JOHN STEPHEN PATRICK v BANK OF NEW ZEALAND [2018] NZSC 73

JOHN STEPHEN PATRICK v BANK OF NEW ZEALAND [2018] NZSC 73 [8 August 2018]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUISC 43/2018[2018] NZSC 73BETWEEN JOHN STEPHEN PATRICKApplicantAND BANK OF NEW ZEALANDRespondentCourt: Elias CJ, Glazebrook and O'Regan JJCounsel: A J Woodhouse for ApplicantR J Gordon for RespondentJudgment: 8 August 2018JUDGMENT OF THE COURTA The application for leave to appeal is dismissed.B The applicant is to pay costs of $2,500 to the respondent.____________________________________________________________________REASONS[1] The applicant seeks leave to appeal against a decision of the Court of Appeal.1In that judgment, the Court of Appeal upheld a decision of the High Court grantingsummary judgment to the respondent for the liability of the applicant under a guaranteegranted by the applicant to the respondent in respect of the obligations of certaincompanies with which he was associated (the Moteo Group).2[2] The applicant changed lawyers after the High Court decision was delivered,and on appeal sought to adduce further evidence and to expand the grounds on which1 Patrick v Bank of New Zealand [2018] NZCA 122 (Gilbert, Dobson and Toogood JJ)[CA judgment].2 Bank of New Zealand v Patrick [2017] NZHC 1184 (Associate Judge Smith).he opposed summary judgment. The proposed new evidence included extensiveaffidavits and exhibits from the applicant and a business adviser who had assisted theapplicant, both of whom had filed affidavits in the High Court. In addition there wasan affidavit from a lawyer who had previously acted for the Moteo Group.[3] After an extensive consideration of the proposed grounds of opposition tosummary judgment that were said to be supported by the new evidence, the Court ofAppeal found that none was tenable, and that the evidence therefore lacked cogencyand refused to admit it.3 Although not determinative of the admissibility decision, theCourt also rejected an argument made on behalf of the applicant that the new evidenceshould be admitted despite not being fresh (in the sense that the bulk of it was givenby witnesses who had given evidence in the High Court) because the failure to adduceit in the High Court was based on trial counsel error. The Court did not accept thatthis was a basis to avoid the requirement that new evidence be fresh.4 In any event,the Court found that trial counsel had not been incompetent because the argumentswhich the applicant's appeal counsel suggested should have been, but were not, run inthe High Court were, in fact, untenable.5[4] The applicant seeks to raise six points of appeal.[5] The first two concern the Court of Appeal's refusal to admit the evidence thatthe applicant wished to adduce in that Court. The applicant wishes to argue that theCourt should have treated the evidence as fresh because the failure to adduce it in theHigh Court was based on trial counsel error and also that the Court ought to have takena less stringent approach given the summary judgment context. We accept that theremay be a point relating to the test for the admission of fresh evidence that wouldwarrant consideration by this Court, but in the present case the rejection of the freshevidence was based on essentially factual considerations, leading to the Court ofAppeal concluding that the evidence was not cogent and that the failure to admit it inthe High Court did not, in fact, result from trial counsel incompetence. In those3 CA judgment, above n 1, at [48].4 At [51].5 At [53].circumstances we do not see any proper basis for granting leave in relation to thesepoints.[6] The third ground is an argument that the Code of Banking Practice issued bythe New Zealand Bankers' Association is enforceable in private actions and thereforecould provide a basis for resistance of summary judgment if there was a tenable casethat the Code had been breached. The applicant argues that the High Court and Courtof Appeal decisions, dating back to 1996, that the Code is not enforceable by privateaction is an example of jurisprudential "creep" but, as the Court of Appeal noted, theapplicant did not commit to whether any legally enforceable duty under the Code arosein tort, in contract or as an incident of a fiduciary relationship between bank andcustomer.6 This argument was not raised in the High Court and rejected in the Courtof Appeal in circumstances where no legal basis for it was identified. No such basisis identified in the leave submissions. In those circumstances, we cannot properlyassess its chances of success. If we gave leave and the argument was particularised,we would be essentially addressing it as a first and last court. In those circumstances,we do not consider it is in the interests of justice to grant leave on this point.[7] The fourth ground is that there may be lender liability on the part of therespondent in relation to the respondent's conduct in making the loans to the MoteoGroup. The applicant argues that New Zealand law is out of step with other countriesin this regard. As the respondent points out, there is no dispute that a bank may beliable for negligently given advice, if it assumes the duty of an adviser.7 The Court ofAppeal also accepted this, and noted that the argument for a wider duty making a bankliable for loss caused by making advances on terms that subsequently appear to bedisadvantageous were again not identified as being an implied contractual term, a dutyin tort or a fiduciary duty.8 We do not see any point in embarking on an exercise ofdetermining the existence or otherwise of a duty without some indication of the basisfor it and a factual underpinning of a claim for breach of the duty.6 At [34].7 Forivermor Ltd v ANZ Bank New Zealand Ltd [2014] NZCA 129 at [56].8 CA judgment, above n 1, at [38].[8] The fifth ground is that the respondent breached s 25 of the Personal PropertySecurities Act 1999, which requires that a secured party must exercise its powers "ingood faith and in accordance with reasonable standards of commercial practice". TheCourt of Appeal considered this argument untenable on the evidence before it (evenassuming admission of the proposed new evidence).9 We see this as essentially afactual question which has been resolved against the applicant in both the High Courtand the Court of Appeal.[9] The sixth ground involves an argument relating to s 120 of the Credit Contractsand Consumer Finance Act 2003. The Court of Appeal found that this argument couldnot be pursued because it was commenced outside the limitation period set out ins 125(3) of that Act. It found the applicant's argument to the contrary was untenable.10We do not see sufficient prospect of an argument to the contrary succeeding to justifythe grant of leave on this point.[10] We do not consider the criteria for the grant of leave are made out. Wetherefore decline leave to appeal.[11] We award costs of $2,500 to the respondent.Solicitors:Woodhouse Law, Auckland for ApplicantMinterEllisonRuddWatts, Wellington for Respondent9 At [44].10 At [29]–[30].