Index of New Zealand Personal Property Securities Act Cases – 1
Index of New Zealand Personal Property Securities Act
Cases
The New Zealand Courts have, since 2004, been building up a body of case law that
explains and clarifies the Personal Property Securities Act (PPSA).
We have gathered all of these cases together in this index, with a copy of each case and a brief summary
of the PPSA issue that it addresses. We will continue to monitor the Courts to make available to you a
complete set of the New Zealand decisions on PPSA matters. If you would like further assistance on PPSA-
related issues, please contact us.
No. Case Citation
Date of
judgment
Section(s) Key point
84
Maginness v
Tiny Town
Projects Ltd
[2023] NZHC
494
14 March 2023
17, 23, 53,
93
The Contract and Commercial Law Act 2017
assists in applying s 53, consistent with Orix
(No. 10 below). An agreement for sale of
goods only becomes a “sale” for the
purposes of s 53 when all conditions for the
transfer of the property are met. Section
23(b) excludes equitable liens from the
PPSA regime despite meeting the s 17
definition of security interest. A purchaser
of goods prior to transfer of title may have
an equitable lien where the goods are
readily identifiable as attributable to the
contract. Equitable liens are equivalent to
property rights in the goods and therefore
have priority over security interests.
83
Premier Legal
Finance
Partnership v
Morrison Kent
[2022] NZHC
1798
26 July 2022 unspecified
A right to bring an action in a debtor’s name
(or in the secured party’s name, if provided
for in the security agreement) can be
property subject to a security. Where the
debtor is bankrupt, that right arguably
remains with the secured party rather than
vesting in the Official Assignee. [A better
interpretation of the judgment may be that
the right is vested in the Official Assignee,
but remains subject to the creditor’s
security].
82 Owens v Dong
[2022] NZHC
411
11 March 2022 36
Security interests are enforceable against
third parties in respect of particular
collateral if the debtor has signed a security
agreement containing an adequate
description of the collateral by item or kind
and enables the collateral to be identified.
81
The Vintage
Aviator Ltd v
DeMarco
[2021] NZHC
3096
18 November
2021
19, 41, 52
A company was deemed under s 19(1)(b) to
have knowledge because of the knowledge
of a director and shareholder that he had
obtained in his role as trustee.
80 Mann v Scutter
[2020] NZHC
755
17 April 2020 25
Section 25 requirement of good faith can be
used to challenge the appointment of a
receiver. Further, whether s 25 requires
active misleading conduct remains
undecided.
79
Eastlight Asset
Trading No. 5
Ltd v Ground
Support (Wgtn
No. 1) Ltd
[2019] NZHC
2534
4 October
2019
Not specified
A receiver appointed under a general
security agreement has the power to deal
with both personal property and real
property, notwithstanding that the
appointing creditor also holds a mortgage
over the real property.
Index of New Zealand Personal Property Securities Act Cases – 2
No. Case Citation
Date of
judgment
Section(s) Key point
78
Brown v
Heartland Bank
Ltd
[2019] NZHC
1105
21 May 2019
16, 17, 23,
45, 75A, 102
Heartland Bank entered into a “whole
turnover” factoring arrangement with
Stages Civil & Electrical Ltd. Stages
subsequently went into liquidation. The key
issue for the Court was whether Heartland
had provided “new value” giving it priority
over preferential creditors in respect of
proceeds arising from account receivables.
Ultimately the Court called for further
submissions and did not give a final
determination on the issue.
77.2
Re Thompson,
ex parte
McCollum
[2020] NZHC
542
18 March 2020 120, 123
Notice under s 120, read in light of s 123,
requires clear and unequivocal advice that
states the secured party proposes to take
the collateral in satisfaction of the
obligation.
77.1
McCollum v
Thompson
[2019] NZHC
915
30 April 2019
109, 110,
114, 116,
117, 120,
123, 132
The legal implications of s 120 are
uncertain; that is, whether the retention of
the collateral is satisfaction that all of the
debts (so that there is nothing outstanding)
or whether the debt is only satisfied to the
extent of the value of the collateral.
76
Auto Finance
Direct Ltd v
Morton
[2019] NZHC
664
2 April 2019
162, 163,
167
Morton lodged a notice under s 162 in an
attempt to discharge AFDL’s financing
statement. The financing statement was in
respect of a vehicle that Morton had
purchased with finance from AFDL. Morton
argued that she had various claims against
AFDL under the Consumer Guarantees Act
that, by way of set off, extinguished her
obligations under the security agreement.
