BANK OF NEW ZEALAND v H P HOLLAND AND RKH HOLLAND [2016] NZHC 1275

BANK OF NEW ZEALAND v H P HOLLAND AND RKH HOLLAND [2016] NZHC 1275 [14 June 2016]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2015-404-003035[2016] NZHC 1275BETWEEN BANK OF NEW ZEALANDPlaintiffAND HELEN PATRICIA HOLLANDFirst DefendantRICHARD KRISTIAN HENRYHOLLANDSecond DefendantHearing: 6 May 2016 and 9 June 2016Appearances: TJG Allan/CJL Wei for the PlaintiffC Patterson for the DefendantsJudgment: 14 June 2016JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSENThis judgment was delivered by me on14.6.16 at 2:30pm, pursuant toRule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDateThe claim[1] The plaintiff (the Bank) applies for summary judgment in the sum of $336,465.80 together with interest of $1,183.18 owing as at 3 November 2015 and interest that has accrued since.[2] The claim arises out of a loan agreement signed on 22 November 2011 by the first defendant, Mrs Holland as borrower, and the second defendant, Mr Holland and Mrs Holland, as guarantors by which they agreed to pay $415,000. The defendants were to pay monthly interest only together with annual principal repayments of $25,000 over the first two years, and thereafter 120 consecutive calendar monthly instalments of principal and interest. A margin of 2 per cent per annum was payable in the event of default.[3] The Bank's claim pleads repayment defaults occurred from and including 16 June 2015, and that payment demands were served but the debt has not been paid.The opposition[4] The defendants oppose summary judgment on the following grounds:(a) They were placed under duress when signing the loan agreement and therefore the loan agreement is void and unenforceable.(b) The Bank's actions in requiring the defendants to sign the loan agreement constituted oppression in terms of the Credit Contracts and Consumer Finance Act 2003 (CCCFA).(c) The Bank failed to observe the requirements of s 176 of the PropertyLaw Act 2007 (PLA) when selling the defendants property at 8Dilworth Avenue, Remuera (Dilworth) and, if they had not done so,then no debt to the Bank or loan agreement would have been required.Background[5] By August 2010 the defendants owed the Bank more than $2,000,000 of which $300,000 to $400,000 had matured but had not been repaid. The Bank served Property Law Act notices on 29 October 2010.[6] Before then and having been provided an opportunity by the Bank, the defendants elected to sell Dilworth. They initially instructed Mr Hart of Unlimited Potential Real Estate to assist.[7] It is the Bank's position that after some nine months of marketing with three real estate agents, which apparently only resulted in one offer, the Bank then appointed the defendants' third real estate agent (Mr King of Ray White Real Estate) to act for the Bank to conduct a mortgagee sale.[8] Following the mortgagee sale a shortfall remained which the Bank agreed to convert into a term loan. The resulting agreement, the subject of this proceeding, comprises a Deed of Agreement Concerning Debt dated 22 November 2011 and theBank's "Letter of Advice – Housing Term Loan" dated 3 November 2011, which by reference, incorporated the Loan Facility Master Agreement (together the loan agreement).[9] For about three years the defendants met their loan agreement repayment obligations but from June 2015 they have not paid any monthly instalments. The Bank made demand and now seeks summary judgment against the defendants.[10] Mrs Holland has sworn an affidavit. It details the defendants' history of theirrelationship with the Bank. Previously Mrs Holland required funds when purchasing an equity share in an Auckland law firm. In that regard the Bank became the lender to the defendants newly formed family trust, the Misimu Trust (Misimu). The Bank says in 2006 it lent Misimu funds to purchase the freehold of Dilworth from the Dilworth Trust Board.[11] Mrs Holland says the total funds advanced by the Bank enabled her to pay income tax and to cover the cost of buying into a partnership share, together with the funds needed to freehold Dilworth totalled approximately $2,000,000.[12] Mrs Holland commenced practice as a barrister in March 2007. When she believed she would have to sell Dilworth she spent capital on repainting the house. Total renovation costs amounted to nearly $50,000. Mrs Holland also said that due to the need to build up her legal practice, and due to Mr Holland's redundancy in2008, they found keeping up with the monthly repayments to the Bank very difficult. Therefore in 2010 they decided to sell Dilworth. In August 2010, the defendants instructed Mr Hart of Unlimited Potential Real Estate to sell Dilworth. Mrs Holland said that the property next door to Dilworth was of a similar size on which was a derelict house. That she said sold for over $1,600,000. The derelict house was removed and the land was subdivided. Mrs Holland says the next-door property was of lesser quality than Dilworth.[13] Property Law Act Notices were served on them at a meeting on 29 October 2010. The defendants were advised the BNZ would not take any steps in that regard for three months. The BNZ's Ms Ramsey is said to have forcefully told the defendants to instruct Barfoot & Thompson to sell Dilworth.