FM CUSTODIANS LIMITED as the custodial trustee of the AUCKLAND MORTGAGE TRUST v SOS INVESTMENTS LIMITED [2014] NZHC 817

FM CUSTODIANS LIMITED as the custodial trustee of the AUCKLAND MORTGAGE TRUST v SOS INVESTMENTS LIMITED [2014] NZHC 817 [17 April 2014]IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYCIV-2013-419-914[2014] NZHC 817BETWEEN FM CUSTODIANS LIMITED as thecustodial trustee of the AUCKLANDMORTGAGE TRUSTPlaintiffAND SOS INVESTMENTS LIMITEDDefendantHearing: 2 April 2014Appearances: Ms Penman-Chambers and Mr O'Brien for PlaintiffMr G Wilkin for DefendantJudgment: 17 April 2014JUDGMENT OF ASSOCIATE JUDGE J P DOOGUEThis judgment was delivered by me on17.04.14 at 10 a.m., pursuant toRule 11.5 of the High Court Rules.Registrar/Deputy RegistrarDate[1] FM Custodians Limited (the plaintiff) has applied for summary judgmentagainst SOS Investments Limited (the defendant), seeking judgment in the sum of$3,131,255.51 together with an order for possession of a property secured by amortgage which forms the basis of the plaintiff's claim.Background[2] There were a series of advances made by the plaintiff to the defendant datingfrom approximately 30 September 2005, which is when the defendant executed amortgage in favour of the plaintiff over the defendant's property at 103 Te AwaRoad, RD 3, Hamilton (the property).[3] The mortgage instrument incorporated a standard-form mortgage memorandum, the key terms of which are set out at paragraph 6 of the statement of claim:1(a) The defendant was to be bound by the terms and conditions contained in the Memorandum as if they were set out in full in any document that resulted in the defendant borrowing money and giving a mortgage;(b) Upon default by the defendant, the plaintiff would be entitled to call up the balance of secured moneys; sell, enter into possession of or appoint a receiver of rental income of the Property; or obtain and enforce judgment against the defendant for all of the secured moneys (or any shortfall between the amount realised from exercise of theplaintiff's rights and powers and the amount owing).[4] The following statement of additional background matters taken from theplaintiff's synopsis of submissions are not in dispute:8. The plaintiff registered the mortgage on 11 November 2005 ("theMortgage").9. On 3 November 2005 the plaintiff advanced the sum of $1,750,000 to the defendant. This loan was renewed on 22 November 2006 pursuant to a loan agreement secured by the Mortgage (the First Loan). The key terms of the First Loan are set out at paragraphs 12 to 16 of the Statement of Claim and include the following:1 Memorandum, clause 16 (Rasmussen, exhibit C).(a) The defendant was required to repay the principal sum together with all other monies then outstanding on the term expiry date (being upon demand by the plaintiff, or otherwise 10 May 2007);(b) The defendant was required to pay interest on the principal sum;(c) The defendant was required to pay, on demand, the plaintiff's legalcosts including costs on a solicitor-client basis;(d) The defendant was required to comply with all of the obligations contained in every agreement between the parties;(e) The defendant was required to comply with the terms of every security interest at any time held by the plaintiff for monies owing;(f) Upon default by the defendant, the plaintiff would be entitled to call up the balance of secured moneys; sell, enter into possession of or appoint a receiver of rental income of the Property; or obtain and enforce judgment against the defendant for all of the secured moneys (or any shortfall between the amount realised from exerciseof the plaintiff's rights and powers and the amount owing).[5] On 22 November 2005 and 9 June 2008 the plaintiff made additionaladvances of $450,000 and $300,000 respectively. Both of the later two advanceswere made on the same basis as the first advance and there is no argument that theywere secured over the property of the defendant.[6] The defendant defaulted under its loan arrangements and default notices were served under s 92 of the Property Law Act 1952 on 8 October 2007, 23 November 2010 and 10 September 2013. There is no dispute that the defendant remains indefault under the last mentioned default notice, leaving aside for present purposeswhether it has an arguable defence that it is not indebted to the plaintiff at all – amatter which I will consider further on in this judgment.Summary judgment principles[7] Rule 12.2(1) of the High Court Rules provides:The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.