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McCollum v Thompson

McCollum v Thompson

Case [2017] NZCA 269 28 June 2017

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA78/2016
[2017] NZCA 269

BETWEEN	ALLAN ROY MCCOLLUM, NANCY MARGARET MCCOLLUM AND TERENCE NEIL WALKER Appellants
AND	DAVID JOHN THOMPSON AND JOSEPHINE RUTH MACBETH Respondents

Hearing:	23 February 2017 (further mateial received on 16 March 2017)
Court:	Asher, Simon France and Peters JJ
Counsel:	B D Gustafson for Appellants W T Nabney for Respondents
Judgment:	28 June 2017 at 10.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe High Court order is quashed.
CThe issues described at [89] are remitted back to the High Court for determination.
DAny issues relating to interest are to be determined in the High Court.
EThe High Court is to determine the final amount owing in accordance with this judgment and its determinations of the issues described in C and D.
FThere is no order as to costs in this Court.
G Costs in the High Court are to be determined in that Court in the light of this judgment.

__________________________________________________________________

REASONS OF THE COURT

(Given by Asher J)

Table of Contents

Para No

Introduction
Court proceedings
Concessions
First submission: the 47 heifers that were found to have been converted were not in fact converted

The argument, and the High Court decision
Analysis
Damages

Second submission: the Judge erred in awarding consequential losses being loss of profits for two milking seasons
Third submission: the Judge erred in finding that the appellants had breached a duty under the Receiverships Act 1993
Fourth submission: the Judge erred in not allowing for payment of debt
Fifth submission: margin of sale at an undervalue too small to warrant set-off
Further issues
Summary
Costs
Remittance back
Result

[1]
[8]
[13]

[15]
[24]
[35]

[39]

[43]

[57]

[61]
[63]
[68]
[70]
[86]
[87]

Introduction

Two of the appellants, Mr and Mrs McCollum, are elderly and in 2011 had money to invest. They had a long-term involvement in farming, although in recent years not dairy farming. The other appellant, Mr Walker, is their friend. The respondents, Mr Thompson and Ms Macbeth, were involved in sharemilking a dairy herd. Mr Thompson had been involved in dairy farming from his childhood. They had borrowed money from ANZ Bank Ltd to finance their sharemilking business, but had fallen into arrears. ANZ had appointed receivers to take control of their herd. The respondents were going to lose their herd unless they could refinance.
Ultimately the appellants agreed to lend $260,000 to the respondents. This was an amount sufficient to repay ANZ in full. A loan and security agreement was drawn up on the Auckland District Law Society (ADLS) form, which provided for an interest rate of 15 per cent per annum. A memorandum of general terms and conditions for a general security agreement on the ADLS form was prepared and signed by the parties on 4 July 2011 (the GSA). It contained a list of 342 animals that were to be security for the loan. These were to be located at the property on which the…

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 McCollum v Thompson

Details

AGLC: McCollum v Thompson [2017] NZCA 269
Case: [2017] NZCA 269
Decision Date: 28 June 2017 at 10.30 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal from the High Court in McCollum v Thompson. The primary dispute was over a loan agreement and the subsequent appointment of receivers to sell secured livestock. The appeal centred on several issues, including whether certain heifers were lawfully seized, the quantum of consequential losses, the liability for the receivers' actions, and the set-off for a debt paid by the appellants. The Court found that the heifers were initially seized unlawfully but became lawful security later, reducing the period of unlawful possession. The Court also reduced the consequential losses awarded, taking into account milking costs and the respondents' sharemilking arrangement. The Court held that the receivers were the agents of the appellants and thus liable for their actions. The Court rejected the argument that the appellants should be reimbursed for a debt they paid on behalf of the respondents. Finally, the Court allowed the appeal, quashed the High Court order, and remitted specific issues back to the High Court for further determination.

Orders