[14] Mrs Holland deposes Barfoot & Thompson "achieved very little". The defendants then instructed Mr King of Ray White who recommended a "do-up" ofthe kitchen. The Hollands did this at a cost of $8,000.[15] Four months later in April 2011, the Bank advised the defendants they would proceed with a mortgagee sale of Dilworth. The Bank instructed Mr King with whom the defendants had an agency contract. Mrs Holland comments:[19] Mr King told people to "just make an offer", he would not give any information as to value except the three-year-old CV of $1,800,000.00 and that he would not tell them what was happening next door on the building site. What was happening was that two expensive town houses were being built. We supplied Mr King with the drawings given to us by the developer. The town houses sold soon afterwards for, I believe, over $2,000,000.00 each.[16] Mrs Holland deposes that Dilworth was sold by private tender for $1.78 million on 7 June 2011. She said the Bank refused to allow the defendants to see the tenders and did not explain why the mortgagee sale was not carried out openly by way of public auction.[17] Mrs Holland deposes that after the sale, the Bank's lawyer Mr Toebes sent to them the loan agreement that the Bank is relying upon in this proceeding. She said Mr Toebes required it to be signed immediately. This, the defendants say, they did without obtaining any legal advice.[18] Mrs Holland says she was under significant pressure with having to arrange to move her 90 year-old ailing mother, and she was very busy at work.[19] In 2015, Mrs Holland learned Dilworth was up for sale again. Other than re- roofing she said it appeared that little work had been done to it. Mrs Holland took about 200 photos to show this. She learned that two days later Dilworth sold for $3,465,000.[20] Mr Holland deposes he had been a practising solicitor with his own sole practice in Remuera until 1992 when he began employment as a solicitor with a then leading property development firm. His work experience since includes a position as a senior associate in the Banking and Finance department of a major Auckland law firm. In his 29 years practising as a lawyer up until 2011, Mr Holland had experience in all aspects of commercial and residential lending by banks, including enforcement proceedings and mortgagee sales.[21] Not knowing of the Bank's purpose when arranging a meeting with them on 29 October 2010, the defendants were distressed when Property Law Act Notices were served upon them. Mr Holland says they were devastated when in April 2011 the Bank advised it would proceed with a mortgagee sale. They requested more time to sell Dilworth themselves but the defendants say the Bank was adamant, indeed aggressive, in asserting that it would proceed with its mortgagee sale.[22] The Hollands were advised by agents and a registered valuer that the market value of Dilworth was over $2,000,000. They said the defendants were aware of the Bank's duty under s 176 of the Property Law Act 2007 (PLA) to obtain the best price reasonably obtainable. They were appalled therefore, when the Bank presented them with a copy of a valuation dated 11 March 2011 from a Mr Swan a registered valuer, which showed a capital value of $1,500,000 when its actual capital value was $1,860,000.[23] That valuation contained a sale assessment value of $1,850,000 under normal market circumstances or, $1,500,000 under a forced sale.[24] Mr Holland deposes:[10] In this case there can be no legitimate reason for providing two different valuation figures depending on the manner of sale. Prospective purchasers may expect to pay less at a mortgagee sale, but that is not a factor affecting the value of the property, and in any event the figures in the Swan valuation are based upon incorrect Capital Value figure which is $360,000 too low.[25] Mr Holland has provided a copy of an email from Mr Boulgaris, a Remuera real estate agent, which noted that in 29 years Mr Boulgaris had never seen a mortgagee sale conducted as this one was – that he "did not know of any qualityhomes of this nature advertised as a mortgagee sale and selling". Mr Boulgaris suggested his services be retained on a three month contract to see whether he could sell Dilworth for $2M.[26] Mr Holland believes his communications with Mr Toebes pre-sale reflectedthe Bank's aggressive and uncompromising attitude. He said Mr Toebes dismissed as being irrelevant, "a genuine valuation" higher than that obtained by the Bank. He informed Mr Toebes he considered the Mr Swan's valuation to be flawed.[27] Mr Holland's position is that the Bank refused to acknowledge the deficiencies in Mr Swan's report, and that the sale procedure adopted was fundamentally flawed. In his view, the Bank failed to observe its duties under s 176 PLA.[28] By her second affidavit in opposition Mrs Holland annexes a copy of a claim in a proceeding the defendants have issued in the High Court on 11 September 2015 against Ray White Real Estate Agents, and Mr King. Mrs Holland also reiterates her concern about the Bank having advertised the sale of Dilworth as a mortgagee sale. She says she asked Mr King whether that was done on his advice, to which she sayshe said "God no".