SGARGETTA v ASB BANK LIMITED [2021] NZCA 459

SGARGETTA v ASB BANK LIMITED [2021] NZCA 459 [10 September 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA85/2018[2021] NZCA 459BETWEEN ELLIOT DANIEL SGARGETTAAppellantAND ASB BANK LIMITEDRespondentHearing: 18 May 2021Court: Cooper, Simon France and Edwards JJCounsel: L A O'Gorman for Appellant A E Simkiss and J J K Spring for RespondentJudgment: 10 September 2021 at 10 amJUDGMENT OF THE COURTA The application to adduce further evidence on appeal is granted.B The appeal is dismissed.C The application for a stay of execution is declined.D Costs are reserved pending determination of the appellant's legal aid application.____________________________________________________________________REASONS OF THE COURT(Given by Edwards J)[1] In 2017, ASB Bank Ltd (ASB) sought summary judgment against Mr Sgargetta in reliance on an unlimited deed of guarantee and indemnityMr Sgargetta had given in respect of loans made by ASB to Sleep Overs Ltd (in receivership and liquidation) (Sleep Overs).[2] The claim was for $598,340.15 plus interest. This represented the shortfall amount after the net proceeds of the sale of two properties (which we shall refer to as the Evergreen and Remarkables lodges) were taken into account.[3] Mr Sgargetta resisted summary judgment on various grounds, including that it was reasonably arguable that ASB was liable for the sale of the two lodges at an undervalue. Woodhouse J rejected that argument and others put forward by Mr Sgargetta and entered summary judgment in the sum sought by ASB.1Mr Sgargetta now appeals.2The essential facts[4] Mr Sgargetta was the director of Sleep Overs and two associated companies (Evergreen Lodge Ltd and Remarkables Lodge Ltd) which are also in receivership and liquidation.[5] Sleep Overs owned and operated the Evergreen and Remarkables lodges located in Queenstown. Both properties were run as accommodation lodges. The plan was to syndicate both lodges, which involved the sale to investors of partial interests in both properties.[6] In 2014, ASB entered into three facility agreements whereby funds were advanced to Sleep Overs and to Evergreen Lodge Ltd. The total sum advanced was $3,452,625. The security for these loans included an unlimited guarantee and indemnity from Mr Sgargetta and mortgages over the Evergreen and Remarkables lodges.[7] In around April or May 2015, the loans fell into default. On 7 July 2015, ASB sent a letter to Mr Sgargetta advising that the loan facilities were in breach, interest1 ASB Bank Ltd v Sgargetta [2017] NZHC 3097 [High Court judgment].2 There is a lengthy procedural history to the appeal, which is unnecessary to canvass in this judgment, except to note that an extension of time to bring the appeal was granted on 15 March 2018.rates would increase after seven days, and that if any excesses were not cleared by 31 July 2015, recovery action would be commenced. The excesses were not cleared.[8] An offer to purchase the Evergreen lodge for $2.16m was received on 15 July 2015, but for reasons unknown, it was not accepted. On 8 September 2015, Sleep Overs appointed Ray White Real Estate (Ray White) to market and sell the Evergreen and Remarkables lodges. Mr Lethbridge was a manager of the Remarkables lodge and was also employed by Ray White as a real estate agent. Ray White intended to sell the properties by auction after a three-month marketing campaign.[9] In the meantime, ASB was taking steps to enforce the loans and had served notices under the Property Law Act 2007 on 21 September 2015. Those Property Law Act notices expired unremedied.[10] In November 2015, ASB obtained valuations of the two lodges from a registered valuer, Mr Jarvis. The Remarkables lodge was valued at $1.85 million and the Evergreen lodge at $2 million, both including chattels. Forced sale values of both lodges were assessed at $1.58 million and $1.78million, excluding chattels, respectively.[11] Although there was interest in the two lodges, Ray White had not secured a sale by the end of 2015, and the planned auction did not go ahead. On 31 December 2015, ASB's solicitors instructed Bayleys Real Estate (Bayleys) to act on its behalf in the marketing and sale of the two lodges. Bayleys commenced marketing the sale of the properties as "mortgagee sales" in early January 2016 with the intention of selling them by auction.[12] In February 2016, ASB appointed Mr Hawkes and Ms Fatupaito of KPMG as receivers of Sleep Overs and the two associated companies. The receivers engaged Bayleys to undertake a marketing campaign for the two lodges. They decided that both lodges would be sold as going concerns by way of tender.