[8] The principles are summarised in Krukziener v Hanover Finance Ltd:2The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried; Pemberton v Chappell [1987] 1 NZLR 1; (1986) 1 PRNZ 183 (CA), at p 3; p 185. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331; [1979] 3 WLR 373 (PC), at p 341; p 381. In the end the Court's assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).[9] In the context of the present proceeding it is also useful to make reference to the Court of Appeal judgment in Australian Guarantee Corporation [NZ] Limited v McBeth:3The summary judgment procedure is a simple expeditious way to enable a plaintiff to obtain judgment where there is no real defence to the claim made: see Pemberton v Chappell [1987] 1 NZLR 1 at p 2. The essence of the procedure is the plaintiff's own verification by affidavit of his own statement of claim and the allegations made in it: Harry Smith Car Sales Pty Ltd v Claycom Vegetable Supply Co Pty Ltd (1978) 29 ACTR 21. There has to be a balancing between the right of the defendant to have his day in Court and to have his proper defences explored and the appropriate robust and realistic approach called for by the particular facts of the case: see Bilby Dimock Corporation Ltd v Patel (1987) 1 PRNZ 84 and Cegami Investments Ltd v AMP Financial Corporation (NZ) Ltd [1990] 2 NZLR 308 at p 313. Although the onus is upon the plaintiff there is upon the defendant a need to provide some evidential foundation for the defences which are raised. If not, the plaintiff's verification stands unchallenged and ought to be accepted unless it is patently wrong.2 Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].3 Australian Guarantee Corporation (New Zealand) Ltd v McBeth [1992] 3 NZLR 54 (CA) at 58-59. The requirement for the defendant to provide an evidential foundation for their defence was accepted by the High Court in Bank of New Zealand v Chapple HC New Plymouth CIV-2011-443- 213, 23 December 2011 at [6].The plaintiff's submissions[10] The plaintiff submits that it is due a sum of $3,131,255.51, consisting of $2,500,000 in advances made to the defendant plus interest and expenses incurred in the intervening period.[11] While there is no dispute as to the amount owed, as the authorities above make clear summary judgment is only available if the defendant has no arguabledefence to the plaintiff's claim.The defendant's submissions[12] The defendant has raised a number of defences to the summary judgment application, the majority of which relate to an alleged arrangement that the plaintiff would pursue Frucom Enginerring GmbH (Frucom) for payment of the advances made to the defendant in lieu of suing the defendant directly or by enforcing itssecurity over the defendant's property (the Frucom arrangement).[13] These defences can be summarised as follows:a) The plaintiff waived its right to pursue the defendant for repayment and its right to rely on the property as security of the mortgage (the waiver argument) by:i) its substantial delay in commencing these proceedings many years after the defendant defaulted on the loans; orii) entering into the Frucom arrangement.b) If it did not waive its rights, the plaintiff is nevertheless estopped from pursuing the defendant because of its conduct in relation to the Frucom arrangement (the estoppel argument).c) In the alternative, the Frucom arrangement was a substitute or variation for the terms of the mortgage memorandum (the novation argument).[14] The defendant also contends it disclaimed liability via a "disclaimer document" dated 30 September 2013.The defendant's affidavit[15] I will now briefly summarise the evidence that Robert Cribb, director of the defendant and covenanter of the mortgage, has put forward to support the assertion that the defendant has an arguable defence. He records that "in my capacity astrustee for the Cribb Family Trust" he initiated summary judgment proceedingsagainst Zender Minol d.o.o., Frucom Engineering GmbH and Margaret ReginaLaughrin.4[16] Mr Cribb records that an order for summary judgment was in fact made in theHamilton High Court on 21 February 2013 entering judgment in the sum of$33,200,000 in favour of Mr Cribb as the plaintiff for the trust.5 The first key pointto be noted is that the debt of the judgment was not obtained by the defendant inperson in these proceedings but by the Cribb Family Trust.[17] Mr Cribb then deposes that Frucom is a substantial Austrian company which has the capacity to pay the judgment in full. He also deposes that the judgment obtained in the High Court of New Zealand was registered in the Queens Bench division of the High Court of England and Wales.