WESTPAC NEW ZEALAND LIMITED V WILTSHIRE HC HAM CIV 2010-419-1675

WESTPAC NEW ZEALAND LIMITED V WILTSHIRE HC HAM CIV 2010-419-1675 22 November 2011IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYCIV 2010-419-1675BETWEEN WESTPAC NEW ZEALAND LIMITEDPlaintiffAND KEVIN GRANT WILTSHIREDefendantHearing: 11 and 14 November 2011Counsel: SCDA Gollin and MD Pascariu for plaintiffMD Talbot for defendantJudgment: 22 November 2011 at 2:00 PMJUDGMENT OF ASSOCIATE JUDGE FAIRE[on application for summary judgment]Solicitors: MinterEllisonRuddWatts, PO Box 3798, AucklandTalbot Law, PO Box 24 232, Hamilton 3253The application[1] The plaintiff seeks summary judgment against the defendant for $2,342,796.58 inclusive of interest allegedly due by the defendant to the plaintiff as at 31 July 2011, plus interest from that date at the default rate to the date of judgment. The claim is based on a guarantee executed by the defendant pursuant to an all-obligations cross-guarantee and indemnity dated 3 June 2008.[2] The guarantee relates to all liabilities owed to the plaintiff by various interests associated with Mr Wiltshire, which are referred to as the Wiltshire Group. They include the Sleeping Giant Trust, Sleeping Giant Farms Ltd, Taurikura Properties Ltd and Prime Investor Homes Ltd.[3] Judgment is sought in respect of amounts owing on various loans and credit facilities provided by the plaintiff to the Wiltshire Group and following the sale of a number of secured assets. Of particular importance to this application are the sale of the following assets:(a) A beach property owned by Sleeping Giant Trust at 41 Panorama Road, Whitianga;(b) A farm property owned and operated as a dairy farm by Sleeping Giant Farms Ltd at 268 Karapiro Road, Cambridge; and(c) A luxury home and lifestyle block owned by Sleeping Giant Farms Ltd at 957 Taotaoroa Road.[4] There were sales of other secured assets. However, no issue is taken with the transactions relating to those assets.The opposition[5] Mr Wiltshire does not dispute liability under the guarantee per se. He opposes summary judgment and disputes that he is liable under the guarantee for theshortfall between the advances made by the plaintiff on the one hand, and the total value realised from the sale of secured assets by the plaintiff on the other; or at thebank's direction. He says the only reason for the shortfall is the bank's conduct inmismanaging the sales of the secured assets and/or selling the secured assets at an undervalue. He says, therefore, that the case is unsuitable for determination on a summary judgment basis and should proceed to a full trial so that the defendant has the benefit of full discovery.The additional ground in opposition[6] Mr Talbot sought leave to amend the notice of opposition at the commencement of the hearing. A short adjournment was granted so that Mr Talbot could present the court with the precise grounds that he sought to add by way of opposition. At the resumed hearing, Mr Talbot presented the court with a handwritten document recording an additional ground of opposition as follows:Westpac breached an agreement to advance a further sum over and above the primary advance.PARTICULARSAGREED (by Westpac) Kevin Wiltshire would use the O/D facility for capital improvements;Westpac would then advance the value as assessed of the capital improvements to provide operating capitalWestpac breached this agreement and thereby caused the funding shortfall that resulted in the defaults.[7] Mr Gollin opposed the amendment. His opposition was based on the premise that:(a) Notification of the further ground was late;(b) That particularisation of the alleged agreement is incomplete. The name of the person who allegedly made the promise and the date of it was not provided; and(c) The oral contract alleged is inconsistent with the contract documents and, in particular, the fundamental basis upon which the loans were made, which involved a substantial repayment of capital advanced as a result of asset sales. He submitted that there could be no basis for an allegation that the bank would undertake further borrowing when the loan that it made was based on the premise that assets would be sold and the loan indebtedness reduced.[8] Having heard submissions on the application for an amendment, I advised counsel that I declined the amendment and would set out my reasons in the judgment that I delivered on the summary judgment application. I now do so.[9] Generally, there are three hurdles that an applicant for amendment must meet before the amendment is granted, namely:(a) The amendment is in the interests of justice;(b) That it will not significantly prejudice the plaintiff; and(c) That it will not cause significant delay.1[10] The Court of Appeal confirmed that amendments to the proceedings were possible in the summary judgment procedure.2[11] I am not satisfied in this case that the amendment is in the interests of justice. There is a lack of particularisation. More importantly, what is advanced as an oral contract is in total contradiction with the basis and terms of the borrowing the plaintiff bank agreed to advance to the Wiltshire Group.