Sgargetta v Borrie - [2025] NZHC 2476

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2025-425-029

[2025] NZHC 2476

BETWEEN
ELLIOT SGARGETTA

Plaintiff

AND

LINDSAY JAMES BORRIE

Defendant

Hearing: 25 August 2025

Appearances:

P W Michalik for Plaintiff

M A Cavanaugh and S O Alomar for Defendant

Judgment:

29 August 2025

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 29 August 2025 at 11.45 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

SGARGETTA v BORRIE [2025] NZHC 2476 [29 August 2025]

[1] The plaintiff (Mr Sgargetta) guaranteed loan facilities made available by ASB Bank Ltd (ASB) to Sleep Overs Ltd (Sleep Overs) in respect to which the defendant (Mr Borrie) is said to have provided registered valuations of two properties used as security for the loans (the APL Property Queenstown Ltd (APL) valuations).

[2] Mr Sgargetta says the APL valuations were negligently prepared and overstated the market values of the properties. Sleep Overs defaulted under the loan facilities, the properties were sold by receivers appointed by ASB, and in subsequent court proceedings Mr Sgargetta has been held liable for the unrecovered loan balances.1

[3] Mr Sgargetta sues Mr Borrie on the basis that had the APL valuations been accurate Sleep Overs would not have increased its borrowings beyond a reasonable margin of security in the properties and his guarantee would not have been called upon. It is pleaded that:

… when the properties had to be sold to repay the borrowings, [Sleep Overs] Limited was unable to repay, causing the plaintiff as guarantor of the [Sleep Overs] Limited borrowing to suffer loss.

[4] Mr Borrie applies for summary judgment on the ground that Mr Sgargetta’s claim is time-barred.2 He says this follows from a straightforward application of the Court of Appeal’s decision in Rea v Auckland Council.3 Mr Sgargetta contends the claim is not time-barred.

[5] The primary issue upon which this application turns is when Mr Sgargetta had knowledge, or ought reasonably to have gained knowledge, of the fact that he had suffered damage or loss for the purposes of s 14(1)(c) of the Limitation Act 2010.

1      ASB Bank Ltd v Sgargetta [2017] NZHC 3097 [High Court judgment]; ASB Bank Ltd v Sgargetta [2018] NZHC 2066 [interest and costs judgment]; and Sgargetta v ASB Bank Ltd [2021] NZCA 459 [Court of Appeal judgment].
2      Limitation Act 2010, ss 11, 12 and 14.
3      Rea v Auckland Council [2024] NZCA 313, [2024] 3 NZLR 242. Leave to appeal to the Supreme Court was refused in Rea v Auckland Council [2024] NZSC 148.

A preliminary issue

[6] Mr Michalik filed a memorandum following the hearing seeking leave to file a further affidavit to clarify the date Mr Sgargetta filed a statement of claim in proceedings he issued against ASB. I convened a telephone conference with counsel and advised them that such clarification would not alter my decision and I would not rely on the date…

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 Sgargetta v Borrie

Details

AGLC: Sgargetta v Borrie [2025] NZHC 2476
Case: [2025] NZHC 2476
Decision Date: 29 August 2025

CaseChat Overview and Summary

The plaintiff, Elliot Sgargetta, initiated proceedings against Lindsay Borrie, a registered valuer, for allegedly negligently overvaluing two properties that were used as security for loans provided to Sleep Overs Ltd by ASB Bank Ltd. Sgargetta claims that had the valuations been accurate, Sleep Overs would not have extended its borrowings beyond a reasonable margin of security, and consequently, Sgargetta's guarantee would not have been called upon. Borrie argues that the claim is time-barred under the Limitation Act 2010. The primary issue before the Court was whether Sgargetta had knowledge, or ought reasonably to have gained knowledge, of the fact that he had suffered damage or loss for the purposes of section 14(1)(c) of the Limitation Act 2010. Sgargetta argued that he only became aware of the overvaluation in September 2024, while Borrie contended that Sgargetta had knowledge much earlier. The Court found that Sgargetta had knowledge that he had suffered damage or loss at least by the time the High Court entered summary judgment against him on 13 December 2017. Consequently, the claim in respect of the Remarkables Lodge valuation was time-barred as it should have been filed by 13 December 2020, and the claim in respect of the Evergreen Lodge valuation was time-barred as it should have been filed by 1 July 2021. As Sgargetta did not commence this proceeding until 7 March 2025, the claims are time-barred. The Court enters summary judgment in favour of Borrie and dismisses Sgargetta's claim. Costs are reserved.

Orders