[13] Twelve tenders were received for the Remarkables lodge ranging from $550,000 to $1.9 million. Eight tenders were received for the Evergreen lodge ranging from $950,000 to $2 million. After a period of negotiation to secure "clean" tenders, the properties were eventually sold on 22 April 2016. The Remarkables lodge was sold for $1.85 million and the Evergreen lodge sold for $1.93 million, both including chattels. The eventual buyers had been introduced to the properties by Mr Lethbridge in his capacity as Ray White real estate agent.[14] The companies were put into liquidation on 15 September 2016. ASB, through its solicitors, made demand on Mr Sgargetta under the guarantees on 19 October 2016. No payment was made.[15] Six months after the sale, the new owners of both lodges were looking to sell. In response to email enquiries, Bayleys (which was engaged by the new owners) indicated that the owner of the Remarkables lodge had a price expectation of $3.5 million, and that offers below $3 million would not be presented.[16] An application for summary judgment against Mr Sgargetta was filed on 18 April 2017. Judgment was sought for the sum of $598,340.15, being the shortfall following the sale of both lodges, plus interest and costs.[17] The application was opposed by Mr Sgargetta who represented himself at the hearing. Judgment in ASB's favour was delivered on 13 December 2017. 3 ASB was awarded interest and its full costs on a solicitor-client basis (less GST) in a separate judgment dated 14 August 2018.4 Mr Sgargetta applied to stay the substantive December judgment pending an appeal. That application was declined in a further judgment delivered on 17 August 2018. 5[18] In October 2017, after the summary judgment hearing, the lodges were both sold again for $2.7 million each.3 High Court judgment, above n 1.4 ASB Bank Ltd v Sgargetta [2018] NZHC 2066.5 ASB Bank Ltd v Sgargetta [2018] NZHC 2061.High Court judgment[19] Mr Sgargetta represented himself in the High Court. The Judge noted deficiencies in the documents, with some of the arguments not easy to follow.6The grounds of opposition were expressed in a variety of ways which the Judge distilled into six grounds,7 amounting to claims that ASB:(a) had breached the terms of the loan agreements by failing to facilitate syndication of the properties by Sleep Overs; 8(b) was reckless, negligent or unconscionable in its efforts to market and sell the lodges before receivers were appointed; 9(c) was not entitled to appoint the receivers; 10(d) was liable for the sale of the lodges at an undervalue, and were liable for the alleged acts and omissions of the receivers in selling the properties; 11(e) acted in breach of the Fair Trading Act 1986 in consequence of which the loan agreements were void and accordingly so was the guarantee; 12and(f) made misrepresentations, and engaged in misleading and unconscionable conduct, which voided the loan agreements and the guarantee. 13[20] The Judge found that Mr Sgargetta had prima facie liability and that none of the grounds of opposition involved a challenge to the validity of the guarantees and6 High Court judgment, above n 1, at [6(a)].7 At [22].8 At [23].9 At [24].10 At [25].11 At [26]–[28].12 At [29]–[30].13 At [31]–[32].facility agreements as contractually enforceable documents. 14 The position was the same in relation to the sum claimed by ASB.15 Those findings are not challenged on appeal.[21] The Judge held that grounds one to four of the opposition could not succeed because the issues raised were not defences, but counterclaims, and advanced as such by Mr Sgargetta. 16 The Judge considered whether some of the grounds of opposition could be said to amount to set-offs, rather than counterclaims. However, he held that this would not assist Mr Sgargetta in resisting summary judgment. That was because of the "pay now, argue later" clause in the guarantees, which essentially precluded a claim of set-off in response to claims by the bank. 17[22] There were other deficiencies with the grounds of opposition noted by the Judge, which are not relevant to the issues on appeal. As to the allegation that ASB is liable in damages for sales of the lodges for less than their market value, the Judge said:[48] There is Mr Sgargetta's contention that ASB is liable in damages for sales of Evergreen Lodge and Remarkables Lodge for less than their market value. The properties were sold by the receivers, not by ASB, and were sold by the receivers in exercise of their powers, and subject to their duties, as receivers. As a matter of law, the acts of the receivers are not attributable to ASB because the receivers were the agents of Sleep Overs, Evergreen and Remarkables. Section 6(3) of the Receiverships Act 1993 provides that a receiver appointed by, or under a power conferred by, a deed or agreement is the agent of the grantor unless it is expressly provided otherwise in the deed or agreement. The agreements in this case expressly provide that a receiver is the grantor company's agent.