SPTC Limited v PJAFT Limited - [2018] NZHC 3139

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV 2018-441-9

[2018] NZHC 3139

BETWEEN
SPTC LIMITED

First Plaintiff

AND

KAY ELIZABETH COOPER

Second Plaintiff

AND

PJAFT LIMITED

Defendant

Hearing: 8-10 August 2018

Counsel:

Second Plaintiff in person

S L Robertson QC for Defendant

Judgment:

30 November 2018

JUDGMENT OF ELLIS J

[1]On 13 March 2018 Churchman J granted ex parte orders:

(a)restraining the defendant (PJAFT) from selling a property owned by the first plaintiff (SPTC) at 17 Bell St, Clive, Hawke’s Bay (the Bell St property) under its power of sale as a second mortgagee; and

(b)restraining the defendant from exercising its rights against the first and second plaintiffs under an all obligations guarantee and indemnity.

[2] SPTC is the corporate trustee of the Folkstone Trust (the Trust), which was established for the benefit of the family of the second plaintiff Mrs Kay Cooper (who is the sole director of SPTC) and Mr Nigel Cooper. Until recently, the Bell St property has been the Coopers’ family home.

SPTC LTD v COOPER [2018] NZHC 3139 [30 November 2018]

[3] This judgment relates to the plaintiffs’ substantive claim, in which they seek to set aside PJAFT’s second mortgage over the Bell St property and the guarantees given to PJAFT by SPTC and Mrs Cooper. Essentially, they allege that Mrs Cooper (both personally and in her directorial capacity) was pressured to sign the relevant instruments by Mr Cooper and a third party, Mr Peter Sutherland, who is said to be PJAFT’s agent. It is also said that PJAFT failed to fulfil an alleged obligation to take steps to ensure “Mrs Cooper signed the documents free from influence or misrepresentation”.

Procedural matters

[4] Before turning to consider the factual and legal aspects of the claims in more detail, it is necessary to record certain unusual features of the hearing before me.

[5] The injunctions granted by Churchman J were, as I have said, granted ex parte and on the papers. At that time, the plaintiffs were represented by Mr John McDowell. Both Mrs and Mr Cooper filed affidavits in support of the application.

[6] On 24 July 2018 (just two weeks before the substantive hearing) Mr McDowell sought leave to withdraw as the plaintiffs’ counsel. After discussing the implications of that with both Mr McDowell and with Ms Robertson QC, I granted the leave sought.

[7] Subsequently, and upon further inquiry, Mrs Cooper confirmed that she wished the hearing to go ahead and that she would appear in person. It was agreed that the plaintiffs could adopt the affidavits sworn by Mrs and Mr Cooper in support of the injunction application as their briefs of evidence. Given the close alignment of interests between Mrs Cooper personally and SPTC, Ms Robertson did not object to Mrs Cooper also speaking (if she wished) on behalf of SPTC.

[8] At the hearing itself, however, it became clear that Mrs Cooper had little real interest in pursuing the claim…

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: [2018] NZHC 3139
Decision Date: 30 November 2018

CaseChat Overview and Summary

In the High Court of New Zealand, SPTC Limited and Kay Elizabeth Cooper sought to set aside a second mortgage over the Bell Street property and the guarantees given to PJAFT Limited by SPTC and Mrs Cooper. They alleged that Mrs Cooper was pressured to sign the relevant instruments by Mr Cooper and a third party, Mr Peter Sutherland, who is said to be PJAFT’s agent. PJAFT Limited opposed the claims. The court found that the plaintiffs had not established that Mrs Cooper (or SPTC) was under any material disability or disadvantage and the claim of unconscionability failed accordingly. The court also found that Mrs Cooper was not subject to undue influence and there was nothing that should have put PJAFT on notice that Mrs Cooper was under any disadvantage or that she was vulnerable in relation to the transactions. The plaintiffs’ reliance on the Credit Contracts and Consumer Finance Act 2003 was also dismissed. The injunction granted by Churchman J was lifted and PJAFT Limited was entitled to its costs on a 2B basis.

Orders