PFNZ LIMITED v BURNS [2023] NZHC 2645

PFNZ LIMITED v BURNS [2023] NZHC 2645 [21 September 2023]IN THE HIGH COURT OF NEW ZEALANDDUNEDIN REGISTRYI TE KŌTI MATUA O AOTEAROAŌTEPOTI ROHECIV-2023-412-63[2023] NZHC 2645IN THE MATTER of a breach of contract and liquidateddemandBETWEEN PFNZ LIMITEDPlaintiffAND MALCOLM BURNSFirst DefendantJOANNE BURNSSecond DefendantLEONARD CHENGThird DefendantHearing: 21 September 2023 (by AVL)Appearances: G K Riach and B I Hood for PlaintiffM Burns for Second Defendant and for himself in-person asFirst DefendantNo attendance for Third DefendantJudgment: 21 September 2023JUDGMENT OF ASSOCIATE JUDGE LESTER(application for summary judgment)[1] PFNZ Limited's application for summary judgment against the defendants washeard in the Dunedin High Court on the morning of 21 September 2023. Mr MalcolmBurns appeared for himself and also wished to explain the position of the seconddefendant, his wife. Mr Burns made it clear he was not speaking on behalf of the thirddefendant, who was unrepresented.[2] No papers in opposition to the application for summary judgment had beenfiled.[3] Mr Burns did not suggest that the defendants were not liable for the amountsclaimed by the plaintiff. He explained he had been attempting to restructure hisbusiness activities and was hopeful that a new investor would provide funds to clearthe plaintiff's debt. Mr Burns explained those funds would hopefully be to hand by10 December 2023, assuming the new investor came on board. He sought that thecase be deferred to allow time for the investor's funds to become available.[4] Mr Riach, counsel for the plaintiff, acknowledged there had been discussionsbetween his client and Mr Burns as to a possible resolution, but he explained hisinstructions were to seek judgment. I explained to Mr Burns that the entry of judgmentand its enforcement are two different matters. Mr Riach understood there may havebeen discussions that the judgments would not be enforced.[5] Given no papers in opposition have been filed, and indeed, Mr Burns did notdispute the debts, I explained to him that the plaintiff was entitled to request the entryof judgment.[6] The one caveat to that position is that the liability of the second defendant issubject to a limitation as follows:LIMITATIONS OF GUARANTEE:[insert details if there is a limit either by amount or proportion of the totalguaranteed obligations/guaranteed indebtedness]the Guarantor's liability is limited to the net equity of the Guarantor in thefreehold property at [property address removed], Dunedin being all the landcomprised in Record of Title [Title reference removed] after payment of priorsecured creditors, usual apportionments and sale costs.[7] I did not consider the plaintiff could seek judgment for a sum that did notreflect the limitation. Mr Riach submitted that the limitation could be construed asa limitation on enforcement rather than on the entry of judgment, but I do not acceptthat I can enter judgment for a sum greater than the amount the second defendant mayactually be liable for.[8] Accordingly, there is judgment against the first and third defendants in termsof paragraphs 11 to 17 of Mr Riach's memorandum of 20 September 2023.[9] As to the second defendant, there is judgment against her for the heads of claimset out at paragraphs 11 to 17 of Mr Riach's memorandum of 20 September 2023 asto liability only.[10] The second defendant's liability is limited to the net equity she has inthe freehold property referred to in her guarantee.[11] Leave is reserved to the plaintiff to seek to have quantum in respect of thesecond defendant fixed.[12] Until the plaintiff is in a position to quantify the second defendant's liability,this proceeding is essentially on hold. Mr Riach is to advise whether the proceedingshould be stayed, subject to the leave reserved._________________________________Associate Judge LesterSolicitors:Harmans, Christchurch (for Plaintiff)Copy to counsel:G Riach, Barrister, Christchurch (for Plaintiff)