[12] In the bank's credit approval summary, a document created on 29 May 2008,the Wiltshire Group's funding requirements are summarised and require a total funding requirement of $10,955,000.00. When that is added to the existing advances made, the total sum borrowed from the bank was $12,342,000.00. The same1 Elders Pastoral Ltd v Marr (1987) 2 PRNZ 383 (CA) at 385.2 Cegami Investments Ltd v AMP Financial Corporation (NZ) Ltd [1990] 2 NZLR 308.document records the credit strategy which provided for an asset sell-down. I will not name the assets, but what was provided for in this document was a sell-down of assets to produce $4,670,000.00. Various dates are recorded for the sell-down of certain assets, with the last date being 31 March 2009. The intention, as recorded in this document, was a final borrowing of $7,672,000.00. In listing the funding requirement, the same document records an allowance of $500,000 being the sum required to pay the interest due on the loans on a capitalised basis. It is self-evident from this that the total indebtedness could not be supported on a stand-alone basis. The borrowing had to cover the cost of borrowing. That is why an asset sale condition was imposed.[13] The formal loan offer was made the next day, 30 May 2008. The term of the loan was 12 months from the date of draw down. The obligation to sell assets, to which I have earlier referred, is contained in the offer. The offer was formally accepted by Mr Wiltshire on 3 June 2008.[14] The authorities that deal with applications for summary judgment have established the principle that the court need not uncritically accept evidence that is inherently lacking in credibility as, for example, where the evidence is inconsistent with undisputed contemporary documents, other statements by the same deponents, or inherently improbable.3 The ground advanced to support the amendment is inconsistent with the loan offer and documents created at the time. It is not credible to suggest that the plaintiff, having specifically made it a condition of the loan that substantial capital reduction be made from the sale of assets, would then agree to a further advance on top of the amount being loaned without such reduction taking place by the sale of assets.[15] Accordingly, I refuse the amendment and conclude that there is simply no foundation for the proposition that there was an agreement to advance a further sum over and above the principal advanced.3 Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 341; Krukziener v Hanover Finance Ltd[2008] NZCA 187 at [26].The legal basis for the remaining grounds in opposition[16] The notice of opposition as filed, and certainly the main thrust of thedefendant's submissions, were directed at the proposition that there has been a breach by the plaintiff of its obligations as mortgagee pursuant to s 176 of the Property Law Act 2007.The court's approach to a plaintiff's summary judgment application[17] Both counsel adopted the summary of principle contained in the Court of Appeal judgment in Krukziener v Hanover Finance Ltd.4The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried:Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court'sassessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).[18] On the issue of affirmative defences, it is appropriate to note the following observations:(a) In Pemberton v Chappell the Court of Appeal said:5If a defence is not evident on the plaintiff's pleading I am ofopinion that if the defendant wishes to resist summary judgment he must file an affidavit raising an issue of fact or law and give reasonable particulars of the matters which he claims ought to be put in issue. In this way a fair and justbalance will be struck between a plaintiff's right to have hiscase proceed to judgment without tendentious delay and adefendant's right to put forward a real defence.4 Krukziener v Hanover Finance Ltd, above n 3, at [26].5 Pemberton v Chappell [1987] 1 NZLR 1 at 3.(b) That position was further reinforced in Australian Guarantee Corporation (New Zealand) Ltd v McBeth where the Court said:6Although the onus is upon the plaintiff there is upon the defendant a need to provide some evidential foundation forthe defences which are raised. If not, the plaintiff'sverification stands unchallenged and ought to be accepted unless it is patently wrongThe mortgagee's obligations under the Property Law Act 2007, s 176[19] The Property Law Act 2007, s 176 provides:176 Duty of mortgagee exercising power of sale(1) A mortgagee who exercises a power to sell mortgaged property, including exercise of the power through the Registrar under section 187, or through a court under section 200, owes a duty of reasonable care to the following persons to obtain the best price reasonably obtainable as at the time of sale:(a) the current mortgagor:(b) any former mortgagor:(c) any covenantor:(d) any mortgagee under a subsequent mortgage:(e) any holder of any other subsequent encumbrance.(2) A mortgagee who exercises a power to sell mortgaged property may not become the purchaser of the mortgaged property except in accordance with section 196 or an order of a court made under section 200.[20] It is not contended that the sale of the security property was in breach of s 176(2). Accordingly, that needs no further comment.