King v PFL Finance Limited - [2012] NZHC 882

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2012-404-001734 [2012] NZHC 882

BETWEEN THOMAS FREDERICK MAZLIN KING AND JUDITH RING KING AS PARTNERS OF THE TFM AND JRK KING PARTNERSHIP AND IN THEIR PERSONAL CAPACITIES
First Plaintiff

ANDHAVELOCK FARMS LIMITED AS TRUSTEE OF THE FOREBANK FARM TRUST
Second Plaintiff

ANDPFL FINANCE LIMITED First Defendant

ANDCRAIG BEECROFT Second Defendant

Hearing: 17 April 2012

Counsel: B O'Callahan & A J Woodhouse for Plaintiffs
A E Hansen for Defendants

Judgment: 3 May 2012

JUDGMENT OF KEANE J

This judgment was delivered by on 3 May 2012 at 12.45pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar
Date:

Solicitors:
Carter & Partners, Auckland for Plaintiffs
Heimsath Alexander, Auckland for Defendants

THOMAS FREDERICK MAZLIN KING AND JUDITH RING KING AS PARTNERS OF THE TFM AND JRK KING PARTNERSHIP AND IN THEIR PERSONAL CAPACITIES V PFL FINANCE LIMITED HC AK CIV
2012-404-001734 [3 May 2012]

[1] On 30 March 2012 Havelock Farm Limited, the nominal owner of Forebank Farm, a 641 hectare holding in two blocks near Havelock, Marlborough, and Thomas and Judith King, whose farm it was, was obtained on a Pickwick basis, an interim injunction restraining PFL, the first mortgagee, and Craig Beecroft, PFL's receiver, from selling the farm, the livestock, the capital equipment and other assets.

[2] As at the date on which they obtained this initial relief, Mr Beecroft as receiver had been in possession of Forebank Farm since 24 January 2012, the farm had been on the market since 17 February 2012 and offers were to close at 4 pm that very day.

[3] The Kings now seek to have those restraining orders extended until the hearing of their substantive proceeding and, anticipating the remedies they then seek, they seek also interim orders with immediate mandatory effect. They seek to have Mr Beecroft's appointment as receiver terminated and their leasehold interest revested in them. They seek the return of their livestock, plant, equipment and machinery.

[4] In their substantive proceeding the Kings ask this Court to reopen, under the Credit Contracts and Consumer Finance Act 2003, the general facility agreement between PFL and Havelock, to which they and their sons are guarantors, under which PFL advanced to Havelock on 29 July 2011 $3.85M for a 12 month term; and to reopen also the related securities then given, including the first mortgage under which the power of sale has thus far been exercised.

[5] The Kings do not contend that the terms of this transaction are oppressive. Rather, they contend that PFL and the receiver acted oppressively in taking possession of the farm on 24 January 2012 and in setting about denuding it of livestock and selling the capital equipment and the farm itself. Mr Beecroft, they contend, did not then act in good faith or for a proper purpose. He did not have reasonable regard to their interests. He was reckless.

[6] The Kings go further. On 24 January 2012, they contend, when Mr Beecroft…

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: [2012] NZHC 882
Decision Date: 3 May 2012

CaseChat Overview and Summary

The High Court of New Zealand considered an application for interim relief in the case of Thomas and Judith King, as partners of the TFM and JRK King Partnership and in their personal capacities, against PFL Finance Limited and Craig Beecroft. The Kings sought to restrain PFL Finance Limited and Craig Beecroft, its receiver, from selling Forebank Farm and its assets. The Kings argued that PFL and the receiver acted oppressively in taking possession of the farm and denuding it of livestock and selling its capital equipment. They sought to have the receiver's appointment terminated, their leasehold interest revested, and the return of their livestock, plant, equipment, and machinery.

The court considered whether the Kings raised a serious question to be tried and where the balance of convenience lay. The court found that the Kings' claim for relief based on waiver and estoppel did not raise a serious question to be tried, as it rested on an assertion of fact that was at odds with reliable evidence. The court also found that the Kings had not established a credible basis for asserting that they were not in default at the date on which the receiver was appointed and that they had been deprived of the ability to remedy their default. The court concluded that the Kings' claim to resume Forebank Farm and the assets must give way to PFL's right to recover the amount it advanced to them. The court declined the Kings' application for interim relief.

The court found that the evidence supported the conclusion that PFL was faced with a default in November 2011 and that the receiver was entitled to take possession of the farm and secure the assets. The court found that the Kings had not established any serious question to be tried as to the receiver's conduct of the receivership that could begin to justify the interim relief they sought. The court considered the balance of convenience and the overall justice of the case and concluded that the interim relief should be denied. The court granted PFL costs on the present application.

Orders