MURRAY v UDC FINANCE LIMITED [2018] NZHC 3386

MURRAY v UDC FINANCE LIMITED [2018] NZHC 3386 [18 December 2018]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2018-404-085[2018] NZHC 3386BETWEEN TREVOR JAMES MURRAYAppellantAND UDC FINANCE LIMITEDRespondentHearing: 5 July 2018Appearances: Appellant in personJ M Embling for RespondentJudgment: 18 December 2018JUDGMENT OF PAUL DAVISON JThis judgment was delivered by me on 18 December 2018 at 1:00 pmPursuant to r 11.5 of the High Court RulesRegistrar/Deputy RegistrarSolicitors:Minter Ellison Rudd Watts, AucklandIntroduction[1] On 28 November 2017, Judge Harrison entered summary judgment in favourof UDC Finance Ltd against Mr Trevor Murray in the sum of $55,657.46.1 The Judgefound that Mr Murray had not raised a credible defence or counterclaim to theapplication for summary judgment.[2] Mr Murray, who is self-represented, now appeals against Judge Harrison'sdecision.Background[3] Mr Murray was the sole director and shareholder of Enlightenz NZ Limited(Enlightenz), a company now in receivership and liquidation. The plaintiff, UDCFinance Limited (UDC), brought proceedings against Mr Murray on 10 March 2017.It applied for summary judgment on the same date.[4] In its statement of claim UDC says that it advanced funds to Enlightenz in 2012and 2013 under six written credit sale agreements.2 Those agreements funded thepurchase by Enlightenz of six vehicles: a 2009 BMW 730D Sedan, a 2012 VolkswagenPassat Alltrack, a 2012 Volkswagen Passat Variant, a 2013 Volkswagen Passat Variant,a 2013 Volkswagen Passat TDI, and a 2013 forklift. Among other terms, UDC saysthat the agreements required Enlightenz to make monthly repayments, and entitledUDC to repossess and sell the goods on the provision of 10 working days' notice ifEnlightenz did not perform its contractual obligations; became insolvent; enteredreceivership; or went into liquidation. UDC says that Mr Murray provided a guaranteeof all amounts payable by the company under the agreements.[5] UDC further says that in early 2016, Enlightenz defaulted under theagreements by failing to make the monthly payments then due. Enlightenz was placedin liquidation in April 2016. UDC says that it sent Mr Murray notices of its intentionto sell the six vehicles, and it then sold the vehicles through Turners Auctions between1 UDC Finance Ltd v Murray [2017] NZDC 26323.2 Three of the agreements were dated 21 December 2012, while the remaining three were dated 12March 2013, 9 April 2013, and 3 September 2013.June and November 2016. It says it retained Turners to provide professional adviceas to the best marketing and method of sale in respect of each vehicle. Turnersprovided estimated auction values for each vehicle, and valuations were also providedby Mike Goeffic, an asset sales specialist contracted to UDC. UDC says all thevehicles were sold at or above the valuations provided by Turners and Mr Goeffic.[6] The net proceeds of sale were applied to the amounts outstanding byEnlightenz under the agreements, leaving a shortfall of $54,284.41. UDC says itprovided accounts of sale to Mr Murray, and made demand on him as guarantor forpayment of the outstanding amounts due under the agreements with interest. It saysMr Murray did not pay the amounts outstanding, and accordingly UDC soughtsummary judgment.District Court decision[7] Judge Harrison granted UDC's application for summary judgment on 28November 2017. After setting out the factual background, the Judge noted that MrMurray did not challenge the validity of his guarantees. Rather, he raised variousdefences to the claim which the Judge addressed in turn.[8] First, Mr Murray said he had a contract with UDC's repossession agentallowing Mr Murray to deliver the 2009 BMW to Turners himself. He says that, inbreach of that agreement, the agent arrived at his address and demanded the vehicle,causing Mr Murray hurt and humiliation. Judge Harrison held that no defence to theclaim was established on this ground.[9] Mr Murray then said that an adjoining commercial tenant, Mr Malinowski,entered into an agreement with UDC to purchase the forklift. The Judge held thatthere was no arguable defence on this ground either, as Mr Malinowski was advisedof the upcoming Turners auction and the opportunity to purchase the forklift at theauction but no sale eventuated.[10] Next Mr Murray said that UDC sent the notices of intention to sell the vehiclesto the incorrect address, and they were not forwarded to him until later. However, theJudge held that UDC acted quite properly in this regard, as this was the addressprovided by Mr Murray at the time the credit sale agreements and guarantees wereentered into and he did not notify UDC of any change in address.