[49] Any claims relating to the sales of the properties, or in respect of other acts of the receivers, can only be claims against the receivers.[23] In addition, the Judge noted that there were evidential difficulties in proving grounds one to four. 18 Those evidential problems also affected grounds five and six, with the Judge finding that the absence of an evidential foundation for these defences meant that they could not succeed. 1914 At [34].15 At [35].16 At [37]–[38].17 At [40].18 At [41]–[47].19 At [50]–[57].[24] The Judge then considered whether the Court should grant a stay of execution of the judgment pending resolution of the counterclaim as provided for under r 12.12(2) of the High Court Rules 2016. He concluded that this was not a case warranting a stay of execution because ASB had a contractual right to require payment in full and Mr Sgargetta had not established an arguable evidential foundation to resist that claim.20 Mr Sgargetta had also had ample opportunity to file compliant documents and provide proper particulars of an arguable defence prior to the hearing: a stay of execution would amount to the grant of a substantial indulgence in Mr Sgargetta's favour in the face of his continued failure to comply with directions of the Court.21[25] Judgment was accordingly entered for ASB in the sum of $598,340.15.22As noted above, a later judgment upheld ASB's claim to interest at the contractual rate of 22.5 per cent per annum and solicitor-client costs.23Grounds of appeal[26] Mr Sgargetta originally filed a notice of appeal and subsequent submissions which raised all those grounds pursued in the High Court. Ms O'Gorman was subsequently engaged by Mr Sgargetta for the purposes of the appeal. Ms O'Gorman helpfully identified the key ground of appeal as relating to ASB's liability for the sale at an undervalue and whether that liability can be advanced as a reasonably arguable defence to a claim for the shortfall.[27] Ms O'Gorman identified the issues arising out of that ground as follows:(a) Was the High Court correct, as a matter of law, to conclude that Mr Sgargetta's arguments amounted to counterclaims and/or were precluded by a "pay now, argue later" clause so that they could not form a basis of refusing summary judgment?20 At [59(a)–(b)].21 At [59(c)–(d)].22 At [61].23 ASB Bank Ltd v Sgargetta, above n 4.(b) Was the High Court correct, as a matter of law, to conclude that ASB could not validly be a defendant for any alleged breach of the statutory duty of care in conducting the forced sales, because the sales were completed by the receivers?(c) If the above questions are answered in the negative, are there any reasonably arguable issues as to the way in which the properties were sold?[28] The first issue raises a question of law. Ms O'Gorman submits that, as a matter of law, summary judgment cannot be entered for the shortfall amount if there are reasonably arguable issues as to the way in which the land was sold. That is because the statutory duties are mandatory and cannot be excluded by contract, and a breach of the duty of care to obtain the best price reasonably obtainable at the time of sale goes directly to the shortfall amount (if any). On that basis, Ms O'Gorman submits that the "pay now, argue later" clauses are ineffective to bar such defences. For this submission Ms O'Gorman relies on the summary of relevant legal principles set out by the High Court in Crown Finance Ltd v Cronin. 24[29] The second issue also raises a question of law as to the basis of ASB's liability. Ms O'Gorman says that there are two legal routes by which ASB's liability for the sale of the properties at an undervalue may be established.[30] The first basis of liability is grounded in s 176 of the Property Law Act. That section obliges a mortgagee exercising a power of sale to obtain the best price reasonably obtainable at the time of sale. Ms O'Gorman says that ASB's duties were triggered under s 176 when it commenced the mortgagee sale process, prior to the appointment of receivers. She submits that the sale of the properties crystallised the loss sustained as a result of the earlier damage.[31] Further, Ms O'Gorman submits that a mortgagee cannot simply avoid liability for its breach by appointing receivers who subsequently sell the property. Accordingly, ASB's liability for breach of its duties under s 176 can operate as a24 Crown Finance Ltd v Cronin [2018] NZHC 1289 at [38]–[40].reasonably arguable defence to the claim for summary judgment despite the fact that it was the receivers who ultimately sold the properties.