[21] What is required in this case is an assessment of the duty owed by the plaintiff to the defendant as the guarantor of the loan pursuant to the Property Law Act 2007, s 176 to see if there is a proper foundation for a defence that that duty has been breached.6 Australian Guarantee Corporation (New Zealand) Ltd v McBeth [1992] 3 NZLR 54 at 59.The mortgagee's duty of care – the law[22] In Crown Money Corporation Ltd v Pink-Martin I extracted a series ofgeneral propositions from authorities in relation to the mortgagee's duty of carewhich I now set out:7(a) The Property Law Act 2007, s 176 and its predecessor, the Property Law Act 1952, s 103A, codify the duty which, under the general law, a mortgagee exercising a power of sale would be taken to owe to thepersons mentioned in the Property Law Act 2007, s 176: Apple FieldsLtd v Damesh Holdings Ltd.8 I have already mentioned that this nowhas been extended to cover guarantors.(b) The duty of care is concerned with obtaining the best price reasonablyobtainable as at the time of sale: Agio Trustees Co Ltd v HartsContributory Mortgages Nominee Co Ltd.9 It is a duty to takereasonable care. It does not necessarily follow that the best pricereasonably obtainable will be achieved.(c) The duty has to be measured at the time of the sale.10 The duty arises at the time the decision to sell is made: Tse Kwong Lam v Wong Chit Sen.11 There is thus a need to analyse the steps taken once the decision to sell is made, up to the time of sale.(d) The duty of care does not qualify the mortgagee's right to decide ifand when to sell: Agio Trustees Co Ltd v Harts Contributory Mortgages Nominee Co Ltd; Downsview Nominees Ltd v First City Corporation Ltd.127 Crown Money Corporation Ltd v Pink-Martin HC Auckland CIV-2008-404-000297,5 September 2008 at [32].8 Apple Fields Ltd v Damesh Holdings Ltd [2003] UK PC 54; [2004] 1 NZLR 721 at 728.9 Agio Trustees Co Ltd v Harts Contributory Mortgages Nominee Co Ltd (2001) 4 NZ ConvC193,480 at [70].10 Ibid, at 75.11 Tse Kwong Lam v Wong Chit Sen [1983] 3 All ER 54 at 77.12 Agio Trustees Co Ltd v Harts Contributory Mortgages Nominee Co Ltd, above n 9 at [70];Downsview Nominees Ltd v First City Corporation Ltd [1993] 1 NZLR 513.(e) When deciding for the purposes of s 176 whether reasonable steps have been taken by a mortgagee to obtain the best price, the steps taken by the mortgagee and those acting with it must be looked at inthe round. The issue is a commercial one, to be viewed in practicalcommercial terms: Apple Fields v Damesh Holdings Ltd.13(f) Assistance in determining the issue mentioned in (e) above can be found by considering the steps endorsed in Harts Contributory Mortgages Nominee Co Ltd v Bryers where the following matters were mentioned:14[c] Where the security is substantial, or specialised property is involved, it will usually be necessary for the mortgagee to obtain and act upon specialised advice as to the method of sale: Tse Kwong Lam v Wong Chit Sen [1983] 3 All ER 54 (PC). Appointing a competent agent to sell does notdischarge the mortgagee's duties, but since its duty isultimately only one of reasonable care, putting the matter in the hands of a competent agent will usually go a long waytowards discharging the mortgagee's duties.[d] In the normal course the proposed sale will need to beadvertised with an adequate description of the property'sattributes and, within reason, widely enough to attract all possible purchasers. In some cases this will need to extend to both general and specialist publications: See Kwong supra at p 61; Ansell v NZI Finance Ltd (unreported, Wellington Registry, A434/83, Quilliam J, 14 May 1984).[e] There is no obligation to postpone the sale in the hope of a better price later, or to break up the assets and sell in a piecemeal manner if this can only be carried out over a substantial period or at a risk of loss: Kwong supra at p 59.[f] When assets are sold by tender or auction, a reasonable period must usually be allowed for purchasers to inspect the property and arrange finance before submitting bids: seeFairer Fishing Co Ltd v Broadlands Finance Ltd(unreported, Timaru Registry, A35/77, 17 August 1984);discussed by Ross, supra, along with Ansell v NZI FinanceLtd.13 Apple Fields v Damesh Holdings Ltd, above n 8, at 729.14 Harts Contributory Mortgages Nominee Co Ltd v Bryers HC Auckland CP403IM00,19 December 2001 at [43], Fisher J.(g) For the breach of duty to be actionable there must be proof of damage:Apple Fields Ltd v Damesh Holdings Ltd.15[23] In Public Trust v Ottow Asher J considered the applicable principles to amortgagee's duty of care under s 176.16 I now supplement the matters to which I made reference in Crown Money Corporation Ltd v Pink-Martin with the following propositions:17(a) A mortgagee sale for a price less than the current market value assessed by valuers does not, of itself, establish a breach of duty, although a large discrepancy may indicate a failure to take reasonable care;18(b) A mortgagee does not have any general duty to maintain properties prior to sale;19(c) Following the service of the Property Law Act notice there is no duty on a mortgagee to keep a guarantor informed of the sales activities;20(d) The mortgagee is not entitled to sell in a hasty way at a knock down price sufficient to pay the debt, which because of the speed of the sale leads to a lower price than could otherwise have been obtained;21 and(e) Proper care must be taken to expose the property to the market and to obtain the best price reasonably obtainable.2215 Apple Fields Ltd v Damesh Holdings Ltd, above n 8, at 729.16 Public Trust v Ottow (2010) 10 NZCPR 879.17 Crown Money Corporation Ltd v Pink-Martin, above n 7.18 Moritzson Properties Ltd v McLachlan (2001) 9 NZCLC 262,448 at [61]; Public Trust v Ottow, above n 16 at [17].19 Silven Properties Ltd v Royal Bank of Scotland plc [2003] EWCA Civ 1409, [2004] 1 WLR 997 at [16]; Public Trust v Ottow, above n 16 at [17].20 G Merel & Company Ltd v Barclays Bank Ltd (1963) 1 SJ 542; Public Trust v Ottow, above n 16 at [17].21 Palk v Mortgage Services Funding Plc [1993] Ch 330 at 337–8; Public Trust v Ottow, above n 16 at [17].22 Harts Contributory Mortgages Nominee Co Ltd v Bryers, above n 14 at [43](d) and (f); PublicTrust v Ottow, above n 16 at [17].Background[24] Mr Wiltshire was a successful businessman. He describes how he had built ITM Building Supplies and Trustco businesses into multi-million dollar annual turnover businesses. He also had interests in building franchises with David Reid Homes Ltd.