[29] She refers to having co-operated "in every way regarding the sale" with theBank. She had informed the Bank that a bare section next door of much lesser size had sold in May 2011 for over $1,000,000.[30] Mrs Holland said she still had no explanation from the Bank as to why they did not auction the property.Summary judgment principles[31] Summary judgment can be awarded when a defendant has no defence to the claim, that is when there is no real question to be tried.1[32] If it appears, in the Court's view and having heard the plaintiff's case, that it is unanswerable then it is for the defendant to provide sufficient particulars to disclose an issue worthy of trial.[33] Where there is a conflict of evidence the Court will not normally resolve these or assess the credibility of a deponent. However, a Judge is not bound to accept evidence uncritically as raising a dispute of fact which calls for no further investigation, or every statement on an affidavit, however equivocal, lacking in precision, inconsistent with undisputed contemporary documents.[34] Affidavit evidence purporting to establish a defence must be credible.[35] In this dispute the evidence focuses upon the decision and process arranged to sell Dilworth by mortgagee sale. The second area of evidential focus concerns the1 Pemberton v Chappel [1987] 1 NZLR 1 at 3 (CA).signing of the loan agreement, in regard to which claims of oppression will be reviewed.The mortgagee sale of Dilworth[36] With regard to the mortgagee sale of Dilworth the defendants say the Bank breached its duties under s 176 of the Property Law Act 2007 (PLA).[37] For some years after the original loan agreement to Misimu was signed, the defendants maintained their obligations with regular repayments. Then those repayments fell into arrears. The defendants decided to sell the property. The Bank agreed to this and then over some eight months the defendants engaged the services of three real estate agents. Over that period of time only one offer had been received.[38] Having served Property Law Act notices in October 2010 the Bank decided in April 2011 the mortgagee sale would proceed by way of tender.Principles[39] Section 176 of the PLA states:176 Duty of mortgagee exercising power of sale(1) A mortgagee who exercises a power to sell mortgaged property, including exercise of the power through the Registrar under section 187, or through a court under section 200, owes a duty of reasonable care to the following persons to obtain the best price reasonably obtainable as at the time of sale:(a) the current mortgagor:(b) any former mortgagor:(c) any covenantor:(d) any mortgagee under a subsequent mortgage:(e) any holder of any other subsequent encumbrance.[40] Asher J in Public Trust v Ottow2 has provided a helpful summary of well known principles under s 176:(a) A mortgagee has no duty at any time to exercise the powers of sale or possession. In default of any provision to the contrary in the mortgage, the power of sale is for the benefit of the mortgagee, who can sell at any time in accordance with the mortgagee's convenience.(b) The mortgagee's duty of care is to take reasonable care to obtain thebest price reasonably obtainable at the time of sale.(c) It does not matter that the time may be unpropitious and that by waiting a higher price could be obtained.(d) A mortgagee is under no obligation to improve the property or increase its value.(e) A mortgagee sale for a price less than the current market value assessed by valuers does not, of itself, establish a breach of duty, although a large discrepancy may indicate a failure to take reasonable care.(f) A mortgagee does not have any general duty to maintain properties prior to sale.(g) The mortgagee is not entitled to sell in a hasty way at a knock-down price sufficient to pay the debt, which because of the speed of sale leads to a lower price than could otherwise be obtained.(h) Proper care must be taken to expose the property to the market and to obtain the best price reasonably obtainable.[41] At [31] of that judgment Asher J set out steps which indicated whether a mortgagee had made reasonable efforts to obtain the best reasonable price:(a) The appointment of a reputable real estate agent to market the property.(b) Obtaining a valuation report from an experienced valuer as a guide to what could reasonably be expected for the property.(c) Marketing over a reasonably long period of time.(d) An extensive advertising and promotional campaign.(e) A properly conducted auction.(f) A sale price that, given all the circumstances, can be reconciled with expert opinion as to value.2 Public Trust v Ottow (2009) 10 NZCPR 879 (HC) at [17].