Sgargetta v Borrie
[2025] NZHC 2476
•29 August 2025
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 of the statement of claim in these reasons. Accordingly, I do not grant leave to file further evidence.
Background
[7] There has been a lengthy history of litigation between Mr Sgargetta and ASB going back to 2017 which provides the background to this claim. The facts are contained in judgments of this Court and the Court of Appeal and counsel’s submissions, upon which I have drawn in what follows below.
[8] Mr Sgargetta was a director of Sleep Overs and two associated companies, Evergreen Lodge Ltd (Evergreen) and Remarkables Lodge Ltd (Remarkables). In 2014 ASB entered into three facility agreements as follows:
(a)an agreement of 21 February 2014 by which ASB made a commercial loan of $1,641,250 to Sleep Overs as borrower, with Evergreen and Mr Sgargetta as guarantors;
(b)an agreement of 17 October 2014 by which ASB made a commercial loan of $1,761,375 to Sleep Overs as borrower, with Evergreen,
Mr Sgargetta and Remarkables as guarantors; and
(c)on 6 June 2014 an overdraft facility of $50,000 to Evergreen as borrower, with Mr Sgargetta and Sleep Overs as guarantors.
[9] The facilities were secured by registered mortgages over properties in Queenstown at Evergreen Road (Evergreen Lodge) and Kingston Road (Remarkables Lodge). Mr Sgargetta, Sleep Overs, Evergreen and Remarkables gave cross- guarantees and indemnities to ASB, with each party guaranteeing to ASB the due and
punctual performance of all payment and performance obligations of each of them to ASB.
[10] On 7 October 2014, Mr Borrie, who was employed by APL, provided ASB with a valuation of Remarkables Lodge at a market value of $2.8 million plus GST (if any). Mr Sgargetta says in reliance upon the valuation Sleep Overs extended its loan from ASB secured against Remarkables Lodge.
[11] On 1 July 2015, Mr Borrie provided ASB with a valuation of Evergreen Lodge at a market value of $2.75 million plus GST (if any). Mr Sgargetta says in reliance upon that valuation Sleep Overs extended its loan from ASB secured against Evergreen Lodge and took out the overdraft facility.
[12] There were defaults by Sleep Overs under the facility agreements. In August 2015 notice of the defaults was given to Mr Sgargetta, as a guarantor, and to the other parties with liability.
[13] On 8 September 2015, Sleep Overs appointed a real estate agent to market Evergreen Lodge and Remarkables Lodge but was not able to achieve a sale.
[14] On 21 September 2015, ASB served default notices under the Property Law Act 2007 on Mr Sgargetta and other necessary parties which expired unremedied. ASB obtained marketing appraisals and instructed a real estate agent to market and sell both Evergreen Lodge and Remarkables Lodge.
[15] On 4 February 2016, ASB appointed receivers of Sleep Overs, Evergreen and Remarkables. Further Property Law Act Notices were served by the receivers, including on Mr Sgargetta. These were unremedied.
[16] On or about 22 April 2016, the receivers sold Evergreen Lodge and Remarkables Lodge. The net proceeds paid to ASB was $3.34 million. The shortfall to ASB, at 15 June 2016, was $590,934. The sale prices achieved were below the APL valuations but aligned with valuations ASB had obtained from Jarvis Valuation & Advisory (Jarvis).
[17] Sleep Overs, Evergreen and Remarkables were put into liquidation by the High Court on the application of the receivers on 15 September 2016.
[18] On 19 October 2016, ASB made demand on Mr Sgargetta, as a guarantor, for payment of the balance outstanding together with interest. No payment was made.
[19] ASB issued High Court proceedings and sought summary judgment against Mr Sgargetta for the unpaid balances under the loan facilities. Mr Sgargetta resisted summary judgment, including on the basis that Evergreen Lodge and Remarkables Lodge were sold at undervalue.
[20] On 13 December 2017, Woodhouse J entered summary judgment against Mr Sgargetta.4 In relation to Mr Sgargetta’s defence that the sales were at undervalue, the Judge recorded:
[26] Mr Sgargetta contends that ASB is liable for the sale of Evergreen Lodge and Remarkables Lodge at prices which were 30 per cent below valuations provided to ASB for the purpose of the loan agreements and 47 per cent below market value in April 2016 when the properties were sold following receivership. ...
