ALLAN ROY MCCOLLUM v THOMPSON [2016] NZHC 28

ALLAN ROY MCCOLLUM v THOMPSON [2016] NZHC 28

The GSA selected Option 1 and by its express terms confined the security to the livestock specifically listed in the schedule annexed to the GSA; therefore progeny and subsequently acquired livestock were not secured. The receivers breached the statutory duty under s19 Receiverships Act 1993 by failing to make reasonable enquiries (including readily available recorded breeding/production data) and by selling the recorded herd to the plaintiffs at an undervalue; plaintiffs are liable in conversion for uplifted animals that were not secured and defendants recover damages for those animals and consequential lost milk income; netting of claims leaves defendants owing plaintiffs the residual...

Citation
[2016] NZHC 28
Parties
Plaintiffs: Allan Roy McCollum; Nancy Margaret McCollum; Terence Neil Walker; Defendants: David John Thompson; Josephine Ruth Macbeth
Court
High Court
Jurisdiction
New Zealand
Judgment Date
28 January 2016
Procedural Posture
Civil Loan and Security (gsa) Dispute / Judgment (final)
Outcome
Partial judgment: plaintiffs' claim for repayment upheld in part; counterclaim by defendants upheld in part; net result defendants remain liable to plaintiffs for $26,606 plus contractual interest from 30 May 2013; defendants awarded damages on counterclaim totaling $238,690 (see breakdown) but netting leaves...
Legal Topics
General Security Agreement Scope, Progeny as Collateral, PPSA Proceeds, Duty of Receiver to Obtain Best Price (s19 Receiverships Act 1993), Implied Contractual Terms, Valuation of Livestock, Conversion and Consequential Loss, Interest and Costs
Contract Property Personal Property Securities Receivership Tort Conversion Equity Remedies/damages General Security Agreement Scope +7 more

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Parties

Allan Roy McCollum; Nancy Margaret McCollum; Terence Neil Walker

Plaintiffs

David John Thompson; Josephine Ruth Macbeth

Defendants

Procedural Posture

Civil Loan and Security (gsa) Dispute / Judgment (final)

Legal Issues

  1. 1 What sum do the defendants owe the plaintiffs for the July 2011 advance?
  2. 2 Whether the GSA secured livestock beyond those listed in the schedule (including progeny and subsequently acquired stock)?
  3. 3 Whether defendants breached GSA obligations (eg herd tags, providing additional security) and consequences?

Ratio Decidendi

The GSA selected Option 1 and by its express terms confined the security to the livestock specifically listed in the schedule annexed to the GSA; therefore progeny and subsequently acquired livestock were not secured. The receivers breached the statutory duty under s19 Receiverships Act 1993 by failing to make reasonable enquiries (including readily available recorded breeding/production data) and by selling the recorded herd to the plaintiffs at an undervalue; plaintiffs are liable in conversion for uplifted animals that were not secured and defendants recover damages for those animals and consequential lost milk income; netting of claims leaves defendants owing plaintiffs the residual...

Court Disposition

Partial judgment: plaintiffs' claim for repayment upheld in part; counterclaim by defendants upheld in part; net result defendants remain liable to plaintiffs for $26,606 plus contractual interest from 30 May 2013; defendants awarded damages on counterclaim totaling $238,690 (see breakdown) but netting leaves...

Orders

  • Judgment: defendants owe plaintiffs $26,606 plus interest under the term loan agreement from 30 May 2013 until payment
  • Findings/awards on counterclaim: conversion and value awards totalling $238,690 comprising $50,200 for 47 two year old heifers (Onion Road), $27,450 for Otanga Valley Road livestock, $110,880 for lost milk income 2013/2014 season, $50,160 for lost milk income 2014/2015 season