[11] Mr Murray then referred to s 110 of the Personal Property Security Act 1999(PPSA), which provides that a secured party exercising a power of sale owes a duty toobtain the best price reasonably obtainable as at the time of sale. The Judge noted thatthis obligation is owed to guarantors, as well as to the debtor. He referred to theprinciples set out in Public Trust v Ottow3 and Harts Contributory Mortgage Co Ltd vBryers,4 and UDC's evidence as to the steps it took to discharge its duty to obtain thebest price reasonably obtainable.[12] The Judge concluded that it was appropriate for the vehicles to be sold throughTurners, and referred to the evidence that the vehicles had been groomed for sale.There was no evidence to support Mr Murray's allegation that Turners was known tobe an auction house where vehicles could be purchased cheaply. The Judge alsoconsidered there were deficiencies in the valuation evidence provided by Mr Murray,which was purportedly prepared by professional valuers, Grays. There was noaffidavit evidence from that organisation, and the spreadsheet of values for each of thevehicles did not establish on what basis the vehicles were valued or on what dates thevaluations were conducted. Nor was there any comparative evaluation by Grays ofthe valuations carried out by Turners and Mr Goeffic. The Judge accordingly did notaccept that Mr Murray's claim the vehicles were sold at an undervalue was establishedto the point where an arguable defence had been raised. He commented:5The procedure adopted by UDC for the sale of the vehicles in question followsa well trodden path of obtaining valuations from an independent valuer, andvalue assessments and the setting of reserve prices by the auctioneer. Not onlywas that done but the vehicles were listed for sale on Turners' website, theauction website, TradeMe, and displayed on Turners' premises for between 7and 49 days.[13] The Judge then considered Mr Murray's counterclaims for:(a) the alleged shortfall in the sale price of the assets;3 Public Trust v Ottow (2009) 10 NZCPR 879 (HC).4 Harts Contributory Mortgages Nominee Co Ltd v Bryers HC Auckland CP403-IM00, 19December 2001.5 At [32].(b) $10,000 for alleged hurt and humiliation; and(c) misrepresentation in relation to the emissions statistics of Volkswagenvehicles.[14] The Judge concluded that none of Mr Murray's counterclaims were credible.Having concluded that Mr Murray had not raised any credible defence or counterclaimto UDC's application for summary judgment, the Judge entered summary judgmentfor UDC in the sum of $55,657.46.Mr Murray's submissions on appeal[15] The point on which Mr Murray focuses his appeal is his claim that UDC didnot properly discharge its legal responsibilities when selling the vehicles, namely theduty under s 110 of the PPSA to obtain the best price reasonably obtainable as at thetime of sale. He does not pursue the other grounds listed in his notice of appeal.[16] Mr Murray makes the following points regarding the alleged breach of UDC'sduty under s 110 of the PPSA:(a) There was an extremely large discrepancy (of around 37 per cent)between the market value of the vehicles and the prices obtained byUDC, which points towards a failure by UDC in exercising its duty.(b) Mr Malinowski had an agreement to purchase the forklift directly fromUDC for around $28,000, and the Judge erred in finding there was nosuch agreement. UDC's failure to complete the sale with MrMalinowski or to ensure they achieved a sale at an equivalent price wasa breach of their duty to obtain the best price reasonably obtainable,considering the forklift was later sold for $20,700.(c) Turners exhibited a lack of care and professionalism in presenting thecars for sale, particularly the BMW.(d) Sale via Turners did not maximise the exposure of the cars to themarket, as Turners have traditionally been a place where buyers go tobuy a low-priced vehicle; it is not an appropriate outlet for sale of recentmodel luxury brand vehicles. Further, in recent years most buyers havegravitated towards online private or dealer sales through websites suchas TradeMe. In contrast to auctions of real property, car auctions arevery poorly attended and do not achieve a good price for the seller.(e) In any event, all the car sales were conducted by Turners through the"Buy Now" process, rather than by public auction as UDC claims. MrMurray exhibits email evidence to this effect from Ben Nicholson,Sales Manager at Turners North Shore.(f) The vehicles, particularly the BMW, should have been sold through acar dealership. Mr Murray refers to evidence he submitted in theDistrict Court from Clive Matthew-Wilson, editor of the Dog andLemon Guide (an annual car buyer's guide sold in Commonwealthcountries).