FIRST MORTGAGE CUSTODIANS LIMITED v HERBERT [2022] NZHC 507

FIRST MORTGAGE CUSTODIANS LIMITED v HERBERT [2022] NZHC 507

Summary judgment was dismissed because plaintiffs did not establish there were no arguable defences; defendants raised multiple triable issues (settlement effects on interest/costs, linked cross-claim from PLA notices, plaintiffs' alleged breach by not releasing GSA preventing refinancing, arguable duress/undue influence affecting Mrs Herbert with a realistic basis for imputing inquiry to lender, and material variation issues) that are fact‑dependent and unsuitable for determination on affidavit evidence.

Citation
[2022] NZHC 507
Parties
First Plaintiff (trustee of Investment Fund): First Mortgage Custodians Limited; Second Plaintiff (manager of Investment Fund): First Mortgage Managers Limited; First Defendants (borrowers): Anthony James Herbert and Stephen Peter Lunn as trustees of the Thackery Trust; Second Defendants (guarantors): Anthony James Herbert and Elizabeth Lillian Herbert as trustees of the Herbert Pukawa Trust; Third Defendants (guarantors and Mortgagors of Wheatley Road): Anthony James Herbert, Fiona Herbert and Stephen Peter Lunn as trustees of the A J and F Herbert Family Trust; Fourth Defendants (guarantors): Malcolm Herbert and Stephen Peter Lunn as trustees of Avenue Road Trust; Fifth Defendants (guarantors): Anthony James Herbert and Stephen Peter Lunn as trustees of Charles Street Trust; Sixth Defendant (individual Guarantor): Malcolm Herbert; Seventh Defendant (individual Guarantor): Anthony James Herbert; Eighth Defendant (guarantor/corporate): MAH Enterprises (Fiji) Limited; Ninth Defendants (guarantors): Malcolm Herbert and Stephen Peter Lunn as trustees of Thorn Place Trust
Court
High Court
Jurisdiction
New Zealand
Judgment Date
22 March 2022
Procedural Posture
Summary Judgment Applications / Application Dismissed (directions to Trial)
Outcome
applications for summary judgment dismissed in both proceedings
Legal Topics
Summary Judgment, Mortgage Enforcement, Foreclosure, Guarantee Enforceability, Duress and Undue Influence, Material Variation of Guarantee, Property Law Act Notices, Settlement Agreement
Civil Procedure Property Law Contract Law Trusts and Equity Secured Transactions Summary Judgment Mortgage Enforcement Foreclosure +5 more

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Parties

First Mortgage Custodians Limited

First Plaintiff (trustee of Investment Fund)

First Mortgage Managers Limited

Second Plaintiff (manager of Investment Fund)

Anthony James Herbert and Stephen Peter Lunn as trustees of the Thackery Trust

First Defendants (borrowers)

Anthony James Herbert and Elizabeth Lillian Herbert as trustees of the Herbert Pukawa Trust

Second Defendants (guarantors)

Anthony James Herbert, Fiona Herbert and Stephen Peter Lunn as trustees of the A J and F Herbert Family Trust

Third Defendants (guarantors and Mortgagors of Wheatley Road)

Malcolm Herbert and Stephen Peter Lunn as trustees of Avenue Road Trust

Fourth Defendants (guarantors)

Anthony James Herbert and Stephen Peter Lunn as trustees of Charles Street Trust

Fifth Defendants (guarantors)

Malcolm Herbert

Sixth Defendant (individual Guarantor)

Anthony James Herbert

Seventh Defendant (individual Guarantor)

MAH Enterprises (Fiji) Limited

Eighth Defendant (guarantor/corporate)

Malcolm Herbert and Stephen Peter Lunn as trustees of Thorn Place Trust

Ninth Defendants (guarantors)

Procedural Posture

Summary Judgment Applications / Application Dismissed (directions to Trial)

Legal Issues

  1. 1 Whether plaintiffs established there was no defence to claims for outstanding loan and enforcement of guarantees and mortgage
  2. 2 Whether the December 2020 settlement agreement limited plaintiffs' contractual remedies including interest and costs
  3. 3 Whether defendants have a linked cross-claim arising from allegedly invalid Property Law Act notices

Ratio Decidendi

Summary judgment was dismissed because plaintiffs did not establish there were no arguable defences; defendants raised multiple triable issues (settlement effects on interest/costs, linked cross-claim from PLA notices, plaintiffs' alleged breach by not releasing GSA preventing refinancing, arguable duress/undue influence affecting Mrs Herbert with a realistic basis for imputing inquiry to lender, and material variation issues) that are fact‑dependent and unsuitable for determination on affidavit evidence.

Court Disposition

applications for summary judgment dismissed in both proceedings

Orders

  • Summary judgment applications dismissed
  • Proceedings referred to registrar for scheduling of next available trial date