[42] Mr Patterson submits for the defendants that the Bank cannot be said to have observed its obligations in the following ways:(a) By their choice of sales agent (because he had been the defendants'sales agent);(b) By adopting the agent's recommendation of a private tender instead ofdirecting sale by auction;(c) By permitting the term "mortgagee sale" to be utilised in saleadvertisements;(d) By accepting the valuation of Mr Swan dated 11 March 2011 that Dilworth was worth $1.85M under normal market circumstances, and was valued for $1.5M under forced sale conditions.Review and comment[43] Much is made of Mr Swan's reference to an incorrect CV. The valuation wasprepared for the Bank to give it an appreciation of likely sale values.[44] Mr Swan may have used the incorrect CV but indicated a price in the range of $1.85M if sold under normal sale conditions. He also reported:It could possibly be worth $2M or in excess thereof but it might be hard tosell because the dwelling itself covers a considerable part of the site and there is not much yard space, although this would probably suit some purchasers. Another factor, which is more likely to affect saleability, pertains to the vacant land immediately to the North of the property and, as we have previously mentioned, future development on these sites could, inthe short term deter some prospective purchasers".[45] The sale price of $1.78M was marginally short of Mr Swan's open market valuation and 11 per cent short of Mr Boulgaris' $2M estimation – notwithstanding the forced sale conditions.[46] On the morning of the Court hearing on 6 May 2016 Mr Patterson provided avaluation estimate by a Mr Sprague an Auckland registered valuer. Mr Sprague'svaluation contained his estimate of Dilworth's value as at 28 March 2011. As did Mr Swan, Mr Sprague reviewed evidence of sales in the surrounding area. He concluded the property could warrant a current market value of $2,080,000.00.[47] It is not to be overlooked that the purpose of the Bank in obtaining a registered valuer's report was to ensure that when agreeing to accept an offer it didso on good advice regarding the range of price reasonably obtainable. Mr Swan hadindicated the possibility of a value of $2M. In the Court's view the Bank had been properly advised of the range of value it should have expected from buyer interest.[48] As Mr Allan submitted, valuation is not a science but an art. The valuation was provided to the Bank for its purpose of an indication of what a sale outcome may realise. Beyond that, the Bank had no obligation as to the final outcome achieved from the valuation provided.[49] Regarding the defendants claims of insufficient advertising or promotion, it isthe Bank's position Ray White had recommended a three week advertising campaigninvolving a deadline private treaty process and offers were required for submission by 7 June 2011. There is no sufficient evidence demonstrating that recommendation was wrong, nor that the defendants were compromised because that recommendation came from their former agent.[50] The defendants complain the sale was advertised as a mortgagee tender. However, and as the evidence is clear, the moment an offeror asks for the particulars and conditions of sale, there is disclosed therein the existence of the mortgagee in control of the sale process of a mortgagee sale.[51] In response to the defendants' request, mortgagee sale signs were not placedon the property or on any signs advertising the sale but that brochure advertising would reflect the fact that it was advertised as a mortgagee sale.[52] The defendants criticise the tender sale process used. However, that wasundertaken on Ray White's recommendation and subject to a condition thedefendants had agreed to namely, by the provision of vacant possession and theinclusion of chattels not commonly sold in a mortgagee sale process. Also eight tenders were received. There was no question but that the process was properlyconducted.[53] The defendants complain about Mr Toebes' requirements that tender offerscontained in envelopes would be opened in private to ensure confidentiality was restricted to the Bank as vendor and to each prospective tenderor. The Court agreeswith Mr Allan's assessment that this was an entirely ordinary legitimate securityprocedure.[54] The defendants suggest the sale was pre emptive. However, and as Mr Allan submits, the property had been on the market for some ten months and nine of those were under the control of the defendants. There can be no question in all the circumstances but that the Bank in its own interest should be entitled to decide when and if to sell.The loan agreement[55] There is no dispute that the loan agreement records the defendants'acknowledgement to pay the Bank a sum of money by regular instalments, including penalty interest in the event of default. For about three years the defendants maintained their repayment obligations.[56] The defendants fell into default and on 3 November 2015 and the Bank made demand for repayment of the loan. However payment was not made.[57] The Bank relies upon clauses 2.1 and 5.1 of the Deed which sets out an acknowledgement of the debt owed by the defendants, as well as a debt waiver of theBank's liability.