[18] It is Mr Cribbs further evidence that he advised Mr Rasmussen who was the CEO of the plaintiff of all of these steps. The following critical passages fromMr Cribb's evidence need to be set out in full:14. As a consequence the plaintiff agreed to join in the process of recovery from [Frucom] and collect direct payment direct from [Frucom] in order to discharge and repay the defendants loans as4 Affidavit of Robert Clifford Hoani Cribb, at para 9.5 Cribb v Zender Minol d.o.o & Ors, HC Hamilton CIV-2012-419-1587, 21 February 2013.evidenced by the plaintiff's invoice number 00000339 dated 30 June2013 ... .15. The plaintiff accepted and recognised the work undertaken by me asa result of the Judgment, settlement arrangements were madebetween the plaintiff and Frucom for settlement of the debt incircumstances which relieved the defendant from action to sell itsproperty in payment from that source.16. It is my understanding Auckland Mortgage Trust varied thearrangement with the defendant, for payment of the loans, byagreeing to an alternative cause in action in accepting repayment ofthe loans direct from [Frucom], being part of the Judgment owing tothe Cribb Family Trust.17. As a consequence the defendant has changed its position in relianceon that understanding.[19] Later in his affidavit he says:19. I consider that PLA notice invalid because, by the time it wasserved, Auckland Mortgage Trust had agreed to await the outcomeof the recovery in collection from Frucom to repay the loans.Hence, on advice, I arranged for the issue and service of a notice ofdisclaimer dated 30 September 2013 ... .20. The plaintiff's proceedings are entirely inconsistent with discussionsand agreement I had concluded with Mr Rasmussen as describedabove and the arrangements the plaintiff made to accept paymentdirect from [Frucom], none of which are referred to in the plaintiff'sapplication or Mr Rasmussen's affidavit sworn 7 November 2013,which does nothing more than provide the core documents for theloans and the mortgage.[20] Much of what Mr Cribb says is evidence that could be described as expressing his conclusions about the effect of arrangements that were entered into. He appears to step around the issue of exactly what the parties said to each other, or what documents were exchanged between them in order to give effect to this arrangement. I consider that such an approach is impermissible as the following extract from McGechan on Procedure make clear:6It is well established that as a general rule in determining summary judgment applications, the Court will refrain from attempting to resolve genuine conflicts of evidence or to assess the credibility of the parties' statements intheir affidavits. However, the object of the procedure would be thwarted if spurious defences or plainly contrived factual conflicts were permitted to prevent judgment being obtained ... A helpful indicator as to where the line6 McGechan on Procedure (Thomson Reuters, online ed) at HC12.2.08.should be drawn is found in the judgment of Greig J in A-G v Rakiura Holdings Ltd (1986) 1 PRNZ 12 at 14:'In a matter such as this it would not be normal for a judge toattempt to resolve any conflicts in evidence contained in affidavits or to assess the credibility or plausibility of averments in them. On the other hand, in the words of Lord Diplock in Eng Mee Yong v Letchumanan [1980] AC 331 at 341 E, the Judge is not bound: 'toaccept uncritically, as raising a dispute of fact which calls for further investigation, every statement of an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable in itself it may be'.[21] What Mr Cribb was required to do was to give evidence about factual matters within his knowledge which would include, for example, the discussions he had with the other side, the factual setting for the discussions, and to refer to and produce documents that were exchanged between the parties. It would then be for the court to determine what factual and legal significance was to be attached to the matters set out in its evidence. Given the absence of evidence in Mr Cribb's affidavit (incontravention of r 9.76(1)(d) of the High Court Rules) I consider that it does not passthe threshold of credibility required to provide support to the defendant's claims.The evidence of his views, in other words, is not probative of any issue that is to be determined in the proceeding.