P v Westpac New Zealand Limited

[2013] NZHC 2585

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-000772 [2013] NZHC 2585

BETWEEN	P Appellant
AND	WESTPAC NEW ZEALAND LIMITED Respondent

Hearing:	26 September 2013
Appearances:	Appellant in person M L Dillon for Respondent
Judgment:	4 October 2013

JUDGMENT OF ELLIS J

This judgment was delivered by Justice Ellis on 4 October 2013 at 3.00 pm

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date………………………

P v WESTPAC NZ LTD [2013] NZHC 2585 [4 October 2013]

[1]      This decision related to P’s appeal from a decision of Judge Harvey in the

District Court relating to a credit card debt owed to the respondent, Westpac.

Name suppression

[2]      P has applied for name suppression essentially on medical grounds.  He has been granted suppression in other civil proceedings involving him and another company.  Although his application was opposed by Westpac, that opposition was largely based on perceived enforcement problems in the event that P’s appeal was unsuccessful. After seeking clarification on that point, however, it became clear that P does not seek to impede any enforcement action that may be taken and, in particular, any bankruptcy proceedings that may eventuate.  He accepts that his name would need to be published in such a context.

[3]      Accordingly, and on the basis of the medical information provided to me, I am prepared to grant suppression of P’s name in relation to this judgment.  To be quite clear, however, suppression does not extend to any subsequent enforcement action that may be taken by the bank.

History of the debt claim

[4]      Debt proceedings were initially commenced by the bank against P in 2006 in relation to:

(a)       a Visa Gold credit card account; (b)     a Mastercard credit card account; (c)      an Encore bank account; and

(d)      collection costs.

[5]      Judgment  was  entered  by  default  in  2007  and  bankruptcy  proceedings followed.   It seems that it was not until those (bankruptcy) proceedings were commenced that P became aware of the judgment against him.  He brought an application to set the default judgment aside on the grounds that the debt proceedings

had not been served upon him.  The bank consented to the setting aside, which occurred in 2009.

[6]      Following a defended hearing in 2011, P was found liable in relation to the Visa Gold and Encore accounts in the quantum claimed by Westpac.  Westpac did not, however, establish that the appellant was liable in relation to the Mastercard account or for collection costs.

[7]      P had also made an application to strike out the bank’s statement of claim, which was dismissed.

[8]      P appealed these decisions to the High Court where Peters J  upheld the decision in relation to the strike out application and the liability for the Visa Gold account.  However, she remitted two questions back to the District Court for a rehearing, namely:

(a)       the quantum of debt due on the Visa Gold account; and

(b)      liability for the Encore account.

[9]      In essence Peters J found that the bank had not established the Visa Gold quantum because it had produced no credit card statements prior to 2001, when a debt of $11,000 was stated to be owing.

[10]     In the rehearing in the District Court in 2013:

(a)       P conceded that he was liable on the Encore account.

(b)      P was found to owe the quantum claimed by Westpac on the Visa

Gold account.

[11]     Judgment was entered against him accordingly.

Establishing quantum

[12]     It is not in dispute that throughout the 1990s, P operated a Westpac Visa credit card account.  That account was upgraded to a Visa Gold account on or about

28 November 2000.

[13]     As I have indicated, the difficulty faced by Westpac in this proceeding, and the reason for the referral back to the District Court in 2012, was that it had been unable to locate all statements relating to the Visa Gold account.  There is thus no complete record, on a month by month basis, of how the final debt of nearly $20,000 was accrued.

[14]    Following the referral back, the bank did, however, locate and produce statements for the Visa Gold account from 9 November 1999 through to 8 November

2000.   The statements from 9 December 2001 through to 9 April 2006 when the account was closed had already been in evidence.  There remained, therefore, a gap of approximately one year in the bank’s records.

[15]     The last statement before the 2000/2001 gap recorded a $7,102.02 debt in relation to the account.  The first statement after the gap records a debt of $11,570. The statements then carry on after the gap for over four years through to April 2006 with a debt of $19,957.02 recorded at the time the account was closed.

[16]     P’s position at trial was that:

(a)      he “thinks” that he significantly reduced the amount of the debt during the period for which no records exist, meaning that the first statement after that period, and all subsequent statements, are wrong; and

(b)he raised a dispute with the bank about the amount of the debt during the four years following the gap.

[17]     He was, however, unable to give any specific of clear evidence about either of these things. Rather, he said that:

I struggle with fatigue, memory loss, and bouts of anxiety and distress …

Unfortunately,  a  consequence  of  my  illness  is  that  I’m  struggling  with details, or remembering previous events, or other matters relevant to my defence of these proceedings.  I’m finding it extremely difficult, because I’m struggling to recall details from many years ago.   I find it hard enough to recall details from months or weeks ago because of my illness.

[18]     Although P contends that the quantum claimed by Westpac is wrong and that the quantum of the debt should be less than that claimed by the bank, he was unable to give any alternative figure.

[19]     Westpac, of course, denies both that there were any additional reductions in debt and that P ever raised an issue with the bank about the amount owing at the time.

