Toll Logistics (NZ) Ltd v McKay - [2011] NZCA 188

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA442/2010
[2011] NZCA 188

BETWEEN TOLL LOGISTICS (NZ) LIMITED
Appellant

AND ANDREW JOHN MCKAY AND JOHN JOSEPH CREGTEN
Respondents

Hearing: 7 April 2011

Court: Arnold, Randerson and Harrison JJ

Counsel: B J Upton and L Barnard for Appellant
M R Bos and C L Clayton for Respondents

Judgment: 16 May 2011 at 3.00 pm

JUDGMENT OF THE COURT

A The appeal is dismissed.

BThe appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Randerson J)

Table of Contents

Para No
Introduction	[1]
The facts in more detail	[6]
The judgment under appeal	[13]
Is Toll entitled to a general lien at common law? General liens The Majeau decision The English authorities The New Zealand cases Texts and commentaries Modification of a common law rule in this context	[16] [16] [17] [21] [44] [49] [53]
Packer’s lien – discussion	[55]
Whether, in any event, the application of a general packer’s lien is excluded by the contractual arrangements between Toll and Scene 1	[64]
Conclusion	[72]

Introduction

This appeal raises issues about common law general liens and their priority in relation to general security agreements under the Personal Property Securities Act 1999 (the PPSA). The appellant (Toll) provided a range of logistical services to Scene 1 Entertainment Ltd (Scene 1). On 22 June 2009, ASB Bank Limited (ASB) appointed the respondents as Scene 1’s receivers. ASB acted pursuant to a general security deed executed on 27 February 2008 under which Scene 1 granted ASB a security interest over all of Scene 1’s present and after-acquired personal property. ASB registered its financing statement on the personal properties securities register under the PPSA on 4 March 2008.
At the date of receivership, Scene 1 owed Toll $287,368.50. Toll was then holding in its warehouse on behalf of Scene 1 approximately 500,000 DVDs valued at approximately $2.6 million. Toll asserted a general packer’s lien over the DVDs. Toll said it was entitled to the lien because part of the services it provided to Scene 1 involved the packing of the DVDs to the order of Scene 1’s customers. Toll claimed that a lien arose either at common law or pursuant to contractual arrangements agreed with Scene 1 and recorded in a letter dated 5 June 2009.
The receivers of Scene 1 (the receivers) concede that there is a contractual lien but contend there is no common law general lien for the services provided by Toll (ie a general lien which exists as a matter of law requiring no proof of custom). The receivers alternatively submit that if there is such a common law general lien, then it is excluded in the present case by the contractual arrangements between the parties.
The receivers applied for directions under s 34 of the Receiverships Act 1993. The broad question before the High Court…

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.

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Details

Case: [2011] NZCA 188
Decision Date: 16 May 2011

CaseChat Overview and Summary

In the case of Toll Logistics (NZ) Limited v McKay, the Court of Appeal considered the issue of whether the appellant, Toll Logistics, was entitled to a general packer’s lien over goods held on behalf of Scene 1 Entertainment Ltd. The court held that Toll was not entitled to such a lien at common law without proof of custom. The Court found that the origins of the packer’s lien in English cases were closely aligned with the factor’s lien, which involved moneylending. The court concluded that a general packer’s lien should not be recognised in New Zealand in the absence of satisfactory proof of a custom supporting such a lien. Furthermore, the contractual arrangements between Toll and Scene 1 excluded the application of any such lien in respect of services rendered by Toll to Scene 1 after 5 June 2009, but not before that date. The appeal was dismissed, and the appellant was ordered to pay the respondents' costs for a standard appeal on a band A basis and usual disbursements.

Orders