[25] Mr Wiltshire was an existing customer of the plaintiff. Prior to Mr Wiltshire's sale of his ITM Building Supplies and Trustco businesses the bank had provided funding for the operation of those businesses. He sold a commercial building that had been part of the Trustco business and used the funds achieved from that sale to purchase the first of the two Karapiro farms for $2.25 million. The purchase was funded from existing resources apart from a sum of $300,000, which was borrowed from Westpac. That property was developed at a cost of $100,000, including the construction of new yards.[26] Dairy commodity prices at the time were strong and the milk payout had reached record levels. Mr Wiltshire decided to expand his farming operation. That led to the decision to acquire the second, and neighbouring, Karapiro farm property, which was acquired for $4.3 million. That purchase was settled on 1 June 2008. Substantial sums were planned to be spent on improvements in this property.[27] Mr Wiltshire undertook a number of commitments. These included the building of an extensive dwelling on a property at Taotaoroa and the funding of the purchase of the second of the Karapiro farms.[28] As already recorded, the June 2008 loan required a significant debt reduction programme by the sale of assets. The programme required the sale of the following assets:(a) Fonterra shares for $540,000 estimated to be completed by 30 June 2008;(b) Riviera 40 foot boat for $700,000 estimated to be completed by 31 December 2008;(c) Marina berth for $275,000 by 31 December 2008;(d) Jaguar XKR for $180,000 by 30 September 2008;(e) Range Rover 2006 for $110,000 by 30 September 2008;(f) Rayglass 730 boat for $60,000 by 31 December 2008;(g) Spec home for $450,000 by 30 June 2008;(h) Spec home for $450,000 by 31 October 2008;(i) Whitianga section for $2,250,000 by 31 December 2008; and(j) Four sections for $540,000 by 31 March 2009.After taking into consideration payment of hire purchase on a boat, that sales were estimated to realise $4,670,000.[29] Mr Wiltshire's position, however, deteriorated. By September 2008 sales ofassets had not proceeded and Mr Wiltshire sought a further $1,000,000 from the bank. The request was declined. Attention was then turned to the sale of the farm sothat the Wiltshire Group's increasing debt position could be addressed. At this stagethe Wiltshire Group was in considerable financial difficulty. A programme was required to accelerate asset sales in order for debt to be reduced. This, in itself, caused problems because some of the assets were in an incomplete state. Some funding was required to put the properties into a position where they could be marketed for sale. Additional funding was provided by the bank for this purpose.[30] It is against this general background that the sales of three principal assets were undertaken. It is those sales that Mr Wiltshire complains were mismanaged andresulted in sales at undervalue, or resulted in him being forced unfairly and under duress to execute sales agreements.Sale of the Karapiro farm[31] Following the purchase of the second farm in 2008, both the second farm and the property that had originally been purchased as a dry stock property were farmed as a dairy unit.[32] The trustees, who were the owner of the farm, defaulted in the loan agreement with the bank on 3 March 2009. Demand was made for outstanding interest that remained unremedied. Between 20 and 23 April 2009, Property Law Act notices were served on the trustees, who were the registered proprietors of the farm. The notices expired unremedied on 28 May 2009.[33] An offer to purchase at $6,800,000 was submitted on behalf of the Bridgefield Trust. The plaintiff said it was not happy with it because of the low deposit offered and the fact that the man behind the trust had a reputation for not settling transactions.[34] The bank obtained a valuation from a registered valuer as at 27 October 2009. Ashworth Lockwood Ltd provided a registered valuation for the property at $6,230,000, exclusive of GST, if any. The valuer then recorded in his report the position relating to any forced sale and reported:FORCED SALE VALUEWe have also been requested to provide an estimated value of the propertyon a ‗Forced Sale' basis.Our experience is that in times of buoyant market conditions a discount below a normal market value can vary between 0–10% but under more depressed market conditions can vary from 10% up to about 40% below a reasonable current market value.The current market conditions are weaker at present and there is a limited demand, restricted lending in the dairy sector, and economic uncertainty, although more recent optimism in milk income returns.This is resulting in a lower level of sales at present and considerable uncertainty in the rural farm market.The subject property is well presented and very well located. In our view, a range of discount below current market value could vary between 15–25%under ‗Forced Sale' circumstances.On this basis would fall into a range of value of between $4,750,000 and $5,400,000.Considering all factors including the good location and the very good standard of improvements on the property, we would assess a current marketvalue under ‗Forced Sale' circumstances therefore as being $5,000,000 (FIVE MILLION DOLLARS) exclusive of GST, if any.