AFDL successfully applied for an order
maintaining the financing statement on the
basis that there was insufficient evidence
that the value of the CGA claims exceeded
the secured debt.
75
Partners
Finance and
Lease Ltd v
Richmond
[2019] NZHC
34
29 January
2019
142, 149,
150
The High Court granted ASB defendant
summary judgment on Partners Finance and
Lease Ltd’s (PFLL) claim that PFLL had a
first ranking registered security interest
over a bulldozer. PFLL’s financing
statement was seriously misleading because
the collateral type listed on the financing
statement for the bulldozer was “goods -
other” rather than “goods - motor vehicles”.
As a result, ASB’s search of the register
failed to disclose PFLL’s financing statement.
74
Murray v UDC
Finance
Limited
[2018] NZHC
3386
18 December
2018
110
The principles applicable to a mortgagee’s
duty when exercising a power of sale under
s 176 of the Property Law Act (PLA) 2007
are relevant by analogy to the duty under
s 110 of the PPSA. The duty under s 110 of
the PPSA requires the secured party to
select an appropriate method of marketing
and sale that is likely to achieve market
value, or close to market value, for that
particular form of personal property.
Index of New Zealand Personal Property Securities Act Cases – 3
No. Case Citation
Date of
judgment
Section(s) Key point
73
Pioneer
Finance Ltd v
Green Cars Ltd
[2017] NZHC
2782
14 November
2017
16, 17, 36,
40, 162, 167
For the purpose of s 40(1)(b) of the PPSA, a
debtor has rights in goods leased to the
debtor by virtue of its possessory interest.
Accordingly, a debtor may grant a security
interest in goods leased to the debtor, and
that security interest is not brought to an
end by the conclusion of the lease.
72.2
Fatupaito v
Harris
[2018] NZCA
497
14 November
2018
25
A mortgagee need not have purity of
purpose when appointing a receiver, but a
mortgagee does act in bad faith if, judged
objectively, it acts for a predominant
purpose which is collateral to its interests as
mortgagee in preserving its security and
obtaining repayment of a secured debt.
72.1
Harris v Bank
of New
Zealand
[2017] NZHC
2374
29 September
2017
25
High Court decision reversed on appeal. See
Court of Appeal decision [2018] NZCA 497,
above.
71.2
Patrick v Bank
of New
Zealand
[2018] NZCA
122
26 April 2018 25 Appeal dismissed.
71.1
Bank of New
Zealand v
Patrick
[2017] NZHC
1184
1 June 2017 25
The bank did not breach its good faith duty
under s 25 when it appointed receivers. The
Court said a secured party is unlikely to be
found to have acted in bad faith where the
secured party was motivated by a desire to
recover the amount due to it or otherwise
protect its collateral.
70
Norris v
Bowater
Finance Ltd
[2016] NZHC
2156
13 September
2016
176, 177,
178, 179
A request for a copy of a security agreement
and other information under s 177 is not
made until the person making the request
provides authentication of his or her claim
to be authorised, and shows that the person
he or she represents holds a security
interest in personal property of the debtor.
69.3
Conway v
Mercedes-Benz
Financial
Services New
Zealand Ltd
[2017] NZCA
463
17 October
2017
16, 17, 24,
114
With limited exceptions, the PPSA is “title
neutral” and apply equally to all forms of
security. By contrast, whether a security
interest is a charge or mortgage for the
purposes of the PLA depends on a
traditional, title-based approach. The Court
of Appeal’s earlier comments to the contrary
(in Dunphy v Sleepyhead) should not be
followed.
69.1
Mercedes-Benz
Financial
Services New
Zealand Ltd v
Conway
[2016] NZHC
1896
16 August
2016
114, 185
Whether a security interest is a charge or
mortgage for the purposes of the PLA,
depends on questions of ownership. That
approach was explained further by the Court
of Appeal, which affirmed the High Court’s
decision.
68
Glover No 2
Ltd v Bank of
New Zealand
[2016] NZCA
182
6 May 2016 17
A General Security Agreement (GSA) can
create security over land, but the PPSA will
not apply.