[22] I now propose to consider the defendant's claims.Waiver by delay[23] An unusual feature of the present case is that there were significant delays on the part of the plaintiff in bringing proceedings against the defendant after defaultshad occurred. The chronology that Mr Wilkin provided is instructive in that regardand I now set out some of the key dates taken from it:Date Event03/11/05 First loan advanced - $1,750,000.0022/11/06 First loan renewed - $1,750,000.0022/11/06 Second loan - $450,000.0001/12/06 First interest payment due on first loan defaultmade01/12/06 First interest payment due on second loandefault made10/05/07 First loan term expiry date10/05/07 Second loan term expiry date08/10/07 First PLA notice09/06/08 Third loan - $300,000.0023/11/10 Second PLA Notice10/09/13 Third PLA Notice[24] The other unusual feature of the business relationship between the parties wasthat even after defaults had occurred under the first and second loans, the plaintiffwas willing some 18 months later to make still further advances to the defendant inthe form of the third loan for $300,000. As well, the Property Law Act notices wereserved and then not followed up on. The plaintiff served three Property Law Actnotices in all on the defendant.[25] The reasons why the plaintiff adopted this unusual approach are not of anyinherent importance to the case but I have mentioned the delays because they are putforward as a separate ground for claiming that the plaintiff had lost its right to nowsue on the outstanding loans. It in fact appears that towards the latter end of theparties' relationship the plaintiff may have been staying its hand while it allowedtime for recovering the unpaid money from Frucom.[26] In answer to this proposed defence, Ms Penman-Chambers referred me toclause 7(b) of the agreement dated 22 November 2006 renewing the term of the loanfor the first advance which provides as follows:Delay does not affect exercise of powers: The lender's rights under this contract will not be affected by any delay in exercising them (whether or not the lender knows that they have become exercisable). The lender may only be held to have acquiesced in or waived any matter in relation to this clause and if to the extent that the acquiescence or waiver is expressed in writing.[27] I accept the submission for the plaintiff that the clause quoted answers the point about implied abandonment or waiver arising from the delays in taking steps to bring proceedings against the defendant.Waiver, estoppel, and novation by agreement[28] Each of these claims derive from the defendant's allegation that the Frucom arrangement modified the parties' rights and liabilities under the mortgagememorandum. The form of this agreement is not certain and it would appear that on the face of the evidence the following possibilities as to its form arise.[29] The first possibility is that the defendant wished the plaintiff to attempt to recover the money direct from Frucom. If it were successful in making recovery then that would be to the advantage of the defendant who would no longer be facing a mortgagee sale and other recovery proceedings. This possibility is supported by the plaintiff sending an invoice dated 30 June 2013 directly to Frucom for thedefendant's debt. Arguably this constitutes implicit evidence that an arrangementhad been made between the plaintiff and the defendant to the effect that the defendant assigned its rights to part of the alleged Frucom debt to the plaintiff. However, it is just as likely that the invoice could have been simply a pro-forma invoice which Frucom was awaiting as a precondition to making payment which it had already agreed to do.[30] The second possibility is that there was an agreement between the parties that the plaintiff would release the defendant from the debt in return for its agreement to allow the plaintiff to send the invoice to Frucom. In other words, in place of liabilityof the defendant, the plaintiff would acquire security in respect of some type of rights against Frucom.[31] The third possibility is that there was a tripartite agreement under which Frucom agreed to assume legal responsibility for the debt of the defendant to the plaintiff.[32] It is against that background that I consider the issues of waiver, estoppel and novation.Waiver and estoppel[33] Reduced to its essentials the first ground rests on an allegation that the Frucom agreement amounted to a waiver on the part of the plaintiff of its rights andits ability to rely on the mortgage security for payment. It is also said, in support ofthe waiver argument, that "settlement arrangements" made between Frucom and theplaintiff for settlement of the debt amount relieved the defendant from threatenedaction to sell the property and meant that the plaintiff was to obtain payment fromFrucom rather than from the defendant.