[58] Those clauses provide:2 Acknowledgment of Liability2.1 The Borrower hereby irrevocably acknowledges and confirms her liability for the Existing Debt and that the principal of the Debt has been overdue for payment since 30 October 2010.2.2 The Guarantors each hereby irrevocably acknowledge and confirm their joint and several liabilities for the Existing Debt under the Guarantee and further acknowledge that they guarantee the repayment of the Debt to BNZ.5. Waiver of claims5.1 Each of the Borrower and each of the Guarantors unconditionally and irrevocably waives, releases and discharges all claims or rights of any kind whatsoever, whether presently known or unknown, that he/she or it has or may have, either alone or together with any other person, against BNZ arising out of or in connection with the Existing Debt or any other matters arising between the Borrower and the guarantors and BNZ before the date of this Deed including withoutlimitation in relation to the Banks' mortgage sale of the Guarantors'property at 8 Dilworth Avenue, Auckland.[59] The defendants contend there are reasons why the loan agreement is not enforceable against them. They claim they signed the loan agreement without have obtained legal advice, and having been subjected to considerable duress. They saythe Bank and its solicitor held an "aggressive and uncompromising" attitude.[60] For the defendants it is claimed this agreement was entered into:(a) Under duress; and(b) Was oppressive under the CCCFA.[61] Mr Patterson for the defendants submits the agreement is oppressive for the reasons:(a) Annual lump sum payments of $25,000 were required in reduction of principal over the first two years.(b) Monthly payments thereafter were required in a sum of about $4,700.(c) While described as a "housing loan" it was for a relatively short termonly.(d) The nature of their employment was such that the threat of proceedings and bankruptcy was worse than for people in many occupations.(e) In the circumstances of the mortgagee sale the defendants should not have had to agree to the terms required.(f) The defendants were told by the Bank that proceedings would issue if the loan agreement was not entered into and their belief was and is they would not have owed the bank anything at all had the Bank complied with its obligations under s 176 PLA.(g) The defendants' position is that the pressure on them was unbearable whereas Mr Toebes said it was an ordinary settlement.[62] The focus of claims of oppression is about perceptions of pressure put upon the defendants by the Bank to sign the loan agreement.The defendants' position[63] Mr Patterson submits that in the circumstances the Bank's actions inrequiring the defendants to sign the loan agreement was oppressive as defined in s 118 of the CCCFA as:oppressive, harsh, unjustly burdensome, unconscionable, or in breach ofreasonable standards of commercial practice.[64] Mr Patterson refers to the decision of the High Court in Westpac New Zealand Limited v Gordon3 where the Court set out the facts that would be relevant to the assessment (relying on Didsbury v Zion Farms Limited4) as follows:[68] The word 'oppressive' as defined in section 118 of the CCCFA hasbeen considered frequently by the Courts. Relevant to this case is the view expressed by Wallace J in Didsbury v Zion Farms Limited (1989) 1 NZConvC 190, 229 at page 190, 238. There the Learned Judge stated that the purpose of the oppression provisions is to give the Court the power to3 High Court, Auckland, CIV 2009-404-003873 at [68]4 (1989) 1 NZConvC 190, 229 at page 190, 238.intervene in any case where there is a sufficiently serious element of unfairness. In that case it was also held that in determining whether a clause is oppressive, relevant facts include the relative state of the parties, the nature and extent of the default, the way in which the default arose, the implications for the borrower, the attitude of the lender, the existence of a collateral purpose and the general appearance of the contract throughout.The evidence[65] Some of the defendants' evidence of perceptions of pressure has already been reviewed herein. To an extent it is summarised by Mrs Holland when she deposes:[25] Mr Toebes sent us an agreement which he required us to sign immediately, the agreement which BNZ relies upon is the basis of thisproceeding. This we signed without legal advice I signed the agreementunder considerable duress and after literally years of pressure from the BNZ; I felt that I was at the end of my tether.[66] Mrs Holland deposes the Bank required its loan agreement to be signedimmediately. The evidence is that on 26 July 2011 Mr Toebes emailed Mr Parmenterin response to his call of 7 July on behalf of the defendants. Mr Parmenter is a wellknown and respected commercial barrister in Auckland. Mr Toebes' email referredto having advised the defendants of the outcome of the sale process and having senta request for a payment proposal with advice that any such proposal would requiresecurity. Mr Toebes' email referred to Mrs Holland's prior payment offer of $10,000per month. Mr Toebes offered to meet with Mr Parmenter when he was in Aucklandthe following week.