[35] The bank consented to Mr Wiltshire on behalf of the trust conducting an extensive marketing of the Karapiro farm properties through PGG Wrightsons. The firm reported to the solicitors for the bank on 24 December 2009. I do not set out the reporting email in full. Suffice to say there was interest shown from three purchasers, the highest of which seemed to be at $5.1 million plus GST.[36] The trustees entered into an agreement for sale and purchase with the trustees of the Blunt Trust on 8 February 2010. The purchase price was $5,500,000. The agreement provided for the giving of possession on 1 June 2010 and with settlement to occur on 1 June 2011 or such earlier date as mutually agreed. The agreement made provision for the payment of rent from 1 June 2010 to 1 June 2011 at a figure of $375,000 plus GST.[37] The bank appointed Michael Peter Stiassny and Brendan James Gibson jointly and severally as receivers and managers of all of the assets of the trust and the company that owned the farming plant and stock on 9 March 2010. The receivers and the purchasing trust agreed to bring the settlement date forward, as they were entitled, with the result that the sale and purchase transaction settled on 31 May 2010, with possession being given on 1 June 2010 as originally contemplated under the sale and purchase agreement. The lease, however, became redundant.[38] The defendant criticises the decision to advance the settlement date by a year. He says that the rent to be paid under the lease would have provided an additional$375,000. The plaintiff's response was that the interest costs for a further year was$524,996.70. The plaintiff concluded that the overall position would have beenworse if the settlement date remained at 1 June 2011. Be that as it may, the decision seems to have been that of the receivers. What is apparent to me on the evidence produced, however, is that by advancing the settlement date, the overall effect was beneficial, and not detrimental, as asserted by the defendant.[39] Mr Wiltshire claims he entered into the agreement to sell the farm because of the duress imposed by the bank. Both counsel were agreed that two elements must be proven for duress to be established:(a) There must be exertion of illegitimate pressure; and(b) The imposition of that pressure must have compelled the victim to enter into the contract.23[40] When the background circumstances of this case are considered, however, it is clear there was nothing illegitimate in expecting the trustees of the farm trust to sign the sale and purchase agreement with the Blunt Trust. The Wiltshire Group was in default. Property Law Act notices had expired. A significant period of time had been left for a sale by the mortgagor utilising his own agent and his own marketing campaign. The only offer that was able to be concluded by contract was the one that was actually accepted. Mr Wiltshire could have refused to sign the sale and purchase agreement. If he had done so it is likely that the farm would have been sold under a mortgagee sale. Be that as it may, those circumstances cannot amount to duress.[41] Mr Gollin submitted there was no evidence of coercion. The agreement was signed by Mr Wiltshire as a trustee and also by the independent trustee, Mr Foster, who is Mr Wiltshire's accountant. Mr Wiltshire received independent legal advice at the time of the signing of the contract. I am forced to conclude that there is simply no foundation for the proposition that Mr Wiltshire entered into the contract on behalf of the trust under duress.[42] Mr Talbot advanced an alternative argument in relation to the farm. Hesubmitted that the farm's condition deteriorated as a result of inappropriate23 Universe Tankships of Monrovia v International Transport Workers Federation [1983] 1 AC 366 (HL) at 400; McIntyre v Nemesis DPK Ltd [2009] NZCA 329, [2010] 1 NZLR 463.management of the farm following the appointment of the receivers. This, he said, came about in circumstances where, arguably, there was a case for saying that the bank had intervened in the management of the farm so that it could be held liable for any mismanagement which the receivers had carried out. His argument developed on the basis that Mr Miller, who had been appointed by the bank to report on the management of the farm, remained in that role while the farm was operated by the receivers. In addition, he noted that the receivers had only attended on one occasionand had, in fact, accepted reports on the farm's condition from Mr Miller.[43] He drew attention to the fact that the farm manager, Mr Rowe, who had been appointed by Mr Wiltshire, criticised the lack of action on a number of farm management issues.