[32] The second basis of liability centres on the sale by the receivers and has its source in agreed principles of law. A receiver who exercises a power of sale of property in receivership also owes a duty under s 19 of the Receivership Act 1993 to obtain the best price reasonably obtainable as at the time of sale. Ms O'Gorman submits that security holders may become liable for acts of receivers (including a breach of the s 19 duty) if they become sufficiently involved in that conduct. 25[33] The third issue on appeal concerns questions of fact. Ms O'Gorman submits that there is a sufficient evidential foundation to establish a reasonably arguable defence that the sales process followed by ASB (via Bayleys, its appointed real estate agent), and that adopted by the receivers, was causative of the properties being sold at an undervalue.[34] The Judge's findings on the law meant he did not need to engage with the substance of the argument regarding sale at an undervalue. However, we consider it a preferable starting point in this case. Summary judgment cannot be resisted if the facts cannot establish a tenable argument that there was a breach of duty, leading to the properties being sold at an undervalue. We proceed on that basis.Should leave to adduce new evidence on appeal be granted?[35] ASB applied to adduce further evidence on appeal, in the form of an affidavit from Mr Martin, the senior Bayleys real estate agent involved with the marketing campaign for the properties. Mr Martin deposes to the difference between the mortgagee and tender processes and responds to the allegation that Bayleys gave a low-price indication for the properties.[36] We accept that the evidence is cogent and credible. The only question is whether it is fresh. Evidence will not be regarded as fresh if it could have been25 Relying on McCollum v Thompson [2017] NZCA 269, [2017] NZAR 1106 at [45]; and Crown Finance Ltd v Cronin, above n 24, at [32].produced at trial with reasonable diligence. 26 Only in compelling and exceptional circumstances will evidence that is not fresh be admitted on appeal. 27[37] The claim that the properties were sold at an undervalue is not new and was advanced by Mr Sgargetta before the High Court. Mr Martin's evidence on the sales process was available at that time. However, the arguments were not framed in the High Court in the same way that they were framed before us. It is also not entirely clear whether the documents now relied on by Mr Sgargetta were before the High Court, as only some of the documents filed by Mr Sgargetta were admitted by Woodhouse J. 28[38] Given the re-focus of the issues on appeal, we consider it is in the interests of justice that the affidavit be admitted on appeal. We grant the application to adduce further evidence accordingly.Is there a tenable argument that ASB breached its duties leading to the properties being sold at an undervalue?[39] Mr Sgargetta's claim on the facts was summarised in Ms O'Gorman's written submissions as follows:By the end of 2015/early 2016, Ray White for the debtor was already in the concluding phases of a voluntary sale process. The appellant has evidence to support his allegation that from at least January 2016 onwards Bayleys (as ASB's agent) wrongly created fire sale price expectations with potential buyers (including giving price indications in the $1 millions, compared with price indications Bayleys gave in the $3 millions some six months later when acting as agents in the on-sale). The case is that potential purchasers would have offered higher (market) prices if Ray White had reasonably been permitted to conclude its own process in early 2016 (under bank oversight), or if Bayleys had not wrongly and detrimentally affected price expectations. The causative impact of those detrimental price expectations continued when Bayleys remained agents (this time on a sole agency basis) after the appointment of the receivers. Nothing in the receivers' sale process broke that chain of causation (ie restored expectations to the pre-existing commercial levels); the ultimate purchasers remained those sourced by Ray White. The sale prices achieved have not been properly reconciled with the expert26 Erceg v Balenia Ltd [2008] NZCA 535 at [15].27 Rae v International Insurance Brokers (Nelson Marlborough) Ltd [1998] 3 NZLR 190 (CA) at 193.28 High Court judgment, above n 1, at [7].opinions as to value, nor the prices sought by Bayleys when the purchasers on-sold the properties.(Document references and footnotes omitted).[40] There are several different strands to this argument. We take each of them in turn.[41] First, Ms O'Gorman says that the entire forced sale process was unnecessary and unreasonable because a voluntary sales process through Ray White was already well progressed.