Mann v Scutter - [2020] NZHC 755

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-155

[2020] NZHC 755

BETWEEN
GARY DOUGLAS MANN

Plaintiff

AND

JOHN MARSHALL SCUTTER

Defendant

Hearing: 16 April 2020

Appearances:

C LaHatte for the Plaintiff

K P Sullivan for the Defendant

Judgment:

17 April 2020

JUDGMENT OF COOKE J

(Interim injunction application)

[1] By interlocutory application dated 8 April 2020 the plaintiff has applied for the following order:

… an order by way of injunction restraining the defendant receiver from taking steps to exercise any power under the Deed of Appointment of receiver and under the security documents, to sell the property.

[2] The relevant property is in Port Underwood Road in Picton. It is used by the plaintiff and his family as their home. It is, however, owned by the plaintiff’s company Silo Solutions New Zealand Ltd (Silo), which had granted security over the property in support of a loan. Silo is in default, a receiver has been appointed (the defendant), and the receiver is in the process of selling the property.

[3] The application was first referred to me in my capacity as Duty Judge. The application was made without notice, but it was able to proceed on a “Pickwick” basis with informal notice being given to the defendant. I scheduled a telephone conference

MANN v SCUTTER [2020] NZHC 755 [17 April 2020]

on 9 April 2020, and after hearing from counsel for both parties set the application down for hearing on 16 April, with directions given for the filing of submissions. I was satisfied at that stage that there was no material prejudice to the plaintiff in delaying the hearing of the application until 16 April.

[4] The hearing before me proceeded by way of VMR in accordance with the procedures followed during the level 4 COVID-19 lockdown as set out in the Protocols released by the Chief High Court Judge, and s 24 of the Epidemic Preparedness Act 2006.

[5] At the conclusion of the hearing I dismissed the application for an injunction, and indicated that my reasons would follow in writing. These are my reasons.

Background

[6] Mr Mann’s company, Silo, was engaged in the business of supplying large silos used as storage for various materials stored in bulk, including crops and cement. The customers needed silos for storage, and the company would arrange construction/delivery. The company operated from Mr Mann’s home. That property was a leasehold estate under a lease with the Marlborough District Council. The initial purchase of the property by Silo was financed by a private lender, Isso Holdings Ltd (Isso) who took a general security agreement over Silo’s assets, including the leasehold interest, as well as personal guarantees from Mr and Mrs Mann.

[7] In recent times Silo and Mr Mann have faced business difficulties. There has been a dispute with one of the purchasers, LaFarge Holcim Ltd (Holcim) who purchased a silo for installation on the wharfs at Wellington. Holcim did not pay…

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 Mann v Scutter

Details

AGLC: Mann v Scutter [2020] NZHC 755
Case: [2020] NZHC 755
Decision Date: 17 April 2020

CaseChat Overview and Summary

In Mann v Scutter, the plaintiff, Gary Mann, sought an interim injunction to prevent the defendant, John Scutter, as the receiver of Silo Solutions New Zealand Ltd (Silo), from selling a property located in Port Underwood Road, Picton, which was used by Mann and his family as their home. The property was owned by Silo, which had granted security over the property in support of a loan. Silo was in default, and Scutter was appointed as the receiver to sell the property. The primary legal issues before the court were whether the receiver's actions were legitimate and if there was a serious question to be tried.

The court examined the validity of the assignment of Silo's debt and security interests to Mr Dave Wilson, who had purchased the debt for $222,430.71. The court found that the assignment was valid and did not affect the receiver's right to enforce the security interest. The court also rejected the argument that proper notice of demand was not given to Silo, stating that notice was given at the specified address in the contractual agreements, and no formal demand was required before enforcement action could be taken.

Furthermore, the court considered whether the actions of the receiver were taken in good faith under the Personal Property Securities Act 1999. The court concluded that Mr Wilson's actions, while possibly perceived as unfair by Mann, were taken in accordance with the receiver's normal functions and duties. The court found that there was no serious question to be tried and dismissed the application for an interim injunction.

The court's reasoning was based on the fact that the property was used as security for Silo's business, which faced financial difficulties. The court found that Mr Wilson did not cause the collapse of the business, and he had taken on his own business risks in the steps that he had taken. The court also noted that further legal processes would be involved in any eviction of the Mann family. The court dismissed the application for an interim injunction, and the defendant indicated that it would not seek costs for this application, reserving its position on future costs should Mann continue to pursue the litigation.

Orders