IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-000976 [2013] NZHC 1366

UNDER	Part 12 of the High Court Rules	

IN THE MATTER	
of an application for summary judgment	

BETWEEN	
CHRISTOPHER JOHN NEALE PETERS Plaintiff	

AND	
WESTPAC NEW ZEALAND LIMITED Defendant	

Hearing:	12 June 2013	

Appearances:	
Plaintiff in Person
P Shackleton and T Bloy for Defendant	

Judgment:	
12 June 2013	

JUDGMENT OF VENNING J

This judgment was delivered by me on 12 June 2013 at 4.45 pm, pursuant to Rule 11.5 of the High
Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:	Simpson Grierson, Auckland
Copy to:	Plaintiff

PETERS v WESTPAC NZ LTD [2013] NZHC 1366 [12 June 2013]

Introduction

[1]       The plaintiff Mr Peters represents himself.  On 29 January this year he filed proceedings against the defendant (the Bank).  In the proceedings he seeks damages for losses he has estimated at $660,000 arising out of his dealing with the Bank.  For present purposes however, his focus is on the application for an order restraining the Bank from selling his property in reliance on its powers as mortgagee.

[2]       The Bank  opposes  Mr  Peters’ application  for  an  injunction.    It  has  also applied for summary judgment against Mr Peters, both as a defendant and on its counterclaim.

[3]       Mr Peters filed an affidavit dated 24 April 2013 in support of his application for injunction.  The Bank has filed several affidavits in response to Mr Peters’ application and in support of its application for summary judgment.  Ms Barrett, a Westpac manager, has sworn and filed three affidavits.  Ms Broadman, a customer solutions manager and privacy officer employed by Westpac has also sworn and filed an affidavit.

[4]       On  6  May  Dobson  J  made  timetable  directions  to  ready  Mr  Peters’ application for interim injunction and the bank’s application for summary judgment for hearing.

[5]       The Bank filed an amended counterclaim to include a claim for possession in accordance with that timetable.   Mr Peters then filed a notice of opposition and further affidavit in opposition to the Bank’s application for summary judgment and possession.

General background

[6]       The documents before the Court, including those attached to the affidavits of Ms Barrett disclose that from time to time Mr Peters made a number of loan agreements with the Bank.  The agreements have been varied from time to time and include a home loan account.

[7]	Mr Peters also had a Mastercard credit card with the Bank.

[8]	As at 8 March 2013 the Bank recorded Mr Peter’s indebtedness to it at

$365,021.34 made up as follows:

00	Agreement and principal	$5,825.80

Accrued interest	$25.88

91	Agreement – principal	$358,617.18

Accrued interest	$552.48

$365,021.34

[9]       As security for his borrowing Mr Peters provided the Bank with a mortgage over the property at 3001, State Highway 2, RD2, Maramarua. (the Maramarua property). The mortgage was registered on 17 June 2003.

[10]     In November 2010 Mr Peters was in default under the agreements.  The Bank froze his accounts.   Mr Peters says he approached the Bank, but was unable to resolve the position.  On 17 December 2010 Mr Peters laid a complaint against the bank with the Banking Ombudsman.

[11]    Mr Peters says that because of a number of personal difficulties including business reverses and loss of family members he was depressed.   Some days he could not get out of bed.   He says that at the time he had a mortgage of over
$200,000 and at one point an overdraft of $70,000 on a very limited income. Although he accepts he drew down the full facility amounts, he considers the Bank should not have lent to him.   He complained to the Banking Ombudsman that the Bank were still throwing money at him and he felt trapped.  He says he asked the Bank about resolution many times but was put off and his issues were never addressed.

[12]     Mr Peters also complained to the Banking Ombudsman that the Bank, which must have known he was in trouble, denied him assistance.  He said that “they [the Bank] should have stepped in themselves years ago as soon as they knew I was in trouble.  It is in their interest as well as mine”.  He asked the Ombudsman for help.

[13]     After the complaint to the Ombudsman Mr Peters met with Mr Nunn, the branch manager of the Bank at Thames on 21 April 2011.  Following that meeting the Bank made an offer to Mr Peters to resolve issues.

[14]     On  28  June  2011  Mr  Peters  concluded  an  agreement  in  full  and  final settlement of his complaint against the Bank.  He agreed to accept the following in
full and final settlement of his complaint. The Bank agreed to:

          clear the arrears on a loan account totalling $7,653.91;

          clear  the  arrears  and  repay  his  overdraft  on  another  overdraft  account totalling $5,918.95.	A $5,000 overdraft remained available at Mr Peter’s
insistence;

          repay and close his credit card totalling $11,077.32;

          pay a year’s house insurance premium with Lumley (excess $650 for the house, $250 for sheds) totalling $1,267.79;

          pay the next three months of loan repayments of $2,086 per month being 28

June, 28 July and 28 August 2011, to a total of $6,258.