[42] To the extent that this is a criticism of the timing of the mortgagee sale process, the law provides a complete answer. The duties owed by a mortgagee under s 176 do not qualify the mortgagee's right to decide if, and when, to sell.29 ASB was not obliged to wait until the Ray White process was exhausted before exercising its power of sale. In any event, Ray White had approximately six months to market the properties before Bayleys was appointed. It cannot be said that ASB acted precipitously in those circumstances.[43] Next, Ms O'Gorman is critical of the decision to market the properties as mortgagee sales. However, we agree with Ms Simkiss, counsel for ASB, that merely advertising properties for mortgagee sale cannot, on its own, be sufficient to show a breach of s 176. Importantly, and as we explain later in this judgment, there is no evidence that the mortgagee marketing led to diminished values in this case, with the ultimate price achieved commensurate with the valuations earlier obtained.[44] Another strand to Ms O'Gorman's complaint is the alleged loss of potential buyers after Bayleys became involved. The evidence to support that claim is found in an affidavit sworn by Mr Lethbridge in which he says that a number of potential buyers identified by Ray White lost interest in the properties after seeing Bayleys' sale process. Reliance is also placed on an email from Mr Lethbridge referring to a purchaser wanting to submit $400,000 less than previously offered and a letter Mr Lethbridge wrote to Sleep Overs on 8 December 2015 stating that he had three sale29 Apple Fields Ltd v Damesh Holdings Ltd [2001] 2 NZLR 586 (CA) at [49].and purchase agreements out to prospective buyers and expressing concern that Bayleys would proceed with their mortgagee marketing "over the time most critical to my potential negotiations".[45] None of this evidence shows a tenable claim that potential buyers were lost as a result of Bayleys' marketing campaign. At the time Mr Lethbridge sent his letter on 8 December 2015, Bayleys had not yet embarked on its advertising campaign. Evidence of concern about something that might happen in the future is not evidence that it actually did happen. Mr Lethbridge's letter suggests that the three potential buyers identified at that sage were waiting for advice on the GST implications of the purchase. There is no evidence to suggest that the Bayleys' marketing campaign caused them to lose interest. Nor is there anything to support the claim that a purchaser wanted to submit $400,000 less than previously offered.[46] In fact, the weight of the evidence suggests the opposite is true. Mr Lethbridge, in his capacity as an agent employed by Ray White, submitted offers on behalf of purchasers in Bayleys' tender process. The ultimate buyers of both properties were introduced by Ray White. That evidence is inconsistent with Bayleys' process resulting in a drop-off of interest in the properties.[47] Ms O'Gorman also complains that Bayleys created fire sale expectations by indicating to interested purchasers that the price was in the low $1 million. An email from "Paul" to Mr Lethbridge dated 15 January 2016 is produced to substantiate that concern. That email provides:Hi Alan.Always interested at the right price Have to be honest Since my first response to you about this property before New Years I have seen the Bayleys mortgagee advertisement for this place and another 'lodge' on the othe[r] side of Queenstown. So Where are the vendors at on price today ?? Your original indication to me a few months back was closer to $3m complete and this was too much !!! Bayleys are indicating low $1m's as a mortgagee without chattles So do your vendors have a complete price ??What's the situation with future bookings at the lodge ?? Are they still taking any ??Cheers.Paul.[48] There are several difficulties in relying on this email. Most obviously, the email is hearsay. It is a statement by "Paul" as to what was allegedly said to him by someone else, allegedly on behalf of Bayleys, in relation to an unidentified property. It is produced to prove the truth of its contents, that is, Bayleys was giving price indications in the low $1 millions for either or both of the lodges.[49] In the context of a summary judgment claim, we accept it is for ASB to prove there is no reasonably arguable defence to its claim. Nevertheless, Mr Sgargetta bears an evidential onus to raise sufficient facts to form the basis of a tenable defence. This Court is not obliged to accept evidence uncritically and may take a robust and realistic approach to the evidence. 30[50] With those principles in mind, we consider there are several features of the statement in the email from "Paul" which mean it is not sufficiently reliable to form the basis of a tenable defence. Those features are:(a) The identity of "Paul" is unknown. There is no evidence of steps taken by either Mr Sgargetta or Mr Lethbridge to further identify him despite the email being disclosed nearly four years prior to the hearing before us.