HOOLE AND ORS V DARBY AND ORS HC AK CIV-2006-404-5235

HOOLE AND ORS V DARBY AND ORS HC AK CIV-2006-404-5235

The Court found that by his words and conduct Mr Darby intended Barry's present and future receivables to be made available to Hillcrest (and thus to CMFL under the GSA); equity treats that disposition as an effective equitable assignment of all receivables written up to the receivers' appointment (3 August 2006), so Hillcrest is the beneficial owner and receivers are entitled to repayments and original documentation; Mr Darby's contrary claim (that Hillcrest only acquired receivables when it had paid for them) was rejected as unsupported and recently invented.

Citation
openlaw-289035e5_e567_4187_8d2c_f22c61df3f94.pdf
Parties
First Plaintiff (receiver and Manager of Hillcrest Services Ltd): Gareth Russel Hoole; First Plaintiff (receiver and Manager of Hillcrest Services Ltd): Kevin David Pitfield; Second Plaintiff: Hillcrest Services Limited (in receivership); First Defendant: P A Darby; Second Defendant: Bronwyn Estate Limited; Third Defendant: Barry's Car Sales Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
18 December 2007
Procedural Posture
Receivership / Commercial Dispute Concerning Ownership of Receivables and Priority of Security / Interim Judgment (trial on Ownership of Receivables); Remaining Issues Reserved for Further Hearing
Outcome
Declared that Hillcrest is the beneficial owner of all receivables written by Barry's up to 3 August 2006 and entitled to repayments; receivers granted control of the suspense account; declarations for production of original documents; other issues reserved.
Legal Topics
Equitable Assignment, Priority of Security Interests, Directors' Duties (companies Act 1993), Bare Trustee/accounting, Anton Piller Orders, Suspense Account
Company Law Equity Secured Transactions Receivership Personal Property Security Equitable Assignment Priority of Security Interests Directors' Duties (companies Act 1993) +3 more

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Parties

Gareth Russel Hoole

First Plaintiff (receiver and Manager of Hillcrest Services Ltd)

Kevin David Pitfield

First Plaintiff (receiver and Manager of Hillcrest Services Ltd)

Hillcrest Services Limited (in receivership)

Second Plaintiff

P A Darby

First Defendant

Bronwyn Estate Limited

Second Defendant

Barry's Car Sales Limited

Third Defendant

Procedural Posture

Receivership / Commercial Dispute Concerning Ownership of Receivables and Priority of Security / Interim Judgment (trial on Ownership of Receivables); Remaining Issues Reserved for Further Hearing

Legal Issues

  1. 1 Whether Barry's receivables were owned by Hillcrest or remained the property of Barry's
  2. 2 Whether there was an arrangement that Hillcrest only acquired receivables when it had paid for them
  3. 3 Whether there was an equitable assignment of Barry's receivables to Hillcrest (and thus subject to CMFL's GSA)

Ratio Decidendi

The Court found that by his words and conduct Mr Darby intended Barry's present and future receivables to be made available to Hillcrest (and thus to CMFL under the GSA); equity treats that disposition as an effective equitable assignment of all receivables written up to the receivers' appointment (3 August 2006), so Hillcrest is the beneficial owner and receivers are entitled to repayments and original documentation; Mr Darby's contrary claim (that Hillcrest only acquired receivables when it had paid for them) was rejected as unsupported and recently invented.

Court Disposition

Declared that Hillcrest is the beneficial owner of all receivables written by Barry's up to 3 August 2006 and entitled to repayments; receivers granted control of the suspense account; declarations for production of original documents; other issues reserved.

Orders

  • Declaration that Hillcrest is the beneficial owner of all receivables written by Barry's up until 3 August 2006 and that those receivables are subject to the GSA in favour of CMFL
  • Declaration that Hillcrest is entitled to all repayments made by borrowers under those receivables into both the Bronwyn account and the Court‑ordered suspense account