[67] On 17 August 2011 Mr Toebes emailed Mr Parmenter again acknowledging having received from him the defendants' statement of financial means. Mr Toebesnoted that the without prejudice proposal made on behalf of the defendants wasunacceptable. Mr Toebes indicated having received instructions to issue proceedingsagainst the defendants. He enquired of Mr Parmenter where service could beeffected.[68] On 28 October 2011 Mr Parmenter emailed Mr Toebes under the heading'Helen's thoughts'. The email noted:If we look at it purely on the basis of the Banks wanting to get as much back from the Hollands as possible, I'd like to think that the attached documentprepared by Helen would be good enough. The only disadvantage to the Bank, as I see it, would be that it would have to sue on the new agreement by SJ rather than sue on the old agreement with all the trappings of the mortgagee sale confusing issues.On top of that, I am pretty confident that Helen and Richard are determinedto make the deal work. I've told you that I want them to take the hit and start their lives again free from stress but, to their credit, they don't want tobe seen as dirty debtors.For my part, I acknowledge that you and your client have been truly helpfuland that I might be looking at a "bridge too far" so I proffer the attached withgreat temerity, while maintaining that, at the end of the day, it's probably not all that inconvenient to your client.[69] The attachment contained Mrs Holland's draft of an agreement. It noted,inter alia:Following the sale of the property the Bank claims that certain sums remain outstanding and are owed by one or more of the Other Parties [Mr Holland and Mrs Holland as trustees of the Misimu Trust and for themselves].The other parties claim that they have claims against the Bank arising out of the sale of the property.The Bank and the other parties have agreed to settle all disputes between them.It is agreed:1. [The defendants] will pay the sum of $ to the Bank as set out in thisagreement2. Payment of interest and principal due monthly shall be paid3. 4. The payments of principal each of $25,000 should be made on duedate within 5 working days7. This agreement is in full and final settlement of all disputes between the parties.[70] On 15 November 2011 Mr Holland emailed Mr Toebes attaching the loan agreement together with a deposit of $9,920.15 into Mr Toebes' trust account.[71] The signatures of the defendants appear to have been witnessed by Mr Parmenter. No evidence has been provided by the defendants to suggest otherwise.[72] In that assessment of matters claims of harsh, unreasonable, or oppressive behaviour need to be measured by the fact that through the intermediary of Mr Parmenter the defendants presented their own proposal for repayment which acknowledged an obligation for principal reductions and monthly payments, that the defendants had issues regarding the sale of the Dilworth, and that they were prepared to pay a sum of money to settle issues with the Bank. After the Bank indicated itwould not agree with the defendant's offer of a settlement sum, the defendantsaccepted and signed the Bank's settlement proposal and with it the waiver clause 5.1.[73] It is against this background the Court reviews complaints of harsh, unreasonable or oppressive behaviour. But, there is also the evidence obtained by the defendants more recently from a Mr Grandy in support of claims of s 118CCCFA 'oppression'.[74] Mr Grandy is an executive director of an independent corporate financial services firm which provides capital raising, merger, acquisition, and advisory services and valuations for small to medium sized companies. He confirms he has been asked to provide independent expert evidence on behalf of the defendants on the issue of harsh, unreasonable, or oppressive behaviour.[75] Mr Grandy has viewed the loan agreement communications between Mr Holland and Mr Toebes, and several documents addressing issues of property values,correspondence between Mr Parmenter and Mr Toebes and letters from Mr Hollandto Mr Toebes.[76] Mr Grandy states:[22] the only material issue that I can see that may be regarded as either harsh, oppressive or unconscionable, is the seeming insistence of the exigent execution of the Settlement Agreement, (which I am informed) was accompanied by discussion of Court action should consent be withheld.[23] My area of concern is not the evidence and obvious threat of legal action, but initially, with the provision of reasonable time for the Hollands to consider the form and impact of the settlement deed. Normally loan agreements and other negotiations with retail borrowers in default get periods of circa 14 days to consider matters.[24] This period would offer the borrower the ability to fully explore a commercially negotiated settlement of the residual debt with the BNZ. Therefore this specific behaviour by the BNZ's counsel seems somewhatharsh and oppressive and not in keeping with standards of reasonable financial services business and ordinary customer.[25] I am therefore somewhat concerned that the BNZ had misconceived of the Hollands as somehow 'sophisticated', 'informed' or 'expert'borrowers, whereas in fact they were quite narrowly specialist legal counsel, with limited commercial depth.