(g) UDC could and should have sold the vehicles through TristramEuropean, a branded dealership that is also UDC's finance agent.Respondent's submissions[17] Mr Embling submits that UDC discharged its duty to obtain the best pricereasonably obtainable for the vehicles because it followed the process recommendedby Asher J in Public Trust v Ottow. He addresses the various points made by MrMurray:(a) Regarding the alleged agreement for sale of the forklift between UDCand Mr Malinowski, Mr Embling says that Mr Malinowski was givenan opportunity to purchase the forklift but no sale was completed. Herefers to the evidence of Ms Mascarenhas of UDC.(b) UDC had no obligation to repair or improve the conditions of thevehicles for sale.(c) Use of the "Buy Now" feature, rather than sale by public auction, wasnot a breach of UDC's duty. Section 113 of the PPSA provides that asecured party may effect a sale of collateral under s 109 by auction,public tender, private sale, or another method.(d) There can be no certainty in the accuracy of the Grays valuations, andthey should be disregarded.Fresh evidence[18] Mr Murray seeks to adduce new evidence on appeal which was not before theDistrict Court Judge:(a) an affidavit of Jakub Malinowski sworn on 27 June 2018;(b) an affidavit of Michael Hatch sworn on 28 June 2018;(c) an affidavit of Jennifer Murray sworn on 27 June 2018; and(d) an affidavit of Lachlan Murray sworn on 27 June 2018.[19] Mr Embling for UDC opposes the introduction of the further evidence onappeal on the grounds that no application for leave has been filed, and the affidavitsdo not meet the criteria for the admission of further evidence on appeal.[20] A party to an appeal may adduce further evidence only with the leave of theCourt.6 As Mr Embling points out, Mr Murray has not made a formal application forleave to adduce further evidence. However, he has filed a memorandum in which hesubmits that the evidence should be admitted because it is essential to ensure the factsof the case are correctly established on appeal. Because Mr Murray is a lay litigant6 High Court Rules 2016, r 20.16(2).and has in substance applied for leave in his memorandum, I am prepared to considerwhether the further evidence meets the criteria for admissibility.[21] The Court of Appeal described the principles applicable to admissibility offurther evidence on appeal in Erceg v Balenia Ltd:7Those requirements are that the evidence be fresh, credible and cogent. It willnot be regarded as fresh if it could, with reasonable diligence, have beenproduced at the trial Particular weight will be accorded in summaryjudgment proceedings to the need for finality: it is only in exceptionalcircumstances that the Court will permit further evidence to be filed on appeal[22] As Duffy J observed in Complaints Committee No 1 of the Auckland DistrictLaw Society v P, however, in special cases further evidence may be admitted eventhough it was reasonably available for the hearing at first instance:8The discretionary power in [r 20.16] is broad enough to permit a Court toallow such evidence to be adduced. Furthermore, discretionary authorityshould never be fettered by fixed guidelines. But such exceptions would berare and to occur, the fresh evidence would need to be cogent and material tothe appeal's resolution Jakub Malinowski[23] Mr Malinowski states in his affidavit that he agreed to purchase the forkliftfrom UDC for a sum of approximately $28,000 including interest charges,administration fees and other costs. He says that Natasha Mascarenhas of UDCconfirmed this sum with him on the telephone, and an invoice for the full amount wasto be sent to him to pay. He says that the forklift was then repossessed withoutwarning, and he was unable to complete the purchase. He was later invited toparticipate in an auction of the forklift, but did not receive any "sensiblecommunication" from Turners advising him of the auction details. He says the forkliftwas eventually sold for considerably less than he was prepared to pay.[24] Mr Malinowski's evidence is not fresh, as it could with reasonable diligencehave been produced in the District Court. It also lacks specificity: he says he reached7 Erceg v Balenia Ltd [2008] NZCA 535 at [15].8 Complaints Committee No 1 of the Auckland District Law Society v P (2007) 18 PRNZ 760 (HC)at [21].an agreement to buy the forklift for a sum "over $28,000" and does not give the datesor times of the events to which he refers. However, his evidence is relevant to theissue on appeal, namely whether UDC complied with its duty to obtain the best pricesreasonably obtainable. Mr Malinowski says that he was prepared to purchase theforklift for a sum of around $28,000, and it is undisputed that the forklift wassubsequently sold for the significantly lesser sum of $20,700. His affidavit containsmaterial of which he has first-hand knowledge. I consider it is in the interests of justiceto admit Mr Malinowski's affidavit, despite it not being fresh evidence. In reachingthis conclusion I am influenced by the fact that UDC has