His mother was the one sued, but Wellington entrepreneur Terry Serepisos was standing in the shadows when General Finance forced a mortgagee sale following default on a commercial loan.
The High Court was told Mrs Serepisos took out a one year $474,000 General Finance loan in 2014 secured over an apartment in Tory Street, central Wellington. She signed a declaration confirming the loan was for business investment. Interest was set at 11.45 per cent, increasing to 21.45 per cent for late payment. No interest payments were ever made. No principal repayments were made. Council rates were left unpaid. Body corporate rates for the apartment were not paid. Within seven months, General Finance issued a Property Law Act notice threatening a forced sale. It took over twenty months for General Finance to sell; finding a buyer at $580,000. During this period General Finance received multiple offers ranging from $390,000 through to $630,000, some of the offers heavily conditional. The earlier $630,000 offer did go unconditional but the buyer then defaulted. After General Finance subsequently sold for $580,000, it sued Mrs Serepisos for the shortfall on resale. With penalty interest added, her debt had ballooned out to over $700,000.
In court, Mr Serepisos gave evidence in place of his mother saying he had authority to speak on her behalf. It is tolerably clear, said Justice Ellis, that Terry Serepisos was in any event her guiding hand in the transaction. Mr Serepisos said he had found a buyer, a Mr Chin, who was willing to pay up to $800,000. General Finance did not get the best price reasonably possible, he alleged. A sale to Mr Chin did not go ahead, he said, because General Finance did not provide access so Mr Chin could inspect the apartment before firming up on price.
General Finance signed off on its sale in early May 2016. There was no evidence that General Finance had knowledge of Mr Chin’s interest prior to this sale, Justice Ellis said. The best evidence was that Mr Chin did not first meet Mr Serepisos until three days after General Finance had sold. General Finance did get the best price possible when selling at $580,000, Justice Ellis ruled. Mrs Serepisos is personally liable for the $332,200 shortfall on resale.
General Finance v. Serepisos – High Court (26.03.18)
18.065