Vegar-Fitzgerald v Mawdsley - [2012] NZHC 1311

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-1683 [2012] NZHC 1311

UNDER the Personal Property Securities Act 1999

AND

IN THE MATTER OF MATAKANA ESTATE LIMITED (In
Liquidation and In Receivership)

BETWEEN PATRICIA ANNE VEGAR-FITZGERALD Applicant

ANDDIGBY JOHN NOYCE AND KEITH MAWDSLEY
First Respondents

ANDMATAKANA ESTATE LIMITED Second Respondent

Hearing: 29 May 2012

Appearances: K W Fulton for Applicant
S M Kilian and F J Hawkins for Respondents

Judgment: 29 May 2012

ORAL JUDGMENT OF ASSOCIATE JUDGE BELL

Solicitors:
Alexander Dorrington (C Alexander) P O Box 7246 Auckland 1141 for Applicant
Email: lawyers@alexanderdorrington.co.nz

Kilian & Associates (Shane Kilian) P O Box 300-845 Albany, Auckland 0752, for Respondents
Email: s.kilian@kilianandassociates.com

Copy for:
Kerry W Fulton, P O Box 3735 Auckland 1140, for Respondents
Email: kerryfulton@xtra.co.nz

VEGAR-FITZGERALD V NOYCE AND MAWDSLEY HC AK CIV-2012-404-1683 [29 May 2012]

[1] This is an application to maintain a financing statement

FH6ND899825E9K18 under s 167 of the Personal Property Securities Act 1999.

[2] The applicant, Patricia Anne Vegar-Fitzgerald, claims that she is the security- holder under a general security agreement dated 19 September 2007. It was registered under the Personal Properties Securities Act on 4 November 2010. The general security agreement was granted by Matakana Estate Ltd. That company went into liquidation on 21 November 2010. The liquidators are Digby John Noyce and Keith Mawdsley.

[3] On 19 March 2012 the liquidators made a demand under s 162 of the Personal Property Securities Act 1999 that Mrs Vegar-Fitzgerald file a financing change statement discharging registration of the financing statement. The demand was made under s 162(a), namely that all the obligations under the security agreement had been performed. According to the letter of demand, Mrs Vegar- Fitzgerald had advanced $570,000 to Matakana Estate Ltd, but had received payments totalling $740,000. As she had been more than fully repaid to the extent of $170,000, there was no reason for the general security agreement to remain on the register. The letter also contained the demand for payment under s 298 of the Companies Act 1993.

[4] The present application is solely under s 167 of the Personal Property Securities Act 1999. I am not required to consider an application for relief under the Companies Act.

[5] In general, the applicant’s response is that the indebtedness of Matakana Estate Ltd to her is far more extensive than the liquidators have allowed. The inquiry in this case is to establish what were the transactions between the applicant and Matakana Estate Ltd, and whether there is a residual indebtedness by Matakana Estate Ltd to the applicant.

[6] On 30 March 2012, Associate Judge Abbott made an interim order maintaining registration of the financing statement pending further order of the court.

[7] In Universal Trucks & Equipment Ltd v Reynolds,[1] Mallon J summarised the statutory context for an application under s 167 at [22]-[27]:
[1] Universal Trucks & Equipment Ltd v Grant Bruce Reynolds [2012] NZHC 483, (2012) 10
NZBLC 99-706.

The PPSA

[22] The PPSA applies…

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: [2012] NZHC 1311
Decision Date: 29 May 2012

CaseChat Overview and Summary

In Vegar-Fitzgerald v Mawdsley, Patricia Vegar-Fitzgerald sought to maintain a financing statement under section 167 of the Personal Property Securities Act 1999. The company, Matakana Estate Ltd, had gone into liquidation, and the liquidators had made a demand under section 162 for the financing statement to be discharged. Vegar-Fitzgerald argued that she was a secured creditor and that the company had not repaid all its debts to her. The court had to decide whether Vegar-Fitzgerald had an arguable case for her security interest, which would allow the financing statement to be maintained. The court found that Vegar-Fitzgerald had an arguable case that the company had not repaid all its debts to her, and therefore the financing statement should be maintained. The court relied on documentary evidence, including accounting records, term loan agreements, and deeds of assignment of debt, to support Vegar-Fitzgerald's claim. The court also noted that the liquidators had not shown incontrovertibly that the documents could not be relied on. The court made an order maintaining the interim order of Associate Judge Abbott and adjourned the hearing to ascertain whether it was necessary for Vegar-Fitzgerald to issue proceedings to establish the actual amount of indebtedness to the company. The court reserved the question of costs to be addressed at the adjourned hearing.

Orders