Dalton v Reeves
[2023] NZHC 2779
•6 October 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-1213
[2023] NZHC 2779
IN THE MATTER OF FIRSTBUILD CONSTRUCTION LIMITED
(in Receivership and in Liquidation)
BETWEEN
SIMON DALTON as liquidator of
FIRSTBUILD CONSTRUCTION LIMITED
(in Receivership and in Liquidation) Applicant
AND
JON BLAIKLOCK REEVES and SILVIA
ELISABETH REEVES as trustees of the REEVES FAMILY TRUST
First Respondents
AND
DAMIEN GRANT and ADAM
BOTTERILL as receivers of FIRSTBUILD CONSTRUCTION LIMITED
(in Receivership and in Liquidation) Second Respondents
Hearing: 11 September 2023 Appearances:
A W Johnson for Applicant
D Purusram for First Respondent K A Cocks for Second Respondent
Judgment:
6 October 2023
JUDGMENT OF ANDERSON J
This judgment was delivered by me on 6 October 2023 at 3.00 pm pursuant to r 11.5 of the High Court Rules 2016.
………………………………
Registrar/Deputy Registrar
Solicitors: Martelli McKegg, Auckland
Victorian Lawyers Ltd, Auckland Waterstone Insolvency, Auckland
DALTON v REEVES [2023] NZHC 2779 [6 October 2023]
Introduction
[1] Mr Simon Dalton, as liquidator (the Liquidator) of FirstBuild Construction Ltd (FB Construction) seeks directions from the court pursuant to s 284 of the Companies Act 1993 as to whether the Reeves Family Trust (the Trust) had an equitable lien in certain building materials that were held by Mr Dalton as liquidator.
[2]As to what is an equitable lien:1
An equitable lien is an equitable right conferred by law upon the plaintiff to have resort to a specific asset to secure the discharge of a liability owed by the owner of the asset to the plaintiff. An equitable lien arises as a matter of law in respect of claims “which equity considers the other party is in conscience bound to perform in order to do justice between the parties”.
[3] A person entitled to an equitable lien is regarded in equity as a secured creditor. In Maginness v Tiny Town Projects Ltd (in liq) (Maginness)2 and Francis v Gross (Francis)3 (together the Tiny Homes cases) it was held that an equitable lien is outside the Personal Property Securities Act 1999 (PPSA) regime and not subject to the priorities under that Act.
[4] The Trust says there was an equitable lien in the building materials. The Liquidator disagrees.
Background
[5] The business of FirstBuild Homes Ltd (FB Homes) was to enter into contracts for the construction of modular homes. FB Construction and FB Homes are sister companies wholly owned by FirstBuild Ltd (together the Group). All three companies are in receivership. FB Construction and FB Homes went into liquidation on 12 May 2023. Mr Dalton is liquidator for both companies.
[6] The Group had one bank account which had sub-accounts for FB Homes and FB Construction. Although contracts were entered into by FB Homes, it otherwise did not trade. Funds were advanced by FirstBuild Ltd to a sub-account of FB Construction
1 Maginness v Tiny Town Projects Ltd (in liq) [2023] NZHC 494 at [107] (footnotes omitted).
2 Maginness v Tiny Town Projects Ltd (in liq), above n 1.
3 Francis v Gross [2023] NZHC 1107.
which undertook the work. To the benefit of customers, the Liquidator has treated claims by FB Homes’ customers as claims against FB Construction. It is for this reason that this application is brought by Mr Dalton in his capacity as liquidator of FB Construction. For convenience, unless the context requires differentiation, I will refer to FirstBuild.
[7] FirstBuild was a relatively new operation: FirstBuild Ltd was incorporated in May 2018, FB Homes in May 2020 and FB Construction in October 2020. The Trust’s evidence was that FirstBuild constructed houses sequentially, although there appears to have been a level of overlap between projects. The Trust’s build was one of the first projects by FirstBuild.
[8] The Trust through its trustees, Mr and Mrs Reeves, contracted with FirstBuild to construct a house at Opito Bay in June 2021. The contract involved considerable on-site works for preparation of foundations and the like. However, the house itself was to be built in six modules in the factory and then transported to site.