67
Fisk v Attorney
General
[2016] NZHC
479; [2016]
NZAR 551
21 March 2016 23,44
Statutory charge under Customs and Excise
Act 1996 out-ranks a GSA. Irrelevant that
GSA attached first, or that Customers had
released goods.
66.2
McCollum v
Thompson
(2017) 23
PRNZ 467
23 February
2017
Not specified
Court of Appeal overturned the loss
calculation but did not reconsider the scope
of “proceeds”.
Index of New Zealand Personal Property Securities Act Cases – 4
No. Case Citation
Date of
judgment
Section(s) Key point
66.1
McCollum v
Thompson
[2015] NZHC
28
28 January
2016
16(1),
45(1)(b)
“Proceeds” does not include progeny of
livestock.
65
McKay v
Johnson
[2015] NZHC
242
23 February
2015
36, 41
Bank could not locate GSA document. The
requirement that the security agreement be
evidenced in writing was satisfied by other
evidence.
64
Thomas and
KMA Group v
Equipment
Finance Ltd
[2014] NZHC
2542
16 October
2014
110
The duty to obtain the best price reasonably
obtainable is directed to the time of sale. To
show sale at undervalue, independent
evidence on reasonableness of steps taken
is required.
63
UDC Finance
Ltd v Brunton
[2014] NZHC
2247
17 September
2014
16, 110
The High Court interpreted s 110 to include
that a secured party selling collateral owes a
duty to a guarantor to obtain the best price
reasonably obtainable. A guarantor is a
“debtor” under s 16(1) because he or she
has payment obligations under the deed of
guarantee, even though they may have no
interest in the collateral. The guarantor had
an arguable defence that the secured party
did not take reasonable care to obtain the
best price reasonably obtainable.
62
Working
Capital
Solutions
Holdings Ltd v
Pezaro
[2014] 3 NZLR
379
15 May 2014 162, 167
Another application to sustain a financing
statement. As in Universal Trucks and
Equipment Ltd v Reynolds the High Court in
this case rejected the analogy with caveat
cases, and the “seriously arguable” test.
Instead, the test is whether the Court is
“satisfied” that none of the grounds for
discharge exist.
61
BNZ v
Waewaepa
Station 2002
Ltd
[2013] NZHC
3321
12 December
2013
16, 45, 53,
90, 109
Claim in conversion by secured creditor
after the debtor transferred collateral
(sheep) to a related party. Recipient of the
sheep claimed it took the sheep free of any
security interest either because they were
sold in the ordinary course of business
(s 53), or because the sale had been
authorised by the secured party (s 45). Sale
was not in the ordinary course of business.
The transaction was arranged so that the
secured party did not receive any of the
proceeds of the sale of the sheep. The
proceeds were applied against a debt
between the debtor and the related party, in
an attempt to get around the bank security.
60
Hughes v Fea
& Heenan
[2013] NZHC
2863
30 October
2013
16(1)(i), 17
Whether a lease of plant bulbs was an “in
substance” security interest. Held that it
was not a security interest to the extent
that it did not give the lessor new rights
over the collateral. However, an interest in
the sale proceeds of goods that a lessee is
obliged to return at the lease’s conclusion
(even where the lessee is permitted to sell
and replace the goods) did constitute a
security interest.
Index of New Zealand Personal Property Securities Act Cases – 5
No. Case Citation
Date of
judgment
Section(s) Key point
59
Carey & Anor v
Smith & Ors
(2013) 11
NZCLC 98-019
05 September
2013
17, 53, 109
A sale and buy-back arrangement between
a company and its shareholders was not a
sale of inventory in the ordinary course of
business. The inventory was therefore
transferred subject to the bank’s GSA.
Further, the sale and buy-back was for
funding purposes, so was an in-substance
security interest.
58
Polymers
International
Ltd v Toon &
Ors
(2013) 11
NZCLC 98-017
30 July 2013
142(1)(c),
145, 149,
150, 151,
172
Failure to register a debtor company’s
incorporation number on the Personal
Property Securities Register (PPSR) will
result in a financing statement being
seriously misleading. The problem could
have been avoided if whoever filled out the
financing statement had indicated that the
debtor was a company, because the PPSR
website would have prompted the person to
add the correct company number. The
addition of a superfluous space in the
abbreviation “NZ” in the name did not make
it seriously misleading, because the system
automatically excludes all spaces and
abbreviations in the words “NZ” in the
searching process.