[34] The second defence, of estoppel, argues that the conduct of the plaintiff in sending an invoice to Frucom for the amounts that the defendant owed, amounted to an implied representation that the plaintiff no longer intended to enforce its debt against the defendant and that it would now not be just to permit the plaintiff to go back on the representation.[35] I agree with the following statement of law taken from the Laws of New Zealand which deals generally with the topics of estoppel and waiver:7Waiver consists of an intentional act, with knowledge, indicating either expressly or by implication an intention to dispense with an existing condition. The intentional act must be such as to be clearly and unequivocally characterised as a waiver of rights. Waiver looks chiefly to the conduct and position of the person who is said to have waived, whereas, in the case of estoppel, it is not essential that the person sought to be estopped should have had knowledge or intention. For waiver, a distinct act7 Laws of New Zealand, Equity (Lexis Nexis, online ed) at [283].must be done so as to constitute waiver; for estoppel, conduct short of a positive act may suffice. Waiver may be distinguished from estoppel in that, when a party intentionally and with knowledge chooses between one of two inconsistent positions, he or she will not be permitted to choose later to the contrary.[36] It has also been noted in the number of cases that an estoppel depends upon, amongst others things, a clear and unequivocal promise or assurance by words or conduct which was intended to affect the legal relations between the parties and to be acted on accordingly.8[37] In my view, if an arrangement having the legal affect that Mr Cribb contends for was entered into, then Mr Cribb was apparently the only person dealing with the plaintiff in regard to it. He ought therefore to have been in a position to produce evidence of the specifics of the transaction that he said lead to the waiver or estoppel that now prevents the plaintiff from enforcing its claim. Nowhere in the evidence though does one find any reference to a statement of intention on the part of the plaintiff to relinquish its rights against the defendant. Without some evidence to support the position of the defendant, it cannot be said that there is an arguable defence of waiver.[38] The fact that the plaintiff decided to go along with an attempt to get the money it was owed from Frucom is equivocal in this context. It does not make it more or less likely that the plaintiff in addressing its demand to Frucom was waiving its claim against the defendant. In his submissions, Mr Wilkin said there was a necessity to hear evidence and for there to be cross examination of the witnesses. However, before that point is reached, it is necessary to at least identify some factual dispute of substance which the court is going to have to resolve. Mr Cribb has not provided any evidence of that kind. He relies upon inferences to be drawn from the fact that the plaintiffs sought payment from Frucom. Whether or not such an inference can be said to arise can be determined at a summary judgment stage.[39] There is no evidence either upon which a defence in estoppel could rest. There is no clear statement by the plaintiff that it was not intending to enforce such rights as it had against the defendant. Nor is there evidence that the defendant relied8 Burbery Mortgage Finance and Savings Ltd v Hindsbank Holdings Ltd [1989] 1 NZLR 356, 359.to its detriment upon such a representation so that it would now be unconscionable for the plaintiff to attempt to withdraw the representation. Again, the fact that the plaintiff thought it worthwhile to try and get the money from Frucom does not carry with it the necessary inference that the plaintiff no longer regarded the defendant as being responsible for the debt.[40] Ms Penman-Chambers also referred me to the fact that the contents of the second invoice dated 17 July 2013 added on to the amounts invoiced in the firstinvoice to Frucom additional items such as "insurance, rates, and maintenance" forthe property. This would indicate on its face that the plaintiff still had an interest in preserving the security for its debt. The house property which had been the security for the debt would be irrelevant to the plaintiff as it was no longer looking to the owner of the property, the defendant, for payment of the debt. Mr Wilkin said that the defendant acted to its detriment by taking no steps to pay off the mortgage and that in the interim the value of the property had depreciated to the point where a mortgagee sale would result in a deficit or larger deficit owing by the defendant to the plaintiff than would otherwise have been. He pointed to the following passage in the evidence that Mr Cribb gave:I understand the property may have a current realisable value of $1.4 million at mortgagee sale.