Toilolo v Westpac New Zealand Limited

[2013] NZHC 3423

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-3151 [2013] NZHC 3423

IN THE MATTER

of Credit Contracts and Consumer Finance

Act 2003

BETWEEN

TIMOTHY TOILOLO Plaintiff

AND

WESTPAC NEW ZEALAND LIMITED Defendant

Hearing:	6 December 2013
Counsel	M Pascariu for Defendant No appearance for Plaintiff
Judgment:	17 December 2013

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 17 December 2013 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:           MinterEllisonRuddWatts, Auckland

Case officer:       Christine Unwin

TOILOLO v WESTPAC NEW ZEALAND LIMITED [2013] NZHC 3423 [17 December 2013]

[1]      The plaintiff Mr Toilolo filed an amended statement of claim on 6 September

2013.  The claim relies on two causes of action against the defendant Westpac New Zealand Limited.  The first cause of action seeks the reopening of credit contracts and the reinstatement of a $14,000 overdraft facility plus damages for “the sum of costs charged to the plaintiff during the process”.  It appears to be a claim for breach of the Credit Contracts and Consumer Finance Act 2003, alleging Westpac’s actions in cancelling his overdraft and its subsequent demand for payment and related mortgagee sale of his property at Orams Road amount to oppressive conduct in breach of reasonable commercial standards of commercial practice.

[2]      The second seeks an order for special damages of $65,000.  It alleges conduct in breach of reasonable standards of commercial practice “in that a reasonable mortgagee would have made further inquiry regarding the veracity of the plaintiff’s claim that he could introduce a buyer who was prepared to pay $370,000” for his property before proceeding with a mortgagee sale.

[3]     On 23 September 2013 the defendant filed a statement of defence and counterclaim.  It also filed an application for summary judgment on the counterclaim and a supporting affidavit sworn by its duly authorised officer, Duncan Dale, who deposes that he is a manager in Westpac’s Credit Restructuring Division and believes that Mr Toilolo has no defence to the counterclaim.

[4]      On 16 October 2013 counsel for the parties sought timetable directions by consent.  By joint memorandum they advised that Westpac wishes to proceed with the summary judgment application and that though Mr Toilolo had not yet filed documents in opposition he wishes to do so.

[5]      On 17 October 2013 Associate Judge Bell made directions by consent and allocated a half day fixture for a defended hearing for the summary judgment application.  He directed Mr Toilolo to file a notice of opposition together with any affidavits in support by 25 October 2013.

[6]      Despite this background no notice of opposition was filed. Additionally there was no appearance for Mr Toilolo when the matter came before me on 6 December.

I note the Registrar advises that counsel for Mr Toilolo indicated there would be no appearance.

The summary judgment application

[7]      Counsel for Westpac seeks orders on its application for summary judgment on the counterclaim.   The counterclaim seeks judgment for an outstanding debt Westpac says it is owed by Mr Toilolo on his overdraft facility and other advances. The amount claimed is $159,111.51.  Westpac’s evidence is that this sum comprises the shortfall after applying the proceeds of the mortgagee sale of the property to Mr Toilolo’s overall indebtedness to Westpac.

[8]      Westpac accepts it has the overall onus of demonstrating there is no arguable defence to the counterclaim.  At the hearing, counsel for Westpac conscientiously drew to my attention the parties had adopted a common position that the plaintiff must satisfy the Court that Mr Toilolo’s claim is not reasonably arguable.   This accords with the advice counsel set out in their joint memorandum of 16 October

2013 that:

The defendant would be able to obtain summary judgment only if it could satisfy the Court that the plaintiff’s claim is not reasonably arguable.  In that case, this proceeding would have to come to an end.

[9]      Counsel submits that if, on this basis, there is any issue as to the Court’s jurisdiction to enter summary judgment, it could only be on the issue of amount or quantum because:

(a)      There  has  already  been  a  judgment  in  the  proceeding  on  an unsuccessful  application  that  Mr  Toilolo  made  for  an  interim injunction which shows that Mr Toilolo has no reasonably arguable case based on oppression as claimed in his (current) first cause of action;

(b)      The second cause of action seeks a limited sum by way of damages and therefore assuming it could give rise to a set-off defence it could only be for $40,000-65,000 at most.

[10]     Given those factors, counsel submits there is no impediment to summary judgment on the issue of liability under r 12.3.

[11]     I  have  taken  time  to  reflect  on  counsel’s  submissions.    On  reflection  I consider that there is no impediment to summary judgment on the counterclaim as to liability or quantum.  This is essentially because of Mr Toilolo’s failure to take steps in opposition to the application for summary judgment on the counterclaim.  Such failure means Mr Toilolo has not raised a defence to the counterclaim, and the counterclaim does not operate as a defence by way of set-off or otherwise.  I note:

(a)      Rule 5.56 requires a defence be filed to a counterclaim.   Rule 5.59 reflects the reason for the rule – it stands as an independent claim and is inserted into the plaintiff’s proceeding as a matter of convenience.

(b)      In the context of summary judgment, r 12.16 states that the rules applying to the plaintiff ’s claim apply to counterclaims.  The plaintiff must therefore file documents in opposition if summary judgment is opposed.

(c)      As no defence has been raised in respect of the counterclaim and no notice of opposition has been filed to the application for summary judgment on the counterclaim in either cause of action, the Court has not had the benefit of any grounds of opposition or defence.

(d)     Westpac has complied with r 12.4 including filing the necessary supporting affidavit depositing to the belief that Mr Toilolo had no defence to the counterclaim.

[12]     I also note these points:

(a)      There has already been a finding on the plaintiff ’s claim, as originally pleaded, that it did not pass the test of a reasonably arguable case.1

That has come about because the plaintiff ’s claim was filed with an

1      Toilolo v Westpac [2013] NZHC 1517.

application for an interim injunction and on that application the Judge found there was no reasonably arguable case for the claim of oppression under the Credit Contracts and Consumers Finance Act

2003.

(b)      That finding stands in respect of the plaintiff’s (current) first cause of action in his amended statement of claim.

[13]     Accordingly, I am satisfied Westpac has proved there is no defence to its counterclaim and that it is entitled to summary judgment on its counterclaim.

[14]     I make orders for summary judgment as follows:

(a)       The plaintiff to pay the sum of $159,111.51;

(b)      The plaintiff to pay interest on the sum of $144,715.79 at the rate of

12.5% per annum from 5 August 2013 until 6 December 2013 (122 days) @ $49.56 per day).

(c)       The plaintiff to pay interest on the sum of $14,395.72 at the rate of

26.95%  per  annum  from  5  August  2013  until  the  date  of  this judgment.

[15]     There will also be an  order for costs against the plaintiff in the sum of

$20,139.34.

[16]     I also make directions as follows:

(a)      If Mr Toilolo intends to prosecute the claim in his statement of claim he is to appear and to discuss the allocation of a trial fixture for any remaining live matters in his proceeding and to fix pre-trial directions.

(b)      The proceeding is to be listed in the Miscellaneous Companies List on

14 February 2014 at 11.45 a.m. for review.

(c)       Memoranda are to be filed and served at least 3 working days prior setting out proposed directions.

(d)      If Mr Toilolo fails to appear and to file and serve a memorandum as directed he can anticipate that his statement of claim will be struck out

for non-prosecution.

Associate Judge Sargisson