[20]     The District Court found that Westpac had proved the Visa Gold debt in the quantum claimed. This finding was based on:

(a)      The statements between 9 November 1999 to 8 November 2000 and then 9 December 2001 to 9 April 2006 which showed:

(i)       payments made out of that account; (ii) payments made into that account; and (iii)         a closing balance of $19,957.02.

(b)The absence of any record of P raising any dispute in relation to the balance of the account at any time.

(c)      Westpac’s  records of  telephone conversations with  P in  which he made promises to pay his indebtedness in full and in the quantum recorded by those statements.

(d)The fact that payments were made by P during the period in question to reduce his indebtedness without reference to the existence of any dispute over the outstanding balance.

[21]     Then, at [15] of his judgment Judge Harvey said:

[15]      Certainly at the first hearing it was quite clear that Mr P was in some considerable difficulties of a personal nature.   He was very unwell and he suffered a major breakdown.  Medical evidence was produced at the last hearing and one can have nothing but sympathy for the plight that he found himself in, but the fact of the matter is that he chose to operate and look after his own affairs even in the throes of this terribly debilitating condition from which he was suffering and it is quite clear that he obviously made some mistakes.

[22]     As  I  have  said,  the  Judge  held  that  the  debt  had  been  established, and awarded interest on the debt from the date of commencement of the proceedings.

The appeal

[23]     Necessarily, the only issue in this appeal is the quantum of P’s indebtedness under the Visa Gold account.  He accepts that he owes a debt in some amount in relation to that account.

[24]     As I understood it, the essential grounds for his appeal are that:

(a)      The bank was unable to establish the quantum of its claim because it could not provide the statements or the computer profile screens for the “gap” year.

(b)The Court should not have allowed Westpac’s claim to proceed when its witness “acknowledged that the bank had failed or neglected to provide” all the computer profile screens, when they had earlier told the Court they had provided these.

(c)      P did not receive Visa Gold standard terms and conditions which required  that  any  dispute  be  raised  in  writing  and  that  he  was permitted to, and did, raise a dispute orally.

(d)The learned District Court Judge erred when he awarded interest on the claims from the time they were filed in 2006.

[25]     Unfortunately, I do not consider that any of these matters have merit.

[26]     As to the first matter, P said in his notice of appeal that “there was no credible evidence supporting the view that [P] had never made any objections to the charges and costs”.  But it seems to me that this contention seeks to reverse the onus that was in fact on P.  Once the quantum of the debt claimed had been prima facie established by the bank statements and the evidence about the bank’s systems, the burden was on P to show that that amount was not owing.  As I have noted, P did not have some alternative figure.  The upshot of his evidence simply was that the debt “seemed” to be too high.

[27]    Accordingly, and in the absence of even vaguely concrete evidence to the contrary, it seems to me that there was more than an adequate basis upon which the learned District Court Judge could find that the quantum of the debt had been established. I have already set out his reasoning in that respect above.

[28]     As to the second matter, I have read the relevant parts of the transcript.   It does not bear out P’s contention.  More specifically, Westpac’s witness did not acknowledge that the bank had “failed or neglected” to provide all the computer profile screens.   Nor had Westpac earlier told the Court they had provided all of them. The witness (and Westpac) simply acknowledged that the screens were unable to be retrieved and could not therefore be made available.

[29]     Nor, in my view, is there anything in the third ground.   First, I agree with Judge Harvey that it seems highly improbable that P did not receive the written terms and conditions, which included the requirement that disputes be notified in writing. But even if he did not, P’s evidence about raising a dispute with the bank orally was far from compelling; it was equivocal at best.  He was unable to be specific about dates (even within a year) or circumstances.  Moreover, the bank has no record of P raising such a dispute and, as Judge Harvey noted, the reality is that P continued to make payments on the card without apparent demur.   There is no sufficient basis upon  which  I  could  conclude that  such  a  dispute was  ever  raised.    Nor  am  I persuaded that any helpful legal consequences would follow had I come to a contrary view.

[30]     As to the last point, P’s point was that interest should not run until after the default judgment was set aside.  But I can see no rational basis for that submission. The only reason the judgment was set aside was because P had not been given the opportunity to defend the claim at the time it was entered.  The claim itself was not struck out.  The learned District Court Judge’s interest award cannot, in my view, be criticised.

[31]     In the end, like the learned District Court Judge, I have nothing but sympathy for P.  He plainly incurred significant credit card debts to Westpac at a time when he was very unwell and his decision-making was impaired.   But unfortunately compassion cannot found a defence to a debt claim.  Any exercise of any discretion in that respect is a matter for the bank.

[32]     The appeal is dismissed accordingly.

[33]     The bank is entitled to its costs on this appeal on a 2B basis.   I decline to revisit the issue of costs on P’s previous appeal.  The matter was referred back to the District Court because of the bank’s inability to prove quantum and deficiencies in its record keeping.  In my view Peters J did not intend her decision on costs to be

contingent or provisional.

Rebecca Ellis J