BANK OF NEW ZEALAND v BATCHELOR [2020] NZHC 2489

BANK OF NEW ZEALAND v BATCHELOR [2020] NZHC 2489 [23 September 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2020-404-001009[2020] NZHC 2489BETWEEN BANK OF NEW ZEALANDPlaintiffAND ANDREW BATCHELORFirst DefendantEXPERT CAPITAL LIMITEDSecond DefendantAppearances: C T Ottow for PlaintiffNo appearance by or on behalf of the DefendantsDate: 23 September 2020JUDGMENT OF WOOLFORD JThis judgment was delivered by me on Wednesday, 23 September 2020 at 3:00 pmpursuant to r 11.5 of the High Court Rules.Solicitors: Buddle Findlay, Auckland[1] This judgment is to be read together with my minute of 15 September 2020.[2] On 30 June 2020, the Bank of New Zealand (BNZ) filed a statement of claim,an interlocutory application for summary judgment, an affidavit in support of theapplication for summary judgment and a notice of proceeding seeking judgment in thesum of $2,529,670.66 as at 30 June 2020, together with interest and costs against thedefendants.Factual background[3] The first defendant, Andrew Batchelor, is the sole director of a companypreviously named Certified Scaffolding Auckland Limited (in liquidation) (presentlynamed EXCSAL Limited) (CSAL). The first defendant was also the sole director ofthe second defendant, Expert Capital Limited (ECL) and Expert Scaffolding Limited(ESL).[4] On or about 13 December 2016, the defendants and ESL (as guarantors)executed an interlocking deed of guarantee and indemnity, dated 13 December 2016under which they guaranteed to the BNZ the payment of all CSAL's existing andfuture obligations to the BNZ (interlocking guarantee).[5] On or about 6 December 2018, the BNZ (as lender) entered into a loan facility– customised average rate loan with CSAL (as borrower) (CARL agreement). Underthe CARL agreement the BNZ agreed to make available to CSAL a loan facility of$3,399,710.00 (facility amount). The facility amount was to be used to repay existingamounts owing to the BNZ by CSAL. On or about 17 December 2018, CSAL drewdown the facility amount under the CARL agreement.[6] On or about 6 December 2018, the BNZ (as lender) and CSAL (as borrower)entered into an overdraft facility (overdraft agreement). Under the overdraftagreement, the BNZ agreed to make available to CSAL an overdraft facility of$300,000.[7] Between November 2019 and February 2020, CSAL failed to pay amounts dueon 20 November 2019, 20 December 2019, 20 January 2020 and 20 February 2020totalling $261,120.00. The failures to make such payments constituted events ofdefault under the CARL agreement. As a consequence of the events of default, CSAL(as borrower) and the defendants (as guarantors) became obliged to repay on demandthe total amount owing under the CARL agreement and the overdraft agreement(together the agreements), including principal, interest and any costs incurred by theBNZ in recovering the amounts demanded.[8] On 28 April 2020, the BNZ made formal demand of CSAL for payment.Despite demand, CSAL failed to pay the amounts outstanding under the agreements.[9] Also on 28 April 2020, the BNZ made formal demand of the defendants (asguarantors) for payment. Despite demand, the defendants failed to pay the amountsoutstanding under the agreements.[10] On 11 May 2020, by special resolution of the shareholder pursuant tos 241(2)(a) of the Companies Act 1993, CSAL was placed into liquidation. On orabout 12 June 2020, the BNZ received $500,000 from the liquidators of CSAL, whichwas applied towards the amounts outstanding under the agreements.[11] As at 30 June 2020, the amount outstanding under the agreements was$2,529,670.66 (total debt) made up as follows:CARL AgreementBalance $2,465,889.63Accrued interest $1,892.67Accrued interest on arrears $289.84Overdraft facilityBalance $57,208.75Debit interest accrued $3,688.22Bank fees and charges $701.55TOTAL $2,529,670.66[12] The current default interest rates applicable to the agreements are:(a) 7.71 per cent per annum on amounts owed under the CARL agreement;and(b) 17.95 per cent per annum on amounts owed under the overdraftagreement.[13] The defendants have failed to pay the total debt outstanding under theagreement in breach of the interlocking guarantee.Application for summary judgment[14] The first defendant, Andrew Batchelor, was served with a copy of theproceedings on 30 July 2020. The second defendant, ECL, was also served with thedocuments at its registered office on 31 July 2020. The defendants have not taken anysteps to defend or dispute the claim by the BNZ. In particular, no statement of defencehas been filed.[15] When the matter was called before me on 15 September 2020, the BNZprovided me with a memorandum of calculation setting out the amount claimedagainst the defendants in the statement of claim under the pleaded facilities plusinterest from 1 July 2020 up to and including 15 September 2020, together withinterest which would continue to accrue from 16 September 2020 up to the date ofpayment in full at the rates and on the amounts as set out.[16] I was satisfied, both that the defendants had not filed a statement of defencewithin the number of working days required by the notice of proceeding and also thatthey had no defence to the statement of claim. I, accordingly, authorised the sealingof a judgment and directed judgment against both defendants in favour of the BNZ.[17] In my minute of 15 September 2020, I authorised judgment in favour of theBNZ in the sum of $2,571,944.52 together with solicitor/client costs in the sum of$4,750 and disbursements in the sum of $1,607.82. The BNZ is also entitled, in termsof its statement of claim, to orders for the payment of interest from the date ofjudgment to the date of payment in the following terms:(a) On $2,465,889.63 of the judgment amount at the rate of 7.71 per centper annum, accruing at $520.88 per day; and(b) On $57,208.75 of the judgment amount at the rate of 17.95 per cent perannum, accruing at $28.13 per day.[18] The Court is directed to seal an order for summary judgment in terms of thedraft provided to the Court by counsel on 18 September 2020._________________________Woolford J