[9] Under the contract, the Owner4 (the Trust) was to pay progress payments as set out in the Agreement at certain stages of the contract.5 Practical completion was expected to be reached within nine months. The contract provided that legal and equitable ownership of materials brought onto the land was to remain with the Builder (FirstBuild) until all monies were paid under the agreement.6 If any materials were not reasonably procurable, the Builder was entitled to substitute materials of similar quality and nature as were reasonably practicable after consultation with the Owner.7 The contract further provided that if either party exercised a right to cancel the Agreement, then the Owner was to pay the Builder for all materials delivered and all Building Work performed up to the date of cancellation.8 There were a number of variations on the contract which were poorly recorded.
4 This judgment adopts the capitalised terms as defined in the contract.
5 Clause 4.
6 Clause 20.
7 Clause 19.
8 Clause 30.6.
[10] In November 2021 FirstBuild asked for a variation of the payment schedule under the contract. It requested that the Trust make advance payment of the progress payments that were only due on receipt of council consent and completion of infrastructure (neither stage having yet been reached). The Trust did so.9 The request was justified by the need to make advance purchase of materials with sufficient lead time, particularly of key items such as structural steel bracketing to join the modules.10 The Trust paid a further progress payment in October 2022, at a point when the pile foundations were to be concreted. This was the progress payment due on completion of foundations plus payments for certain variations.11 A final progress payment was to be paid on completion.
[11] Plywood and shiplap cladding was acquired for the Trust’s project.12 Shiplap cladding is less common than other forms of cladding. It had been specified by the Trust and had not been used on other FirstBuild contracts. However, the cladding and plywood are both generic materials available from wholesale suppliers. The materials were ordered under the reference “19RLO” which was the internal FirstBuild reference used for the Trust’s project. The plywood in question13 was ordered in or about May 2022. The shiplap cladding was ordered in or about December 2022. The materials had been delivered to the FirstBuild warehouse but most remained in packaging at the time of liquidation. Some had been used in one of the builds in progress.
[12] At liquidation, the contract between the parties remained on foot, although the Trust had issued a notice of default on 9 May 2023 asserting that the company had repudiated the contract and requiring certain actions. Pursuant to their contract, the Trust had paid $505,929.48 in total towards the build. The value of works on the Opito Bay site at liquidation was $97,883.95.
9 A sum of $124,007 was paid.
10 Email 22 November 2021, FirstBuild to the Trust. This also stated that “[W]e are already holding close to $80k worth of timber purchased several months ago for your project and deposit paid on your plywood that has a total cost of $40k when available in the next few weeks. While these aren’t tangibly fixed into and onto your sections, it is stock that we hold.”
11 A sum of $346,452.48 was paid.
12 The Liquidator pointed to an exchange involving another FirstBuild customer to say that the relevant orders covered both the Reeves’ build and another, but the Trust demonstrated that the product related to the Reeves’ project.
13 This appears to be different plywood than plywood FirstBuild had said was ordered back in November 2021 when advance payment was requested. See n 10 above.
[13] The issue is whether there was an equitable lien in favour of the Trust over the cladding and plywood. 14 By agreement the Liquidator has released this product to the Trust and is holding its agreed value of $26,500 in a bank account pending this decision.
Tiny Homes cases
[14]Both parties relied on Maginness and Francis.15
[15] Maginness concerned tiny homes that were to be constructed at the company’s facility and only delivered to the customer on payment in full.16 At the time of liquidation, the homes ranged from 40–50 per cent to 95 per cent complete.17 The Court was referred to the Australian High Court decision of Hewett v Court in support of an equitable lien.18
[16] In Hewett v Court, a builder of prefabricated homes had agreed to construct a house and transport it to the purchasers’ land for completion. The price was payable in instalments. The builder became insolvent after the deposit and the first of the instalments were made. Shortly prior to commencement of the winding up the parties agreed that the purchaser would pay for the value of the work completed and take the incomplete house.
[17] Traditionally, the equitable lien has been applied in discrete categories. One recognised category is the purchaser’s lien in the context of contracts for sale of real or personal property. The equitable lien over the subject matter of the sale secures repayment of the sums outlaid by the purchaser in the event of default in performance by the vendor. The contract in Hewett was for the provision of work and materials not for sale of property.19 An equitable lien had not previously been held to arise in that context.
14 The Trust had previously advanced the alternatives of a security interest or ownership interest but these are not pursued.
15 Maginness v Tiny Town Projects Ltd (in liq), above n 1; Francis v Gross, above n 3.
16 Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [44].
