Auto Finance Direct Limited v Morton - [2019] NZHC 664

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2809

[2019] NZHC 664

UNDER The Personal Property Securities Act 1999 and Part 19 of the High Court Rules

IN THE MATTER

of an application to maintain the registration of a financing statement

BETWEEN

AUTO FINANCE DIRECT LIMITED

Applicant

AND

BRIDGET MORTON

Respondent

Hearing: 26 March 2019

Appearances:

A J Steel for the Applicant No appearance of Respondent

Judgment:

2 April 2019

JUDGMENT OF MUIR J

This judgment was delivered by me on Tuesday 2 April 2019 at 1.30 pm Pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:…………………………

Counsel:
A J Steel, Barrister, Auckland

Solicitors:
S Weir, Kemps Weir, Greenlane Copy to the Respondent

AUTO FINANCE DIRECT LIMITED v MORTON [2019] NZHC 664 [2 April 2019]

Introduction

[1] The applicant, Auto Finance Direct Limited (AFDL), applies by originating application under s 167 of the Personal Property and Securities Act 1999 (the PPSA) for an order maintaining registration of its financing statement on the Personal Property Securities Register (PPSR). Such registration is in respect of the respondent Ms Morton’s 2005 BMW motor vehicle, which she purchased on 28 September 2018 for the sum of $5,495.00. That sum, together with related fees of $375.35, was fully financed by AFDL. The vehicle was purchased from Christchurch dealer, Major Motors Limited (MML).

[2] On 7 January 2019, AFDL obtained a without notice order from the Court in terms of its application. It did so because of the strict statutory time limits attaching to proceedings of this nature.

[3] Subsequently, Ms Morton filed a notice of opposition and affidavit, and the matter was scheduled for a substantive hearing on the originating application.

[4] As is usual in the context of without notice orders which are followed by an on notice application, the onus of proof remains on the original applicant, in this case AFDL.1

Background

[5] On 31 October 2018, one month after purchase, the vehicle broke down. Coincidentally, this was outside local Dunedin authorised distributor, Cooke Howlison BMW. It identified the car as having faults with its starter motor and alternator. Ms Morton engaged with MML. However, disputes arose about whether it was entitled to undertake repairs with after-market parts and in respect of its liability for Cooke Howlison’s diagnostic services. Ms Morton accordingly instructed Cooke Howlison to proceed with the repairs.

[6] In the course of doing so, Cooke Howlison found that the car’s digital motor electronics unit (DME), which comprises the comprehensive management system for

1 Toyota Finance New Zealand Ltd v Christie HC Auckland CIV-2009-404-379, 15 July 2009.

the engine, was floating in water and required replacement. Ms Morton notified MML accordingly and on 7 November 2018 informed AFDL that MML was not co-operating with her required repair regime. By 8 November, all repairs (including replacement of the DME) were complete for which the total account was $5,356.34, including diagnostic services.

[7] Ms Morton sought recovery of that sum…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2019] NZHC 664
Decision Date: 2 April 2019

CaseChat Overview and Summary

Auto Finance Direct Limited applied for an order maintaining the registration of its financing statement on the Personal Property Securities Register in respect of a 2005 BMW motor vehicle purchased by Bridget Morton. Ms Morton opposed the application, asserting that her obligations under the security agreement had been performed, and that the security interest was extinguished. The court was required to decide whether Auto Finance Direct Limited satisfied the requirements of section 167 of the Personal Property Securities Act 1999, which provides that the court may order the registration of a financing statement be maintained if satisfied that none of the grounds for making a demand under section 162 exist. The court found that the applicant satisfied it that none of the grounds for making a demand under section 162 exist, and ordered that registration of the applicant's financing statement in respect of the BMW motor vehicle be maintained. The court ordered that costs be reserved pending discussions with counsel who have been retained by Ms Morton for that purpose. If costs are unable to be resolved, memoranda may be filed on a specified timetable.

Orders