provided a reply affidavit,meaning the Court has the benefit of both party's versions of events. Accordingly Ialso admit the affidavit of Natasha Mascarenhas.Michael Hatch[25] Mr Hatch states that he is a vehicle valuer with 40 years' experience, havingincorporated the company Car Valuation New Zealand Ltd some 20 years ago andhaving started the company Car Valuers (BOP) Ltd in 2017. Mr Hatch reaches thefollowing conclusions:My analysis shows compared with statistical based market values (backed bysales data from experienced industry retail senior managers) and with dueconsideration to my experience and qualifications:a. The average sale price of all vehicles and assets is about 37% below themarket price.b. Turners valuation was about 48% below the market price.c. Mr Goeffic's valuation was about 38% below the market price.[26] Mr Hatch confirms the valuations made by Grays by reference to his ownanalysis and market data. He attaches a table setting out the Grays' valuations and hisown comments, as well as data from vehicle dealers around New Zealand.[27] Mr Hatch's evidence is not fresh in that it could, with reasonable diligence,have been provided to the District Court. As Mr Embling points out, Mr Hatch is anexperienced car valuer from whom Mr Murray has sought an expert opinion, but MrHatch does not state that he has agreed to comply with the Code of Conduct for ExpertWitnesses.9 That code of conduct is important because it sets out the expert's duty ofindependence and impartiality. However, I note that UDC has relied on the valuationsprovided by Mr Goeffic without any evidence of his qualifications as an expert valueror any evidence that he has agreed to comply with the Code of Conduct for ExpertWitnesses. It is apparent that Mr Hatch is a person with a considerable amount ofvehicle valuation experience which qualifies him as an expert witness able to commenton the approximate values of the vehicles in question. The basis on which Mr Hatchhas made the valuations is not entirely clear: he does not state that he has viewed thevehicles; nor does he attach notes referencing their condition. However, he lists themake, model and year of each vehicle and refers to their mileage.[28] Mr Hatch's evidence, while it suffers from some lack of specificity and clarity,is clearly material to the resolution of the issue on appeal. It is cogent in that it supportsthe Grays' valuations with reference to industry data and Mr Hatch's own experience.Elements of Mr Hatch's affidavit stray into legal submission, for example where heexpresses the view that UDC has breached s 110 of the PPSA. With the exception ofthose portions that express a view on points of law, I admit the evidence of Mr Hatch.Jennifer Murray[29] Again, the affidavit provided by Mr Murray's wife, Jennifer Murray, is notfresh evidence as it could have been provided to the District Court. In her affidavitMrs Murray expresses views about Turners and the sales conducted by them, includingthe way in which cars are prepared and presented for sale. Her affidavit containshearsay statements by staff members at Turners, and also assertions of fact aboutTurners on which Mrs Murray is not qualified to comment. Her affidavit alsoinappropriately strays into legal submissions regarding UDC's obligations under thePPSA. With regard to the requirements for adducing further evidence on appeal, Idecline to admit Mrs Murray's affidavit.9 High Court Rules 2016, sch 4.Lachlan Murray[30] The affidavit of Mr Murray's son, Lachlan Murray, refers to the sale of a 2013Volkswagen Passat vehicle belonging to his mother. He says it was similar to thevehicles purchased by Enlightenz on credit, but an inferior model. He says he listedit on TradeMe for sale in March 2018, and sold it several days later for $21,100.Before selling it, he says he took it to Turners Auctions in Albany for an appraisal. Heattaches emails from Turners valuing the car at around $10,000 - $12,000, based onTurners' record of sales for similar cars.[31] Lachlan Murray's evidence is fresh in the sense that the events to which herefers took place after the District Court hearing. He compares Turners' recent saleshistory of 2013 Volkswagen Passat vehicles with the results achieved at his privatesale via TradeMe, with a view to establishing that Turners sells vehicles more cheaplythan the price which can be achieved through private sales. I do not consider that thesingle example given by Lachlan Murray of a higher price achieved by private salecogently establishes that point. With regard to the principles that govern the admissionof further evidence on appeal, I decline to admit Lachlan Murray's affidavit.Mr Murray[32] Finally, UDC also objects to the admission of Mr Murray's affidavit on appeal.I acknowledge that much of it strays into legal submission rather than fact, and