17 At [8]–[9].
18 Hewett v Court (1983) 149 CLR 639 (HCA).
19 Hewett v Court, above n 18, at 646, 656 and 662.
[18] The majority of the High Court of Australia held that the question before the Court was to be decided not by labels, but by considering the rights and obligations for which the contract provides, with a view to determining whether an equitable lien was to be implied for the protection of those rights or the enforcement of those obligations.20 The majority held that the purchasers were entitled to an equitable lien on the unfinished house for the amounts paid, hence this arrangement was not a preference.
[19]Gibbs CJ considered:21
The contract recognizes that the home which will be constructed and placed on the site will be a particular building which will be ascertained and identified at latest by the time when the first instalment of the purchase price, other than the deposit, is paid. That instalment is to be paid on the pitching of the roof, and that of course means that it is necessary to identify the particular house on which the roof is pitched. Moreover, the construction of the house, once commenced, is to be concluded within sixty working days, unless time can be extended under the contract. The contract did not simply require that a house which conformed to the appellants’ plans and specifications should be completed within sixty working days. What it required was that the company should construct, and conclude the construction of, “the home”; in other words, the company was obliged to conclude the construction of the particular home which it commenced to build to the appellants’ plans and specifications and it could only suspend the construction of that home in the circumstances permitted by cl 6(b). It was that home which, when completed, it was obliged to transport to the site and place on stumps there, having first insured it while in transit.
[20]He concluded this analysis:22
I cannot, with all respect, agree that the company could, consistently with the contract, have sold to somebody else the home which was being constructed for the appellants, once it had been identified, and then satisfy its contractual obligations by building another house.
[21]Gibbs CJ held there was an equitable lien on the following basis:23
The rules of equity are not so rigid and inflexible that it is necessary to discover precise authority in favour of the existence of a lien before one can be held to have been created. I do not of course intend to suggest that the courts may proceed on general notions of justice without regard to settled principles.
20 At 647.
21 At 647.
22 At 647–648.
23 At 649.
But the present case seems to me to fall within the principles which govern the creation of a purchaser's lien.
[22] Deane J similarly carried out a close consideration of the facts and the terms of the contract and concluded that the circumstances were sufficient for an equitable lien.24 Deane J emphasised that it was a fundamental assumption of the contract that from the time construction commenced a particular home was being constructed in accordance with the customer’s plans and specifications.25 Murphy J agreed an equitable lien arose on the facts.26
[23] In Maginness, the contracts for the tiny homes were for the sale of goods, not for work and materials as had been the position in Hewett. The purchasers needed to overcome arguments on behalf of the liquidators that the sale of goods legislation excluded existence of an equitable lien.27 Venning J concluded that it did not.28
[24] The purchasers also faced the barrier that the sale of goods was for the sale of future unascertained goods (the tiny homes) which did not exist at the time payments were made. The purchasers argued that an equitable lien could arise once the goods that are the subject matter of the contract become ascertained in their part completed state, relying on the dicta of Gibbs CJ in Hewett v Court as outlined at [20] above.
[25] The liquidators in Maginness urged the Court to take a cautious approach to the implication of an equitable lien. They pointed to Toll Logistics (NZ) Limited v McKay where the Court of Appeal applied such an approach to the recognition of common law liens.29 However, the purchasers argued that there was no need to be cautious about the recognition of a lien in respect to the purchase price for goods, like the tiny homes, that had been specifically manufactured for the purchasers. They argued that the recognition of an equitable lien for the tiny homes purchasers was a just result as recognised in Hewett v Court.30
24 At 669.
25 At 669.
26 At 650.
27 Contract and Commercial Law Act 2017, pt 3. See Re Wait [1927] 1 Ch 606.
28 Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [109].
29 Toll Logistics (NZ) Ltd v McKay [2011] NZCA 188, [2011] 2 NZLR 601 cited in Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [100].
30 Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [100].
[26]Venning J accepted the purchasers’ submissions. He held:
[109] … Mr Butler’s submission that the application of the developing principles of equity and a liberal approach to the application of [the sale of goods legislation] enable and support the imposition of an equitable lien in the present case. As Gibbs CJ noted in Hewett v Court the rules of equity are not so rigid and inflexible that it is necessary to discover precise authority to support the existence of an equitable lien.