[26] It seems to me harsh and oppressive, to insist on waiving allclaims against the BNZ (and its agent), when the interplay of correspondence between the Hollands and the BNZ prior to the sale of theproperty evidences the Hollands' cautioning the BNZ that the preferred marketing timetable and methodology would likely result in a less than fully transparent sales process. Moreover, that such a sales process may call into question the appropriateness of the price received, especially when measuredagainst the legislative construction trustee obligation of the BNZ as to act onthe interests of all of the creditors of the property, including the family trust,and the Hollands, in regard to the maximisation of value of the property.[27] I would comment from the correspondence that I have reviewed, that the Hollands were ordinarily cooperative with the BNZ during the sale process. However, I also note a long and sometimes unsatisfactory pattern of loan servicing behaviour by the Hollands.[77] Mr Patterson submits that in the circumstances and including the loan agreement waiver clause provision, the Bank not making any concessions, theimmediacy, and the limited advice, all amounted to oppression and that the Courtshould consider whether reasonable standards of banking practice have beenbreached.[78] Mr Patterson submits Mr Grandy's evidence supports claims of an arguabledefence.Review and comment[79] In the Court's view claims of oppressive behaviour are not supported by theevidence or Mr Grandy's assessment. The defendants' perceptions of oppression are largely about the pressures they were under. Those were understandable but the evidence suggests they were far from being perceived as uncontrollable or misunderstood.[80] The Court was not assisted greatly by Mr Grandy's affidavit. Mr Grandyrefers to having viewed correspondence but it is unclear about the extent of that he was provided with. Some conclusions he has reached are not the same as those reached by the Court – in particular any perception that the defendants have insufficient time to consider their position sufficiently before signing the loan agreement, nor regarding the availability of professional advice to assist in that regard.[81] Also it appears Mr Grandy has not had a great deal of experience in a commercial banking practice over the last 15 years or so.[82] In reply to Mr Grandy's affidavit, Ms Northcott a bank manager swore an affidavit. It notes Mr Grandy's evidence does not refer to two previous banking loan agreement documents of a similar kind signed by the Hollands, nor of their experience as commercial lawyers – that Mr Holland gave evidence in his affidavit about his legal experience and Mrs Hollands' background includes reference to hergoing to the bar after 15 years with a well known Auckland legal firm having become a partner in 1999 and having been a "Litigation Team Leader".[83] Ms Northcott states the Hollands could have engaged in litigation with the Bank for little or no cost to themselves but at great expense to the Bank. Indeed the draft deed of agreement prepared by Mrs Holland and sent by Mr Parmenter to the Bank on 28 October 2011 recorded the Hollands may make claims against the Bank arising out of the sale of the property.[84] Ms Northcott comments that because the Hollands were prepared to acknowledge their indebtedness for the shortfall requiring a refinement of their draft deed, the waiver clause contained in that was simply a natural and prudent additional protection. The arrangement saw the Bank repaid the full amount of the shortfall but the Hollands obtaining time to do so in exchange for the waiver. Ms Northcott concludes:[8] There is no bank policy governing timeframes within which the bank and its customer should, by their legal counsel, negotiate outcomes as occurred here. The Hollands barrister could, had he felt pressed, asked formore time to reflect. Likewise the Hollands could have asked for more time. As far as I am aware they did not.[85] Mr Patterson objects to parts of Ms Northcott's affidavit. His objections include reference to previous banking documents signed by the defendants which were not previously in evidence – that there is no evidence by the defendants that they had never signed banking documents before and therefore Ms Northcott'sreference is not evidence in reply. The Court does not accept that criticism.Reference was made in evidence to the earlier loan.[86] Mr Patterson objects to evidence suggesting Mrs Holland being a commercial lawyer. He says there is no evidence of that before the Court. Similarly MrPatterson objects to the details of Mrs Holland's professional experience byreference to details from the New Zealand Law Society website. Mr Patterson says it is hearsay. Perhaps, but it is also a matter of public record.[87] Commenting on Ms Northcott's reference to the waiver clause being a 'natural and prudent additional protection' Mr Patterson submits it was afundamental attempt to remove all the defendants' rights in the context of their not acknowledging indebtedness in their proposed document but being required to bythe plaintiff in the final document together with the waiver clause.