indeedreiterates many of the points made by Mr Murray in his synopsis of argument. BecauseMr Murray is self-represented, I do not take a strict approach and I am prepared toadmit and consider those portions of his affidavit that contain legal submissions. Ialso admit those portions of his affidavit that contain assertions of fact of which he hasfirst-hand knowledge. However, I disregard the hearsay statements that Mr Murrayrecords in his affidavit, as well as assertions of fact that are essentially repetitions ofthe affidavit evidence of Mrs Murray and Lachlan Murray, which I have held to beinadmissible on appeal.DiscussionLegal principles[33] The principles applicable to a summary judgment application weresummarised by the Court of Appeal in Krukziener v Hanover Finance Ltd:10(a) The question on a summary judgment application is whether thedefendant has no defence to the claim; that is, that there is no realquestion to be tried. The Court must be left without any real doubt oruncertainty.(b) The onus is on the plaintiff, but where its evidence is sufficient to showthere is no defence, the defendant will have to respond if the applicationis to be defeated.(c) The Court will not normally resolve material conflicts of evidence orassess the credibility of deponents. But it need not accept uncriticallyevidence that is inherently lacking in credibility, as, for example, wherethe evidence is inconsistent with undisputed contemporary documentsor other statements by the same deponent, or is inherently improbable.(d) In the end, the Court's assessment of the evidence is a matter ofjudgment. The Court may take a robust and realistic approach wherethe facts warrant it.[34] An appeal against the entry of summary judgment proceeds by way ofrehearing.11 The appellant is entitled to judgment in accordance with the opinion ofthe appellate Court, which must consider the merits of the case afresh.12 In doing sothe appellate court must form its own opinion of the acceptability and weight to beaccorded to the evidence, rather than deferring to the lower court's assessment.1310 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26]; High CourtRules 2016, r 12.2(1).11 Meroiti v Southern Receivables Ltd [2017] NZHC 2637 at [18].12 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.13 McKay v Sandman [2018] NZCA 103, [2018] NZAR 707 at [31].[35] Mr Murray's argument on appeal is that the Judge was wrong to reject hisdefence that UDC had breached its duty under s 110 of the PPSA. Section 110 of thePPSA provides that a secured party who exercises a power of sale of collateral unders 109 owes a duty to obtain the best price reasonably obtainable as at the time of sale.Although the duty is not expressed in the statute as being owed to guarantors, I agreewith Associate Judge Bell in UDC Finance Ltd v Brunton that it would be anomalousif the duty was owed to borrowers but not to guarantors.14[36] Judge Harrison held, and I agree, that the principles applicable to a mortgagee'sduty when exercising a power of sale under s 176 of the Property Law Act 2007 arerelevant by analogy to the duty under s 110 of the PPSA. As Judge Harrisonrecognised, those principles were collected and summarised in Public Trust v Ottow:(a) a mortgagee has no duty to exercise the powers of sale or possession atany particular time. In default of any provision to the contrary in themortgage, the power of sale is for the benefit of the mortgagee, whocan sell at any time in accordance with the mortgagee's convenience;(b) the mortgagee's duty of care is to take reasonable care to obtain the bestprice reasonably obtainable at the time of sale;(c) it does not matter that the time may be unpropitious and that by waitinga higher price could be obtained;(d) a mortgagee is under no obligation to improve the property or increaseits value;(e) a mortgagee sale for a price less than the current market value assessedby valuers does not, of itself, establish a breach of duty, although a largediscrepancy may indicate a failure to take reasonable care;(f) a mortgagee does not have any general duty to maintain properties priorto sale;14 UDC Finance Ltd v Brunton [2014] NZHC 2247 at [59].(g) following the service of a Property Law Act notice there is no duty ona mortgagee to keep a guarantor informed of sales activities;(h) the mortgagee is not entitled to sell in a hasty way at a knock-downprice sufficient to pay the debt, which because of the speed of sale leadsto a lower price than could otherwise be obtained; and(i) proper care must be taken to expose the property to the market and toobtain the best price reasonably obtainable.[37] Section 109 of the PPSA provides that a secured party may effect a sale ofcollateral by auction, public tender, private sale, or another method. In Public Trust vOttow, Asher J set out the following steps which would indicate that a mortgagee hadmade reasonable efforts to obtain the best reasonably obtainable price:15(a) The appointment of a reputable real estate agent to market the property.