Gower v FTG Securities Limited - [2020] NZHC 2011

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV–2018–409–229

[2020] NZHC 2011

UNDER the Receiverships Act 1993

IN THE MATTER

of the receivership of Tuam Ventures Limited (in receivership and in liquidation)

BETWEEN

COLIN ANTHONY LATHAM GOWER

and STEPHEN JOHN TUBBS as receivers of Tuam Ventures Limited (in receivership and in liquidation)

Applicants

AND

FTG SECURITIES LIMITED

First Respondent

AND

ROBERT BRUCE WALKER as liquidator of Tuam Ventures Limited (in receivership and in liquidation)

Second Respondent

AND

BANK OF NEW ZEALAND

Third Respondent

AND

CROWN ASSET MANAGEMENT LIMITED

Fourth Respondent

AND

BRENTON JOHN HUNT

Fifth Respondent

CIV-2019-409-511

UNDER

the Companies Act 1993

IN THE MATTER

of the receivership of Tuam Ventures Limited (in receivership and in liquidation)

BETWEEN

ROBERT BRUCE WALKER as liquidator of Tuam Ventures Limited (in receivership and in liquidation)

GOWER v FTG SECURITIES LIMITED [2020] NZHC 2011

Applicant

AND

FTG SECURITIES LIMITED

First respondent

AND

COLIN ANTHONY LATHAM GOWER

and STEPHEN JOHN TUBBS as receivers of Tuam Ventures Ltd (in receivership and in liquidation)

Second respondents

Hearing: 10 June 2020

Representation:

J M Appleyard for the receivers R B Walker (liquidator) in person

A J Forbes QC and H Weston for FTG Securities Ltd K M Paterson and A E Cao for Bank of New Zealand

R P Coltman and K Rowe for Crown Asset Management Ltd

Judgment:

10 August 2020

JUDGMENT OF OSBORNE J

This judgment was delivered by me on 10 August 2020 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Introduction

[1] This judgment is concerned with matters arising in the receivership and in the liquidation of Tuam Ventures Ltd (in receivership and in liquidation) (Tuam). Both the receivers and the liquidator have applied to the Court for directions. Colin Anthony Latham Gower and Stephen John Tubbs were appointed as receivers of Tuam on 27 July 2009 by Bank of New Zealand (BNZ) as the holder of a general security agreement (GSA). Robert Bruce Walker was appointed by this Court as liquidator of Tuam on 9 February 2012.

These applications

[2] The receivers and the liquidator respectively apply under the Receiverships Act 1993 and the Companies Act 1993 for directions relating to the receivership and/or liquidation.

[3] These proceedings were consolidated with other proceedings to be heard together. By reason of overlapping matters, it is convenient to issue this single judgment in relation to these two proceedings.

[4] I am today issuing separate judgments in relation to the two other consolidated proceedings. In the first, FTG Securities Ltd v Crown Asset Management Ltd (the
-1710 proceeding), I determine that the plaintiff, FTG Securities Ltd (FTG) does not have interest or title (through equitable assignment) in debts and securities provided by Tuam and purportedly assigned by Crown Asset Management Ltd (CAML) to Tuam in 2015.1 As the Court had previously determined that the 2015 transaction did not constitute an effective statutory assignment (see below at [13]–[14]), FTG has no…

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: [2020] NZHC 2011
Decision Date: 10 August 2020

CaseChat Overview and Summary

The High Court of New Zealand heard two consolidated proceedings concerning the receivership and liquidation of Tuam Ventures Limited (Tuam), a property development company in Christchurch. The proceedings involved multiple parties, including the receivers, the liquidator, various financial institutions, and creditors, with a central dispute over the assignment of debts and securities from Tuam. The primary issue before the Court was whether FTG Securities Limited (FTG) had obtained a valid assignment of debts and securities from Tuam through a Deed of Transfer of Debt and Securities with Crown Asset Management Limited (CAML). The Court was also tasked with determining the distribution priorities among the creditors and the potential surplus from the receivership.

The Court found that the Deed of Transfer did not result in an effective equitable assignment of the debts and securities to FTG, thus affirming that CAML retained the second-ranking security interests. The Court further ruled that FTG was not entitled to any surplus from the receivership as it had no valid interest in Tuam's debts and securities. The liquidator's cross-applications seeking declarations regarding FTG's entitlements and the validity of the assignments were dismissed. The Court emphasized that it was not in a position to speculate on undisclosed information and that it was the responsibility of the parties to provide complete evidence. The costs and disbursements in both proceedings were reserved, allowing parties to apply for costs within a specified timeframe.

In summary, the Court determined that FTG did not have a valid interest in Tuam's debts and securities, and consequently, was not entitled to any surplus from the receivership. The Court also dismissed additional directions and declarations sought by the liquidator, reserving the right for further hearings if priorities between creditors remained unresolved.

Orders