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Maginness v Tiny Town Projects Limited (in liquidation)

Maginness v Tiny Town Projects Limited (in liquidation)

Case [2023] NZHC 494 14 March 2023

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-002282

[2023] NZHC 494

UNDER Part 19 of the High Court Rules 2016 and s 284(1)(a) of the Companies Act 1993

IN THE MATTER

of an application pursuant to s 284(1)(a) of the Companies Act 1993 for directions in relation to the liquidation of Tiny Town Projects Limited (in liquidation)

BETWEEN

TONY LEONARD MAGINNESS and

JARED WAIATA BOOTH as liquidators of Tiny Town Projects Limited (in liquidation) Applicants

AND

TINY TOWN PROJECTS LIMITED (in

liquidation) Respondent

Hearing: 20 February 2023

Appearances:

E C Gellert and Z Zhao for Applicants

A S Butler KC and J L Bates for Tiny Town purchasers R B Hucker and M C Swan for Sescape

A H Hong for Warmerdams

Judgment:

14 March 2023

JUDGMENT OF VENNING J

This judgment was delivered by me on 14 March 2023 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date……………
Solicitors: Lowndes Jordan, Auckland
Brown & Bates, Napier McCaw Lewis, Hamilton Molloy Hucker, Auckland

Counsel:A S Butler KC, Wellington R B Hucker, Auckland

MAGINNESS v TINY TOWN PROJECTS LIMITED (in liq) [2023] NZHC 494 [14 March 2023]

TABLE OF CONTENTS

Background [2]
Parties’ positions [13]

The declarations [21]

Issues  [22]
The conditions of contract  [23]
Has property in the tiny homes passed to the fully paid purchasers?              [25]
Counsels’ submissions  [25]

Analysis — when does property pass? [33] Section 53 of the PPSA [66]

Counsels’ submissions [66]

Analysis [75]

Equitable lien [90]

Counsels’ submissions [90]

Analysis [107]

Institutional constructive trust [120]

Counsels’ submissions [120]

Analysis [124]

The Warmerdams’ final payment [131]

Analysis [134]

Summary/Result [137]

Declarations [138]

Costs [139]

[1] Tiny Town Projects Limited (in liquidation) (the company) was placed into liquidation on 15 November 2022. At the time it had partially completed construction of six tiny homes. Following the company’s liquidation an issue has arisen as to the ownership of the partly constructed tiny homes and the nature of their purchasers’ interests in them, if any.

Background

[2] The company operated from leased premises at Moturoa, New Plymouth. Its business was the construction and sale of custom-built “tiny homes”. It offered studio, one-bedroom and two-bedroom customisable options, with a starting price of
$155,990.

[3] The tiny homes were generally three metres in width, with variable lengths depending on whether they were studio, one-bedroom or two-bedroom. Each tiny home was constructed to suit the requirements of a particular customer (for example

the purchaser was able to choose fittings from a restricted number of options). The tiny homes took approximately four to six months to build. They were built on a steel trailer and had a steel frame. The company obtained a Code Compliance Certificate (CCC) from the New Plymouth District Council for each tiny home before delivery. The tiny homes were transportable. On completion each tiny home was transported on a low deck truck to the delivery site specified by the purchaser.

[4]…

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.

Continue reading Maginness v Tiny Town Projects Limited (in liquidation)

Details

AGLC: Maginness v Tiny Town Projects Limited (in liquidation) [2023] NZHC 494
Case: [2023] NZHC 494
Decision Date: 14 March 2023

CaseChat Overview and Summary

The case of Maginness v Tiny Town Projects Limited (in liquidation) involved a dispute over the ownership of six partially completed tiny homes and the nature of the purchasers' interests in them. The High Court of New Zealand was tasked with determining the ownership of the tiny homes and resolving various claims made by the purchasers, including equitable liens and constructive trusts. The court examined the terms of the sale agreements, the application of the Personal Property Securities Act 1999, and the equitable principles that might apply. The court found that property in the tiny homes had not passed to the fully paid purchasers, and that section 53 of the PPSA did not apply. The purchasers were granted equitable liens over the tiny homes to the extent of the purchase moneys paid by them, which were outside the provisions of the PPSA. The court refused to impose an institutional constructive trust over the tiny homes. Finally, the court ordered the liquidators to return the post-liquidation payment of $46,430 to the Warmerdams, as it was a mistake made due to the company's liquidation.

Orders