It began with a $65,000 loan, ending with creditor Gary Sword claiming damages of two million dollars for supposed conversion of furniture at an Auckland motel which the High Court later ruled he had no rights over. Stuck in the middle was motel operator Anuj Gupta, not involved with the original $65,000 loan and needing police assistance to evict Mr Sword from his motel unit.
Ten years after the event, the High Court was asked to unravel events which took place in 2015.
The Newmarket motel sits on land leased from Dilworth Trust, across the road from Dilworth School, itself funded from lease revenue.
In 2014, the then motel lessee was kicked off site for non-payment of lease rentals.
As is common, sundry chattels on site were abandoned and left behind.
A new lease was taken up by Neville Bright’s Newmarket International Motor Inn Ltd. He guaranteed lease payments.
At this time, Mr Sword was a long-term resident at the motel.
The High Court was told Mr Sword and his company D&E Buses Ltd are in the business of making loans to ‘companies and individuals in difficult circumstances.’
Mr Bright proved to be one of those individuals. His Newmarket Inn struggled to keep up with lease payments to Dilworth Trust.
He borrowed from Mr Sword, who drew up a loan agreement stating that Mr Bright gave security over all chattels at Newmarket Inn in return for a short-term $65,000 loan.
Overlooked was the fact that Mr Bright did not own the chattels. Newmarket Inn might, and that was an issue later disputed. This was supposedly tidied up two months later, to Mr Sword’s satisfaction, with extra documentation signed by Newmarket Inn.
Meanwhile, Dilworth Trust was looking to remove Newmarket Inn as lessee for failing to pay rent. At the same time, Mr Sword was negotiating with Dilworth, unsuccessfully, to take over as new lessee.
Dilworth Trust seized the initiative, having Mr Gupta’s family trust take possession as the new lessee running the motel.
For Mr Gupta, Mr Sword and his claim to have security over motel chattels proved to be long-running problem.
Mr Gupta’s family trust set about replacing much of the motel chattels: fridges, television sets, bedding and some furniture.
Mr Sword was trespassed and evicted from his motel unit, the Tenancy Tribunal later ruling he was not a tenant.
The High Court was told Mr Gupta offered to retain and hand over any chattels Mr Sword could prove rights to.
Looking at terms of the Dilworth Trust lease, Justice Campbell later ruled Newmarket Inn, and by extension Mr Sword as supposed secured creditor, did not own any of the chattels left behind after Newmarket Inn’s lease was cancelled.
Mr Sword’s claim to damages for conversion was dismissed.
At best, Mr Sword had rights to a number of leased fridges having produced a receipt showing he had purchased the fridges from a company hiring them to Newmarket Inn.
The High Court was told these fridges had been held in storage next to the motel restaurant after being replaced by Mr Gupta.
Mr Sword delayed making arrangements to uplift these chattels, Justice Campbell said.
Instead, he left them on site for months, choosing instead to bill Mr Gupta for supposed use of the fridges; invoices never paid. He later sued for conversion.
No damages were payable for conversion. Mr Sword chose not to take back the fridges promptly, Justice Campbell ruled.
D&E Buses Ltd v. Anuj & Pallavi Family Trust – High Court (15.12.25)
26.052