TSB Bank Ltd v Burgess

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2010-009-002978 [2013] NZHC 3291

BETWEEN  TSB BANK LIMITED Plaintiff

ANDGARY OWEN BURGESS Defendant

Hearing:                   11 and 12 November 2013

Appearances:           NRW Davidson QC and G R Burgess for Plaintiff

Defendant Appears in Person

Judgment:                10 December 2013

JUDGMENT OF D GENDALL J

Introduction

[1]      This proceeding had its beginnings in the District Court at Christchurch as a

2010 debt collection following a mortgagee sale by the plaintiff (the bank) against its former customer, the defendant Gary Owen Burgess (Mr Burgess).

[2]      In  2008  the  bank  advanced  two  loans  to  Mr  Burgess  to  enable  him  to refinance debt and purchase his ex wife’s interest in the property concerned.  The loans totalled $165,000 and comprised a table mortgage advance of $140,000 and a further revolving credit facility of $25,000.  They were secured by a first mortgage over the rural property at 563 Medbury Road, RD1, Hawarden (the property), previously  owned  by  Mr  Burgess  and  his  former  wife,  Susan  Natalie  Beaven, (Ms Beaven), the ownership of which he was to take over.

[3]      Not long after the loan was advanced, Mr Burgess fell into arrears of interest. On 26 February 2010 the bank served a default notice under s 119 Property Law Act

2007.  The default was not remedied and so the bank proceeded with a mortgagee

sale, selling the property at auction on 11 June 2010.

TSB BANK LIMITED v BURGESS [2013] NZHC 3291 [10 December 2013]

[4]      Earlier, the bank had obtained a registered valuation of the property and engaged a real estate agent to commence preparations for the mortgagee sale. At the auction the property was sold for $210,000 (inclusive of GST) with settlement under the mortgagee sale occurring on 2 July 2010.

[5]      Following the sale, there was said to be a residual indebtedness owing of about  $23,000.     On  27  October  2010  the  bank  brought  proceedings  against Mr Burgess in the District Court to recover this sum.

[6]      Mr Burgess’ response was to file a counter claim against the bank in the District  Court  alleging  unlawful  conduct  on  its  part,  and  seeking  unspecified amounts which exceeded $700,000 (alternatively claimed by Mr Burgess at a figure of over $1 million).

[7]      Given the quantum of this counter claim, on 28 July 2011 Judge Neave in the

District Court ordered that the proceeding be transferred to the High Court – TSB

Bank Limited v Burgess.1

That occurred.

[8]      Leaving Mr Burgess’ counterclaim on one side (a counter claim, which as will be seen below, has been stayed), the bank’s present claim before this Court is for the sum said to represent the shortfall following the mortgagee sale.  It amounts to

$22,911.70 calculated as follows:

(a)      Gross amount realised from the mortgagee sale  $210,000.00

(b)      Less the following payments:

(i)         GST paid on sale  $23,333.33

(ii)        Principal balance of Mr Burgess’ two loan accounts which were consolidated

$166,148.59

(iii)      Unpaid and accrued interest  $10,324.68 (iv)      Default and other fees payable under the…