PFNZ Limited v Burns

[2023] NZHC 2645

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTEPOTI ROHE

CIV-2023-412-63

[2023] NZHC 2645

IN THE MATTER

of a breach of contract and liquidated demand

BETWEEN

PFNZ LIMITED

Plaintiff

AND

MALCOLM BURNS

First Defendant

JOANNE BURNS
Second Defendant

LEONARD CHENG

Third Defendant

Hearing:

21 September 2023 (by AVL)

Appearances:

G K Riach and B I Hood for Plaintiff

M Burns for Second Defendant and for himself in-person as First Defendant

No attendance for Third Defendant

Judgment:

21 September 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(application for summary judgment)

PFNZ LIMITED v BURNS [2023] NZHC 2645 [21 September 2023]

[1]    PFNZ Limited’s application for summary judgment against the defendants was heard in the Dunedin High Court on the morning of 21 September 2023. Mr Malcolm Burns appeared for himself and also wished to explain the position of the second defendant, his wife. Mr Burns made it clear he was not speaking on behalf of the third defendant, who was unrepresented.

[2]    No papers in opposition to the application for summary judgment had been filed.

[3]    Mr Burns did not suggest that the defendants were not liable for the amounts claimed by the plaintiff. He explained he had been attempting to restructure his business activities and was hopeful that a new investor would provide funds to clear the plaintiff’s debt. Mr Burns explained those funds would hopefully be to hand by 10 December 2023, assuming the new investor came on board. He sought that the case be deferred to allow time for the investor’s funds to become available.

[4]    Mr Riach, counsel for the plaintiff, acknowledged there had been discussions between his client and Mr Burns as to a possible resolution, but he explained his instructions were to seek judgment. I explained to Mr Burns that the entry of judgment and its enforcement are two different matters. Mr Riach understood there may have been discussions that the judgments would not be enforced.

[5]    Given no papers in opposition have been filed, and indeed, Mr Burns did not dispute the debts, I explained to him that the plaintiff was entitled to request the entry of judgment.

[6]    The one caveat to that position is that the liability of the second defendant is subject to a limitation as follows:

LIMITATIONS OF GUARANTEE:

[insert details if there is a limit either by amount or proportion of the total guaranteed obligations/guaranteed indebtedness]

the Guarantor’s liability is limited to the net equity of the Guarantor in the freehold property at [property address removed], Dunedin being all the land comprised in Record of Title [Title reference removed] after payment of prior secured creditors, usual apportionments and sale costs.

[7]    I did not consider the plaintiff could seek judgment for a sum that did not reflect the limitation.  Mr Riach submitted that the limitation could be construed as   a limitation on enforcement rather than on the entry of judgment, but I do not accept that I can enter judgment for a sum greater than the amount the second defendant may actually be liable for.

[8]    Accordingly, there is judgment against the first and third defendants in terms of paragraphs 11 to 17 of Mr Riach’s memorandum of 20 September 2023.

[9]    As to the second defendant, there is judgment against her for the heads of claim set out at paragraphs 11 to 17 of Mr Riach’s memorandum of 20 September 2023 as to liability only.

[10]   The second defendant’s liability is limited  to  the  net  equity  she  has  in  the freehold property referred to in her guarantee.

[11]   Leave is reserved to the plaintiff to seek to have quantum in respect of the second defendant fixed.

[12]   Until the plaintiff is in a position to quantify the second defendant’s liability, this proceeding is essentially on hold. Mr Riach is to advise whether the proceeding should be stayed, subject to the leave reserved.

Associate Judge Lester

Solicitors:
Harmans, Christchurch (for Plaintiff)

Copy to counsel:
G Riach, Barrister, Christchurch (for Plaintiff)