[44] I have carefully considered this evidence but do not consider there is any foundation for the proposition that the receivers, in this case, were acting in any other capacity than as agent for the trust. In particular, I do not see any foundation for the proposition that the receivers were acting as agents for the plaintiff. Nothing in the documentation suggests that this construction could arise. Section 6(3) of the Receiverships Act 1993 therefore applies.[45] I have carefully considered Mr Talbot's submissions in relation to the sale of the farm. However, when one stands back and looks at the overall picture, the evidence discloses a sale at a time when the market was under stress, at a figure that was in excess of the forced sale figure contained in the registered valuation obtained by the bank; as well as at a time that followed fairly extensive attempts by Mr Wiltshire himself to sell the farm property. I can find no criticism of the actions of the bank in relation to this transaction that would found a defence to the claim for summary judgment.Sale of Taotaoroa property[46] This property is referred to as the ―home property. It consists of 20 hectaresof land. It contains a dwelling and is situated at 6/957 Taotaoroa Road, Cambridge. It was purchased by Mr Wiltshire in about 2000. From 2004 he commenced thebuilding of a substantial dwelling of some 733 square metres in size. The cost of the construction of this property was said to be in excess of $2.1 million. There is a substantial outside area, including a swimming pool, a large concrete yard and driveways and outdoor living areas. Mr Wiltshire says he had a valuation commissioned on the property on 17 July 2009 and that the valuation given was $2,840,000. That, however, was based on an ―as completed position. At the time ofthe valuation it had not been completed. This valuation was made by Telfer Young, registered valuers, and was produced. Those valuers valued this property in its then state at $2,660,000.[47] From November 2009, Mr Wiltshire began marketing the property using Kevin Deane, real estate agent of Harcourts in Morrinsville.[48] An offer was received through a solicitor, Mr Brian Nabbs, representing a South African family. The purchaser was identified as BSN Trustees Ltd, or nominee. BSN Trustees Ltd is the trustee company of Mr Brian Nabbs, solicitor. The offer was at $2.5 million. The offer was conditional on a number of terms and also provided for a deferred settlement. The settlement date provided was 12 December 2010. The contract provided for the purchasers to have possession pursuant to a lease commencing on 12 December 2009. The contract provided for a deposit of $50,000 on the signing of the contract and $50,000 on it becoming unconditional. The lease provided for a payment of $75,000 per annum.[49] Mr Wiltshire says that he discussed the offer with the bank's officer, Mr Warren Banks, and was persuaded by Mr Banks to offer a counter-offer. The counter-offer that was made was not accepted. It produced yet a further counter- offer from the purchasers. That counter-proposal increased the purchase price from $2.5 million to $3 million and increased the lease so that a total lease payment of $96,000, instead of the $75,000, was to be paid. The lease provided for rental to be paid on a monthly basis.[50] Mr Wiltshire said that the reason for the lease was because the South African purchasers required the time to get their money out of South Africa and to meet immigration rules to enable them to emigrate of New Zealand. He said that whilstthe bank accepted the purchase price of $3 million, it was not prepared to entertain the delayed settlement for the lease period.[51] The proposal to purchase for $3 million without the 12 month lease was put to the purchasers, but they declined.[52] The problem with delaying settlement was similar to that which occurred with the farm. Mr Banks, the plaintiff's manager in its credit reconstruction group,noted that depending on the principal of loan allocated to this property, the interest cost for a year during the term of any lease period would have been between $135,747 on the lower principal and $231,607 on the higher principal. It was therefore substantially more than the $960,000 that was being offered for rent. The bank, on the authorities that I have referred to, was under no obligation to accept a deferment of the settlement date with a lease arrangement as part of the sale package. The evidence before me suggests that there was some risk in proceeding on that basis. I therefore conclude that it was understandable that the proposed contract was not accepted by the plaintiff.[53] The property was appraised by four real estate agents in December 2009. The position, in summary, is as follows:(a) Bruce Spurdle of First National gave the property a current market value of $2,349,250 and a forced sale value of $2,184,802. He suggested a sale by auction and with a marketing plan over a three to four week period and a commitment of $10,246 to the marketing costs;(b) Cambridge Real Estate gave the property a current market value between $3,000,000 and $3,300,000 and a forced sale value of $2,500,000–$2,800,000. This firm also suggested a sale by auction and a marketing period of six to seven weeks and with a marketing budget of $7,256;(c) Harcourts gave the property a current market value of $3,000,000 and a forced sale value of between $1,500,000 and $2,000,000. Mr Deane recommended an auction sale and marketing programme over a five- week period with a budget of $11,965; and(d) Bayleys Real Estate also gave a marketing proposal and suggested an auction with a five week marketing programme and with a marketing budget of $15,047.99.