King v PFL Finance Ltd - [2014] NZHC 250

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-1734 [2014] NZHC 250

BETWEEN
THOMAS FREDRICK MAZLIN KING

and JUDITH RUTH KING as partners of the TFM AND JR KING PARTNERSHIP First Plaintiffs

AND

HAVELOCK FARMS LIMITED Second Plaintiff

AND

PFL FINANCE LIMITED First Defendant

AND

CRAIG BEECROFT Second Defendant

Hearing:
10 - 14, 17 - 21 and 24 - 28 June 2013

5 - 6 August 2013
2 - 6 September 2013

Appearances:

D G Chesterman and S R Carey for First Plaintiffs
K M Quinn and M H Tushingham for Defendants

Judgment:

21 February 2014

JUDGMENT OF PETERS J

This judgment was delivered by Justice Peters on 21 February 2014 at 4.45 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date: ...................................

Re-delivered at 4:30 pm on 13 May 2014 as per minute of Peters J of 7 May 2014

Solicitors: Holland Beckett, Tauranga
Heimsath Alexander, Auckland

Counsel: D G Chesterman, Auckland
S R Carey, Auckland
K M Quinn, Auckland
M H Tushingham, Auckland

KING v PFL FINANCE LIMITED [2014] NZHC 250 [21 February 2014]

Contents
Introduction [2] Causes of action [10] Background [11] Factual issues [45] Credibility [61] Section 9 Fair Trading Act 1986 [75] Credit Contracts and Consumer Finance Act 2003 [91] Property Law Act 2007 [100] Service [102] Whether any loss arose from PFL’s failure to comply with s 121(1) PLA [117] PFL’s responsibility for the actions of the Second Defendant [140] Duties pursuant to s 18 Receiverships Act 1993 [142] Duties pursuant to s 19 Receiverships Act 1993 [194] Counterclaim [222] Result [227] Costs [230]

[1] I issued a results judgment in this proceeding on 19 December 2013, in which I entered judgment for the First and Second Defendants on all causes of action pleaded by the First Plaintiffs against the First and Second Defendants in the Fifth Amended Statement of Claim. These are my reasons, and my judgment on the Defendants Amended Statement of Counterclaim against the First Plaintiffs.

Introduction

[2] This proceeding arises from a loan of $3.385 million made by PFL Finance Limited (“PFL”) to Havelock Farms Limited (“Havelock”) in July 2011. The loan was secured by, amongst other things, memoranda of mortgage registered against farm land of which Havelock was the registered proprietor (“land”). The First Plaintiffs (“Mr and Mrs King”) guaranteed repayment of the loan.

[3] On or about 29 November 2011 PFL served a notice under s 119 of the Property Law Act 2007 (“PLA notice” and “PLA”), that notice following a failure by Havelock to pay interest to PFL on 15 November 2011. Havelock did not remedy the default within the time specified in the PLA notice.

[4] On 24 January 2012, PFL appointed the Second Defendant (“Mr Beecroft”)

as receiver of the assets of, amongst others, Havelock and Mr and Mrs King.

[5] Mr Beecroft brought the farming operation to a halt, and relocated all livestock and plant and equipment. Mr and Mrs King owned most, if not all, of the livestock…

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: [2014] NZHC 250
Decision Date: 21 February 2014

CaseChat Overview and Summary

The High Court of New Zealand recently delivered judgment in the case of King v PFL Finance Limited. The proceeding arose from a loan of $3.385 million made by PFL Finance Limited to Havelock Farms Limited, secured by memoranda of mortgage registered against farm land. The loan was guaranteed by Mr and Mrs King. When Havelock Farms Limited defaulted on an interest payment, PFL served a notice under the Property Law Act 2007, following which PFL appointed a receiver to the assets of Havelock Farms Limited and Mr and Mrs King. The Kings brought proceedings against PFL Finance Limited and the receiver, alleging various breaches of statutory duty and seeking damages. The defendants counterclaimed in respect of assets and chattels which they had been unable to locate. The court found in favour of the defendants on all counts, awarding costs in favour of the defendants on the counterclaim. The court found that the defendants had not breached any statutory duty and that the plaintiffs were not entitled to any damages. The court also made orders under the Receiverships Act 1993, requiring the plaintiffs to comply with various obligations, including the production of documents and information relating to the property in receivership.

Orders