FTG SECURITIES LIMITED v CROWN ASSET MANAGEMENT LIMITED [2020] NZHC 2007

Parties

Procedural Posture

Civil / Judgment (high Court)

Legal Issues

1. 1 Whether FTG obtained a valid equitable assignment of CAML's rights under the Priority Deed despite cl 15 prohibition
2. 2 Whether the cl 15 prohibition on assignment prevents equitable assignment as well as statutory assignment
3. 3 Whether FTG has standing to enforce the Priority Deed against BNZ

Ratio Decidendi

FTG did not obtain an effective equitable assignment of CAML's rights under the Priority Deed because clause 15 plainly prohibited transfer of any interest or right in the Secured Party's securities without the other Secured Party's prior approval of the form of the assignee's agreement; that prohibition extended to equitable assignments and prevented FTG acquiring enforceable contractual rights against BNZ. FTG is also disentitled to equitable relief by reason of its deliberate participation in the breach (clean hands). However, insofar as CAML retains proceeds and the Transfer Deed remains in force, CAML must account to FTG for any proceeds it receives pending valid cancellation of the...

Court Disposition

FTG's claims to enforce the Priority Deed against BNZ and to be declared equitable assignee are dismissed; alternatively FTG is barred by clean hands; CAML must account to FTG for any proceeds it receives under the Transfer Deed unless and until that Deed is validly cancelled; judgment awarded for BNZ on the second...

Orders

• Unless and until the Deed of Transfer of Debt and Securities dated 15 June 2015 between FTG Securities Ltd and Crown Asset Management Ltd is validly cancelled, Crown Asset Management Ltd is required to account to FTG Securities Ltd for any proceeds Crown Asset Management Ltd may receive from any realisation of the...
• Except to the extent of the declaration ordering CAML to account (above), the declarations sought against the first and second defendants are refused.