(b) Obtaining a valuation report from an experienced valuer as a guide towhat could reasonably be expected for the property.(c) Marketing over a reasonably long period of time.(d) An extensive advertising and promotional campaign.(e) A properly conducted auction.(f) A sale price that, given all the circumstances, can be reconciled withexpert opinion as to value.[38] Judge Harrison set out those steps at [22] of his judgment. I note, however,that Asher J was dealing with the appropriate steps for sale of real property. Thosesteps may require some modification where personal property is concerned: sale bypublic auction, for example, may not always be the most effective method of sale for15 At [31].items of personal property. I consider that the duty to take reasonable care to obtainthe best price reasonably obtainable requires the secured party to select an appropriatemethod of marketing and sale that is likely to achieve market value or close to marketvalue for that particular form of personal property.The present case[39] UDC set out the valuations and sale price for each of the vehicles in a scheduleto its submissions. I add a further column containing the valuations provided byGrays, as confirmed by Michael Hatch:Vehicle Turners'suggestedreserve priceMr Goeffic'svaluationSale price Graysvaluation2009 BMW $26,000 $24,000 $26,000 $40,0002012VolkswagenPassat Alltrack$21,500 $24,000 $25,500 $30,0002012VolkswagenPassat Variant$12,000 $13,000 $14,500 $28,0002013VolkswagenPassat Variant$16,000 $18,000 $20,000 $30,0002013VolkswagenPassat TDI$15,000 $18,000 $20,000 $29,000Forklift $17,000 N/A $20,700 N/A[40] It is evident from the table that there is a significant dispute between the partiesas to the market value of the vehicles. The Goeffic valuations are found in vehicleappraisal forms where details about the individual vehicle are noted, including theWOF expiry, details of any extras present on the vehicle, and the condition of thebodywork, paint, interior, tyres and glazing. In some cases the condition is noted asbeing average or fair, by reference to dirt or stains in the interior, small dents or visiblescratches, chips or other marks on the vehicles. In the section for general comments,Mr Goeffic has noted matters such as no service history or service overdue, or thebattery needing replacing. Although no affidavit was provided by Mr Goeffic, it isplain that he has conducted a detailed personal inspection of the vehicles.[41] Mr Hatch's valuations, by contrast, do not refer to the condition of the vehiclesor other matters that may well affect their market value, such as their service history.However, it is apparent that he has conducted a careful comparison of market pricesfor each vehicle by reference to their make, model, year and mileage. Mr Hatch'sexperience as a valuer is evident, while I am unaware of Mr Goeffic's experience andqualifications, or the way in which he reached his valuations. The evidence of bothexperts is unsatisfactory in that neither has assured the Court of their independenceand impartiality by agreeing to the Code of Conduct for Expert Witnesses.[42] A summary judgment hearing is not the appropriate forum for the resolution ofthe dispute as to market value. However, with the benefit of Mr Hatch's affidavit onappeal, I consider that it is arguable that the vehicles were sold for prices considerablybelow their true market value. Although the factors referred to on Mr Goeffic's vehicleappraisal forms may have lowered the value of the vehicles, they are not sufficient toexplain the significant difference between Mr Goeffic's valuations and Mr Hatch'sestimation of the vehicles' market value.[43] While sale below market value is not determinative of breach of s 110 of thePPSA, Asher J recognised in Public Trust v Ottow that a large discrepancy betweenthe sale price and the current market value may indicate a failure to take reasonablecare.[44] Turning to the sales process, Mr Embling submits that UDC took the followingsteps:(a) UDC retained Turners, a reputable sales agent for used vehicles, toprovide professional advice as to the most appropriate marketing andmethod of sale in respect of each vehicle.(b) Turners evaluated and provided an estimated auction value andsuggested reserve price for each of the vehicles. Mike Goeffic, an assetsales specialist, also appraised each vehicle (with the exception of theforklift) and provided an estimated market value for each vehicle.(c) Turners recommended that each of the vehicles be sold by publicauction, with the exception of the 2009 BMW which Turnersrecommended be sold using the "Buy Now" process.