Simpson v New Zealand Associated Refrigerated Food Distributors Ltd CA36/06

In the Court of Appeal of New Zealand, the appeal in Simpson v New Zealand Associated Refrigerated Food Distributors Ltd concerned the interpretation and operation of the Personal Property Securities Act 1999. The first appellants, the receivers of Service Foods Manawatu Limited, and the second appellants, the liquidators of the same company, were challenging the respondent, New Zealand Associated Refrigerated Food Distributors Limited, over the validity and scope of a claimed security interest. The respondents asserted that a written trade agreement between the parties created a security interest in their favour, which they perfected through registration on the Personal Property Securities Register. The appellants argued that the agreement did not create a security interest, that the security interest was not perfected by registration, and that the perfected security interest was restricted to certain goods.

The court had to decide whether the written terms of trade created a security interest, whether the security interest was perfected by registration, and what the scope of the perfected security interest was. The court concluded that the terms of trade did create a security interest, as they were intended to secure payment or performance of an obligation. The court also held that the registration by the respondents did perfect the security interest, as the error in the description of the collateral was not seriously misleading, and any issues could be rectified by the debtor. Finally, the court determined that the perfected security interest was limited to the goods supplied and not paid for, as per the terms of the security agreement.

The appeal was dismissed, and the respondents were awarded costs of $6,000 plus usual disbursements from the first appellants, with no order for costs against the second appellants.