57
Perpetual Trust
Ltd v Bank of
New Zealand
[2013] NZHC
1800
17 July 2013 16, 108
Application of s 108 PPSA. The first-ranking
secured creditor took enforcement action
following default by a debtor under a trust
deed, and was owed reasonable court costs
by the debtor. Under s 108, the Court
ordered that, on receipt of a request from
the secured creditor for payment, the bank
which held the debtor’s accounts would be
entitled to apply the funds to meet the sums
due to the creditor’s debt.
56
McCloy &
Bridgeman v
Manukau
Institution of
Technology
[2013] 3 NZLR
390
1 May 2013
16, 17, 36,
40, 45, 53,
66, 88, 89,
90, 91, 93
A construction contract can give rise to a
security interest. Where the principal has
the right to use and sell materials and
equipment following default by the
contractor, the principal has a security
interest in those materials and that
equipment. The transfer of the equipment
under the contract was not authorised by a
GSA holder (s 45), nor was it a sale in the
ordinary course of business (s 53).
55
NZ Natural
Juice Co v
Heartland Bank
Limited
[2013] NZHC
755
22 April 2013 45, 93, 102
A conflict between the rights of an assignee
of an account receivable, and those of the
account debtor. Section 102(1)(a) applied,
such that the assignee was bound by the
terms of the contract between the assignor
and the account debtor, which included a
contractual right of set off. The account
debtor’s ability to rely on that contractual
right was not limited by the time limit in
s 102(1)(b), which provides that an account
debtor may not exercise a set off against
the assignee, where the account debtor’s
claim arose after the account debtor knew
of the assignment.
Index of New Zealand Personal Property Securities Act Cases – 6
No. Case Citation
Date of
judgment
Section(s) Key point
54
Haar v
Eastland Tyres
Ltd
[2013] NZHC
692
9 April 2013 Not specified
A creditor owes a duty to a guarantor to
perfect a security interest granted by the
principal debtor for the debt, so that it is
available in the exercise of a guarantor’s
subrogation rights where the guarantor
makes payment of the principal debt.
Follows NZ Bloodstock v Jenkins (see
case 9). On the facts, the guarantor was not
discharged from liability because the
creditor’s failure to register did not cause
any loss.
53
Thorn v RFD
Finance
Limited
[2012] NZHC
1959
7 August 2012 114, 132
The High Court rejected an argument that
s 132 of the PPSA (“Entitled persons may
redeem collateral”) was a code that ousted
the provisions in the PLA which permit
redemption of mortgages. The PLA
continued to apply.
52
Vegar-
Fitzgerald v
Noyce
[2012] NZHC
1311
29 May 2012
162, 165,
166, 167
Application to sustain financing statement.
Court prefers earlier approach of “is there
serious or arguable case”, on a summary
basis. Court rejects Universal Trucks
approach where Court determines fully and
finally whether a security interest exists.
51.1
Gibbston
Downs Wines
Ltd v Perpetual
Trust Ltd & Ors
[2014]
NZCCLR 6
22 October
2013
40, 41, 66,
69, 70, 135,
153, 159
Appeal dismissed. Not necessary to resolve
the time at which priority is to be
determined, but High Court’s analysis “has
much to commend it”.
51
Gibbston
Downs Wines
Limited v
Perpetual Trust
Ltd
[2012] 2 NZLR
574
28 May 2012
40, 41, 66,
69, 70,130,
135, 153,
159
Priority between competing security
interests should be determined at the time
those interests come into conflict. This
analysis will depend on the facts. It will
often, but not necessarily, be the point
when the debtor is placed in receivership.
50
Air Liquide v
SupaGas 2009
and Ors
[2012] NZHC
2583
10 May 2012
16, 17, 25,
66A, 135
In order to argue that a transaction is “a
lease for a term of more than one year”, it
was necessary to bring evidence that the
lessor was regularly engaged in the
business of leasing goods. Lack of such
evidence prevented summary judgment
being entered”.
49
MJN
McNaughton v
Thode
[2012] NZHC
982
10 May 2012
109, 114,
120(2)
Relationship between Sale of Goods Act
(SOGA) and PPSA. Purchaser of goods
granted “security interest”, agreed to
restrictions on use of the goods. Terms did
not include any express retention of title.
Title passed to the purchaser in terms of the
SOGA.