(b) The Bayleys' agent who allegedly gave the price indication is not identified either. The suggestion that a Bayleys' agent would give such a price indication is undermined by the affidavit from Mr Martin, who denies that such an indication was given, and says that it is not Bayleys' policy to give price indications in a mortgagee sale.(c) The email does not identify the property about which the statement was allegedly made.(d) The email does not contain any detail about how "Paul" came to understand Bayleys' price indication.30 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26].(e) The email to which it responds (presumably from Mr Lethbridge) has not been disclosed so the statements in the email lack context.[51] The unreliability of the evidence distinguishes this case from Robertson v ASB Bank Ltd on which Ms O'Gorman relied. 31 In that case, there was evidence from three different witnesses that the real estate agent had given a price indication that the property would sell for around $1 million. This Court accepted that the evidence provided a plausible narrative for the appellants' belief that the agent was undermining the sales process with a view to obtaining a quick sale from which a commission could be taken.32[52] There is another distinguishing factor also. In Robertson, this Court found that it was reasonably arguable that initial steps taken by the bank (via its appointed agent) were a breach of s 176, notwithstanding subsequent steps taken by the bank to sell the property.33 In this case, however, there is insufficient evidence to suggest that any breach of the s 176 duty (assuming such a breach can be established) continued to have effect on the sales process adopted by the receivers and the ultimate sales prices obtained.[53] Ms O'Gorman relies on the continued involvement of Bayleys to support the claim that the earlier breaches continued to have effect. She also refers to minutes of a meeting held on 8 March 2016 which record that the receivers did not have a marketing plan and would be adopting the Bayleys' plan.[54] We do not consider it can be safely inferred from the receivers' minutes that the receivers were adopting and continuing the first Bayleys' marketing strategy. It could equally be inferred that the receivers were adopting a new Bayleys' strategy. The evidence suggests that this is, in fact, what occurred. That arises out of the second receivers' report for Sleep Overs, dated 3 October 2016, which records as follows:On appointment the Receivers considered the property sales processes already in place, which were a private sale with Ray White and a mortgagee sale with Bayleys. The Receivers reviewed the current processes and other available31 Robertson v ASB Bank Ltd [2014] 597.32 At [39].33 At [57].options and after discussions with the agents decided that a Tender process would be the option most likely to achieve the highest asset realisation for both properties. The Receivers made a decision to continue operating both lodges given favourable demand for accommodation in the Queenstown Lakes area and to assist with obtaining the best sales price through a going concern sale. Bayleys were appointed the sole agent for both properties. The tender process closed 22 March 2016.[55] While the sales strategy prior to the appointment of receivers had been sale of the properties by auction, the receivers decided the sale should be on the basis of a going concern, with offers being made by tender. The decision to adopt a different sales strategy counters any inference that Bayleys' involvement continued the prior sales strategy which Ms O'Gorman says was flawed. It also counters any suggestion that ASB was involved with the receivers' sales process to such an extent that it should be liable on that basis. There is simply insufficient evidence to support the claim that the receivers' process was insufficient to constitute a new and untainted sales process.[56] There is also insufficient evidence to support the claim that the receivers' sales process was hasty or inadequate. The receivers' second report records that there were 12 tenders received for the Remarkables lodge ranging from $550,000 to $1.9 million, eight tenders for the Evergreen lodge ranging from $950,000 to $2 million, and one tender for both properties for a price of $2.5 million. There is nothing to suggest that the tender process was flawed.