[27]He continued:
[110]In the present case, an important feature is that the partly constructed tiny homes are readily identifiable as having been applied to the separate contracts with the individual purchasers they relate to. While they remain the property of the company, in the normal course of its business and absent default by the purchasers, the company could not, in any sensible commercial sense, have sold the tiny homes to anyone other than the identified purchasers. The individual purchasers, both fully paid and partly paid, have paid moneys towards the purchase of those specific and identifiable (but not yet completed) tiny homes. There exists readily identifiable subject matter to which the liens can attach. In those circumstances I consider equity’s response should be to support an equitable lien over the partly completed homes in favour of the purchasers to the extent of the value of the purchase moneys paid by the individual purchasers.
[111]The important features of the present case are the ability to precisely identify the tiny homes and that they have been appropriated to the contract.
[28] In Francis, tiny homes or “pods” were intended to be constructed first at the company’s facilities and then at the customer’s site.31 The relevant pods were in various degrees of “incomplete construction at the company’s facilities” and none of the customers had paid anything near the full purchase price by the time of liquidation.32
[29] Jagose J adopted Venning J’s approach to conclude that there was an equitable lien. Having considered how the facts before him differed from those in Maginness, Jagose J considered:
[35]Nonetheless, there is no room for distinction in the “important features” of the cases respectively before Venning J and me: the ability precisely to identify the buildings at issue and appropriation to the respective customer’s contract. If anything, the contractual scope,
31 Francis v Gross, above n 3, at [2].
32 At [31].
if only for ‘Works’ on the customer’s ‘Site’, makes such identification and appropriation of even more materiality in the case before me. … The customer’s payment, in whole or part, is not of itself a sufficient basis on which to attach a lien over any of the company’s assets. Rather the lien only is to the extent of payments attributable to identified goods appropriated to the contract in question, as a charge against those particular goods. Whether it is so in any circumstance likely will be a question of fact and degree.
[36]Deposit alone does not suffice, which addresses the liquidators’ other concern for unfairness in an equitable lien’s attachment to incomplete pods (although no construction commenced for those 20 deposit- payers). Key is the degree to which the specific (and not unascertained or future) good, whether complete or incomplete, may be thought excluded from any ‘commercially sensible’ sale to another customer. Where payments in the ordinary course of business directly obtain the company’s developed manufacture of goods custom-made for the customer, without the customer’s knowledge of an existing competing interest (of which no knowledge here is evidenced), equity can and should fasten on the goods in manufacture themselves to the extent of the customer’s payments.
[37]The relevant customers all have paid money to the company attributable directly to identified goods appropriated to their respective contracts. Equitable liens attach accordingly ...
(Footnotes omitted).
[30] The Trust relies upon the above decisions for the proposition that an equitable lien should be recognised on the current facts. The Liquidator relies upon these cases for his proposition that it should not. Neither party contends the approach was wrong.33
Submissions
[31] Mr Purusram for the Trust submits that the evidence is “crystal clear” that at the time of liquidation, FirstBuild was in the process of working on the build for the Trust and had the materials and components associated with the Trust’s project in their warehouse. He emphasises that the product was ordered under the Trust’s reference, and in the case of shiplap cladding, to the Trust’s specification. He points to evidence that the Trust was advised the product was being purchased for their project, and the
33 Mr Johnson made clear that the Liquidator does not concede that the two High Court decisions are correct on whether an equitable lien stands outside the priorities in the Personal Properties Securities Act 1999. I need not consider this, given my view is that there is no equitable lien in any event.
principal of FirstBuild had identified it for them in the factory. Mrs Reeves had also taken a photo of the materials prior to liquidation.
[32] In those circumstances the Trust submits that an equitable lien arises. The Trust points to references in the Tiny Homes cases that appropriation of specific goods to the contract formed the basis for an equitable lien. Mr Purusram says that here, the materials were plainly identified, assigned and appropriated to their contract. He says that on the facts of this case:
It would be unfair, inequitable and against the interests of justice for the [Trust] to be compelled to pay for materials which they have already paid for, belonged to them, and it was just a matter of taking possession.
[33] Mr Johnson for the Liquidator submits that no equitable lien can arise here as the goods are generic in nature. In contrast to the Tiny Homes cases, the goods here are “not such that they can be excluded from any commercially sensible sale to another customer”. Although the product could have been used on the Trust’s build, it could equally be used for other builds. He said that this was a key factor in a lien being recognised in the Tiny Homes cases.