[21] Woodhouse J held that ASB could not be liable in damages for sales at less than the market price as the properties were sold by receivers, not by ASB, and as a matter of law the acts of the receivers were not attributable to ASB.5 Mr Sgargetta was later ordered to pay ASB interest to judgment and full costs on a solicitor-client basis (less GST).6
[22] Mr Sgargetta appealed to the Court of Appeal. On 10 September 2021, the Court of Appeal dismissed Mr Sgargetta’s appeal.7 Although Mr Sgargetta represented himself in the High Court, before the Court of Appeal he was represented by counsel. Notably, the Court of Appeal considered Mr Sgargetta’s argument that Evergreen Lodge and Remarkables Lodge were sold at undervalue and said:
[57] … The actual sales prices achieved were $1.85 million for the Remarkables lodge and $1.93 million for the Evergreen lodge. Both included
4 High Court judgment, above n 1.
5 At [48].
6 Interest and costs judgment, above n 1.
7 Court of Appeal judgment, above n 1.
chattels. The valuations undertaken by Mr Jarvis in November 2015 for the Remarkables and Evergreen lodges were $1.85 million and $2 million (both including chattels), respectively, and the forced sales values were
$1.58 million and $1.78 million (both excluding chattels), respectively. Importantly, the actual sales prices were in the vicinity of the valuations and exceeded the forced sales values.
[58] The sales prices achieved were also very close to the anticipated offers of $2 million for each property, which Mr Lethbridge said were ready to be made on 10 March 2016, and the offer of $2.16 million for the Evergreen lodge received by Ray White in July 2015. That evidence suggests that the prices obtained were true market values for the properties at the time.
[59] Evidence from late 2015 and 2016 is a better comparator than valuations obtained from 2013 and 2014, which were not proximate to the sales date. …8
[23] Mr Sgargetta then issued proceedings against ASB and Sleep Overs’ receivers in the High Court, including for the sale of Evergreen Lodge and Remarkables Lodge at undervalue. ASB sought to strike out the claims against it. Associate Judge Gardiner granted that application, noting:9
[54] Mr Sgargetta submits that his claim … is new and was not decided by the Court of Appeal. He emphasises that the Jarvis valuations were remarkably different from other valuations, focusing particularly on the APL valuation of Evergreen in July 2015 for $2.75 million. He acknowledges that the Jarvis valuations were in evidence and were considered by the Court of Appeal but says that he did not rely on them in this way. …
…
[56] The Jarvis valuations were in evidence in the summary judgment proceeding and were referred to by the Court of Appeal. The APL valuations particularised in his statement of claim were prepared by Sleep Overs and were also in evidence. Mr Sgargetta cannot say that he was unaware of the discrepancy between the Jarvis valuations and the APL valuations when he advanced his appeal.
[24] Associate Judge Gardiner also referred to the Court of Appeal’s judgment and its consideration of the valuation evidence as follows:10
[62] In any case, the Court of Appeal made a factual finding that there was no evidence that the Secured Properties were sold for less than market value. The Court of Appeal considered the actual sales prices achieved against the valuations undertaken by Jarvis, the anticipated offers of $2 million for each property which Mr Lethbridge said were ready to be made in March 2016, and
8 The valuations included the APL valuations.
9 Sgargetta v ASB Bank Ltd [2023] NZHC 2413 [strike out judgment] (footnotes omitted).
10 (footnotes omitted).
the offer of $2.16 million for Evergreen Lodge received by Ray White in July 2015. The Court also explicitly considered the fact that each lodge sold for
$2.7 million on 19 October 2017. It considered the APL valuations obtained in 2013 and 2014 which Mr Sgargetta particularises in his present statement of claim. It was explicit that it did not consider these to be a good comparator. The Court of Appeal did not explicitly refer to the APL valuation of July 2015 for $2.75 million, but this valuation was in the evidence. Based on all the evidence before it, the Court of Appeal decided that the claim that the properties were sold for less than market value was untenable. This issue is decided, and Mr Sgargetta is estopped from contending to the contrary in any court proceeding.
[25] I understand Mr Sgargetta filed an appeal from Associate Judge Gardiner’s decision and that appeal is yet to be heard.