48
Universal
Trucks v
Reynolds
(2012) 10
NZBLC 99-
706; (2012) 11
NZCLC 98-003
21 March 2012
16, 35, 36,
89, 90, 149,
150, 162,
165, 167
Revision of how courts should approach
applications to maintain financing
statements. It is not enough to establish a
seriously arguable case for maintaining
registration, instead, the court must be
satisfied that no grounds exist for
demanding change.
47
Swindle v
Matakana
Estate
[2012] 1 NZLR
806; [2012]
NZCCLR 4
28 October
2011
53, 82, 83,
84, 85
Section 53 - sale by winemaking companies
to related companies for financing purposes
was in the ordinary course of business.
Index of New Zealand Personal Property Securities Act Cases – 7
No. Case Citation
Date of
judgment
Section(s) Key point
46.2
Strategic v
Bridgman
[2013] 3 NZLR
650
09/08/2013
16, 17, 23,
35, 40, 43,
44, 35, 47,
53, 107
High Court decision affirmed on appeal.
The Court of Appeal added that a possible
liability to pay an unidentifiable sum at an
uncertain future date will not amount to an
account receivable, but an existing
monetary obligation that is not earned by
performance under a contract is.
46.1
Burns v
Commissioner
of Inland
Revenue
(2011) 25
NZTC 20-070;
(2011) 10
NZCLC
264,885;
(2011) 9
NZBLC
103,284
10/08/2011 16, 23
Definition of “accounts receivable” is not
limited to book debts. An “account
receivable” is any monetary obligation,
subject to the exceptions in the definition in
the PPSA, and in s 23 of the PPSA. North
Shore Taverns case expressly rejected.
A receivable will only be available to
referential creditors if the monetary
obligation was owed to the company at the
time that the receivership or liquidation
started. Appeal Pending.
45
Nichibo v
Lucich
(2011) 9
NZBLC
103,253;
[2011]
NZCCLR 31
15/07/2011
16, 17, 45,
53, 57, 58,
73, 162,
163(a),
165(1), 167
The fact that the employee of the vendor is
the purchaser of the goods does not, by
itself, take the transaction outside of the
ordinary course of business
44
R v Kiriona;
Lima
(unreported)
Gendall J, HC
Palmerston
North, CRI-
2008-054-
001871
12/07/2011 17
Relief against forfeiture case – on facts,
applicant had no security interest.
43
Stockco v
Walker
[2011] NZAR
669; (2011) 9
NZBLC
103,243
24/06/2011 23, 93, Pt 8
Common law lien has priority over security
agreement (ss 23 and 93). Whether the
grazing contract created a common law lien
depended on whether the grazing contract
was for the purpose of improving the goods
42.2
Marac Finance
Ltd v Greer
[2012] 2 NZLR
497
01/03/2012
16, 17, 23,
41, 66, 95
The mortgage containing an assignment of
rental does not need to be registered on the
PPSA. The receiver appointed under a
mortgage has priority over a receiver
appointed under a GSA.
42.1
Marac Finance
Ltd v Greer
(2011) 9
NZBLC
103,189
17/03/2011 17, 23, 86
The right of a mortgagee of land to rental
payments (collected by a receiver appointed
by the mortgagee) falls outside the scope of
the PPSA by operation of s 23.
41.2
Healy
Holmberg v
Grant
[2012] 3 NZLR
614
02/10/2012 36, 40, 66
Court of Appeal rejected High Court’s
analysis and confirmed that, as between
registered security interests, priority is
determined by order of registration, not by
order of perfection.
41.1
Healy
Holmberg v
Grant
(2011) 10
NZCLC
264,833;
(2011) 9
NZBLC
103,182
24/02/2011
36, 40, 41,
66, 67
Ruling on the validity and priority of alleged
security interests. The Court held that date
of perfection, not registration, governs
priority. [The judgment is wrong on this
point and should not be relied on. If there is
any injustice in having a later executed
security agreement take priority over an
earlier agreement, merely because it was
registered first, that is a matter for the
voidable transactions regimes.]
Index of New Zealand Personal Property Securities Act Cases – 8
No. Case Citation
Date of
judgment
Section(s) Key point
40.3
Stiassny v
Commissioner
of Inland
Revenue
[2013] 1 NZLR
453
28/11/2012
17, 19, 23,
25, 45, 53,
94, 95, 195,
196, 197,
198
The Supreme Court upheld the Court of
Appeal’s decision. The Supreme Court also
noted that all security interests under the
PPSA are statutory fixed charges, and that
there are no longer any securities which are
recognised as operating as floating charges.