[15]     Mr Peters went on to sign an acknowledgement:

I further acknowledge that I am aware the Bank has left the overdraft facility in place at my insistence.   I am aware that the Bank’s position is that my financial situation means I do not qualify for an overdraft, and if I have any difficulties in making repayments I accept that the bank is not responsible for my decision to use the facility, that I am responsible for repaying it, and am unable to make a further complaint.

[16]     The  Bank  performed  its  obligations  under  the  settlement  and  effectively wrote off or paid $32,175.97 in total to Mr Peter’s benefit.

[17]     However Mr Peters again failed to comply with his ongoing obligations to the bank.  He again fell into arrears.  He has not paid anything since mid to late 2011. Mr Peters accepted in the course of submission that he has been “living off the

Bank” since then.   In January 2012 Westpac issued a demand for the arrears then owing of $10,113.74.   The notice required repayment by 20 January 2012.   The notice expired unremedied.  On 23 February 2012 Westpac served a Property Law Act notice on Mr Peters.   The notice required payment of $13,108 by 30 March
2012. Again, the notice expired unremedied.

[18]     On  10  April  2012  Mr  Peters  contacted  Simpson  Grierson,  the  Bank’s solicitors to inquire about selling the property himself.  On the same day Westpac’s solicitors confirmed that, without prejudice to their rights under the Property Law Act notice, the Bank would agree to defer further enforcement action until 31 May
2012 to allow Mr Peters to achieve a sale acceptable to the Bank on a number of conditions, including that he meet ongoing loan repayments when due.

[19]     Further communications ensued between the parties.  Mr Peters did not sell the property.  Westpac subsequently instructed Barfoot and Thompson to market and sell the property.  The agents experienced difficulty with Mr Peters.  On a number of occasions  in  September  2012,  December  2012  and  January  2013  the  Bank’s solicitors  wrote  to  Mr Peters  requesting  his  co-operation  with  the  sale  process. Again,  in  the course of submissions, Mr Peters accepted he had obstructed the Bank’s agents.

[20]   Mr Peters then subsequently filed his application for injunction, which commenced these proceedings.

Mr Peter’s claims

[21]     Mr Peters alleges generally that the Bank owes a duty of care to him as a customer and that it has, through the conduct of its employees, breached a fiduciary obligation by abusing his trust.   He referred generally to a “syndicate” which had targeted him, and in his opinion, set him up.  He says that the Bank has mismanaged his account facilities and loaded up his accounts with loans and overdrafts above the amount he could service with his income.  Next, he says various employees of the Bank gave him wrong advice and information and ignored requests for assistance. Then, when he became aware he was under threat of losing his home he says the

Bank was unwilling to assist him and acted to frustrate his efforts to address the issue.

[22]     Mr Peters particularly complains about the Bank’s actions around August

2006 when he was considering purchasing machinery for his agricultural contracting business.  He says he was told he could have up to $40,000 when he only wanted to borrow $10,000 to $15,000.  He says that $60,000 was loaded into his account and that was where he started getting in over his head.  In late 2007 he tried to pursue a service within the Bank known as the Resolutions Team but, he says, was denied access to the team.

[23]    Mr Peters says that by February 2008 he had a $68,000 overdraft and felt burdened by the debt that he was unable to service.  He says he repeated his requests for assistance or resolution meetings in 2008 and 2009.  In November 2010 when the Bank froze his accounts he made further requests to speak with the Resolution Team and was told there would be a five week wait.  He says eight weeks passed without any contact.  He then contacted the Banking Ombudsman.

[24]   In relation to the settlement that Mr Peters and the Bank subsequently completed, he believes it was not a real settlement because in his view it was one- sided with the Bank only offering him more debt.  He considers the settlement to be little more than hush money.  He says the Ombudsman failed to follow his terms of reference.   He considers he should not be held accountable for any legal liability when there was, in his words, “no proper offer and agreement between both parties, therefore there was no settlement”.

[25]     Mr Peters says he believes:

the contract is void of consideration, and disclosure of the true terms and conditions of the contract, as the contract is one sided as the mortgagee has all priority and the customer has none, there is no disclosure of the banking Ombudsman or their terms, or denial of recourse.  Customer forced to accept as there is no other option.