[26] In around November 2023, Mr Sgargetta instructed new counsel. Mr Sgargetta says it was at this stage he started to consider whether the APL valuations may have overvalued the properties. He says by September 2024 expert advice was received which identified that the APL valuations “had gone wrong, rather than the Jarvis set”. This proceeding was filed on 7 March 2025.
Summary judgment principles
[27]Rule 12.2(2) of the High Court Rules 2016 reads as follows:
12.2 Judgment when there is no defence or when no cause of action can succeed
…
(2)The court may give judgment against a plaintiff if the defendant satisfies the court that none of the causes of action in the plaintiff’s statement of claim can succeed.
[28] The principles that apply to a defendant’s application for summary judgment were set out in Stephens v Barron as:11
(a)The defendant has the onus of proving on the balance of probabilities that the plaintiff cannot succeed. Usually this will arise where the defendant can offer evidence which is a complete defence to the plaintiff’s claim.
11 Stephens v Barron [2014] NZCA 82, (2014) 21 PRNZ 734 at [9], citing Westpac Banking Corp v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA) (footnotes omitted).
(b)An application for summary judgment will be inappropriate where there are disputed issues of material fact or where material facts need to be ascertained by the Court and cannot confidently be concluded from affidavits. It may also be inappropriate where ultimate determination turns on a judgment able to be properly arrived at only after a full hearing of the evidence.
(c)The Court must be satisfied that none of the claims can succeed. It is not enough that they are shown to have weaknesses. The assessment is not to be arrived at on a fine balance of the available evidence as would be appropriate at a trial.
(d)The residual discretion of the Court to refuse summary judgment would be properly invoked to avoid the oppression which would otherwise result if an application by a defendant for summary judgment would pre-empt a plaintiff exercising the right to amend the pleadings.
(e)Summary judgment should not be applied for unless the substantive merits of the case are clear and capable of summary disposal.
Limitation Act 2010
[29]Sections 11 and 14 of the Limitation Act relevantly provide:
11 Defence to money claim filed after applicable period
(1)It is a defence to a money claim if the defendant proves that the date on which the claim is filed is at least 6 years after the date of the act or omission on which the claim is based (the claim’s primary period).
(2)However, subsection (3) applies to a money claim instead of subsection (1) (whether or not a defence to the claim has been raised or established under subsection (1)) if—
(a)the claimant has late knowledge of the claim, and so the claim has a late knowledge date (see section 14); and
(b)the claim is made after its primary period.
(3)It is a defence to a money claim to which this subsection applies if the defendant proves that the date on which the claim is filed is at least—
(a)3 years after the late knowledge date (the claim’s late knowledge period); or
(b)15 years after the date of the act or omission on which the claim is based (the claim’s longstop period).
...
14 Late knowledge date (when claimant has late knowledge) defined
(1)A claim’s late knowledge date is the date (after the close of the start date of the claim’s primary period) on which the claimant gained knowledge (or, if earlier, the date on which the claimant ought reasonably to have gained knowledge) of all of the following facts:
(a)the fact that the act or omission on which the claim is based had occurred:
(b)the fact that the act or omission on which the claim is based was attributable (wholly or in part) to, or involved, the defendant:
(c)if the defendant’s liability or alleged liability is dependent on the claimant suffering damage or loss, the fact that the claimant had suffered damage or loss:
(d)if the defendant’s liability or alleged liability is dependent on the claimant not having consented to the act or omission on which the claim is based, the fact that the claimant did not consent to that act or omission:
(e)if the defendant’s liability or alleged liability is dependent on the act or omission on which the claim is based having been induced by fraud or, as the case may be, by a mistaken belief, the fact that the act or omission on which the claim is based is one that was induced by fraud or, as the case may be, by a mistaken belief.
(2)A claimant does not have late knowledge of a claim unless the claimant proves that, at the close of the start date of the claim’s primary period, the claimant neither knew, nor ought reasonably to have known, all of the facts specified in subsection (1)(a) to (e).
(3)The fact that a claimant did not know (or had not gained knowledge), nor ought reasonably to have known (or to have gained knowledge), of a particular fact may be attributable to causes that are or include fraud or a mistake of fact or law (other than a mistake of law as to the effect of this Act).
