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Regan v Brougham

Regan v Brougham

Case [2019] NZCA 401 2 September 2019

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA666/2017
[2019] NZCA 401

BETWEEN	CHRISTINE ANNA ELIZABETH REGAN AND MARK JEFFEREY TUFFIN Appellants
AND	BRYCE BROUGHAM First Respondent RACHAEL CHRISTINA DEY Second Respondent

Hearing:	25 July 2019
Court:	French, Collins and Wild JJ
Counsel:	F A King and M A Thomson for Appellants J K Mahuta-Coyle for First Respondent No appearance for Second Respondent
Judgment:	2 September 2019 at 11.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
BJudgment is entered for the appellants against the first respondent for $50,000 together with interest on that sum from the date of demand (5 October 2012) to the date of payment at the applicable rate(s) stipulated in the Term Loan Agreement.
CThe first respondent must indemnify the appellants for their reasonable costs of this appeal and of the application for leave to appeal.
DCosts in the District Court and High Court are reserved in terms of [36] of this judgment.

____________________________________________________________________

REASONS OF THE COURT

(Given by Wild J)

Introduction

This is a second appeal, by leave.[1] It is against a judgment of Simon France J delivered in the High Court at Wanganui on 24 May 2017.[2] The issue is whether the first respondent, Mr Brougham, guaranteed a loan. Agreeing with the judgment of Judge Ross in the District Court,[3] Simon France J held he had not.

Facts

[1]Regan v Brougham [2018] NZCA 157.

[2]Regan v Brougham [2017] NZHC 1091.

[3]Regan v Brougham [2016] NZDC 18553.

On 15 February 2010 the appellants entered into a Term Loan Agreement (the Agreement) whereby they lent $50,000 to B & R Enterprises Ltd (the Borrower). The Agreement was on the printed Auckland District Law Society form. The first page of the Agreement set out the parties to, and the guarantors of, the loan in the following way:

The second page of the Agreement contained the terms of the agreement to repay, essentially “You agree that … you will repay all amounts that you borrow from us …”. Conditions precedent to advance and the signatures of the parties and the guarantor followed in this format:
The first of those signatures is that of the second respondent, Ms Dey, as a director of the Borrower. The next two signatures are those of Mr Brougham. It is common ground that Mr Brougham’s first signature was in his capacity as the other director of the Borrower (although it is on the wrong signature line), and his second signature is as guarantor (and is on the correct signature line).
At trial in the District Court there was some disagreement in evidence between Ms Dey and Mr Brougham as to how Ms Dey came to be named in the Agreement as a guarantor, but did not sign as a guarantor. We deal with this in [15] and [16] below.
As might be expected, the later parts of the…

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 Regan v Brougham

Details

AGLC: Regan v Brougham [2019] NZCA 401
Case: [2019] NZCA 401
Decision Date: 2 September 2019 at 11.30 am

CaseChat Overview and Summary

The case of Regan v Brougham involved an appeal against a judgment of Simon France J delivered in the High Court at Wanganui on 24 May 2017. The primary issue was whether Bryce Brougham, the first respondent, had guaranteed a loan. The High Court had upheld the District Court's judgment that Mr Brougham had not guaranteed the loan. The Court of Appeal was tasked with determining whether the first respondent had indeed guaranteed the loan as claimed by the appellants.

The central legal question revolved around the enforceability of a guarantee contained within the Term Loan Agreement signed by Mr Brougham. The appellants argued that the agreement itself constituted an enforceable guarantee, while Mr Brougham contended that the agreement was insufficient as a guarantee and that a separate deed of guarantee was required. Additionally, it was argued that the agreement did not meet the statutory requirements for a written guarantee under the Property Law Act 2007.

The Court of Appeal held that the Term Loan Agreement did constitute an enforceable guarantee. The court rejected Mr Brougham's arguments that the agreement was insufficient as a guarantee, that a separate deed was necessary, and that it did not comply with statutory requirements. The court found that the agreement clearly identified the terms of the loan and the guarantor's obligations, and Mr Brougham had signed the document as a guarantor. The court emphasized that the law excludes prior negotiations and subjective intent from admissible evidence, focusing instead on the signed document's objective terms. The court concluded that the agreement provided all necessary details to constitute a guarantee enforceable against Mr Brougham.

The appeal was allowed, and judgment was entered for the appellants against Mr Brougham for the amount of the loan plus interest from the date of demand to the date of payment. Mr Brougham was ordered to indemnify the appellants for their reasonable costs of the appeal and the application for leave to appeal. Costs in the District Court and High Court were reserved for further determination.

Orders