Ruling notes in-house counsel could make demands on lender’s behalf
New Zealand’s Court of Appeal has rejected an appellant’s argument that he and an advertising company’s chief executive officer had a “meeting of the minds” regarding the suspension of the performance of the company’s obligations under loan agreements.
Pursuant to two loan agreements dated 28 March 2024, the respondent in Jaques v Wilson Parking New Zealand Limited [2026] NZCA 129 agreed to advance a total of $570,000 to a digital advertising company, of which the appellant was the sole director.
The loans were for the construction of two advertising billboards to be displayed on the respondent’s car park sites.
Under the agreements, the respondent would get a licence fee for the billboard licensed area, while entities associated with the appellant would receive advertising and other revenue.
The agreements required the advertising company to pay the respondent 60 monthly instalments of principal and interest payable on the first day of each month, beginning 1 August 2024.
A general security agreement over the advertising company’s assets and the appellant’s “all-obligations unlimited personal guarantee” dated 28 March 2024 secured the advances, to be drawn down in tranches of:
The appellant’s guarantee – adhering to a standard form deed of guarantee and indemnity from the Auckland District Law Society – referred to the advertising company’s formation and installation of two digital billboards at the respondent’s Christchurch premises.
The appellant guaranteed that the advertising company would duly perform the agreements. The respondent proceeded to advance two tranches amounting to $456,000 to the advertising company.
However, in an email headed “Without Prejudice” and sent in the morning of 22 July 2024, the appellant:
At around noon that day, the respondent’s chief executive officer called the appellant and talked to him for six minutes, explicitly “without prejudice.”
That afternoon, the respondent’s in-house counsel also emailed the appellant. After requesting some more information to assist her in making a recommendation to the respondent’s management, she continued to correspond with him.
In a 31 July 2024 email, the respondent’s in-house counsel informed the appellant that the 1 August 2024 payments remained due, “pending management’s decision.”
On 13 August 2024, pursuant to the general security agreement, the respondent appointed receivers to the advertising company.
On 20 August 2024, the respondent demanded that the advertising company and the appellant repay $456,000 in advances. Moreover, the respondent suspended the payment of the third tranche.
On 17 September 2024, the respondent unsuccessfully demanded repayment from the appellant under the guarantee.
Before the High Court, the respondent brought proceedings for summary judgment amounting to $456,000 from the appellant.
Associate Judge Cogswell of the High Court granted the respondent summary judgment totalling $456,000, plus interest and costs, against the appellant. On appeal, the appellant pointed to an alleged meeting of the minds with the respondent’s CEO on 22 July 2024.
The Court of Appeal of New Zealand saw no error in the High Court judge’s finding that the appellant lacked an arguable defence against the respondent’s claim.
The appeal court ruled that the demonstrably implausible evidence presented on the appellant’s behalf lacked credibility and went against the contemporaneous documentary record.
The appeal court noted that both agreements included a clause that prohibited amending or varying the agreement without the advertising company’s, the appellant’s, and the respondent’s written and signed agreement.
Given this clause, the appeal court found it unlikely that the parties wanted the agreements to be open to informal variation.
Based on the record, the appeal court noted that the appellant:
The appeal court held that the appellant could not have misunderstood the respondent’s reliance on the without prejudice nature of the telephone conversation with its CEO, given that he titled his initial 22 July 2024 email “Without Prejudice.”
Based on the evidence, the appeal court determined that the appellant probably would have immediately and directly raised the alleged meeting of the minds regarding the agreements’ suspension, but failed to do so initially, which impacted the veracity of his argument.
The appeal court found that the respondent’s in-house counsel could make demands on the company’s behalf.
The appeal court said the appellant made little sense in his characterisations of the correspondence from the respondent’s in-house counsel. The appeal court added that the appellant could not pick and choose which of the respondent’s representatives he would accept as having the authority to make demands.
