Secure Funding Limited v Va'ai

[2013] NZHC 449

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2012-485-2450 [2013] NZHC 449

UNDER  the Property Law Act 2007

BETWEEN  SECURE FUNDING LIMITED Plaintiff

ANDCAROLINE VA'AI AND TALOSAGA VA'AI

Defendants

Hearing:         8 March 2013

(Heard at Wellington)

Counsel:         T. Cochrane - Counsel for Plaintiff

Judgment:      8 March 2013

ORAL JUDGMENT OF ASSOCIATE JUDGE D.I. GENDALL

Solicitors:           Lowndes & Associates, Barristers & Solicitors, PO Box 7311, Auckland 1141

SECURE FUNDING LIMITED V C VA'AI AND T VA'AI HC WN CIV-2012-485-2450 [8 March 2013]

Introduction

[1]      Before the Court is an application by the plaintiff seeking orders for summary judgment against the defendants.

[2]      There is no opposition to the summary judgment application nor statement of

defence filed by the defendants to the plaintiff’s claim against them.

Background Facts

[3]      Around 10 February 2005 the plaintiff as lender advanced to the defendants the sum of $162,000.00 pursuant to a mortgage loan agreement.   The loan was secured by mortgage to the plaintiff over the defendants jointly owned property at 53

Beauzami Crescent, Ascot Park, Wellington being certificate of title WN38D/517 (Wellington Registry) (the property).   The mortgage was recorded in a Mortgage Instrument dated 21 December 2004 and registered as Mortgage No. 6307869.4.

[4]      Around 27 November 2007 the plaintiff and the defendants entered into a second mortgage loan agreement for the purpose of refinancing the original property loan.

[5]      On 29 November 2007 the plaintiff advanced to the defendants $240,000.00 pursuant to the terms of the second loan agreement.

[6]      Default has occurred with respect to these loan agreements.  As I understand it the plaintiff has been in default since December 2011.  This default has not been remedied despite notices under s 119 Property Law Act 2007 being duly served by the plaintiff on the defendants on 12 and 17 November 2011 respectively.

[7]      Given the defaults all, amounts under the second loan agreement became due and owing around 18 December 2011.   That default continues and the plaintiff became entitled to possession of, and to seek an order for sale of, the property.

[8]      In the plaintiff’s statement of claim, it is pleaded that as at 7 September 2012 the defendants are indebted to the plaintiff in the sum of $273,451.17 representing

the  loan  balance  pursuant  to  the  second  loan  agreement  of  $272,044.09  and

$1,407.08 being costs and interests.

[9]      Despite demand having been made, the defendants have failed to pay and continue to fail to pay any of the amounts due and outstanding.

[10]     The plaintiff now seeks by way of summary judgment the following:

(a)      An order that the defendants vacate and deliver up possession of the property.

(b)       Judgment for the sum of $273,451.17 noted above.

(c)      Interest  on  the  judgment  sum  at  the  default  rate  under  the  loan agreements of 15.10% per annum from 7 September 2012 to the date of judgment and a continuation of this interest up to the final date of payment.

(d)      Costs on an indemnity basis.

Counsels’ Arguments

[11]     The present summary judgment application is brought pursuant to r 12.2

High Court Rules.  This provides that 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 as specified in the plaintiff’s statement of claim.

[12]     The longstanding authority with respect to r 12.2  Pemberton v Chappell [1987] 1 NZLR 1 notes that the onus of proof on a summary judgment application rests with the plaintiff to show there is no defence. The circumstances, however, may cause the evidentiary onus to shift to the defendant. Overall, the Court needs to be satisfied there is no defence, or in other words that the plaintiff ’s case is unanswerable. The Court is not to reach that conclusion if it can see an arguable defence. A plaintiff however will succeed in discharging the onus upon it where the only possible defences are fanciful or are not bonafide.

[13]     In the present case, the proceedings and the summary judgment application were served upon the first-named defendant on 4 February 2013 and on the second- named defendant on 13 February 2013.  A proper affidavit of service is before the Court.

[14]     It is now 8 March 2013.  The provisions of r 12.7 requiring service of the proceeding not less than 15 working days before the allocated hearing date are met here.

[15]     Rule 12.9 High Court Rules states that any party who intends to oppose an application for summary judgment must, at least three working days before the allocated date for hearing the application, file and serve a Notice of Opposition and an affidavit in support.