40.2
Commissioner
of Inland
Revenue v
Stiassny
[2012] 11
NZCLC 98-002
15/03/2012
17, 24, 25,
43, 44, 95,
Pt 8
Section 95 (recipient of debtor-initiated
payment takes free) protects a creditor only
from a proprietary claim. It does not
operate to extinguish any other legal claim,
such as damages for money paid under a
mistake. However, s 95 prevents an in
personal claim based on priority from being
made. Decision upheld on appeal to
Supreme Court.
40.1
Stiassny v
Commissioner
of Inland
Revenue
(2011) 10
NZCLC
264,786
04/11/2010 95
High Court decision later upheld on appeal.
See Court of Appeal decision dated
15/03/2012.
39.2
Glenmorgan
Farm Ltd (in
rec and in liq)
v New Zealand
Bloodstock
[2012] 1 NZLR
555
20/12/2011
10, 16(1),
17, 107, 109
High Court decision affirmed on appeal.
39.1
Glenmorgan
Farm v New
Zealand
Bloodstock
(Unreported)
Potter J, HC
Auckland, CIV-
2008-404-
1759 (HC)
27/09/2010 40(3), 109
Secured creditor’s failure to register its
security interest did not affect the debtor’s
obligation to pay the secured debt. It
affected only priority. Debtor remained
liable to repay both secured creditors.
38.2
Rabobank v
McAnulty
[2011] 3 NZLR
192 (CA)
23/05/2011 16, 17, 40
Three key rulings on definition of “lease for
a term of more than 1 year”: (i) qualifiers in
(b) and (c) apply to bailments as well as
leases; (ii) a bailment will be a lease for
more than 1 year only if the bailor is to
profit from the bailment (and not merely the
transaction). (This matches the Australian
Act); and (iii) “regularly” in (c) will require
some recurrence of leasing transactions,
either before or after, actual or intended.
38.1
Rabobank v
McAnulty
(Unreported)
Associate
Judge Gendall,
HC Wellington,
CIV-2010-485-
647
23/08/2010
16, 17, 35,
36, 40, 66
High Court decision later considered on
appeal (result upheld, but on different
reasons). See Court of Appeal decision
23/05/2011.
37
Commerce
Commission v
Budget Loans
(Unreported)
Wilson DCJ, DC
Auckland, CRI-
2009-004-
028349 (DC)
26/07/2010 44
Sentencing decision under the Fair Trading
Act. Lender had misrepresented its rights
under an all present and after acquired
property clause in relation to consumer
goods (there being restrictions on such
security in s 44). [The details are not
apparent from the sentencing notes. See
the summary of facts.]
36.3
StockCo v
Gibson
(2012) 11
NZCLC 98-010
26/07/2012
16, 17, 19,
36, 40, 45,
53, 82, 87,
88, 177
The Court of Appeal largely upheld the High
Court’s decision. The main difference key
difference is that the Court of Appeal did not
accept that “750 mixed age cows” were
adequately described just because the
debtor could identify them.
Index of New Zealand Personal Property Securities Act Cases – 9
No. Case Citation
Date of
judgment
Section(s) Key point
36.2
Gibson v
StockCo
[2011]
NZCCLR 29
(HC)
17/12/2010
16, 17, 19,
25, 36, 40,
45, 53, 66,
82, 87, 88,
89, 177,
185, 187,
191
Lengthy and thorough discussion of:
(i) ordinary course of business
(ii) subordination under s 88, (iii) the good
faith requirement in s 25, requiring positive
conduct rather than mere knowledge, and
(iv) SOGA applying to determine issues of
identifying stock.
36.1
Gibson v
StockCo
(Unreported)
White J, HC
Auckland, CIV-
2009-404-
7120 (HC)
05/07/2010 Not specified
Interlocutory decision declining an order for
sale of disputed collateral prior to trial.
35.2
Toll Logistics v
McKay
[2011] 2 NZLR
601 (CA)
16/05/2011
17, 23,
41(1) (b)(ii),
66(b), 93
Toll accepted the High Court’s decision on
the PPSA point. Toll unsuccessfully appealed
the decision that it did not have a common
law lien.