[54] The bank instructed Bayleys to act as its sole agent and to market the property over five weeks with the sale of the property by the plaintiff as mortgagee. An auction was held on 8 April 2010. The property was passed in. Negotiations were undertaken with potential purchasers. On 7 May 2010 the bank sold the property for $1,900,000.[55] The defendant's criticisms of the bank in relation to the sale of the homecentre on the bank's refusal to permit an agreement to proceed based on a lease for12 months. The second criticism is that the marketing campaign that the bank actually adopted consisted of a programme over five weeks and was, by and large, a local marketing campaign, with the exception of the advertising on the internet on three websites. I have considered this evidence. There is no evidence that supports the view that buyers who might have an interest did not have the opportunity to be involved in the sale of this property. Again, when I analyse the legal principles that I have referred to in [19]–[22] of this judgment, I can find no basis that would support a defence based on s 176 of the Property Law Act 2007 in relation to the sale of this property. The only transaction that is used to advance the submission that there was a sale at substantially less than the market value was an unusual one which carried a substantial risk of non-performance carried over a 12 month period. I conclude that there is no proper basis for a defence to the summary judgment claim arising fromthe bank's sale of this asset.Sale of Panorama property[56] The property at 41 Panorama Road, Whitianga was purchased by Mr Wiltshire's interests in 2004 for $1,200,000. It is a section of 1,215 square metres with a direct north-facing aspect. To the east there are uninterrupted views over Front Beach, Flaxmill Bay and Cooks Bluff. The view to the north is of Mercury Bay in its entirety. The view to the west is of Buffalo Beach, Whitianga and the entrance to the Whitianga Harbour. There are 280 degrees of uninterrupted sea views from an elevated, yet completely private, large section with beach access to a Coromandel beach. It was originally purchased as a bare block with no services, other than those to the boundary. Mr Wiltshire ran power, sewerage and water services on to the property and constructed two small dwelling units and a significant deck area. The dwelling units total approximately 50 square metres and provide accommodation for four people. They include a toilet, full bathroom and full kitchen facilities.[57] In 2006, or early 2007, Mr Wiltshire says he turned down an offer of $3.5 million for the property. Mr Wiltshire commissioned a valuation from Telfer Young, registered valuers, dated 29 October 2009. The valuers gave a value of $1.6 million for the property, with a forced sale figure of $1.28 million.[58] The bank, as mortgagee, had an auction conducted on 2 February 2010 in the exercise of its power of sale. The auction was undertaken by Mr Hunt of Whitianga Realty Ltd — Ray White, which had been instructed by the bank on 4 December 2009. The property passed in at auction. The top bid received was $660,000. It was subsequently sold by the plaintiff on 19 March 2010 for $950,000.[59] Mr Wiltshire criticises this transaction. He claims the beach property was sold at undervalue as a result of completely inadequate marketing. He criticises the amount set aside for marketing the property, which was just over $4,600. He says that the marketing failed to appreciate that what was being sold was an exclusive piece of real estate which, because of its location, would have appeal to national and international buyers as a potential holiday residence. Mr Wiltshire says that he expressed his concern to Mr Warren Banks of the plaintiff. As a result he wasinvited to come up with a marketing plan. He did so and presented a campaign budget totalling $15,000. His proposal was declined by the plaintiff. The property was passed in at the auction.[60] Mr Hunt records the steps taken in the marketing campaign and noted that names are listed of people who had made inquiries of his office about the property. He also referred to the internet site statistics that were recorded and that inquiries from 50 overseas persons had been noted. He complained that they were hampered in the approach taken by Mr Wiltshire to the sales process. That is not denied by Mr Wiltshire, who initially denied access to the property and later made access conditional upon information being given to him as to the marketing being undertaken by the bank and its real estate agent.[61] The eventual purchaser, Mr Keith Patterson, has filed an affidavit in opposition to the summary judgment application. Mr Patterson records that in late 2009 he was actively in the market to purchase a beach property in the Fairy Landing area of Coromandel Peninsula. He owned a nearby property. He sold a property and entered into the purchase of another, though this did not proceed. He further reported that his sister, who lives in Melbourne, had telephoned him and told him that she had seen the subject property advertised. As a result, he said he went to Whitianga and saw the advertisement of the property in the window of Ray White'soffice. He then said that as a result of talking to the receptionist and Mr John Hunt, the real estate concerned, he received very little information. All he received was a copy of the title and a copy of the date and terms of auction. He asked for information concerning the status of the property with the local authority, but was given no information and told simply to talk to the council. He said that he informed the real estate agent that he was a cash buyer, but his name was not taken. He says that he was told by the agent that the anticipated purchase price would be higher than the $960,000 that he eventually paid for the section.