[30] Mr Sgargetta sues Mr Borrie in negligence. To succeed he must establish, amongst other things, that as a consequence of the failure by Mr Borrie to exercise reasonable care in preparing the APL valuations he suffered damage or loss. His claim is a money claim for the purposes of the Act.12
12 Limitation Act, s 12(1).
[31] The primary limitation period for money claims is six years from the date of the act or omission on which the claim is based, but this is subject to both a late knowledge extension and a 15-year longstop period.13 There is no dispute that the acts on which Mr Sgargetta’s claim is based are the issue of the APL valuations. The dates the APL valuations were issued are 7 October 2014 for Remarkables Lodge and 1 July 2015 for Evergreen Lodge. On that basis, the primary periods for Mr Sgargetta’s claim expired on 7 October 2020 and 1 July 2021 respectively.
[32] However, Mr Sgargetta says the late knowledge extension applies and he has three years from the date he acquired late knowledge to bring his claim. In Spark New Zealand Trading Ltd v B, the Court of Appeal noted that for claims filed outside the six-year primary period it is crucial to determine the late knowledge date, which is defined by s 14.14
[33] As to when a claimant ought reasonably to have gained knowledge of all the facts specified in s 14(1), it was held in Rea v Auckland Council that a claimant will have constructive knowledge of the requisite facts if they have:15
… information that would lead a reasonable person to begin investigating whether a right to claim exists. They cannot close their eyes to the obvious. They cannot postpone taking action if a reasonable person in their circumstances would take action.
[34] Rea v Auckland Council concerned a claim against a local authority that had issued a code compliance certificate for a residential building later found to have defects. The certificate was issued in 2013, the primary period expired in 2019 and the proceedings were filed in September 2021. The Council brought a strike out application based on a limitation defence. The plaintiffs asserted it was not until March 2019 that they had sufficient knowledge of the defects because previous reports they had received concerning the defects had been negligently prepared. The Court of Appeal analysed the history of the Act and said:16
[34] Parliament’s intention was to clarify and simplify the limitation regime. The stated purpose of the current Limitation Act is to encourage
13 Sections 11(1) and (3). The longstop provision is not in issue in this case.
14 Spark New Zealand Trading Ltd v B [2025] NZCA 153 at [69].
15 Rea v Auckland Council, above n 3, at [67].
16 (footnotes omitted)
claimants to make claims for monetary or other relief without undue delay by providing defendants with a defence to stale claims. The accrual of a cause of action as the mechanism for starting time running was abandoned in favour of a single formula applying to all money claims, namely the act or omission on which the claim is based. The “primary period” of six years ... runs from the date of the act or omission on which the claim is based.
[35] The plaintiffs’ claim was time-barred as the plaintiffs had gained late knowledge of all the relevant facts by 23 March 2017, which was the date they received a report as to the extent of remedial work required for the building. The Court said:
[69] We therefore agree with Mr Weston that the information contained in these reports meant that, by 23 March 2017 at the latest, Mr and Mrs Rea had either actual or constructive knowledge of all the relevant facts, namely that: the [code compliance certificate] had been issued on 18 October 2013; the Council had issued the [code compliance certificate]; there was damage to the property that was more than minor; and repairs would be required including, with some specificity, what those repairs would be. We consider it beyond argument that this information would have led a reasonable person to begin investigations, including taking legal advice. Had they sought legal advice, there can hardly be any doubt that they would have learned that the matter required urgent attention because of the limitation period.
...
[71] We conclude that Mr and Mrs Rea gained knowledge of the facts required for late knowledge by 23 March 2017 at the latest. The late knowledge period therefore expired, at the latest, on 23 March 2020 and the claim against the Council is time-barred.
Mr Sgargetta’s evidence
[36] Mr Sgargetta says when ASB first called in its lending and appointed receivers he had confidence in the APL valuations and that the properties would comfortably sell for enough to cover the borrowing with no shortfall. He says subsequently, when receivers for ASB obtained valuations from Jarvis:
… I was certain that it was the Jarvis valuations that were too low. I believed that the receivers had breached their duties to me, and to the other creditors of the company, including ASB, by procuring lower valuations, to achieve a quicker sale.
[37] He also says he was personally involved in efforts to sell the properties and there was interest at prices at about what Mr Borrie had assessed, in excess of those assessed by Jarvis. However, the real estate agents appointed by the receivers
promoted the properties as a mortgagee sale and provided interested buyers with copies of the Jarvis valuations, resulting in buyers reducing their offers.
