TSB Bank Limited v Wheldale - [2013] NZHC 2799

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-001678 [2013] NZHC 2799

BETWEEN
TSB BANK LIMITED

Plaintiff/Applicant

AND

ALLEN JOHN WHELDALE Defendant/Respondent

Hearing: 24 October 2013

Appearances:

J Anderson for the Plaintiff/Applicant

A J Wheldale in person, the Defendant/Respondent together with a McKenzie friend

Judgment:

24 October 2013

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
24.10.13 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

TSB BANK LIMITED v A J WHELDALE [2013] NZHC 2799 [24 October 2013]

[1] The plaintiff (the Bank) lent the defendant Mr Wheldale the sum of $228,000 on 4 February 2009 subject to the loan being secured by a first registered mortgage over Mr Wheldale’s Trimdon Street property.

[2] On 29 June 2009 the Bank lent Mr Wheldale $255,000 to be secured by first

registered mortgage over Mr Wheldale’s Sun Place property.

[3] Each loan was recorded in a signed loan agreement which provided for fortnightly payments of principal and interest over a period of 30 years. Interest rate and default interest rates were detailed. In the event of default the Bank was entitled to demand payment of all its costs, charges, losses and expenses in connection with its exercise of its rights, powers or remedies, and including all legal expenses incurred on a solicitor and client basis.

[4] Fortnightly payments fell into default. Notices of default issued and were served. The Bank obtained the power of sale in respect of each of the properties.

[5] Both properties have since been sold by the plaintiff but for a lesser amount than the Bank calculates was required to be paid to it i.e. $243,937.11 in respect of the two properties. Interest continues to accrue from and including 19 March 2012 at a daily rate of $58.75.

[6] The Bank seeks leave to apply for summary judgment and, if granted, the Bank seeks summary judgment upon its claim. In response Mr Wheldale has filed a notice of opposition. In support he has sworn an affidavit. He has also filed a statement of defence.

[7] Mr Wheldale’s grounds of opposition are, inter alia:

(a) The Bank disposed of the properties “without due and proper consideration and care”.

(b)The matter should be referred for trial to properly investigate the actions of the Bank and its representatives in the sale processes.

(c) That he has a good defence as his affidavit discloses.

[8] By his affidavit Mr Wheldale explains:

4....That my defence is not a simple one nor is it the typical defence as alleged by the Applicant, but rather it has substantial merit and justice will best be served if it is explored correctly, legally and otherwise an opportunity is given to the applicant and the respondent alike to be cross examined... rather than on the papers as traversed by the Applicant.

[9] Mr Wheldale says that notwithstanding that HCR 12 permits these applications to be considered on the papers he has concerns of a general nature…

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 2799
Decision Date: 24 October 2013

CaseChat Overview and Summary

The case of TSB Bank Limited v Wheldale involved a dispute between the plaintiff bank, TSB Bank Limited, and the defendant, Mr Allen John Wheldale. The Bank had lent Mr Wheldale sums of money secured by mortgages over two properties, which subsequently went into default. The Bank sold the properties and sought summary judgment for the outstanding debt, which Mr Wheldale opposed on various grounds, including claims of improper sale processes and inadequate valuations. The High Court of New Zealand considered whether the Bank had complied with its duty under the Property Law Act 2007 to obtain the best price reasonably obtainable at the time of sale. The Court found that the Bank had engaged reputable real estate agents and valuers, conducted a reasonable marketing campaign, and sold the properties in a manner consistent with the statutory duty. Despite the sales prices being lower than the original estimates, the Court concluded that the Bank had not breached its duty and granted the Bank leave to apply for and summary judgment in its favour.

The legal issues in this case primarily revolved around whether the Bank had complied with its statutory duty to obtain the best price reasonably obtainable when selling the mortgaged properties. Mr Wheldale argued that the Bank had failed in its duty by selling the properties at prices significantly below their estimated values, alleging negligence and improper conduct in the sale process. The Court needed to determine whether the Bank's actions in selling the properties were in accordance with the requirements of section 176 of the Property Law Act 2007, which imposes a duty on a mortgagee to obtain the best price reasonably obtainable at the time of sale. Additionally, the Court had to consider Mr Wheldale's opposition to the summary judgment application and whether there were any genuine issues of fact or law that required a full trial.

The Court reasoned that the Bank had followed a proper and commercially reasonable process in selling the properties, despite the sales prices being lower than the original valuations. The Bank had engaged reputable real estate agents and valuers and conducted a marketing campaign that involved advertising and showing the properties to interested parties. While the sale prices were less than initially estimated, the Court found that the properties were sold in a manner consistent with the statutory duty. The Court also noted that the Sun Place property was marketed and sold as a "leaky" unit, which affected its sale price. Regarding Mr Wheldale's claims of not being consulted and the alleged unreliability of the valuations, the Court found no evidence to support these claims and concluded that the Bank had not breached its duty. Consequently, the Court granted the Bank leave to apply for and summary judgment in its favour.

Orders