Discussion
[34] For the reasons I outline below, I agree with the Liquidator that no equitable lien arises on the current facts.
[35] First, the present case involves a building contract for construction of a house. While a contract of this kind was held in Hewett v Court to be a contract for work and materials not sale of goods, I approach this case not by the type of contract involved, but rather whether the circumstances support an equitable lien. Having said that, caution needs to be applied to references in the cases discussed to goods being ascertained or appropriated to the contract as a basis for the materials here being subject to an equitable lien. The contract in the present case is not a contract to purchase the materials. It is a contract for the construction of a house on the Trust’s property that uses those materials. The house is the work product. It is true that modules of the house were to be constructed at the company and transported there. However, the subject matter of the contract was the house to be constructed at Opito
Bay. That is what the Trust was paying for. The cases discussed above provide no authority for the proposition that an equitable lien will extend to generic materials obtained for use in the construction of the home.
[36] The concept of property being “appropriated to the performance of the contract” is arguably “juridically incongruous”34 in the context of a contract for work and materials. The concept of “appropriation” applies to sales of goods and determines when title to unascertained or future goods passes to the purchaser.35 Wilson and Dawson JJ in the minority in Hewett v Court considered that the company’s contractual obligations would have been discharged by the delivery of any house that complied with the contractual specifications.36 I need not decide whether an equitable lien was correctly recognised or imposed in Hewett v Court because I am satisfied that even applying the approach of the majority, an equitable lien does not arise on the current facts.
[37] Second, in Hewett v Court there was a focus on the mutual rights and obligations of the parties as informing whether an equitable lien should be recognised. In the present case the contract provided that on cancellation of the contract the Owner was to pay for such of the materials that had been “delivered”.37 In the context of the contract for construction of the home at Opito Bay, “delivered” means delivered on site. It is implicit in this positive obligation that on cancellation the Owner did not have to pay for materials that had been delivered on site.
[38] Structurally, that clause supports that no equitable lien arises over materials held at the Builder’s warehouse. The equitable lien does not secure performance of a contract, it secures the payment of a money sum that would be payable on cancellation for default by the obligor.38 By the contract, the Owner was not obliged to pay for materials held at the warehouse on cancellation. Materials held at the warehouse
34 Michael Crawford “The Case Against the Equitable Lien” (2019) 42(3) MULR 813 at 835.
35 At 835–836.
36 Hewett v Court, above n 18, at 658.
37 Clause 30.6.
38 Peter Blanchard (ed) Civil Remedies in New Zealand (2nd ed, Thomson Reuters, New Zealand 2012) at 440, 441 and 442 as cited in Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [107].
should not secure repayment of any sum on cancellation.39 The contractual terms marked delivery as the point at which mutual rights and obligations arose with respect to the status of materials on cancellation.
[39] Third, and most relevant to the way the parties argued the case, in my view it is key to the finding that equitable liens arose in all three of the cases discussed above that the part-completed home the subject of the lien was an item being constructed to the specific requirements of the claimant. The basis for equity’s intervention in such a case, as set out in Gibbs CJ’s analysis is that:40
[The] company could [not], consistently with the contract, have sold to somebody else the home which was being constructed for the appellants, once it had been identified, and then satisfy its contractual obligations by building another house.
[40]This is the foundation for Venning J’s view that:41
While [the part completed homes] remain the property of the company, in the normal course of its business and absent default by the purchasers, the company could not, in any sensible commercial sense, have sold the tiny homes to anyone other than the identified purchasers.
[41]In turn, Jagose J said:42
Key is the degree to which the specific (and not unascertained or future) good, whether complete or incomplete, may be thought excluded from any ‘commercially sensible’ sale to another customer. Where payments in the ordinary course of business directly obtain the company’s developed manufacture of goods custom-made for the customer, without the customer’s knowledge of an existing competing interest (of which no knowledge here is evidenced), equity can and should fasten on the goods in manufacture themselves to the extent of the customer’s payments.
[42] Similarly, in International Finance Corporation v DSNL Offshore Ltd an equitable lien arose in a contract for work and materials over purpose-built equipment
39 In New Zealand for contracts other than for sale of goods, in the absence of specific provision in the contract, the potential liability secured by an equitable lien is the prospective sum ordered under s 43 of the Contract and Commercial Law Act 2017.
