High Court of New Zealand

30 September 2009

MEDIA RELEASE

BARTLE v G E CUSTODIANS & ORS

PRESS SUMMARY

This summary is provided to assist in the understanding of the Court’s

judgment. It does not comprise part of the reasons for that judgment.
The full judgment with reasons is the only authoritative document. The
full text of the judgment and reasons can be found at
www.courtsofnz.govt.New Zealand

The High Court has released its decision in this claim for damages by
Mr & Mrs Bartle who invested funds in a joint venture with the Blue Chip group
involving the purchase of an Auckland apartment. For this purpose they
borrowed some $630,000 from GE Custodians and mortgaged their previously
debt-free home in Whangarei as well as the apartment purchased.

The Blue Chip group collapsed in early 2008 leaving the Bartles with the
responsibility to repay the mortgages. As pensioners, they face the loss of their
home and the apartment in order to meet their repayment obligations.

The High Court has found that the Bartles’ lawyer Mr J Mathias was negligent in
failing to advise them that they were taking the entire risk of the investment in
the event of the Blue Chip group failing. Blue Chip did not assume any direct
responsibility to GE Custodians as lender. The High Court has also found that
the Bartles did not contribute to their losses by any negligence on their own
part.

The Bartles’ claim against GE Custodians has not been upheld. GE had no
direct dealings with the Bartles and had no knowledge that the loans they made
were in connection with a Blue Chip investment. GE did not know that the
Bartles’ only income was from their pension. Tasman Mortgages Ltd (now in
liquidation) dealt with the Bartles and prepared and presented their loan
applications to GE. The High Court has found that Tasman was not acting as
the agent of GE and that there is no basis to find that any actions or knowledge
on the part of Tasman should be attributed to GE.
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The High Court has also found that alterations made to some documents
lodged by Tasman to support the loan applications were not fraudulent or
intended to deceive. In particular, the description of the Bartles as self-
employed investors was understood by both GE and Tasman to refer to
investors who were not employed at the time of the loan applications.

The High Court also dismissed a claim made against GE for negligence and
further allegations that the loans were unconscionable or oppressive.

The decision of the Court has been issued on an interim basis as the amount of
damages has yet to be assessed. A further hearing will be held before the end
of the year to assess the sum which the Bartles may recover from Mr Mathias.