(d) The vehicles were listed for sale on Turners' website, the auctionwebsite, TradeMe, and displayed on Turners' premises for between 7and 49 days.(e) Each of the vehicles were sold at a price equal to or exceeding thereserves suggested by Turners and the valuations provided by MrGoeffic.[45] Mr Murray says that the vehicles were not in fact sold by public auction, andattaches email correspondence with a Turners staff member in which he asked for saledetails of each of the vehicles. Ben Nicholson, Turners Sales Manager, responded on25 June 2018 indicating that each of the vehicles were sold through the "Buy Now"process, with the exception of the forklift. On the other hand, Brian Strickland, amanager in UDC's asset management division, states in his affidavit dated 10 March2017 that each vehicle was sold by public auction at Turners Auctions. There istherefore a conflict in the evidence as to the method of sale, which I am not in aposition to resolve. However, I note that Mr Murray is critical of the auction processin any event, saying that vehicle auctions are poorly attended and do not achievepremium prices. The implications of selling vehicles through the "Buy Now" processas opposed to public auction are not clear to me on the evidence provided.[46] Putting aside the question of whether the vehicles were sold through "BuyNow" or by way of public auction, Mr Murray says that sale through Turners wasinappropriate in any event. He relies on Mr Hatch's evidence to the effect that Turnersis known in the industry as a place where buyers go to purchase a low-priced vehiclewith an unknown history, unsupported by branded warranties or after sales support.Mr Hatch says that the BMW and Volkswagen vehicles should have been sold throughbranched franchise dealers to obtain the best price.[47] I accept that these are matters on which Mr Hatch is qualified to comment, inhis experience as a car valuer. In the absence of any explanation from UDC as to whyTurners was chosen and why it was an appropriate outlet for sale of these vehicles, Iconsider that it is arguable UDC has not selected an appropriate method of marketingand sale designed to achieve market value or close to market value.[48] I note, however, that I do not accept Mr Murray's submissions that Turnersexhibited a lack of care and professionalism in presenting the cars for sale. Not onlyis there no evidence to support that submission, but it is well established that thesecured party need not improve the property or increase its value prior to sale.[49] I turn next to the forklift and the evidence of Mr Malinowski and MsMascarenhas. Ms Mascarenhas sets out the following series of events:(a) On 4 May 2016, she instructed Turners to repossess the forklift, notingthat UDC had been instructed by the receiver of Enlightenz, ChapmanAtkins, to do so.(b) Later that same day, she withdrew the instruction to repossess theforklift as her colleague advised her Mr Malinowski had expressed aninterest in purchasing it.(c) Later that same day, her colleague Mr Baynosa discussed the potentialsale of the forklift with Mr Malinowski. Ms Mascarenhas called MrMalinowski and left him a message notifying him that UDC requiredconfirmation from Chapman Atkins that it disclaimed its interest in theassets financed by Enlightenz before it could provide him with a quote.(d) On 9 May 2016, Ms Mascarenhas called Mr Malinowski to notify himthat UDC would proceed with repossessing the forklift, and told himshe would provide his contact details to her colleague at UDC whowould be overseeing the sale of the forklift. She then provided MrMalinowski's details to Jason Gilberd of UDC.(e) UDC repossessed the forklift on 10 May 2016.[50] Ms Mascarenhas attaches email correspondence between Mr Gilberd and MrMalinowski. Mr Gilberd advised Mr Malinowski on 11 May 2016 that because theforklift had now been repossessed, UDC was "bound to follow a prescribed legalprocess" and after the issuing of statutory notices it would offer the forklift for sale byway of public auction at Turners. Mr Gilberd then offered to pass Mr Malinowski'scontact details on to Turners. Mr Malinowski responded on the same day asking forhis contact details to be passed on, and providing his cell phone number. He also askedwhen and where the auction would take place. Mr Gilberd responded on the same daygiving the location of the auction and saying he anticipated it would take place onMonday 30 May. He provided the contact details of a Lawrence Chand from Turners.[51] The next email is dated 9 June 2016: Mr Malinowski asked Mr Gilberd whenthe auction would take place. Mr Gilberd responded on the same day explaining thatthe battery charger had not been recovered immediately when the forklift wasrepossessed, and when the agents returned to the premises they discovered the batterycharger had been removed. The matter had been reported to the insurance companyand to police, which had delayed the sale of the forklift. Mr Gilberd was unable toconfirm the date of auction, as it had to wait until the charger was recovered or aninsurance claim was accepted.