[88] Mr Patterson submits the Bank's case does not discharge the onus of provingthere is no arguable defence.[89] In the Court's view the claim of lack of legal advice appears withoutsubstance. Over a period of four months Mr Parmenter corresponded on thedefendants' behalf with the Bank's solicitor Mr Toebes. Mrs Holland prepared aninitial without prejudice payment proposal in a form which acknowledged anobligation for repayment but in a sum much less than was owed. Mrs Holland'sproposal was presented through Mr Parmenter. In the end the defendants' signatureto the Bank's proposal appears to have been witnessed by Mr Parmenter.Conclusion[90] The Court does not agree with the submission that the Bank's case does not discharge the onus of proving there is no arguable defence. In the Court's view thereis no arguable basis for reopening the loan. The loan was a refinance of an existing debt and was in effect receipt by the Hollands of a new loan advance coupled with a waiver of all claims against the Bank.[91] There had been a mortgagee sale shortfall. The amount of that shortfall was less than the amount that had been owing for nearly a year prior to the mortgagee sale.[92] The Court's impression is that the Bank wished to avoid recourse to Courtprocess as indeed Ms Northcott commented upon.[93] Throughout, the defendants had acknowledged their indebtedness to the Bank. They wanted time to pay. A proposed deed was prepared by them and through their counsel was tendered to the Bank as a foundation i.e. starting point for a settlement. That document of the defendants recorded that the Bank and the defendants had agreed to settle all disputes between them.[94] In response the Bank indicated the payment proposal was unacceptable. MrToebes' letter on behalf of the Bank noted that the proposal contained an offer to payapproximately half of the debt owing. He commented on the high level of personal debt and estimated annual expenses. He referred to there not having been any payments of the debt or interest for nearly a year.[95] The loan agreement was signed by the defendants three months later.Undoubtedly, the defendants experienced significant stress for all those reasons theyhave identified. However, they were experienced lawyers and were undoubtedlycommercially savvy; working, as they must have done, in the area of contractnegotiations where stress was a common factor. The second defendant has detailedhis extensive experience working in the commercial and residential property fields.Also, it is clear the defendants had access to legal advice from Mr Parmenter for notless than three months prior to signing the agreement. Mr Allan submits it is improbable Mr Parmenter, as legal adviser to the defendants, would oversee his clients signing an agreement under duress. The Court agrees with that assessment.[96] The evidence is, and the Court mentions this notwithstanding Mr Patterson'sobjection, that five years earlier the defendants completed a deed of agreement and a waiver clause in terms not dissimilar to those before the Court for present consideration.[97] By their deed of agreement the defendants could cancel that facility but would be required to repay the advance. Instead and without criticism of the loanterms the defendants performed their agreement obligations over a three year perioduntil March 2015.[98] Yet, and only now the defendants claim in effect that they were forced to dosomething that should have not been imposed upon them. In the Court's view thedefendants have endeavoured to downplay the significance of the role of Mr Parmenter acting on their behalf. Mr Patterson had submitted evidence of the defendants that legal and commercial background may have been overstated. All of this comes more than three years after the loan agreement was entered into and when for most of that period loan terms were being complied with and no complaints had been made. Indeed, as Mr Allan submits, the fact that Mrs Holland requested a suspension on hardship grounds is an affirmation of the terms of the loan and entirely inconsistent with oppression; as was the Bank's response in allowing a three month suspension when the defendants requested it.[99] Mr Patterson submitted that the loan agreement did not advance funds. With respect that appears to misrepresent the arrangement. A new loan account was created in order to pay the old debt. The Court agrees that in the circumstances there was a good commercial purpose for this approach to have been taken.Result[100] The Court does not accept that there is sufficiency of evidence in support of claims of mortgagee sale breaches, or of banking standards or in that regard oppressive conduct by the Bank which compelled the defendants to sign the loan agreement they believe they should not have been required to sign.Judgment[101] There are orders accordingly for the entry of judgment against the defendants in terms detailed in paragraph [1] herein.[102] The Court orders payment of costs on a 2B basis together with disbursements as approved. Costs are the joint and several responsibility of the defendants.Associate Judge Christiansen