[26]     In relation to the Property Law Act notice Mr Peters says he was not properly served with the notice served on 23 February 2012.  The person who served it did not identify himself.

[27]     Mr Peters then refers to a number of examples which, he says, showed the

Bank failed to act fairly.   He refers to the Property Law Act notice, which stated

$13,108 was to be paid by 30 March 2012, but says that when he attempted to remedy the default he was told the arrears were now $21,000.

[28]    He complains that the Bank only gave him six weeks to sell the property himself.  He considers six months would have been more reasonable.  He says he has done everything possible to resolve the issue.  He says the Bank was negligent in its dealings with him and if the Bank had addressed his concerns four years earlier and responded to his request for assistance the present situation may not have occurred.

[29]     Mr Peters claims damages of $660,000.  There are a number of heads of loss making that sum up.  He estimates he has lost equity in his property of $260,000 and claims generally in relation to his agricultural business a loss of $100,000, his living and income $50,000, financial security $100,000, ability to obtain credit $50,000 and quality of life (lifestyle and health) $100,000.

[30]     In his affidavits Mr Peters repeats the matters set out in the statement of claim and deposes to them.

The law

[31]     It is convenient to first address Mr Peters’ application for interim injunction. The principles to apply on an application for injunction are settled.  The Court will first determine whether there is a serious question to be tried and, if satisfied there is, will consider where the balance of convenience lies.  Ultimately the Court will have regard to the overall interest of justice:  Klissers Farmhouse Bakeries Ltd v Harvest
Bakeries Ltd.1
[32]	The plaintiff’s general claims seem to be based on allegations: (a)	that the Bank owed him a duty of care;  and/or

1	Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 129 (CA).

(b)	that the Bank owed him a fiduciary obligation in relation to its dealing with him;

(c)       that the settlement agreement is void or not binding.

[33]     Apart from certain exceptions, the relationship between banker and customer is generally a debtor creditor relationship governed by contract: Foley v Hill.2   The general proposition is as stated by the authors of Ellinger’s Modern Banking Law as:3

As banks can normally be expected to further their own commercial interests ahead of their customers’, the courts have consistently stressed that banks’ deposit-taking and lending activities are not generally fiduciary in character,
...

[34]     In Cornish v Midland Bank plc4  the Court of Appeal rejected a claim by a customer’s widow against the Bank based on an alleged fiduciary duty.  The Court observed that the starting point was that ‘in the normal case’ there would generally be no question of a fiduciary relationship and that customers will face an uphill struggle persuading the Court otherwise.

Did the Bank prevent repayment?

[35]     In any event, for the reasons that follow, however Mr Peters characterises his claims, there is no arguable basis to them.  Although Mr Peters makes a number of general complaints against the Bank, he gives few specific examples of those complaints.  One is his complaint the Bank frustrated his efforts when he attempted to put things right by telling him that $21,000 was required to redress the default under the Property Law Act notice.

[36]     Mr Peters gives no particulars of the conversation in which he says the Bank told him the amount was $21,000.   He does not identify when he says the conversation took place, other than saying it was prior to 30 March and that he, Mr
Peters had “offered to remedy the default”.  He does refer to speaking to a Mr Peter

2	Foley v Hill (1848) 2 HLC 28.
3	EP Ellinger, E Lomnicka and CVM Hare  Ellinger’s Modern Banking Law (5th  ed, Oxford University Press, Oxford) at 128-129.  See also Bartle v GE Custodians [2010] 1 NZLR 802 (HC).
4	Cornish v Midland Bank plc [1985] 3 All ER 513 (CA).

Retemeyer to confirm the amount claimed but does not say when.  During the course of submissions Mr Peters also produced a letter from a real estate agent Mr Pryde, in which Mr Pryde relates a conversation he had with Mr Peters on 12 April 2012 including that by 31 March the default amount had risen to $21,000.  I do not accept that letter as evidence.  It is clearly hearsay and is not even attached to Mr Peters’ affidavit.  Mr Pryde should have provided an affidavit.  Further, it is of limited probative value because it is clear he is merely relating what Mr Peters has told him. Next, the letter is dated 22 April 2013, over a year after the conversation he purports to refer to.  Finally Mr Pryde appears partisan – he says rather colourfully that the Bank’s action in contracting another real estate agent (as opposed to him) “... completely lost all Mr Peter’s equity in the property ...”.

