Spinnaker v Moss - [2013] NZHC 2295

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-002282 [2013] NZHC 2295

BETWEEN SPINNAKER CAPITAL LIMITED Plaintiff

AND

JEFF MOSS Defendant

Hearing: 20 August 2013

Appearances:

S Grant for Plaintiff
D Hurd for Defendant

Judgment:

4 September 2013

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Wednesday, 4 September 2013 at 3.00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Counsel: S Grant, Auckland
Stewart Germann Law Office, Auckland

SPINNAKER CAPITAL LIMITED v MOSS [2013] NZHC 2295 [4 September 2013]

Introduction

[1] Spinnaker Capital Limited (Spinnaker) applies for summary judgment against

Jeffrey Moss (Mr Moss) to enforce a personal guarantee that he gave for a loan of

$2,052,000 advanced on 17 March 2011 by Spinnaker to Peacock Street Trust Limited (PSTL) as trustee of the Peacock Street (No 2) Trust (the loan). The loan was secured by registered first mortgages over numbers 15, 23 and 25 Peacock Street, Glendowie, and a registered general security agreement over all present and after acquired property of the borrower.

[2] The purpose of the loan was to refinance existing debt. On 12 May 2010, Spinnaker had advanced a loan of $2,010,000 (which included an establishment fee of $110,000) to Moss Auckland Trust Limited (MATL). The loan to MATL was repaid by the loan to PSTL on 17 March 2011. The term of the loan to PSTL was less than two months, with the repayment date being 13 May 2011. The interest rate was 10 per cent per annum with a default rate of 15 per cent per annum above the interest rate.

[3] The loan was not repaid on 13 May 2011. Four and a half months later, on

29 September 2011, the repayment date was extended to 13 February 2012. A further fee of $130,000 was added to the loan as of 1 August 2011 and incurred interest accordingly. At that time, the loan facility was said to be $2,362,000, which included capitalised interest of $82,000. The interest rate remained unchanged but five per cent of the interest was to be paid monthly, with the balance of five per cent interest being added to the loan and itself incurring interest. The loan was to be further secured by an unregistered second mortgage over Levels 1-4, 233 Queen Street, Auckland (the Strand property), with a priority of $450,000 plus costs and interest.

[4] The loan was not repaid on 13 February 2012. Three months later, on

18 April 2012, the repayment date was extended to 30 June 2012. A further fee of

$100,000 was added to the loan as of 31 March 2012 and incurred interest accordingly. At that time, the loan facility was said to be $2,450,000 plus interest. It was also agreed that interest was to be paid “in monthly payments and at the rate of

$10,000 per month”. The priority in respect of the unregistered mortgage over the

Strand property was increased to $1,000,000 plus costs and interest.

[5] The loan was not…

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.

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Details

Case: [2013] NZHC 2295
Decision Date: 4 September 2013

CaseChat Overview and Summary

Spinnaker Capital Limited (Spinnaker) sought summary judgment against Jeffrey Moss (Mr Moss) to enforce a personal guarantee that he gave for a loan of $2,052,000 advanced on 17 March 2011 to Peacock Street Trust Limited (PSTL) as trustee of the Peacock Street (No 2) Trust. The loan was secured by registered first mortgages over three properties and a registered general security agreement over all present and after acquired property of the borrower. The loan was not repaid and Spinnaker now seeks summary judgment against Mr Moss for $2,838,730.56, the amount due under the loan pursuant to the guarantee. Mr Moss opposed the application for summary judgment and argued that he had a number of defences, which he says, are reasonably arguable, such that Spinnaker is not entitled to summary judgment. The court found that there was insufficient evidence of any misrepresentations and/or misleading or deceptive conduct on the part of Spinnaker to establish a real question to be tried. The lack of independent legal advice, in itself, was not a defence to the summary judgment application. The terms of the guarantee signed by Mr Moss did not prohibit Mr Reesby or Spinnaker from dealing with the Strand property as they saw fit. The court found that there was a real question to be tried about the amount of the interest payable under the loan from the date of its extension on 18 April 2012. There will be summary judgment against the defendant in favour of the plaintiff for the sum of $2,450,000. The issue of the proper interest payable since 18 April 2012, any credit to be given for the profit sharing arrangement on the future sale of 27 Peacock Street and the $4,000 discrepancy is to go to trial. The defendant is to pay the costs of and incidental to this proceeding on a full indemnity basis.

Orders