the loans.

First call of proceeding

[4]      The  application  was  called  on  19 July  2010.    Counsel  appeared  for  the plaintiff.  No appearance was entered on the defendant’s behalf.

[5]      I summarised the position as it appeared to me at that time in a minute.  The minute recorded the following:

1)       This application for summary judgment was called before me today.

2)The defendant was called and entered no appearance.   I was told, however, that parties known to her were seated in the court, no doubt keeping a watching brief.

3)I announced to counsel for the plaintiff that I was concerned about the affidavit in support of the application.  In a number of respects it does not match the paragraphs to which it makes reference in the statement of claim.   Counsel informed me that this was simply a typographical error and that the paragraph numbers were approximately one number out in each case.  The court relies on the accuracy of affidavits in support of summary judgment applications. Whilst amendments can be made, it is vital the evidential foundation for a summary judgment application is correct.  Accordingly, I order that the affidavit in support be re-executed so that the errors are removed.  The defendant has not appeared today, but may well be advised by those present of the order which I have made.   If she makes  application  to  the  plaintiff’s  solicitors  for  a  copy  of  the revised affidavit that must be made available to her forthwith.

4)Another matter that concerned me was that the first cause of action is in respect of a loan which advanced the sum of $5,000.   The plaintiff has realised one of the securities that are involved in the loan agreements and has debited the costs of the exercise against the loan which is the subject of the first cause of action.  The result is that a sum of some $38,978.43 is claimed in respect of the first cause of action.   In this respect counsel referred me to clause 2.9 of the loan agreement in respect of the first cause of action.

5)I invite counsel at the resumed hearing of this application to provide authority which justifies the inclusion of such a provision in the contract or, if no authority exists, by reference to the appropriate legislation indicating that a clause, such as clause 2.9, is not objectionable.     (Refer,  for  example,  to  Credit  Contracts  and Consumer Finance Act 2003.)

6)       Accordingly, I order as follows:

a.An  amended  affidavit  in  support  of  the  application  for summary judgment  shall be  filed  by 26 July 2010.    If  a request is made by the defendant for a copy of same, a true copy shall be provided to her forthwith;

b.The application for summary judgment is adjourned to the summary judgment list at 12 noon on 16 August 2010.   I expect counsel to cover the matters I have referred to in this minute at that time;

c.A copy of this minute is to be sent to the plaintiff’s counsel and posted by the Registrar to the defendant at 84 Alfred Street, Hamilton.

Amendments

[6]      Generally, there are three hurdles which an applicant for an amendment must meet before an amendment is granted, namely,

a)        that the amendment is in the interests of justice;

b)        that it will not significantly prejudice the defendant; and

c)        that it will not cause significant delay: Elders Pastoral Ltd v Marr.1

(1987) 2 PRNZ 383 at 385.

[7]      In  Cegami  Investments  Ltd  v  AMP  Financial  Corp  (NZ)  Ltd2   it  was confirmed that amendments to the proceedings were possible in the summary judgment procedure.

[8]      An amended affidavit by David Frank Rugen was filed.  Counsel confirmed, as did Ms Mainwaring, that a copy of the affidavit was forwarded to Ms Mainwaring on 26 July 2010.

[9]      The problems that I saw originally in the proof of this case have been cured. I can find no evidence of any prejudice to the defendant by my reading the amended affidavit in place of the original affidavit.   There is no question of any difficulty being caused by delay in the matter.   Indeed, the adjourned hearing has led to a situation where the defendant has, in fact, appeared.  I conclude therefore that it is appropriate that I read the amended affidavit of David Frank Rugen in support of the application for summary judgment.

Opposition

[10]   The Registry has received the following documents, apparently on the defendant’s behalf, namely:

a)        Document headed “Letter of courtesy and warning order”;

b)Unsworn affidavit of Walker F Todd which appears to relate to a proceeding in the Circuit Court for the County of Oakland and which has a date on it 5 December 2003;

c)        Document entitled “To the trial judge”; and

d)Document entitled “Rule of engagement notice of undertaking and intent and lawful claim of rights”.