[62] That indication apparently dissuaded him from attending the auction. He said that he telephoned after the auction and was told that the property had been passed in at $660,000. He said that he returned to John Hunt and said that he was genuinely interested. He was told by John Hunt that they were negotiating with the top bidder.He claims that the agent appeared disinterested but, in any event, he was advised to put in an unconditional offer, which he did at $750,000. He was told by the real estate agent that the bank had received a higher offer, but it was conditional.[63] Mr Patterson then arranged for his lawyer to write to the solicitors for the bank saying they were still interested. He says that that letter received no reply. Heagain contacted the real estate agent and was referred to an employee of the bank'ssolicitors. As a result, they then negotiated with the employee of the bank'ssolicitors. He then said he was very surprised to get the property at the price they paid. He added:From our knowledge of property in the area, a prime beach front property such as this we would have expected to have sold for much more than the price we eventually paid.[64] No detail is contained in the evidence before me of the negotiations from thebank's side that were conducted with Mr Patterson, the eventual purchaser. Mr Hunt comments on Mr Patterson's affidavit and, without summarising all matters, it is clear that Mr Hunt's version of events is quite different from that of Mr Patterson's. The conflict in position between Mr Hunt's version of events and Mr Patterson'sversion of events is something that cannot be resolved in a summary judgment application.[65] I am left in some doubt about this sale. It may well be that the bank took all appropriate steps to attain the best reasonable price. Mr Patterson's evidence,however, leaves me with some doubt about the matter, such that I am not satisfied that the plaintiff has discharged the onus that there is no defence available. That is because it is possible that the marketing that was undertaken was not sufficient to reach the potential market of available purchasers. Further, there is the possibility that potential purchasers were not given appropriate assistance that might have promoted their interest in the property. Whether that is the case, in my view, needs to be tested at trial and certainly is something that I am not satisfied can be dealt with on the affidavits that have been filed and placed before me.[66] I raised with counsel what the position might be if I reached such a conclusion. The valuation evidence suggests that there might have been a sale at anundervalue by up to $330,000. I invited Mr Talbot to advise what his client'sposition would be if the other areas of the judgment were left out of contention and this one was the only one that might be the subject of a trial. The preliminary indication would be that there might be some doubt concerning a figure of $330,000 maximum. If that were the case, then it would seem appropriate that judgment be entered for the balance of the claim, that is the amount claimed less $330,000. Mr Talbot did not disagree with that approach. The approach, of course, is permitted by the very words of the High Court Rules, r 12.2(1), which permits the court to enter judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.[67] I am not able to directly calculate the amount for which judgment should be entered if this allowance is made. I raised that difficulty with counsel and invited them to confer and to file a memorandum. The reason for that position is that there needs to be a recalculation of interest, taking into account the fact that the sale of the property may well have been at an undervalue of up to $330,000 calculated from the time of sale, that is 19 March 2010.[68] Counsel shall accordingly file either a joint memorandum; or, if there is no agreement on the calculation, memorandum by the plaintiff, followed by the defendant, and a reply by the plaintiff at seven-day intervals. The file shall be referred to me for the entry of judgment.[69] I was advised by Mr Talbot that the defendant is the subject of a grant of legal aid. Counsel were agreed, in the circumstances, that no order for costs should be made. It is on that basis that there will be no order for costs.The future of this case[70] I intend, when entering judgment finally on this case, to make provision for a further case management conference. Having regard to the outcome, this case would benefit from discussion between the plaintiff bank and the defendant. If there is no agreement, I intend to give directions for the filing of a statement of defence and anyadditional discovery that is required dealing with the defence that arises out of the sale of the Panorama property.[71] Accordingly, that will also be covered in the final judgment, which I willissue following counsel's memorandum.