[38] Following the sale of the properties Mr Sgargetta attributed the sales prices achieved to breaches of duty by the receivers, and when ASB pursued him under the guarantee:
… I defended their claims, based on the Jarvis valuations being wrong, and the APL valuations being right. I acted for myself in the case. Although it would have been in their interests to argue that the APL valuations were wrong, ASB did not argue that.
[39] He says when ASB obtained judgment he appealed and instructed counsel, who presented submissions to the Court of Appeal and:
[h]er submissions relied on the APL valuations as correct, and an important part of demonstrating the receivers’ sales breached their duties by selling at lower values.
[40] He says the Court of Appeal decided there was not a tenable argument that the properties sold at undervalue, but:
[t]he Court’s focus was on the sale process adopted, and the fact that prices achieved were close to the values attributed by Jarvis. As at the High Court, the APL valuations were not criticised. They were accepted as accurate, but dismissed as not being close enough in time to the sale date.
Once again, no one suggested or argued that the Jarvis valuations were right, and the APL valuations were wrong.
[41] As noted above, Mr Sgargetta then filed his own proceedings in the High Court against ASB and the receivers which were struck out. Following that, Mr Sgargetta appealed that decision to the Court of Appeal. He says:
[a]s consistently throughout, I firmly believed that the Jarvis valuations were wrong, and the APL valuations were right, and that I had suffered loss from the fact that ASB and its receivers had sold the properties relying on the Jarvis valuations, not that I had suffered loss from my own and ASB’s reliance on the APL valuations. …
[42] He then says it was only in November 2023, when contacting new counsel, that he started to consider whether the problems might have resulted from APL overvaluing
the properties, and on 4 September 2024 the expert’s report was received which identified that the APL valuations were wrong.
Mr Sgargetta’s submissions
[43] Mr Michalik confirms that in determining whether Mr Sgargetta had late knowledge the only fact specified in s 14(1) in contention is subs (1)(c), which is the date on which Mr Sgargetta had the requisite knowledge that he had suffered damage or loss.
[44] Mr Sgargetta’s case is that he acquired that knowledge on 4 September 2024 as “[b]efore that time, he was not aware that APL had negligently overvalued the subject properties, or that he had suffered loss because of that”.
[45] Mr Sgargetta argues that he had three years from 4 September 2024 to bring his claim, and as he filed it on 7 March 2025 it is not time-barred.
[46] Mr Borrie’s contention is that Mr Sgargetta knew he had suffered damage or loss much earlier as he was aware of all of the following as they occurred; Sleep Overs’ defaults, that the sale proceeds of Evergreen Lodge and Remarkables Lodge were insufficient to repay ASB, that he was liable under his guarantee for the shortfall, that the High Court ordered him to pay the shortfall, that his appeal from that decision to the Court of Appeal was dismissed, and that his claim against ASB and the receivers was struck out.
[47] Mr Michalik argues that none of this is sufficient to establish that Mr Sgargetta knew or ought to have known he had suffered damage or loss, as a distinction is to be drawn between “a liability” and “a loss”. While it is accepted Mr Sgargetta knew he had a liability to ASB for the shortfall upon the sale of the properties:
[i]t is not possible to characterise that liability as a loss, as value was received, unless and until it is known that the obligor should have had an alternative. This knowledge does not and cannot arise until it is recognised that the liability should never have been incurred and that the cause of that liability is something that could have been avoided. It is only then that an evident liability can fairly be treated as a loss.
[48] On this basis it is said Mr Sgargetta did not have, and could not have had, knowledge that he had suffered damage or loss until he recognised that his liability to repay the shortfall “should never have been incurred and … could have been avoided”.
[49] Mr Michalik submits that viewed in this way the decisions of the High Court and Court of Appeal did not signal to Mr Sgargetta that he had suffered damage or loss. To the contrary, they confirmed his obligation to ASB was a legal liability to repay value given for his guarantee and not damage or loss.