40 Hewett v Court, above n 18, at 647–648. Deane J at 668 similarly posited a test of whether “the owner would be acting unconscientiously or unfairly if he were to dispose of the property … to a stranger without the consent of the other party or without the actual or potential liability having been discharged”.
41 Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [110].
42 Francis v Gross, above n 3, at [36].
and components used or to be used in the superstructure of an oil platform.43 Coleman J said:44
If one proceeds from the basis that, as was clear in Hewett v Court and as is clear in the present case, that the contract is one for work and materials, it is impossible to exclude the availability of equitable relief in a case where the contracted work product and its components were to have characteristics specifically designed for the requirements of the purchaser.
[43] Whereas Venning J put the position in terms that the insolvent company “could not, in any sensible commercial sense, have sold the [goods] to anyone [else]”,45 Coleman J put the position in terms of the right to restrain a sale to a third party:46
I have no doubt that in principle upon delivery of all the … equipment for which [the claimant made payment], [the claimant] is entitled to an equitable lien from the time of delivery. The question whether the contract was such as to qualify for such an interest can be tested by asking whether it was amenable to equitable relief and in particular whether, had [the insolvent company] attempted to dispose of the … equipment to a third party without [the claimant’s] consent and without discharging the amount [the claimant] had paid for it, [the claimant] could have obtained an injunction to restrain such disposal or whether they would have been left to a remedy in damages.
[44] None of these cases support an equitable lien over the plywood and shiplap cladding. Here the products were acquired for the purpose of the building contract but they are generic products not yet applied to construction of the Trust’s house. Such materials are available for sale and purchase from wholesale suppliers. FirstBuild could have substituted those materials for others in the Trust’s build and disposed of the acquired materials elsewhere. There would be nothing demanding equity’s intervention in restraining FirstBuild from doing this.
[45] I have considered whether the fact that FirstBuild requested, and the Trust agreed, to two progress payments being brought forward in November 2021 apparently to assist FirstBuild with lead time on materials changed this position or the equities generally. 47 On balance in my opinion, it did not. This brought forward progress payments but otherwise did not vary the contract. Nor is it clear to me that
43 International Finance Corporation v DSNL Offshore Ltd [2005] EWHC 1844 (Comm) (QB).
44 At [60].
45 Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [110].
46 International Finance Corporation v DSNL Offshore Ltd, above n 43, at [62].
47 See [10] above.
the advance has a relation to the generic product acquired in May 2022 and December 2022.48 I do not view the November 2021 variation of the payment schedule as creating an equity requiring generic product to be held to satisfy liability of FirstBuild on default.
[46] Identifying a coherent theory for the circumstances in which equity will intervene to provide proprietary relief in the form of an equitable lien in the context of a contractual relationship such as the present is no straightforward task. The remedy only has utility in insolvency when the real contest is between creditors of the obligor. The question whether in given circumstances the claim is one “which equity considers the other party is in conscience-bound to perform in order to do justice between the parties”49 is answered in the cases discussed above in large part by the fact that the subject matter appropriated to the contract is specifically designed, or custom made for the claimant. That is not the case for the materials here.
[47] As I noted above, both parties relied on the Tiny Homes cases as answering the question of whether there was an equitable lien on the current facts. Neither considered them to be wrongly decided.50 I have concluded that those cases do not support an equitable lien here. That disposes of the application.
Conclusion
[48]I direct that:
(a)No equitable lien or security interest or ownership existed in favour of the Trust in respect of the shiplap cladding and plywood described in the list attached to the Liquidator’s originating application.
(b)The sum of $26,500 that is held in a solicitors’ trust account plus any accumulated interest is to be released to the Liquidator.
48 The latter was ordered after the further progress payment due under the contract for completion of foundations was paid by the Trust.
49 Peter Blanchard, above n 38, at [441] as cited in Maginness v Tiny Town Projects Ltd (in liq), above n 1, at [107].
50 I was advised that the Francis case is under appeal although not on its scope.
[49] The parties are to file a joint memorandum on costs within 14 days, or if costs cannot be agreed:
(a)The Liquidator is to file a memorandum on costs within 14 days.
(b)The Trust is to file a memorandum in response within a further 14 days.
Anderson J
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