Wroxton Finance Limited v Walton - [2013] NZHC 1560

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2013-409-000447 [2013] NZHC 1560

BETWEEN WROXTON FINANCE LIMITED First Plaintiff
ANDCANTERBURY TRUSTEES (2007) LIMITED

Second Plaintiff

ANDCONRAD FREDERICK WALTON Defendant

Hearing: 4 June 2013

Appearances: G K Riach and T E Hutchinson for Plaintiffs
Mr C F Walton (Defendant) in person

Final Judgment: 26 June 2013

FINAL JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] Wroxton Finance Limited (“Wroxton”) and Canterbury Trustees (2007) Limited (“CTL”) are private money lenders. In this proceeding they seek an order under s 137 of the Property Law Act 2007 directing the defendant to pass to them physical possession of his property in Christchurch which is secured to them by way of mortgage.

[2] Section 137 provides:

137 Exercise of power to enter into possession

(1) If a mortgagee becomes entitled under a mortgage, after compliance with subpart 5, to exercise a power to enter into possession of mortgaged land or goods, the mortgagee may exercise that power by –

WROXTON FINANCE LTD v CANTERBURY TRUSTEES (2007) LTD [2013] NZHC 1560 [26 June 2013]

(a) ... (b) ...
(c) applying to a court for an order for possession of the land or goods.

Subpart 5 sets out restrictions on exercise of this power, but none are in issue in this case.

[3] Wroxton and CTL say that Mr Walton is in default under an agreement by which they advanced funds to him, which required him to make certain payments, which he has not made. Mr Walton accepts that he has not made the payments but he opposes the entry of summary judgment against him on the ground that the contract was signed by him under duress, or alternatively that the contract is an unconscionable bargain.

The facts in more detail

[4] In 2009 Mr Walton and his late partner borrowed money from Wroxton and CTL, intending that it be repaid after 12 months. During that time Mr Walton’s partner died and when a significant earthquake occurred early in September 2010 he suffered damage to the contents of the home over which the loan was secured. The major earthquake on 22 February 2011 caused damage to the property and most of the remaining contents. A further earthquake on 13 June 2011 caused even more damage to the house and resulted in it being given a “white zone” designation which Mr Walton says prevented him from selling it, repairing it or refinancing it for six months.

[5] At the end of that period repairs were organised through the Earthquake Commission and its appointed contractor, Fletcher Building, which took control of the repair project in January 2012 with an expected repair period of two months. Over six months passed without the repairs being started. Eventually contractors came on site but in November 2012, having undertaken a good deal of work on the property, including removing its original roofing material, they moved off the site, leaving the property incomplete and surrounded by scaffolding. It remains in that condition now.

[6] The funds…

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 1560
Decision Date: 26 June 2013

CaseChat Overview and Summary

Wroxton Finance Limited and Canterbury Trustees (2007) Limited (collectively "the lenders") are seeking an order for possession of a Christchurch property mortgaged to them by Conrad Frederick Walton, pursuant to section 137 of the Property Law Act 2007. Mr Walton, the defendant, has admitted defaulting on his loan agreement but claims that the contract was signed under duress or is an unconscionable bargain. The case was heard before Associate Judge J G Matthews in the High Court of New Zealand Christchurch Registry. The court was required to determine if Mr Walton had an arguable defence against the lenders' application for summary judgment.

The court examined the elements of duress and unconscionable bargain as potential defences. The court found that the lenders did not pressure Mr Walton into signing the settlement agreement and that the agreement actually favoured him. The court also found that there was no evidence of a significant disability or disadvantage on Mr Walton's part that would make the agreement unconscionable. The court concluded that neither defence was arguable.

Considering the residual discretion to grant or refuse summary judgment, the court found that refusing judgment would defeat the commercial purpose of the contract and that the lenders were not acting unfairly or oppressively. While recognising the hardship that an immediate order for possession might cause Mr Walton, the court noted that he had not made efforts to resolve his claim against the Earthquake Commission and Fletchers, and there was no guarantee that a successful outcome would significantly assist him in repaying the debt to the lenders. The court decided to grant the lenders' application for summary judgment but stayed the judgment for a period of four weeks to allow Mr Walton time to potentially resolve his claim or make alternative arrangements for accommodation.

The final orders of the court were that judgment be entered in favour of the lenders on their application for summary judgment, with the judgment stayed until noon on Wednesday, 24 July 2013, and that the lenders were entitled to costs on a 2B basis plus disbursements to be fixed by the Registrar.

Orders