35.1
McKay v Toll
Logistics
[2010] 3 NZLR
700 (HC)
22/06/2010
17, 23, 41,
66, 74, 93,
94, 95, 96,
97, 98, 99,
100, 101,
102, 103,
114, Pt 7,
Pt 8
The priority given to liens over security
interests by s 93 PPSA is only given to
common law, statutory and maritime liens.
Contractual liens qualify as security
interests and are subject to the priority
rules governing security interests.
34
Asset Finance
v Ministry of
Justice
[2011] DCR 1 25/05/2010 Not specified
Financier with charge over vehicle,
registered on PPSR, took priority over
Ministry of Justice, despite the Ministry
having seized the vehicle for non payment
of fines, prior to the financier’s charge and
registration. [Was the decision correct?
Judge failed to consider s 103, which gives
priority to execution creditors. Ministry was
arguably an execution creditor in terms of
that section. Policy would certainly support
that analysis].
33
Triumph
Motorcycles v
Keogh
[2010] DCR
824 (DC)
29/03/2010 16, 17, 36
A consignment will not amount to a security
interest solely because it imposes certain
obligations on the consignee in respect of
the goods.
32.3
Tubbs v Ruby
2005
[2011] 3 NZLR
551
27/07/2011 25, 53
Ordinary course of business and s 53.
Waimate’s sale of timber to Ruby was in the
ordinary course of business, despite being
between related entities, for cashflow
purposes only, timber remaining physically
with Waimate and all timber to be later on
sold by Waimate to customers. Further,
timber provided by Waimate to Ruby to
“replenish” converted timber was also taken
by Ruby free of the bank’s security interest
partly on the grounds that the receivers, as
agents of Waimate, should not be able to
take advantage of Waimate’s wrongful
conversion
32.2
Tubbs v Ruby
2005
(2010) 9
NZBLC
103,051
05/08/2010 17, 41, 53
Application of “ordinary course of business”
test in s 53 PPSA. A transfer of goods to a
related company was arguably outside the
ordinary course of business, as it was not
for cash but in satisfaction of an existing
debt.
Index of New Zealand Personal Property Securities Act Cases – 10
No. Case Citation
Date of
judgment
Section(s) Key point
32.1
Tubbs v Ruby
2005
[2010]
NZCCLR 31
(HC)
26/02/2010 53
High Court decision later overturned (in
part) on appeal. See Court of Appeal
decision 05/08/2010.
31
Motorworld v
Turners
Auctions
[2010]
NZCCLR 30
(HC)
17/02/2010 45, 109
Secured party impliedly authorised dealing
and in doing so prevented the security
interest from continuing in the collateral and
extending to the proceeds. Conversion and
knowing receipt claims against auctioneer
failed.
30.2
Rabobank v
StockCo
(2011) 13
TCLR 191
11/03/2011
16, 25, 149,
150, Sch 1
The lack of a partnership name on the
registration was not misleading because in
fact the farm was not run as a partnership.
Whether name on the registration was
seriously misleading depended on detailed
analysis of the way in which the debtor
organised its business affairs.
30.1
Rabobank v
StockCo
[2010]
NZCCLR 25
17/02/2010
16(a)(iii),
41, 66, 73,
74, 90, 142,
149, 150,
172
Summary judgment declined, partly
because failure to include name of
partnership in financing statements was
arguably seriously misleading, thus arguably
invalidating registration. See substantive
decision 11/03/2011
29
Daniel Smith
Industries Ltd
v Cranes
International
(Unreported)
Allan J, HC
Rotorua, CIV-
2009-463-286
(HC)
16/12/2009
16, 17, 36,
162, 165,
167, Pt 10
Order maintaining a financing statement;
seriously arguable case that security
agreement existed between the parties.
28
NZ Associated
Refrigerated
Food v Donley
(2010) 10
NZCLC
264,626 (HC)
30/10/2009
17,
45(1)(b),
53, 94
Application of “ordinary course of business”
test in s 53 PPSA. Also, summary judgment
denied on a claim of knowing receipt;
further argument required on whether an
equitable interest in the proceeds of sale
could stand separately to the security
interests under the PPSA.