[11]     On  16  August  2010  at  the  second  call  of  this  proceeding  I  allowed  a Mr McKay  to  speak  on  behalf  of  the  defendant.    The  defendant  was  present, however, throughout.   Mr McKay presented a further document which is headed “Statement to be read on the record”.

The courts approach to a summary judgment application

[12]     Rule 12.2 of the High Court Rules requires that a plaintiff satisfy the court that a defendant has no defence.   In Krukziener v Hanover Finance Ltd3  guidance was given as to how that position should be approached by the court when determining a summary judgment application.  The court said:

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: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). 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: MacLean v Stewart (1997) 11

PRNZ 66 (CA). 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: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). 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: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).

Ms Mainwaring’s documents

[13]     Ms Mainwaring’s documents do not disclose any legitimate defence to the plaintiff’s claim against her.   They do not comply with the relevant High Court Rules, namely rr 7.24 and 7.25 relating to an opposition.  They do not relate to the form and content required for affidavits, which is prescribed in r 9.76.  They do not provide for me any basis for a defence to the plaintiff’s claim.  Indeed, counsel for the plaintiff described them as nonsensical.

[14]     Out  of  an  abundance  of  caution  I  arranged  for  the  Registrar  to  show Ms Mainwaring copies of the loan documents and the contract of guarantee which are  annexed  to  the  amended  affidavit  of  David  Frank  Rugen.    Ms Mainwaring confirmed that a likeness to her signature was contained in the copy documents. There is nothing in the material before me to suggest that she had not signed the originals of the loan documents and the guarantee.

[15]     In my minute of 19 July 2010 I expressed concern relating to the amount claimed in the first cause of action when that was considered against the amount actually advanced under the first loan agreement.  Counsel had drawn attention to clause 2.9 of the terms and conditions applicable to the first loan agreement and to all of the other loan agreements exhibited.  That gave authority to charge the first loan agreement with any amount which is due and payable.

[16]     The evidence discloses that the first loan agreement account was used as the payment account in respect of the defendant’s other obligations to the plaintiff, including her obligations under the second, third and fourth loan agreements.  Each month the amounts owing under each of the four agreements were debited against the  first  loan  agreement  account.    I can  find  nothing  objectionable,  nor  was  it suggested on Ms Mainwaring’s account that there was anything objectionable, in the way loans were linked and payments were accounted for.   There is certainly no justification, on the material placed before me, to suggest that this clause, or the manner of handling payments, was oppressive.  Counsel, indeed, referred me to Tapp

v ASB Bank Ltd4  where payments were made through a current account.   What is

apparent in this case is that there is no foundation to suggest:

a)        the money was not advanced to the defendant;

b)        that she was not obliged to pay it back with interest; and

c)        that there has been any wrong charging of the defendant in respect of the moneys now claimed.

In short, I am satisfied that the plaintiff has met the required onus of proof as to both liability and quantum in respect of the amounts claimed by way of summary judgment.

[17]     Counsel  presented  a  helpful  memorandum  which  sets  out  the  amounts claimed  under  each  of  the  causes  of  action  with  the  appropriate  calculation  of interest.  For completeness sake, I set out paragraphs (a) to (e) of that memorandum.

A.    For first cause of action against the defendant

(a)    Amount claimed as per statement of claim  $38,978.43 (b)     Interest on the sum of $38,686.43 at the rate of 10.85%

per  annum  compounding  on  the  15th   day  of  every

month from 13 May 2010 to 16 August 2010  $1,114.96

Subtotal  $40,093.39

Interest continues to accrue on the sum of $38,686.43 at the rate of 10.85% per annum from 17 August 2010 until the date of actual payment

(c)    An order that the defendant and any other occupants at

84 Alfred Street, Hamilton, vacate this property and deliver up possession of the property to the plaintiff

B     For a second cause of action against the defendant

(a)    Amount claimed as per statement of claim  $42,604.34

(b)Interest on the sum of $42,420.78 at the rate of 10.85% per  annum  compounding  on  the  15th   day  of  every month from 13 May 2010 to 16 August 2010

$1,222.58

Subtotal  $43,826.92

Interest continues to accrue on the sum of $42.420.78 at the rate of 10.85% per annum from 17 August 2010 until the date of actual payment