[16]     As noted above, no Notice of Opposition or affidavit in support has been filed on behalf of either of the defendants.

[17]     Effectively therefore no defence to this proceeding has been identified in any way.

[18]     One additional matter has occurred here however, which must be mentioned. This occurred I am told around the middle of the day, yesterday 7 March 2013 when counsel  for  the  plaintiffs  received  from  Macalister  Mazengarb  solicitors  in Wellington a fax regarding this matter.   That fax advised that the second-named defendant, Talosaga Va’ai (Mr Va’ai), attended the offices of Macalister Mazengarb that day, 7 March 2013 together with documentation relating to the plaintiff’s present claim.

[19]     The Macalister Mazengarb letter claims that for some unexplained reason the Notice of Interlocutory Application for summary judgment which had been served on Mr Va’ai provided for a hearing date of 8 April 2013.  By way of contrast, the Notice  of  Interlocutory Application  for  Summary Judgment  served  on  the  first- named defendant Mrs Va’ai provided for a hearing date of 4 March 2013.

[20]     In addition, however, Macalister Mazengarb did note that Mr and Mrs Va’ai had received a letter from counsel for the plaintiff sent earlier this week indicating that a new date of hearing of this matter had been scheduled for today, 8 March

2013.   This occurred when this matter was last called before me in the List on

Monday, 4 March 2013.

[21]     The Macalister Mazengarb 7 March 2013 letter goes on to state:

We fail to see how an order can be made against both parties for vacant possession and payment of the amount outstanding when the property is owned as joint tenants and there are three different dates for such an order to be made by the Court.

On this basis we seek an adjournment of any order to be made to the date stated in Mr Va’ai’s Notice to 8 April 2013.  We also ask that consideration be given to any further extension you will be prepared to grant past this date to allow time for research to be done into how (if at all) this matter can be rectified without going to a mortgagee sale.

Our clients are genuinely interested in trying to resolve this matter without the need for a mortgagee sale and we will be instructing the mortgage broker once you can confirm that an extension is available.

An urgent response would be appreciated.

[22]     As I have noted above, this letter from Macalister Mazengarb was addressed and sent to counsel for the plaintiff.  No communication of any kind has been made by or on behalf of Mr and Mrs Va’ai with the Court.  Nor as I have noted above is there any appearance before the Court today on behalf of Mr and Mrs Va’ai.  Instead, Mr Cochrane for the plaintiff, properly in my view, put to the Court a request I understand  he  had  received  from  Macalister  Mazengarb  that  the  Court  might consider an adjournment of the application today to a hearing on 8 April 2013.  Mr Cochrane, who I repeat was acting solely as counsel for the plaintiff, went on to note that the plaintiff opposes any further adjournment of this matter and wishes the Court to dispose of the unopposed summary judgment application today.

[23]     Again I note that there is no appearance before me by or on behalf of the defendants Mr and Mrs Va’ai today.  The only material the Court has before it on behalf of the defendants is a copy of the 7  March 2013 letter from  Macalister Mazengarb to counsel for the plaintiff.  That letter does not in any way indicate the basis upon which Mr and Mrs Va’ai may have a defence to the plaintiff’s claim against them, nor any substantive grounds upon which they might oppose the present summary judgment application.

[24]     Indeed,  the  letter  from  Macalister  Mazengarb  appears  to  be  written essentially on behalf of Mr Va’ai who claims that, as the original summary judgment application served on him it is said provided for a date of hearing of 8 April 2013, all matters should be deferred to that time.  This is despite the fact that, from all the evidence which is before the Court, Mr and Mrs Va’ai continue to live together at the property and Mrs Va’ai at least has been well aware throughout that the summary judgment application was to be heard on 4 March 2013 and this was adjourned to today, 8 March 2013.

[25]     In  addition,  Mr  Va’ai  was  clearly  aware  from  the  advice  received  from counsel for the plaintiff that this hearing was to take place today 8 March 2013. Material before the Court shows that this advice was provided by a process server on Wednesday, 6 March 2013.

[26]     From  the  7  March  2013  letter  from  Macalister  Mazengarb  noted  above however, it is difficult to escape the conclusion that Mr Va’ai simply seeks some further  time  “to  resolve  this  matter”,  without  the  need  for  a  mortgagee  sale. Macalister Mazengarb advise they will be instructing a mortgage broker if it can be confirmed that “an extension of time is available.”

