Westpac NZ Ltd v Patel - [2013] NZHC 1011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-6788 [2013] NZHC 1011

UNDER Part 12 of the High Court Rules

IN THE MATTER OF an application for summary judgment

BETWEEN WESTPAC NZ LIMITED Plaintiff

ANDYATISH MORAR PATEL & ANOR Defendants

Hearing: 6 May 2013

Appearances: M Powell and P Shackleton for Plaintiff
G Thwaite and S Kim for Defendants

Judgment: 9 May 2013

JUDGMENT OF ASSOCIATE JUDGE DOOGUE

This judgment was delivered by me on
9 May 2013 at 5 pm, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:
Simpson Grierson, Private Bag 92518, Wellesley Street, Auckland –
morgan.powell@simpsongrierson.com / phillip.shackleton@simpsongrierson.com

Kenton Chambers lawyers – ken@kentonlaw.co.nz
(Counsel: Mr G Thwaite - gthwaite@iprolink.co.nz)

WESTPAC NZ LIMITED V PATEL & ANOR HC AK CIV-2012-404-6788 [9 May 2013]

Background

[1] The plaintiff, Westpac New Zealand Limited (“Westpac”), applies for summary judgment against the defendants. This case arises out of two separate lending agreements which the plaintiff entered into with the defendants. The first was for the advance of funds to enable the defendants to purchase what the parties called the “Fitzgerald Property”. For that purpose on 12 May 2011 the plaintiff advanced a sum of $698,000 secured by first registered mortgage over the Fitzgerald Property. The second advance was of the sum of $272,000 secured by a registered mortgage pursuant to a loan agreement dated 30 June 2011 to enable the defendants to purchase what the parties described as the “Swanson Property”.

[2] The following chronology is taken from the submissions for the plaintiff. The matters stated are uncontested.

[3] Around May 2011, the defendants approached Westpac for a loan to purchase the Fitzgerald Property for investment purposes.

[4] As part of the application process, Westpac received:

a) a signed statement of assets and liabilities confirming the defendants had a net asset position of $346,000;

b) financial statements for Y & Zad Limited for the years ending 31

March 2010 and 31 March 2011 along with projections for the year ending 31 March 2012. The financial statements for the year ending
31 March 2011 showed a net profit of $177,683.50. The projected profit for the year ending 31 March 2012 was $177,598;

c) a registered valuation for the Fitzgerald Property showing a market value of $905,000;

d) a lease agreement for the Fitzgerald Property;

e) an agreement for sale and purchase for the Fitzgerald Property also showing a rental income of $3,000 per annum;

f) various bank statements;

g) various GST Returns; and

h) financial statements for S.Y. Trading Limited for the years ending 31

March 2009 and 31 March 2010.

[5] On 12 May 2011, Westpac advanced the defendants the sum of $698,000 to purchase the Fitzgerald Property pursuant to a Choices Home Loan Agreement dated
11 May 2011 (“91 Loan Agreement”). Westpac’s advances under the 91 Loan

Agreement were secured by a first registered mortgage over the Fitzgerald Property.

[6] Around June 2011, the defendants approached Westpac for a further loan for the purpose…

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.

Continue reading Westpac NZ Ltd v Patel

Details

AGLC: Westpac NZ Ltd v Patel [2013] NZHC 1011
Case: [2013] NZHC 1011
Decision Date: 9 May 2013

CaseChat Overview and Summary

Westpac NZ Limited applied for summary judgment against the defendants in relation to two separate lending agreements. The first agreement was for the advance of funds to enable the defendants to purchase the Fitzgerald Property, secured by a first registered mortgage. The second agreement was for the advance of funds to enable the defendants to purchase the Swanson Property, secured by a registered mortgage. The defendants defaulted on their loan repayments, leading Westpac to sell the secured properties. The defendants opposed Westpac's summary judgment application, alleging that Westpac breached implied terms of the relevant contracts, which were implied by the Code of Banking Practice. The court found that the defendants did not have an arguable defence and that Westpac was entitled to summary judgment in the amount of $213,915.40 plus interest, costs, and disbursements. The court rejected the defendants' argument that the Code's provisions should be implied into the contracts by custom, stating that the Code was advisory in intent and that there was no evidence of a notorious practice supporting the defendants' claim. The court also found that there was no sound policy basis for imposing an obligation on banks to advise customers about the commercial wisdom of their proposed transactions.

Orders