[41] I understand that it was Mr Wilkin's submission that because of therepresentation that was made, no steps were taken by the defendant to pay off the mortgage. As a result, in the intervening period the value of the property slipped and this detriment is therefore attributable to the alleged representation.[42] However, as Ms Penman-Chambers noted, there is no basis upon which such evidence could be admitted and in fact no evidence was provided. Mr Cribb himself does not appear to have any qualifications that would entitle him to give opinions about the current value of the property. I accept that criticism.[43] But there are other more substantial difficulties with this ground of defence. If erosion in the value of the property was to constitute the detriment which the defendant relies upon, it would be necessary to demonstrate at least an arguable casefor asserting that there was some linkage between the alleged representation, the resulting decision of the defendant to refrain from some course of action (presumably repayment of the loan) based upon the representation and the loss or detriment that was suffered.[44] The defendant has not established a platform for the defence because it would be necessary to demonstrate that there were some substantial ground from which the defendant could argue that:a) the defendant could, and would have, paid the mortgage off, but for the representation; andb) in the period commencing from when the actions or inaction of the defendant were first influenced by the statement the value of the property diminished.[45] In regards to (a), there no evidence that the defendant would have acted in a different way than it actually did by, for example, paying off the loan.[46] In regards to (b), the date of the first invoice to Frucom is 30 June 2013. In the absence of some other date, it is to be assumed thereon that the defendant understood it was the intention of the plaintiff to seek payment from Frucom. It could only have been from around about this period that the choices or elections which the defendant made were influenced by the "representation". There is nothingin the evidence or that is inherent in the circumstances of the case which suggests that even if there had been a diminishment in the value of the property, that it took place during the period after 30 June 2013.[47] But in the end the effect of sending those invoices is equivocal. The evidential effect of any inference that can be drawn from the sending of those invoices does not absolve the defendant from the obligation to point to some evidence of the distinct statements which are said to have given rise to the waiver and estoppel. Mr Cribbb had his opportunity to provide such information and he did not.[48] Obviously the defendant or at least Mr Cribb on its behalf knew about the invoice and indeed had a copy of it in its possession. It is inherently unlikely that the plaintiff would on its own motion and without reference to the plaintiff take such a step. Clearly, in the circumstances of this case, one of the probable explanations for why the plaintiff sent the invoice to Frucom was because the defendant asked it to do so. Mr Cribb in his evidence left this issue in the air.[49] I should also note that in the affidavit in reply filed by Mr Rasmussen agreed that the plaintiff had in fact submitted invoices to Frucom. He does not however accept that there was any intention to enter into any arrangement which would have had the effect of releasing the defendant from the amount due.[50] The court is required to take a practical and commercially realistic view of the evidence that has been put forward. On the one hand, Mr Cribb speaks of his"understanding" that the defendant was to be excused payment but does not providethe supporting reasons why that was a reasonable view. On the other hand, there is Mr Rasmussen's express denial that there was any such arrangement. There is alsothe contents of the invoice referring to continuing maintenance of the secured property. That is a contemporaneous document which points to the likelihood that, notwithstanding the invoice made out to Frucom, the plaintiff still considered that ithad rights against the defendant's property which provided the reason why it wasexpending its own funds on its maintenance.[51] Finally, the scenario upon which the defences are based is one which is inherently unlikely. It would be unusual for a financier in the position of the plaintiff to relinquish the mortgage security over real estate as a security in return for some type of informal arrangement pursuant to which it was given authority to invoice a debtor of the defendant.