My Decision

[27]     From all the matters noted above it will be clear that, in so far as Mr Va’ai alone is concerned, an error may have occurred in the provision of a nominated hearing date of 8 April 2013 on the Notice of Interlocutory Application for Summary Judgment served on him on 13 February 2013.  This differed however from the 4

March 2013 hearing date specified on the Notice of Interlocutory Application for

Summary Judgment served on his co-defendant and wife Mrs Va’ai on 4 February

2013.

[28]   Although this could be seen as a purely technical error in this matter, nevertheless on its face Mr Va’ai might argue as I see it that in terms of r 12.9 High Court Rules he has a period of up to 3 working days before the nominated date for

hearing the application (he says being 8 April 2013) to file and serve a Notice of

Opposition to the application and an affidavit in support.

[29]     In my view however, although this technical argument might be open to Mr Va’ai on the basis of what appears to be a clear error earlier in the documentation, his argument and the fact that no purported defence of any merit has been advanced by him must mean as I see it that the interests of justice require the present summary judgment application to be disposed of now.

[30]     I reach this conclusion on the basis that no argument has been raised to counter the suggestion that his co-defendant wife Mrs Va’ai, the joint owner of the property and person with whom he co-habits, has been well aware throughout of the

4 March and 8 March 2013 hearing dates for this matter.  And, Mr Va’ai himself acknowledges that he has been aware of today’s hearing date, 8 March 2013 for at least the last two days.

[31]     In addition, no grounds of defence or opposition to the summary judgment application have been put forward in any way.  Instead, as I note at para [26] above it seems from the 7 March 2013 letter from Macalister Mazengarb, that the defendant Mr Va’ai simply seeks some time presumably to endeavour to refinance the debt in question.

[32]     At  this  point,  I note  the provisions  of  r  1.2  High  Court  Rules,  that  the objective of the rules is to secure the just, speedy and inexpensive determination of any proceeding or any interlocutory application.  Bearing this in mind and both the High Court’s inherent jurisdiction and what I see as the overall interests of justice in this  case,  it  is  my view  that  the  present  summary judgment  application  should succeed, but on the basis that the order I am about to make with respect to possession of the property is delayed for a short period, to allow the defendants the opportunity to carry out an urgent refinancing of their debt, if this is indeed a real possibility.

[33]     That  said,  I conclude here that,  given  what  is  effectively no  substantive

response of any kind by the defendants to the plaintiff’s claim, the plaintiff has

satisfied the r 12.2 onus upon it to show that the defendants have no defence to the claim outlined in their statement of claim.

[34]     Accordingly,  summary  judgment  is  now  granted  to  the  plaintiff  on  its application against the defendants Caroline Va’ai and Talosaga Va’ai, and orders are now made as follows:

(a)      An order by way of  summary judgment  for the outstanding debt claimed in the plaintiff’s statement of claim of $273,451.17 is now made.

(b)Interest on the judgment sum is now awarded at the rate of 15.10% p.a.,   being   the   default   interest   rate   under   the   mortgage   loan agreement, from 7 September 2012 to 8 March 2013.

(c)      Interest on this judgment sum is to continue at the rate of 15.10% per annum from 8 March 2013 to the date of final payment, in terms of the default provisions in the loan documentation.

(d)An order is now made that the defendants are to vacate and deliver up vacant  possession  of  the  property  contained   and  described  in certificate of title WN38D/517 (Wellington) by 1.00 pm on Friday, 22

March 2013.

[35]     As to costs, the plaintiff seeks costs on this proceeding on an indemnity solicitor and client basis.  It is presumed this is pursuant to default provisions in the Loan Agreement.

[36]     Costs however at this point are reserved, given that there is no affidavit evidence before me as to the level of costs claimed by the plaintiff.  If the parties are unable to agree on the issue of costs, then counsel may file memoranda on costs on a sequential basis which are to be referred to me, and in the absence of either party indicating they wish to be heard on the matter, I will decide the question of costs based on the material which is before the Court.

Postscript

[37]     The reason for delaying the order for possession I have made against the defendants is simply to provide them, as requested in the 7 March 2013 letter from Macalister Mazengarb, with an opportunity to endeavour to refinance this debt.  A period of some two weeks has been allowed for this to occur.  Certainly in my view, if there is any real possibility of a full refinancing occurring to clear the plaintiff’s debt, this will become apparent within that period of time.

‘Associate Judge D.I. Gendall’