FIRST MORTGAGE CUSTODIANS LIMITED v HERBERT and [2020] NZHC 2874

FIRST MORTGAGE CUSTODIANS LIMITED v HERBERT and [2020] NZHC 2874

Thackeray proceeding: summary judgment dismissed because there is a real and finely balanced factual issue whether plaintiffs, by their knowledge and involvement in lease sunset extensions and by their works programme and loan extension terms, varied or waived the contractual CCC deadline such that defendants have an arguable defence. Thorn proceeding: summary judgment granted because defendants' contention that plaintiffs were obliged to transfer funds between distinct loan facilities lacked contractual or equitable foundation; no implied term or estoppel established and defendants had no defence. Plaintiffs did not breach disclosure obligations in the summary judgment applications.

Citation
(2020) 25 PRNZ 515
Parties
First Plaintiff: FIRST MORTGAGE CUSTODIANS LIMITED; Second Plaintiff: FIRST MORTGAGE MANAGERS LIMITED; First Defendants (thackeray Trustees): ANTHONY JAMES HERBERT and STEPHEN PETER LUNN as trustees of the Thackeray Trust; Guarantors (thackeray): Second to Ninth Defendants (Thackeray guarantors); First Defendants (thorn Trustees): MALCOLM ANDREW HERBERT and STEPHEN PETER LUNN as trustees of the Thorn Place Trust; Guarantors (thorn): Second to Fifth Defendants (Thorn guarantors)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
3 November 2020
Procedural Posture
Civil – Summary Judgment Applications / Summary Judgment Decision Delivered (judgment Dated 3 November 2020)
Outcome
Application dismissed in CIV-2020-441-29 (Thackeray); Application granted in CIV-2020-441-31 (Thorn) with judgment entered for plaintiffs subject to existing injunction; costs reserved
Legal Topics
Summary Judgment, Default, Foreclosure, Waiver, Estoppel, Implied Terms, Cross Collateralisation, Interim Injunction
Contract Property Mortgage Civil Procedure Equity Summary Judgment Default Foreclosure +5 more

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Parties

FIRST MORTGAGE CUSTODIANS LIMITED

First Plaintiff

FIRST MORTGAGE MANAGERS LIMITED

Second Plaintiff

ANTHONY JAMES HERBERT and STEPHEN PETER LUNN as trustees of the Thackeray Trust

First Defendants (thackeray Trustees)

Second to Ninth Defendants (Thackeray guarantors)

Guarantors (thackeray)

MALCOLM ANDREW HERBERT and STEPHEN PETER LUNN as trustees of the Thorn Place Trust

First Defendants (thorn Trustees)

Second to Fifth Defendants (Thorn guarantors)

Guarantors (thorn)

Procedural Posture

Civil – Summary Judgment Applications / Summary Judgment Decision Delivered (judgment Dated 3 November 2020)

Legal Issues

  1. 1 Whether plaintiffs complied with disclosure and conduct obligations in summary judgment applications
  2. 2 Whether Thackeray trustees were in default for failing to obtain a code compliance certificate by the contractual date or whether that date was varied or waived
  3. 3 Whether Thorn trustees had a defence based on entitlement to transfer funds between facilities (cross‑facility netting) or estoppel

Ratio Decidendi

Thackeray proceeding: summary judgment dismissed because there is a real and finely balanced factual issue whether plaintiffs, by their knowledge and involvement in lease sunset extensions and by their works programme and loan extension terms, varied or waived the contractual CCC deadline such that defendants have an arguable defence. Thorn proceeding: summary judgment granted because defendants' contention that plaintiffs were obliged to transfer funds between distinct loan facilities lacked contractual or equitable foundation; no implied term or estoppel established and defendants had no defence. Plaintiffs did not breach disclosure obligations in the summary judgment applications.

Court Disposition

Application dismissed in CIV-2020-441-29 (Thackeray); Application granted in CIV-2020-441-31 (Thorn) with judgment entered for plaintiffs subject to existing injunction; costs reserved

Orders

  • Costs reserved; parties to agree or file memoranda for costs determination