McCollum v Thompson - [2019] NZHC 3090

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-1958

[2019] NZHC 3090

BETWEEN ALLAN ROY MCCOLLUM, NANCY MARGARET McCOLLUM and TERENCE NEIL WALKER
Plaintiffs

AND

DAVID JOHN THOMPSON and JOSEPHINE RUTH MACBETH

Defendants

Hearing: 18 November 2019

Appearances:

B Gustafson for Plaintiffs C McLean for Defendants

Judgment:

26 November 2019

JUDGMENT OF LANG J

[on counterclaim by defendants for special damages following conversion of livestock]

This judgment was delivered by me on 26 November 2019 at 3.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

McCOLLUM v THOMPSON [2019] NZHC 3090 [26 November 2019]

[1] On 28 January 2016 I delivered a judgment determining a claim by the plaintiffs and several counterclaims by the defendants (the initial judgment).1 That judgment was subsequently the subject of a partly successful appeal to the Court of Appeal.2 The Court of Appeal remitted several issues back to this Court for determination.3

[2] On 16 February 2018 I delivered a supplementary judgment determining two of those issues.4 I am now required to determine the sole remaining issue remitted for further consideration in this Court. This relates to a counterclaim by the defendants for special damages to compensate them for consequential losses flowing from the conversion by the plaintiffs of livestock owned by the defendants.

Background

[3] In July 2011 the plaintiffs advanced funds to the defendants to enable them to refinance a bank loan. The terms of advance were recorded in a term loan agreement, and the defendants provided security for the loan by way of a general security agreement (GSA) dated 4 July 2011. This provided the plaintiffs with security over 342 head of livestock owned by the defendants as at the date they obtained the loan from the plaintiffs.

[4] The defendants were unable to repay the loan when it fell due on 4 July 2012. On 4 February 2013 the plaintiffs issued a demand for repayment of the sum of approximately $270,000. When this was not met the plaintiffs appointed receivers under the GSA on 13 February 2013.

[5] On the date of their appointment the receivers uplifted 201 cows and 47 two year old heifers that belonged to the defendants. These were pastured on a property situated on Onion Road, Horotiu (the Onion Road property). The defendants had been farming these under a sharemilking agreement that gave them the right to use the

1      McCollum v Thompson [2016] NZHC 28.
2      McCollum v Thompson [2017] NZCA 269.
3 At [86].
4      McCollum v Thompson [2018] NZHC 173.

Onion Road property in return for giving the owner of the property a share of the income derived from the sale of milk produced by the defendants’ herd.

[6] The receivers subsequently sold the livestock uplifted from the Onion Road property to the plaintiffs. The receivers set off the amount realised from the sale of the livestock against the balance then owing by the defendants to…

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 [2019] NZHC 3090
Case: [2019] NZHC 3090
Decision Date: 26 November 2019

CaseChat Overview and Summary

The case of McCollum v Thompson, involving the plaintiffs Allan Roy McCollum, Nancy Margaret McCollum, and Terence Neil Walker, and the defendants David John Thompson and Josephine Ruth Macbeth, was heard by the High Court of New Zealand, Auckland Registry. The case concerned a counterclaim by the defendants for special damages following the conversion of livestock by the plaintiffs. The plaintiffs had advanced funds to the defendants to refinance a bank loan, secured by a General Security Agreement over the defendants' livestock. When the defendants defaulted on the loan, the plaintiffs appointed receivers who uplifted and sold the livestock. The defendants claimed special damages for the loss of income from the milk production of the converted livestock.

The court had to determine whether the defendants were entitled to special damages for the consequential losses caused by the conversion of the livestock. The court noted that special damages could be awarded if the loss was a reasonably foreseeable result of the defendant's unlawful acts and if the plaintiff had knowledge or could foresee the particular loss suffered. The court held that the plaintiffs knew the livestock was capable of producing milk and the defendants could claim special damages if they proved the plaintiffs' actions caused them real loss. The court found that by the time the plaintiffs converted the livestock, the defendants had effectively ceased trading due to the termination of their lease and the lack of a viable means to derive income from the livestock. Therefore, the true measure of the defendants' loss was the capital value of the livestock, for which credit had already been given. The court dismissed the claim for special damages. The court also reserved leave for the plaintiffs to file any further memorandum on the issue of costs.

Orders