Murray v Baxter - [2019] NZHC 2444

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV2019-404-000653

[2019] NZHC 2444

BETWEEN
EMMA MARY MURRAY, WAYNE

DEREK ANDERSON and FOUR S TRUST
LIMITED as trustees of the Four S Trust and CRAIG ROBERT WILLIAM BRYDON, DARELLE JANISE BRYDON and

JEFFREY HOLLIS STRATTON as trustees of the Craig and Daniella Brydon Family Trust and S.A.S. TRUSTEE COMPANY

LIMITED and TRUSTS LIMITED, all

former shareholders of JLE HOLDINGS LIMITED

Plaintiffs/Applicants

AND

ANTHONY CHANNON BAXTER

First Defendant/First Respondent

WILLY LEFERINK

Second Defendant/Second Respondent

Hearing: 19 August 2019

Appearances:

C A Murphy for Plaintiffs

D J Ballantyne for Defendants

Judgment

26 September 2019

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

Solicitors:
Powle & Hudson Limited, Auckland Canterbury Legal, Christchurch

MURRAY v BAXTER [2019] NZHC 2444 [26 September 2019]

Introduction

[1] The plaintiffs seek summary judgment against the defendants in the sum of USD 713,428.36 plus interest and costs. They say that the defendants are in breach of their obligations as guarantors under a contract, described as a “Variation of Agreement” (the Variation), requiring them to guarantee all the obligations of the purchasers of a company shareholding.

[2] The defendants say that they have a defence by way of set-off to the claim on the basis of a working capital adjustment (yet to be determined) that will likely affect the purchase price of the shares that is the subject of the guarantee.

[3] In determining the question of whether the plaintiff has established that the defendants have no defence, the critical issue for determination is whether the plaintiffs have established that the defendants cannot, as a matter of contractual interpretation, raise a set-off as a defence.

Relevant legal principles

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

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.

[5]The principles are summarised in Krukziener v Hanover Finance Ltd:1

[26] The principles are well settled. 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 (CA) at 3. 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

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 Murray v Baxter

Details

AGLC: Murray v Baxter [2019] NZHC 2444
Case: [2019] NZHC 2444
Decision Date: 26 September 2019

CaseChat Overview and Summary

The case of Murray v Baxter involved a dispute between the plaintiffs, who were former shareholders of JLE Holdings Limited, and the defendants, Anthony Channon Baxter and Willy Leferink, who were guarantors of a contract. The plaintiffs sought summary judgment against the defendants for USD 713,428.36 plus interest and costs, claiming that the defendants breached their obligations as guarantors under a contract. The defendants argued that they had a defence by way of set-off due to a working capital adjustment yet to be determined that would affect the purchase price of the shares that was the subject of the guarantee.

The court had to determine whether the plaintiffs had established that the defendants had no defence to the claim. The court held that the contractual provisions excluded a right of set-off and that the defendants could not raise a set-off defence as a matter of law. The court found that the defendants' obligations under the contract were strict and that they were required to guarantee the due performance by the buyer of all of its obligations without regard to the working capital adjustment. The court also held that it had a residual discretion under r 12.2 to refuse summary judgment to avoid oppression or injustice to the defendant, but that the threshold for granting a stay of execution or refusing summary judgment had not been made out in this case.

As a result, the court granted the plaintiffs' application for summary judgment and awarded them judgment against the defendants in the sum of USD 713,428.36, plus interest at the contractual rate of 15 per cent per annum from 1 March 2019 until the date of payment. The court also awarded costs to the plaintiffs on a solicitor/client basis, subject to the court's approval of those costs.

Orders