[37]     Against Mr Peters’ very general evidence and the inadmissible letter from Mr Pryde there is the evidence of the Bank.  First that of Ms Boardman, who deposes that on 30 March 2012 Mr Peters called her to advise that the Property Law Act notice was expiring that day and that he had put his property on the market for sale. He asked what the next steps were.  There was no mention of $20,000 or that Mr Peters was going to meet the demand.   Ms Boardman made a file note on 2 April which confirms that conversation.

[38]     It may be Mr Peters is confused about the date of his discussion.  I note that Mr Peters did have a discussion with the Bank’s solicitors on 10 April.  Further, Ms Hussey of the Bank had a discussion with Mr Peters on 1 May 2012 where the increased arrears figure was discussed. The file note records:

   Chris  phoned  and  was  agitated;  wanting  to  get  an  itemised calculation as to how the figure of approx $20k defaults is arrived at whilst back in March he was saying that it was only approx $12k

   Calculation as follows:

$6,300 - 3 mos no payment of $2,086 pm
$1,580 - Legal fees
580 - Val fees,

Approx $20,500.

[39]     That note is consistent with a subsequent letter Mr Retemeyer wrote to Mr Peters on 3 May.  It also shows that Mr Peters could not have been in arrears to the Bank by anything like $20,000 – $21,000 at 30 March 2012.

[40]     The allegations  that  Mr  Peters  makes  are  general  and  not  particularised. They are inconsistent with the contemporary documents recorded by the Bank and are otherwise inherently improbable.  As at 30 March, his default was no more than that recorded in the notice. The Bank had no reason to advise him otherwise.

[41]     The contemporaneous documents satisfy me that Mr Peters was not told before the expiry of the Property Law Act notice on 30 March 2012 that his default had increased to $20,000.

[42]     In any event, the short answer to this point is that it was not for Mr Peters to offer to make payment.  Mr Peters had an existing and ongoing obligation under the terms of his loan agreements and the mortgage document to pay the default.  If Mr Peters had tended the amount due and claimed under the Property Law Act notice prior to its expiry on 30 March then that would have been an end of the matter.  Mr Peters did not do so.  There is a further and final point.  Mr Peters was clearly not in a financial position to pay the $13,108 by 30 March 2012.   He had paid nothing since mid to late 2011.   He had no ability to pay the default and has provided no evidence he could do so.

The Bank’s actions as mortgagee

[43]     Next, Mr Peters says that the Bank was unreasonable in only giving him six weeks  to  sell  the  property  when  a  six  month  period  would  be  considered  a reasonable time to sell the property.

[44]     I accept the submission for the Bank that giving Mr Peters time to sell the property was an indulgence.  A mortgagee can choose when and if to sell.  Westpac has obligations to Mr Peters under s 176 of the Property Law Act 2007.  However,

subject to those obligations it is for the Bank to determine when to sell:  Public Trust v Ottow.5

The alleged failure to assist

[45]     Mr Peters next complains the Bank failed to provide him with assistance when his problems began.  However, this appears to relate to the issues that arose before the involvement of the Ombudsman.  Those matters were incorporated in the settlement concluded with the assistance of the Ombudsman’s office.

The overlending issue

[46]     Mr Peters  suggests  that  although  he only wanted  $10,000  to  $15,000  in August 2006 he was lent $40,000 and later discovered approximately $60,000 was loaded into his account.

[47]    Mr Peters’ evidence is directly contrary to the loan agreements and the extensions to the loan agreements that he signed at the relevant times.   They set limits to borrowing.  Mr Peters accepted in submission that he drew the money down and used it.  As observed by Randerson J in Bartle v GE Custodians6 it would be a curious state of affairs if a borrower could seek loans and then complain the lender had complied with the request.

[48]     Finally, and in any event, these complaints were resolved by the settlement negotiated through the Ombudsman.

The challenge to the settlement

[49]     Mr Peters’ response is to submit the offer was not a real settlement because it was one-sided.   It is quite clear that the Bank provided consideration for the settlement.   It wrote off a number of outstanding accounts Mr Peters had with the Bank, paid an insurance premium on his behalf and waived its right in relation to monthly mortgage payments for three months.   It cannot be characterised as one-
sided.

5	Public Trust v Ottow (2010) 10 NZCPR 879 at [17].
6	Bartle v GE Custodian, above n 3.

[50]     Mr Peters also says the Bank misled the Ombudsman.   He refers to the reference in the Bank’s letter to the Ombudsman of 31 May 2011 to an application for a loan dated 26 June 2008.  Mr Peters made the point the schedule of loans provided by the Bank to him in March 2012 does not refer to 26 June 2008.  The short answer is that the reference to 26 June 2008 was a reference to the date of the application, not the loan itself.  The application was granted, and the loan faculty accepted by Mr Peters on 16 July 2008.

