SENIOR TRUST CAPITAL LIMITED v HANNON [2023] NZHC 3628

SENIOR TRUST CAPITAL LIMITED v HANNON [2023] NZHC 3628

The applications were dismissed because, although the failure to file a defence was acceptably explained, Catherine did not demonstrate a reasonably arguable defence sufficient to show a miscarriage of justice: the estoppel and implied term arguments as to repayment from R1 were not tenable in the commercial context and were undermined by the contemporaneous facts and parties' positions; the duress defence was abandoned and contrary to contemporaneous evidence and affirmation; no arguable breach of s176 was established; accordingly the default judgment and the bankruptcy notice were properly maintained.

Citation
[2023] NZHC 3628
Parties
Defendant/counterclaim Plaintiff: Senior Trust Capital Limited; First Plaintiff/counterclaim Defendant; Judgment Debtor: Catherine Phyllis Hannon; Second Plaintiff: Tompkins Wake Trustees 2019 Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
12 December 2023
Procedural Posture
Bankruptcy/insolvency Proceedings / Application to Set Aside Default Judgment and to Set Aside Bankruptcy Notice (application Dismissed)
Outcome
Applications to set aside the default judgment and the bankruptcy notice dismissed; Senior Trust entitled to costs
Legal Topics
Setting Aside Default Judgment, Bankruptcy Notice, Guarantee Liability, Personal Loan Repayment Priority, Mortgagee Sale, S176 Property Law Act 2007, Duress, Estoppel, Implied Terms, Fair Trading Act 1986
Insolvency Contract Property Law Equity Civil Procedure Consumer Protection Setting Aside Default Judgment Bankruptcy Notice +8 more

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Parties

Senior Trust Capital Limited

Defendant/counterclaim Plaintiff

Catherine Phyllis Hannon

First Plaintiff/counterclaim Defendant; Judgment Debtor

Tompkins Wake Trustees 2019 Limited

Second Plaintiff

Procedural Posture

Bankruptcy/insolvency Proceedings / Application to Set Aside Default Judgment and to Set Aside Bankruptcy Notice (application Dismissed)

Legal Issues

  1. 1 Whether default judgment should be set aside under High Court Rules r 15.10
  2. 2 Whether defendant has a reasonably arguable defence to liability under the guarantee
  3. 3 Whether the Hannon loan was repayable from the sale proceeds of Unit R1 by estoppel or implied term

Ratio Decidendi

The applications were dismissed because, although the failure to file a defence was acceptably explained, Catherine did not demonstrate a reasonably arguable defence sufficient to show a miscarriage of justice: the estoppel and implied term arguments as to repayment from R1 were not tenable in the commercial context and were undermined by the contemporaneous facts and parties' positions; the duress defence was abandoned and contrary to contemporaneous evidence and affirmation; no arguable breach of s176 was established; accordingly the default judgment and the bankruptcy notice were properly maintained.

Court Disposition

Applications to set aside the default judgment and the bankruptcy notice dismissed; Senior Trust entitled to costs

Orders

  • Applications dated 13 July 2023 to set aside the default judgment entered 22 May 2023 and to set aside the bankruptcy notice dated 1 June 2023 (served 29 June 2023) are dismissed
  • Senior Trust is entitled to costs; Senior Trust may file a costs memorandum within five working days; if not filed costs are awarded on a 2B basis plus disbursements as fixed by the Registrar; if filed, a reply of up to five pages may be filed within five working days