M CHAPMAN-SMITH AND LABYRINTH HOLDINGS TRUSTEE COMPANY LIMITED AS TRUSTEES OF THE MICHAEL CHAPMAN-SMITH FAMILY TRUST V MB ALLERBY AND PA MCBRIDE AS TRUSTEES OF THE ALLERBY FAMILY TRUST & ANOR HC WN CIV-2011-485-2114

M CHAPMAN-SMITH AND LABYRINTH HOLDINGS TRUSTEE COMPANY LIMITED AS TRUSTEES OF THE MICHAEL CHAPMAN-SMITH FAMILY TRUST V MB ALLERBY AND PA MCBRIDE AS TRUSTEES OF THE ALLERBY FAMILY TRUST & ANOR HC WN CIV-2011-485-2114

The November Agreement constituted a valid written guarantee signed by the defendant and supported by consideration (forbearance/rescheduling); the agreement objectively imposed a monetary repayment obligation of $304,000 on the principal debtor and a personal guarantee by the defendant; the defendant's contentions about repayment in shares, on-lending to EEL, or need to join EEL are not arguable defences to enforcement of the personal guarantee, and summary judgment is therefore appropriate.

Citation
openlaw-51ae98bc_56b4_4239_977c_1a9c4b1230d9.pdf
Parties
Plaintiff: Michael Chapman-Smith; Plaintiff: Labyrinth Holdings Trustee Company Limited as trustees of the Michael Chapman-Smith Family Trust; First Defendant: Murray Brent Allerby as trustee of the Allerby Family Trust; First Defendant: Paul Aiden McBride as trustee of the Allerby Family Trust; Second Defendant: Murray Brent Allerby
Court
High Court
Jurisdiction
New Zealand
Judgment Date
27 April 2012
Procedural Posture
Summary Judgment Application / Judgment on Summary Judgment Application Delivered
Outcome
Summary judgment granted in favour of the plaintiffs against the second defendant
Legal Topics
Guarantee, Variation of Contract, Forbearance as Consideration, Enforcement of Personal Guarantee, Summary Judgment
Contract Law Property Law Trusts Civil Procedure Guarantee Variation of Contract Forbearance as Consideration Enforcement of Personal Guarantee +1 more

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Parties

Michael Chapman-Smith

Plaintiff

Labyrinth Holdings Trustee Company Limited as trustees of the Michael Chapman-Smith Family Trust

Plaintiff

Murray Brent Allerby as trustee of the Allerby Family Trust

First Defendant

Paul Aiden McBride as trustee of the Allerby Family Trust

First Defendant

Murray Brent Allerby

Second Defendant

Procedural Posture

Summary Judgment Application / Judgment on Summary Judgment Application Delivered

Legal Issues

  1. 1 Whether the November Agreement constituted a valid enforceable personal guarantee by the second defendant
  2. 2 Whether there was valid consideration supporting the guarantee (forbearance/rescheduling)
  3. 3 Whether the defendant has an arguable defence that repayment was to be in EEL shares and not cash

Ratio Decidendi

The November Agreement constituted a valid written guarantee signed by the defendant and supported by consideration (forbearance/rescheduling); the agreement objectively imposed a monetary repayment obligation of $304,000 on the principal debtor and a personal guarantee by the defendant; the defendant's contentions about repayment in shares, on-lending to EEL, or need to join EEL are not arguable defences to enforcement of the personal guarantee, and summary judgment is therefore appropriate.

Court Disposition

Summary judgment granted in favour of the plaintiffs against the second defendant

Orders

  • Second defendant Murray Brent Allerby to pay to the plaintiffs the principal sum of $304,000.00
  • Costs awarded to the plaintiffs against the second defendant on a Category 2B basis together with disbursements as fixed by the Registrar