[52] Mr Malinowski next emailed Mr Gilberd on 10 August asking for an update.Mr Gilberd responded the following day saying that the matter was with the policeand insurer and "beyond UDC's control". He reiterated that once UDC was in aposition to sell, Turners would contact Mr Malinowski.[53] There followed some discussion via email about whether the forklift could besold without a battery charger, Mr Gilberd maintaining it could not as UDC had fundedthe purchase of the forklift with a charger. Mr Malinowski replied on 11 August saying"OK, up to you, but I cant [sic] wait anymore so I will just go ahead and buy anotherone". Mr Gilberd replied with an apology and asked whether Turners should removehim from their contact list. There was no further response from Mr Malinowski.[54] In his affidavit Mr Malinowski claims that he had an agreement with UDC forpurchase of the forklift. He says:I spoke to a female representative of UDC who I believe was NatashaMascarendhas [sic] and we agreed on the price and an invoice was to be sentthrough for me to pay the full amount.[55] I do not find Mr Malinowski's claim to have concluded an agreement withUDC for the purchase of the forklift to be credible, particularly as he did not assert hehad a concluded agreement in subsequent correspondence. It is apparent from theaffidavit evidence of both Ms Mascarenhas and an email from Chapman Atkins, whichMr Malinowski attaches to his affidavit, that while Mr Malinowski had made an offerto UDC, no concluded agreement was in place. Ms Atkins of Chapman Atkins wroteto Ms Mascarenhas on 11 May 2016, saying:We also understand that the tenant (Jacob) has made an indicative offer toUDC Finance for the purchase of the forklift of approximately $28,000. Ifurther understand that you have advised him that UDC Finance wish to havea "cooling off" period of 30 to 40 days. In all likelihood this purchaser willbe lost as I further understand that he is not prepared to wait 30-40 days topurchase.As Andree Atkinson has previously advised Jason Gilberd, the offer of$28,000 is significantly greater than the valuation we received onappointment.[56] Although no final agreement had been reached, the email from Ms Atkinsindicates that UDC was on notice that Mr Malinowski would likely be lost as apotential purchaser if made to wait for 30-40 days. UDC was also aware that the pricebeing offered by Mr Malinowski was significantly higher than valuations ChapmanAtkins had received. As Ms Mascarenhas notes, there was some difficulty locatingthe battery charger which delayed matters, as sale was not possible without the batterycharger. Mr Malinowski blames the failure to collect the charger and its subsequentloss on UDC's negligence. It is not possible to determine matters of fault regardingthe battery charger on the evidence presented, so I put that matter to one side.[57] I consider Mr Gilberd was wrong to suggest that UDC was "bound to follow aprescribed legal process", meaning sale through Turners. UDC was bound to takereasonable care to obtain the best price reasonably obtainable, which does notnecessarily mean selling the property at a public auction when an offer exceedingmarket value was made by a private purchaser. I consider it is arguable that UDC'sdetermination to sell the forklift through Turners rather than agreeing to a private saleto Mr Malinowski (or using an alternative method of sale that would have achieved acomparable price to that offered by Mr Malinowski) constituted a failure to takereasonable care to obtain the best price reasonably obtainable for the forklift.Conclusions[58] Having reviewed the evidence and the arguments afresh, I consider Mr Murrayhas an arguable defence to UDC's claim on the grounds that UDC has failed in its dutyas the secured party to take reasonable care to obtain the best price reasonablyobtainable when selling the six vehicles. In particular, I consider there is room forargument as to the true market value of the vehicles; whether Turners was theappropriate outlet for sale; and whether UDC should have accepted Mr Malinowski'soffer to purchase the forklift or used an alternative method of sale that would havesecured a comparable price to Mr Malinowski's offer.[59] It follows that I find there to be a serious question to be tried, and consequentlysummary judgment should not have been entered.Result[60] The appeal is allowed. The order for summary judgment is set aside, and Iremit the matter to the District Court for directions as to the future conduct of theproceeding and mode of trial.16_____________Paul Davison J16 See District Court Rules 2014, r 12.12(1).