Service of the Property Law Act notice

[51]     Mr Peters says that he was “not properly served with the notice of default”.

However, it is clear from his own affidavit that he effectively received it.

The Ombudsman

[52]     Mr   Peters   next   complains   about   the   involvement   of   the   Banking Ombudsman.     He  says  the  Banking  Ombudsman  failed  to  comply  with  his obligations under paragraphs 17 to 23 of the Banking Ombudsman’s terms of reference.   However, those clauses were not engaged as they only applied if a settlement was not concluded.  In any event, even if the Banking Ombudsman had failed to comply with his terms of reference it does not affect the settlement Mr Peters concluded with Westpac which, as noted, Westpac provided consideration for.

Mr Peters’ claim generally

[53]     For completeness, I note that Mr Peters’ pleading is defective.  It is prolix and repetitious.  There is no logical connection between the amounts pleaded by him as claimed as lost and the sums involved.

[54]     In short, none of the matters that Mr Peters has referred to raises a serious question to be tried by this Court.   Mr Peters’ complaints are not capable of reformulation in any coherent or sensible way, which would support a cause of action.

[55]     Although it is unnecessary to go on and consider the balance of convenience, I note Mr Peters’ acceptance that he has no ability to support his undertaking in any event.

[56]     Mr Peters’ application for injunction must be dismissed.

Westpac’s claim for summary judgment

[57]     That leaves Westpac’s application for summary judgment.  The principles in relation to a summary judgment application by a defendant were settled by the case of Westpac Banking Corporation v M M Kembla New Zealand Ltd.7   The onus is on the defendant, in this case the Bank, to prove on the balance of probabilities the plaintiff cannot succeed in his claim.   In the present case I am satisfied, having regard to the matters discussed above, that the plaintiff cannot succeed on the claims he seeks to raise against the Bank.   The Bank is entitled to summary judgment against the plaintiff on his claim against the Bank.

[58]     The  Bank  also  seeks  summary  judgment  on  its  counterclaim.    It  seeks judgment in the total sum of $365,021.34 together with interest on that sum from 8
March 2013.  In its amended counterclaim it also seeks an order for possession.  The rules relating to summary judgment apply to counterclaims.8    Further, amended pleadings are permitted:   Cegami Investments Ltd v AMP Financial Corporation (NZ) Ltd.9    Mr Peters filed an opposition to the amended counterclaim which seeks an order for possession.  He has said all that can be said in opposition to it.

[59]    The Bank satisfies the Court that Mr Peters has no arguable defence to its claims.  He has effectively accepted that he has “lived off the Bank” for the last two years and also that he has deliberately obstructed its sale process in order to avoid bankruptcy.    The  Bank  is  entitled  to  summary  judgment  on  its  counterclaim
including the order for possession as contained in the amended statement of claim.

7	Westpac Banking Corporation v M M Kembla New Zealand Ltd [2001] 2 NZLR 298 (CA).
8	High Court Rules, r 12.16.
9	Cegami Investments Ltd v AMP Financial Corporation (NZ) Ltd [1990] 2 NZLR 308.

Result/orders

[60]	(a)	Mr Peters’ application for injunction is dismissed.	
	
(b)	
Judgment for the Bank on Mr Peter’s claim against it.	
	
(c)	Judgment for the bank against Mr Peters in the sum of $376,018.29 as follows:	

(a)	Amount claimed as per statement of claim	$365,021.34	

(b)	
Interest on the sum of $5,825.80 accruing at the rate of 10.75% per annum compounding monthly from 8 March 2013 to 12 June 2013	
$168.17	

(c)	
Interest on the sum of $358,617.18 accruing at the rate of 11.24% per annum compounding monthly from 8 March 2013 to 12 June 2013	
$10,828.78	
	
Total	
$376,018.29	

(d)	Interest continues to accrue on the sum of $5,825.80 at the rate of

10.75% per annum compounding monthly from 13 June 2013 to the date of actual payment.

Interest continues to accrue on the sum of $358,617.18 at the rate of

11.24% per annum compounding monthly from 13 June 2013 to the date of actual payment.

(e)	Mr Peters and/or any other occupants of the Maramarua property must deliver up vacant possession of the Maramarua property within
14 days of the date of this judgment or such later date as the Bank and

Mr Peters agree to in writing.

Costs

[61]	Costs to the Bank on a 2B basis for one counsel.  I decline costs on a solicitor client basis as they are not sought on that basis in the amended counterclaim.

Venning J