Judy and Bruce Bartle say GE Custodians knowingly lent them more money than they could repay if Blue Chip defaulted. Photo / Martin Sykes
Financier GE Custodians says it did not even know Blue Chip was behind a deal in which two Whangarei pensioners borrowed $630,000 they cannot repay.
The financier is defending claims including fraud and reckless lending in a High Court case brought by burned Blue Chip investors Bruce and Judy
Bartle.
The Blue Chip collapse has left the couple high and dry, and they are seeking to have mortgages over their home and a central Auckland investment apartment discharged.
They accuse the lender, GE Custodians, of:
* Recklessly lending them the money;
* Being aware that mortgage broker Tasman Mortgages had altered a loan application to describe them as "self-employed investors" in order to get the loan approved;
* Getting them in to an "oppressive" investment, as defined by the Credit Contracts and Consumer Finance Act;
* Getting them in to an "unconscionable" investment, because it knew they had no ability to repay if Blue Chip defaulted.
The Bartles say they had no idea they were borrowing anything more than an initial $137,000 against their house to invest in a Symonds St apartment as part of the joint venture.
In reality they had borrowed $263,000 against their house and $366,000 on the apartment.
Their action also targets Tasman Mortgages and the lawyer who advised them, Jonathan Mathias.
Yesterday GE's lawyer, Bruce Stewart, told the court the Bartles signed the loan application and there was no evidence Tasman had altered it. "If there was a fraud, it was a fraud on GE, not a fraud by GE."
He said GE did not know Blue Chip was involved in the transaction, and did not induce the Bartles to borrow the money.
The Bartles had signed the sale and purchase agreement as part of the joint venture three weeks before GE even received the first mortgage application, he said, and the terms of the loan agreement were standard, with nothing oppressive about them.
He added that claims of reckless lending had not been upheld in various courts of the Commonwealth in the past 35 years.