C     For a third cause of action against the defendant

(a)    Amount claimed a per statement of claim  $99,507.75

(b)Interest on the sum of $99,079 at the rate of 10.85% per annum compounding on the 15th  day of every month from 13 May 2010 to 16 August 2010

$2,855.46

Subtotal  $102,363.21

Interest continues to accrue on the sum of $99,079.00 at the rate of 10.85% per annum from 17 August 2010 until the date of actual payment

D     For a fourth cause of action against the defendant

(a)    Amount claimed as per statement of claim  $113,530.98

(b)    Interest  on  the  sum  of  $110,000.00  at  the  rate  of

10.85% per annum compounding on the 15th  day of every month from 13 May 2010 to 16 August 2010

$2,595.85

Subtotal  $116,126.83

Interest continues to accrue on the sum of $110,000.00 at the rate of 10.85% per annum from 17 August 2010 until the date of actual payment

E     For a fifth cause of action against the defendant

(a)    Amount claimed as per statement of claim  $148,731.62

(b)    Interest  on  the  sum  of  $147,950.33  at  the  rate  of

10.85% per annum compounding on the 15th  day of every month from 13 May 2010 to 16 August 2010

$3,491.43

Subtotal  $152,223.05

Interest continues to accrue on the sum of $147,950.33 at the rate of 10.85% per annum from 17 August 2010 until the date of actual payment

I am satisfied that the amounts claimed in that memorandum are correct.

Order for possession

[18]     The statement of claim also seeks an order for possession of the property of which security was given.  The defendant gave mortgage securities in favour of the plaintiff in respect of two properties.  One has been sold.  Property Law Act notices were served on the defendant.  The evidence discloses attempts by the defendant to prevent the plaintiff from having access, for the purpose of exercising its right of mortgagee sale, to the property at 84 Alfred Street, Hamilton.  The mortgage gives the plaintiff the right to take possession of the property.

[19]     The plaintiff is entitled to rely on the Property Law Act 2007, s 137(1)(c). The relevant parts of the provision are:

137     Exercise of power to enter into possession

(1)       If a mortgagee becomes entitled under a mortgage, after compliance with subpart 5, to exercise a power to enter into possession of mortgaged land or goods, the mortgagee may exercise that power by—

…

(c)applying to a court for an order for possession of the land or goods.

[20]     I have already recorded that notices under the Property Law Act had been issued in this case.   The prayer for relief seeking an order for possession is accordingly justified.

Costs analysis

[21]     Counsel’s memorandum also set out a calculation of costs based on Category

2 Band B of the High Court Rules.  The calculation is as follows:

(a)Item 1 : Commencement of proceedings (3 days @ $1,880 per day)

$5,640.00

(b)Item 5.1 : Preparing and filing summary judgment application (0.6 days @ $1,880 per day)

$1,128.00

(c)      Item 4.17: Appearing at mention (0.2 days

@ $1,880 per day)

$376.00

(d)      Item 4.18: Sealing judgment (0.2 days @

$1,880 per day)

$376.00

Subtotal  $7,520.00

[22]     Counsel’s   memorandum   also   included   the   disbursements   which   were incurred which are as follows:

(a)         Filing statement of claim and interlocutory application for summary judgment

$1,100.00

(b)        Sealing fee  $40.00 (c)     Service fee             $101.25

Subtotal  $1,241.25

I am satisfied as to the correctness of that sum.

Judgment

[23]     Accordingly I enter judgment as follows:

a)        On the first cause of action, inclusive of interest to today, $40,093.39;

b)An order that the defendant and any other occupants at 84 Alfred Street, Hamilton vacate that property and deliver up possession to the plaintiff;

c)        On  the  second  cause  of  action,  inclusive  of  interest  to  today,

$43,826.92;

d)       On   the   third   cause  of  action,   inclusive   of   interest   to   today,

$$102,363.21;

e)        On  the  fourth  cause  of  action,  inclusive  of  interest  to  today,

$116,126.83; and

f)        On   the   fifth   cause   of   action,   inclusive   of   interest   to   today,

$152,223.05.

Costs

[24]     The  defendant  shall  pay  the  plaintiff’s  costs  of  $7,520.00  together  with disbursements of $1,241.25.

JA Faire

Associate Judge