MYVIRTUALHOME INTERNATIONAL LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION) V NGATI TAMA CUSTODIAN TRUSTEE LIMITED HC AK CIV-2009-443-000548

MYVIRTUALHOME INTERNATIONAL LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION) V NGATI TAMA CUSTODIAN TRUSTEE LIMITED HC AK CIV-2009-443-000548

On the facts and documents the court concluded Auran Technologies retained its own copy of Auran Jet while MVHI and CDS jointly owned a copy under the April 2006 heads of agreement; the debenture granted by CDS to Ngati Tama, the MVHI guarantee and the deed of priority executed on 24 December 2008 were valid and not defeated by negative pledge or fiduciary breach allegations because Martin acted as sole director for a proper corporate purpose to secure funding and there was no knowing receipt by Ngati Tama; the November 2006 purported licence amendment was not an effective variation for want of consideration and was of doubtful authenticity, so the receiver was entitled to terminate the...

Citation
openlaw-eaadddbe_a94e_4921_9151_4dde0aaf3191.pdf
Parties
First Plaintiff: MyVirtualHome International Limited (in receivership and in liquidation); Second Plaintiff: Open Group Ltd; Third Plaintiff: David William Phillips; Fourth Plaintiff: MVH Group Limited; First Defendant: Ngati Tama Custodian Trustee Limited; Second Defendant: Rodney Ivan Martin; Third Defendant: Gregory Lloyd White; Fourth Defendant: Te Runanga o Ngati Tama; Fifth Defendant: The Custodians and Elders and Trustees of the Ngati Tama iwi; Sixth Defendant: Homesoft Group Pty Ltd (previously Brisbane Software Pty Ltd)
Court
High Court
Jurisdiction
New Zealand
Judgment Date
3 August 2011
Procedural Posture
Commercial/company Litigation Involving Receivership, Liquidation and Intellectual Property / Hearing on Separately Stated Preliminary Questions; Judgment on Those Preliminary Questions (trial on Interlocutory Issues)
Outcome
Preliminary questions answered: Auran Jet was not owned by a single entity (Auran retained its copy; MVHI and CDS jointly owned a copy); the debenture, guarantee and deed of priority executed 24 December 2008 were valid; the receiver was entitled to terminate the licences and proceed with sale.
Legal Topics
Debenture Validity, Security Priority and Subordination, Director Fiduciary Duties, Negative Pledge and PPSA Issues, Knowing Receipt/dishonest Assistance, Licence Termination and Contractual Variation, Ownership of Software Source Code, Receivers' Powers and Duties
Company Law Insolvency and Receivership Property Law Contract Law Equity and Trusts Intellectual Property Law Civil Procedure Debenture Validity +7 more

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Parties

MyVirtualHome International Limited (in receivership and in liquidation)

First Plaintiff

Open Group Ltd

Second Plaintiff

David William Phillips

Third Plaintiff

MVH Group Limited

Fourth Plaintiff

Ngati Tama Custodian Trustee Limited

First Defendant

Rodney Ivan Martin

Second Defendant

Gregory Lloyd White

Third Defendant

Te Runanga o Ngati Tama

Fourth Defendant

The Custodians and Elders and Trustees of the Ngati Tama iwi

Fifth Defendant

Homesoft Group Pty Ltd (previously Brisbane Software Pty Ltd)

Sixth Defendant

Procedural Posture

Commercial/company Litigation Involving Receivership, Liquidation and Intellectual Property / Hearing on Separately Stated Preliminary Questions; Judgment on Those Preliminary Questions (trial on Interlocutory Issues)

Legal Issues

  1. 1 Who owned the Auran Jet engine source code as at 24 December 2008?
  2. 2 Were the debentures, deed of subordination and guarantee executed on 24 December 2008 valid?
  3. 3 Did the director (Rodney Martin) breach fiduciary or statutory duties in executing the security documents?

Ratio Decidendi

On the facts and documents the court concluded Auran Technologies retained its own copy of Auran Jet while MVHI and CDS jointly owned a copy under the April 2006 heads of agreement; the debenture granted by CDS to Ngati Tama, the MVHI guarantee and the deed of priority executed on 24 December 2008 were valid and not defeated by negative pledge or fiduciary breach allegations because Martin acted as sole director for a proper corporate purpose to secure funding and there was no knowing receipt by Ngati Tama; the November 2006 purported licence amendment was not an effective variation for want of consideration and was of doubtful authenticity, so the receiver was entitled to terminate the...

Court Disposition

Preliminary questions answered: Auran Jet was not owned by a single entity (Auran retained its copy; MVHI and CDS jointly owned a copy); the debenture, guarantee and deed of priority executed 24 December 2008 were valid; the receiver was entitled to terminate the licences and proceed with sale.

Orders

  • Answer (a): as at 24 December 2008 Auran Technologies retained a copy of Auran Jet and MVHI and CDS jointly owned a copy.
  • Answer (b): the debenture granted by CDS to Ngati Tama, the MVHI guarantee and the deed of priority executed on 24 December 2008 are valid.