GOWER v FTG SECURITIES LIMITED [2020] NZHC 2011

GOWER v FTG SECURITIES LIMITED [2020] NZHC 2011

The Transfer Deed of 15 June 2015 did not effect a valid statutory assignment of the Tuam debts and securities and, as determined in the consolidated -1710 judgment, it also did not effect an equitable assignment; accordingly CAML retains legal and equitable title as second-ranking secured creditor under the...

Source-derived case information.

Citation
[2020] NZHC 2011
Parties
Applicant (receiver): Colin Anthony Latham Gower; Applicant (receiver): Stephen John Tubbs; First Respondent: FTG Securities Ltd; Second Respondent (liquidator): Robert Bruce Walker; Third Respondent: Bank of New Zealand; Fourth Respondent: Crown Asset Management Ltd; Fifth Respondent: Brenton John Hunt
Court
High Court
Jurisdiction
New Zealand
Judgment Date
10 August 2020
Procedural Posture
Applications for Directions Under the Receiverships Act 1993 and Companies Act 1993 (consolidated Proceedings) / Hearing and Judgment on Applications for Directions; Matters Adjourned for Mention and Leave Reserved; Costs Reserved
Outcome
Declarations and directions issued: FTG did not obtain valid legal or equitable assignment; CAML holds second-ranking security; FTG is not entitled to receivership surplus; cross-applications dismissed; matters adjourned/leave reserved; costs reserved.
Legal Topics
Priority of Securities, Statutory Assignment, Equitable Assignment, Constructive Trust, Unclean Hands/defences, Directions to Receivers and Liquidator, Costs
Receivership Law Companies Law Insolvency Equity and Trusts Property Security Law Civil Procedure Priority of Securities Statutory Assignment +5 more

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Parties

Colin Anthony Latham Gower

Applicant (receiver)

Stephen John Tubbs

Applicant (receiver)

FTG Securities Ltd

First Respondent

Robert Bruce Walker

Second Respondent (liquidator)

Bank of New Zealand

Third Respondent

Crown Asset Management Ltd

Fourth Respondent

Brenton John Hunt

Fifth Respondent

Procedural Posture

Applications for Directions Under the Receiverships Act 1993 and Companies Act 1993 (consolidated Proceedings) / Hearing and Judgment on Applications for Directions; Matters Adjourned for Mention and Leave Reserved; Costs Reserved

Legal Issues

  1. 1 Whether FTG obtained a valid statutory assignment of Tuam's debts and securities from CAML
  2. 2 Whether FTG obtained a valid equitable assignment of those debts and securities
  3. 3 Which party holds second-ranking security under the Priority Deed and is entitled to any surplus after BNZ's first-ranking entitlement

Ratio Decidendi

The Transfer Deed of 15 June 2015 did not effect a valid statutory assignment of the Tuam debts and securities and, as determined in the consolidated -1710 judgment, it also did not effect an equitable assignment; accordingly CAML retains legal and equitable title as second-ranking secured creditor under the Priority Deed, FTG has no entitlement to any receivership surplus, cross-applications are dismissed, and directions/orders follow for distribution priorities and reservation of costs.

Court Disposition

Declarations and directions issued: FTG did not obtain valid legal or equitable assignment; CAML holds second-ranking security; FTG is not entitled to receivership surplus; cross-applications dismissed; matters adjourned/leave reserved; costs reserved.

Orders

  • Declaration that after payment of Bank of New Zealand's entitlement as holder of the first-ranking security, Crown Asset Management Ltd holds the second-ranking security pursuant to the Deed of Priority dated 25 February 2008
  • Cross-applications of FTG Securities Ltd and Robert Bruce Walker (as liquidator) for other directions or orders dismissed in CIV-2018-409-229