[50] Mr Michalik distinguishes Rea v Auckland Council on the basis that it concerned a claim for loss consequent upon physical damage to property, whereas this case concerns what he described as an intangible obligation to satisfy a liability to pay money.17
My analysis
[51] Mr Sgargetta’s submissions are founded on the erroneous view that for the purposes of s 14(1)(c) knowledge of damage or loss requires an awareness of the cause of the damage or loss. He says he did not have, nor should he have had, such knowledge because he was unaware that APL had negligently overvalued the subject properties until 4 September 2024.
[52] That submission is contrary to the Court of Appeal’s decision in Rea v Auckland Council, where the Court said the words of s 14(1)(c) “do not convey, even implicitly, any requirement for knowledge of a causal link between the defendant’s acts or omission, and the loss or damage”.18
[53] I do not accept the submission that Rea v Auckland Council can, or should, be distinguished on the basis that it concerned loss consequent upon physical damage. Not only is there no reason in principle to distinguish Rea on that basis, I agree with Mr Cavanaugh that it would be contrary to Parliament’s intention, recognised by the Court of Appeal, to clarify and simplify the limitation regime.19
17 Rea v Auckland Council, above n 3.
18 At [62].
19 At [34].
[54] Even if one was to accept Mr Sgargetta’s premise that s 14(1)(c) required knowledge that his liability was “unjustified”, that was the position he in fact took from the outset when defending ASB’s claim to recover the shortfall. It has never been Mr Sgargetta’s position that he has a justified liability to ASB for the shortfall on sale; indeed, he continues to pursue ASB and the receivers to avoid that liability.
[55] I also do not accept Mr Sgargetta’s contention that he could not have suspected the APL valuations were incorrect until he received expert advice. Notwithstanding his faith in the APL valuations, Mr Sgargetta also knew that he was liable for the shortfall upon the sale of the properties, that the ASB borrowings had been supported by the APL valuations, that the properties had been sold below those valuations, that ASB had obtained the Jarvis valuations, and that the Jarvis valuations were aligned with the sale prices obtained. Any reasonable person would have been alive to the possibility that the APL valuations may have overvalued the properties and investigated that possibility at the outset. Mr Sgargetta could not close his eyes to this obvious possibility, and nothing in any of the Court decisions could have been taken as an endorsement that the APL valuations were correct.
[56] My view of that is not altered by Mr Michalik’s submission that Mr Sgargetta is a layman and not a lawyer. Mr Sgargetta has been involved in the purchase, development and syndication of ownership of valuable properties. It is clear that the significance of the APL valuations was known to him.
[57] There is a case that Mr Sgargetta had the required knowledge that he had suffered damage or loss for the purposes of s 14(1)(c) when the properties were sold and demand was made upon him for payment of the shortfall. However, it is beyond any serious argument that he knew, or ought to have known, that he had suffered damage or loss from at least the time the High Court entered summary judgment against him on 13 December 2017.
[58]Applied to this case the position is:
(a)The acts on which Mr Sgargetta’s claim is based are the issue of the APL valuations which occurred on the dates of those valuations, being
7 October 2014 for Remarkables Lodge and 1 July 2015 for Evergreen Lodge.
(b)The primary periods for Mr Sgargetta’s claim expired on 7 October 2020 (Remarkables Lodge) and 1 July 2021 (Evergreen Lodge) respectively.
(c)Mr Sgargetta acquired late knowledge of his claim by 13 December 2017.
(d)In respect to APL’s valuation of Remarkables Lodge, Mr Sgargetta should have filed his claim within three years of him acquiring late knowledge, that is by 13 December 2020.20
(e)In respect to APL’s valuation of Evergreen Lodge, the position is slightly different. As Mr Sgargetta had late knowledge of that claim within the first three years of the primary period it has no meaningful effect on the date by which his claim had to be filed. The claim should have been filed by the end of the primary period on 1 July 2021.
(f)As Mr Sgargetta did not commence this proceeding until 7 March 2025, it is time-barred.
[59] Mr Borrie has a complete defence to the claim and is entitled to summary judgment.
Result
[60] I enter summary judgment in favour of Mr Borrie and dismiss Mr Sgargetta’s claim.
20 Limitation Act, ss 11(2) and (3)(a).
[61] As requested by counsel, I reserve costs. If counsel cannot agree on costs they may file memoranda within 21 days. Memoranda should be no longer than six pages and I will decide costs on the papers.
O G Paulsen Associate Judge
Solicitors:
P Michalik, Wellington Wotton Kearney, Auckland
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