[57] The receivers had to negotiate clean tenders for each property. The actual sales prices achieved were $1.85 million for the Remarkables lodge and $1.93 million for the Evergreen lodge. Both included chattels. The valuations undertaken by Mr Jarvis in November 2015 for the Remarkables and Evergreen lodges were $1.85 million and $2 million (both including chattels), respectively, and the forced sales values were $1.58 million and $1.78 million (both excluding chattels), respectively. Importantly, the actual sales prices were in the vicinity of the valuations and exceeded the forced sales values.[58] The sales prices achieved were also very close to the anticipated offers of $2 million for each property, which Mr Lethbridge said were ready to be made on 10 March 2016, and the offer of $2.16 million for the Evergreen lodge received byRay White in July 2015. That evidence suggests that the prices obtained were true market values for the properties at the time.[59] Evidence from late 2015 and 2016 is a better comparator than valuations obtained from 2013 and 2014, which were not proximate to the sales date. We also do not consider any weight can be put on emails sent six months after sale in which the price expectations for each property were set at a minimum of $3 million. These emails are not indications of value but are simply reflective of the hopes and expectations of the owners of the lodges at the time. Similarly, the fact that each lodge sold for $2.7 million on 19 October 2017, nearly 18 months after sale, cannot be compared to the sales achieved by the receivers. The obligation to obtain the best price reasonably obtainable is assessed at the time of sale.[60] The upshot of all this evidence is that we do not consider there to be a sufficiently tenable defence that ASB's marketing strategy, prior to the appointment of the receivers, was flawed and led to the properties being sold at an undervalue. Nor is there a reasonably arguable case that the receivers' sales process was a continuation of the prior process or that ASB (via Bayleys) was so involved with that process so as to be liable for any breach by the receivers. Finally, to the extent that there was any flaw in any of the sales processes, we do not consider there to be a tenable claim that these lead to the properties being sold at an undervaluation.[61] These conclusions make it unnecessary to consider and decide the legal arguments advanced by Ms O'Gorman. Whatever the legal route chosen to fix ASB with liability, we are satisfied that Mr Sgargetta does not have a reasonably arguable defence to ASB's claim.Is there a reasonably arguable defence on the other grounds?[62] Mr Sgargetta's original notice of appeal and written submissions (both filed prior to Ms O'Gorman's involvement) challenged the entirety of Woodhouse J's judgment. Although the other grounds of appeal were not expressly abandoned, Ms O'Gorman did not address them in either her written or oral submissions. We need only deal with them very briefly in those circumstances. We do so by reference to the six grounds identified by Woodhouse J in his judgment and reproduced at [19] above.[63] Our findings are sufficient to dispose of grounds two and four. As to the others, there is insufficient evidence that ASB:(a) breached its obligations in relation to syndication. The fact that ASB was aware that Sleep Overs was planning to syndicate the lodges is not enough to constitute an obligation to assist. There is no evidence that it was a term of the facility agreements and related securities that ASB would facilitate syndication (ground one);(b) wrongfully appointed receivers (ground three); or(c) acted in breach of the Fair Trading Act (ground five); or(d) did anything which would be sufficient to support an action for relief founded on the doctrine of unconscionable bargain (ground six).[64] It follows that we are not satisfied that Mr Sgargetta has a reasonably arguable defence to ASB's claim and the Judge did not err in entering summary judgment.Should a stay be granted?[65] Ms O'Gorman submits that if the judgment is not set aside, then a stay of execution should be ordered to allow Mr Sgargetta to pursue his claims against ASB. We do not consider a stay to be appropriate in this case. This proceeding was commenced in April 2017 and there has been significant delay in getting to this point. Mr Sgargetta's claims are not strong enough to warrant yet further delay. ASB is entitled to recover the outstanding funds. We decline to grant a stay.Result[66] ASB's application to adduce further evidence on appeal is granted.[67] The appeal is dismissed.[68] The application for a stay of execution is declined.[69] As to costs, Mr Sgargetta's application for a grant of legal aid for the appeal was pending at the time of the hearing. We accordingly reserve costs pending the determination of that application.Solicitors:MinterEllisonRuddWatts, Auckland for Respondent