[52] My conclusion is that there is no issue to be tried between the parties on the question of whether the plaintiff lost its rights to claim against the defendant as a result of waiver or estoppel.The novation argument[53] The defendant's claim that the Frucom arrangement either varied the parties'rights and liabilities under the mortgage memorandum or, alternatively, acted as a substitute for it falls the same way as the waiver and estoppel arguments. Following the conclusions made concerning Mr Cribb's affidavit evidence, Mr Cribb's "understanding" that the plaintiff "varied" the arrangement with the defendant is notadmissible evidence. There is no other evidence to support the assertion (at [12] (c) above) that the contractual terms were varied. It was Mr Cribb's obligation, if hewished to put forward such a case, to give evidence identifying facts upon which the Court could conclude that the defendant had an arguable defence based on such an alleged variation. He has failed to do so.The "disclaimer" document[54] The defendant also submitted through counsel that it had an arguable defencearising from a document which was described as a "disclaimer". This was adocument which Mr Cribb signed and which is dated 30 September 2013. The document is apparently addressed to the plaintiff then so far as material reads as follows:Auckland Mortgage TrustMortgage no. 6644255.2 South Auckland RegistrySecured over 103 Te Awa Road, Rd3, Tamahere, Hamilton 3283 New ZealandTAKE NOTICE that:1. Notwithstanding payment or pending payment or discharge of mortgage 6644255.2 related liability, linked to the above-mentioned account and property, all parties referred to in the schedule That below jointly and severally disclaim any and all responsibility for the said liability as $ 3.130 million as per the Invoice Statement issued to Frucom EngineeringGmbH from Auckland Mortgage Trust dated 30th June 2013 (copy attached)2. Pursuant to the judgment of the New Zealand High Court in dated 2st February 2013 by His Honour Associate Judge Faire as subsequently registered by Master Fontaine on 13th April 2013 in theQueen's Bench Division of the High Court of England, the saidparties hereby jointly and severally reserve the right to take legal orother proceedings against appropriate parties to be indemnified for any and all loss by reason of the payment being made by them or on their behalf.SCHEDULE1. Robert Hoani Cribb (as trustee for the Cribb Family Trust)2. The Cribb Family Trust3. Equity Management CorporationDated 30 September 2013[signed]Robert H CribbAnd as trustee for and on behalf of the Cribb Family Trust and Equity Management Corporation Limited[55] Apart from other difficulties with this agreement, there is the consideration that counsel for the plaintiff mentioned that the document was signed by Mr Cribb in his capacity of trustee of the Cribb Family Trust which is not the debtor or the defendant in this proceeding.[56] It is not clear what, if any, legal effect this document has. It is obvious that a party cannot unilaterally disclaim liability for an obligation that he owes to another. Whatever effect this document has, it cannot be viewed as providing a defence to the claim that the plaintiff has brought against the defendant.Conclusion[57] For all of the foregoing reasons, I consider that the material that has been put forward by the defendant is insufficient to establish that there is an arguable defence. In other words, the net effect of the evidence that Mr Cribb has put forward fails to satisfy the requirement that the defendant must be able to point to an arguabledefence to the plaintiff's claim.[58] I therefore order that judgment is to be entered in favour of the plaintiff in the sum of $3,131,255.51.[59] I am satisfied that the plaintiff is entitled to recover possession of the property in terms of the powers contained in the mortgage which the mortgagor granted. There is no dispute either that the plaintiff served the required notice under s 119 of the Property Law Act 2007 of its intention to exercise the powers under the mortgage which included the power to take possession. There will therefore be an order that the defendant is to deliver possession of the land described in the statement of claim to the plaintiff.[60] The parties should confer on the matter of costs and if they are unable to agree they are to file memoranda not exceeding five pages on each side within 10 working days of the date of this judgment._____________J.P. DoogueAssociate Judge