Blue Chip test case to Supreme Court after GE wins appeal

Bruce and Dorothy Bartle were aged 66 and 65 respectively, had a combined pension income of less than $25,000, and owned a house worth $400,000 in Whangarei…they borrowed more than $600,000 from GE to buy an investment property from Blue Chip. They purchased an apartment in Symonds Street in Auckland for $552,000, which was later sold for $250,000 after the mortgage fell into default.

http://www.guide2.co.nz
August 5, 2010

Blue Chip test case to Supreme Court after GE wins appeal

Gavel.jpg

Wellington, May 6 NZPA - Retired Blue Chip investors Bruce and Dorothy Bartle are heading to the Supreme Court over their dealings with the failed group after financial giant GE won an appeal to challenge an earlier Appeal Court ruling.

The Bartles case is seen as a test case for many elderly investors who face losing their homes because of Blue Chip, whose largest shareholder was Mark Bryers and whose ultimate lender was GE.

After a High Court dismissal of the Bartles' claims, the Appeal Court found in May that loans the couple took out to buy an apartment in Auckland were oppressive.

The Bartles sought to avoid the credit transaction which supported the purchase of an apartment and the potential loss of their home, which was mortgaged to support the transaction. They argued it was unconscionable or oppressive under the Credit Contracts and Consumer Finance Act.

GE was today given leave to appeal the ruling in the Supreme Court with a date expected in October.

However, the case will not address relief for the Bartles if GE's case is dismissed. That will be determined in the High Court.

The Bartles have also been turned down in an application for reasonable costs whatever the outcome of the appeal.

"They submit that their case is clearly arguable (as to which there is no issue), that there is a substantial public interest in obtaining a decision of this court on the issues raised by the appeal, and that it would be onerous to expect them to fund the appeal," the Supreme Court justices said today.

But decisions on costs generally follow litigation, and there was no case for pre-emptive costs.

The Bartles' litigation is being funded largely by their lawyers.

The Whangarei couple were described as naive, but also very poorly served by their solicitor Jonathan Mathias, who is bankrupt, and was found in the High Court judgment to be negligent.

The ultimate lender GE was independent of Blue Chip and had outsourced its lending operations in New Zealand.

GE has claimed to be an innocent lender in that it advanced money for secured loans which were arranged by other companies.

Bruce and Dorothy Bartle were aged 66 and 65 respectively, had a combined pension income of less than $25,000, and owned a house worth $400,000 in Whangarei when they saw an advertisement for an investment opportunity from Blue Chip New Zealand Ltd.

With another $48,000 in the bank and various other assets such as a campervan and a car, they borrowed more than $600,000 from GE to buy an investment property from Blue Chip.

They purchased an apartment in Symonds Street in Auckland for $552,000, which was later sold for $250,000 after the mortgage fell into default.

http://www.guide2.co.nz/money/news/home-loans/blue-chip-test-case-to-supreme-court-after-ge-wins-appeal/11/18468


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