UDC Finance Limited v Rout - [2015] NZHC 212

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-000577 [2015] NZHC 212

BETWEEN
UDC FINANCE LIMITED

Plaintiff

AND

STEPHEN DALE ROUT First Defendant

AND

MARU STACEY ROUT Second Defendant

JANE ROUT and STEPHEN DALE ROUT as trustees of the SD and JM ROUT FAMILY TRUST

Third Defendants

Hearing: 5 February 2015

Appearances:

M D Pascariu for Plaintiff
A N Riches for Second Defendant

Judgment:

19 February 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] The plaintiff (UDC) sues the second defendant (Mr Rout) under a guarantee he signed on 13 June 2007 by which he, the first defendant Stephen Rout (his father), and three companies in which his father and others held shares, guaranteed repayment to UDC of all guaranteed amounts then or in the future payable to UDC by each of the other guarantors. UDC seeks judgment for the sum owed to it by Stephen Rout as guarantor of the indebtedness of three companies, Steve Rout Contracting Limited, Blue 9 Limited, and Southern L C Limited.

[2] Mr Rout does not deny that he signed the guarantee, nor does he dispute the amount claimed from him by UDC. He says, however, that he signed the guarantee
under undue influence, and that UDC is estopped from claiming any sum from him.

UDC FINANCE LTD v ROUT [2015] NZHC 212 [19 February 2015]

[3] UDC applies for summary judgment against Mr Rout, under r 12.2 of the

High Court Rules. This provides:

12.2Judgment when there is no defence or when no cause of action can succeed

(1) The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.

...

[4] The principles the Court is to apply on an application for summary judgment are summarised in Krukziener v Hanover Finance Ltd:1

[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic…

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: [2015] NZHC 212
Decision Date: 19 February 2015

CaseChat Overview and Summary

The plaintiff (UDC) sought judgment against the second defendant (Mr Rout) for the sum owed to UDC by Stephen Rout under a guarantee signed by Mr Rout. Mr Rout argued that he signed the guarantee under undue influence, and that UDC is estopped from claiming any sum from him. UDC applied for summary judgment. The Court considered the principles to be applied on an application for summary judgment, including the onus on the plaintiff to show that there is no defence. The Court found that Mr Rout had established a defence of undue influence on the basis that he signed the guarantee under undue influence. The Court concluded that it was not appropriate to determine on a summary basis which of two principles should be applied to facts established by affidavit, but untested by cross-examination. The Court dismissed the application for summary judgment.

Orders