27
ANZ v SNJ
Dairy
(Unreported)
Woodhouse J,
HC Hamilton,
CIV-2009-419-
1404 (HC)
23/10/2009 109
Bank entitled to repossess collateral subject
to GSA after the debtor leased goods to
another party on oral terms and without the
bank’s permission.
26 ALF No 9 v Ellis
(unreported)
Ronald Young
J, HC
Wellington,
CIV-2009-485-
435 (HC)
13/10/2009 52, 87, 12
PPSA allows a debtor to sell its interest in a
cause of action that is subject to a GSA.
Failure to obtain GSA-holder’s consent does
not render the transfer void.
25.1
Viacom v
Scene 1
(Unreported)
Andrews J, HC
Auckland, CIV
2009-404-
4305 (HC)
18/08/2009
16, 35, 36,
40
Copyright is personal property and subject
to the operation of the PPSA. The prior-
ranking security holder did not breach
copyright by selling DVDs, etc., even though
copyright held by lower-ranking secured
party.
24
Arcus Springs
v Jeffreys
(Unreported)
Harvey DCJ,
DC Auckland,
CIV- 2009-
004-997 (DC)
17/09/2009 16, 17
An indefinite lease will qualify as a lease for
more than one year if it can potentially run
for that length of time.
Index of New Zealand Personal Property Securities Act Cases – 11
No. Case Citation
Date of
judgment
Section(s) Key point
23
Toyota Finance
v Christie
(Unreported)
Asher J, HC
Auckland, CIV-
2009-404-
3797 (HC)
15/07/2009
17, 40, 162,
165, 167,
Pt 10
Detailed analysis of the manner in which
courts should approach applications to
maintain financing statements.
22
Compass v NZ
Guardian Trust
(Unreported)
Cooper J, HC
Auckland, CIV-
2009-404-
1500 (HC)
19/03/2009 25
Failed application to prevent appointment of
receivers on the basis that the right had not
been exercised in accordance with
reasonable standards of commercial
practice, in reliance on good faith obligation
in s 25 PPSA.
21
Fisk (Whaitiri
Potato
Company) v
Grace
(2009) 6 NZ
ConvC 194,707
(HC)
18/11/2008 44, 100
Creditor’s Purchase Money Security Interest
(PMSI) rights in unplanted seeds disappear
once seeds are annexed to land and become
crops.
20
Blue Water
Resort v Marac
(2009) 9
NZBLC
102,409 (HC)
20/08/2008
17, 23, 104,
105(b)(i),
108, 134,
Pt 2, Pt 9
Assignee of debt arguably not protected by
PPSA because right to payment arose in
connection with an interest in land
19
Commissioner
of Inland
Revenue v
North Shore
Taverns (in liq)
(2009) 10
NZCLC
264,429 (HC)
27/08/2008 16(1)
Definition of “accounts receivable” is limited
to book debts or trade credit accounts. [See
criticism by M Gedye in “What is an Account
Receivable” (2000) 15 NZBLQ 168.]
18
Gough Finance
v PL Adams
(unreported)
McDonald DCJ,
DC Whangarei,
PPN153871812
9 (DC)
23/07/2008 177
Secured party must be notified before a
seized motor vehicle is sold to pay off
unpaid fines. Security interest has priority
over fines. [Note that subsequently the Act
is to be amended
17
Stiassny v
Dunedin City
Council
(unreported)
30 May 2008,
Winkelmann J,
HC Auckland,
CIV-2007-404-
3463 (HC)
30/05/2008 17, 23, 40
A trust can in substance be a security
interest if it secures payment or
performance of an obligation; no security
interest found on the facts.
16.3
NZ Associated
Refrigerated
Food v
Simpson
(unreported)
Dobson J, HC
Wellington,
CIV-2007-485-
1563; CIV-
2005- 485-
1820 (HC)
20/06/2008 17, 82
PMSI supplier only had PMSI in unpaid
stock; onus is on supplier to determine
which goods supplied were not paid for.
Default position is that oldest debts are paid
for first.
16.2
NZ Associated
Refrigerated
Food v
Simpson
(unreported)
Dobson J, HC
Wellington,
CIV-2007-485-
1563; CIV-
2005- 485-
1820 (HC)
06/05/2008 Not specified Minute recalling 28/04/2008 decision.
16.1
NZ Associated
Refrigerated
Food v
Simpson
(2008) 10
NZCLC
264,418 (HC)
28/04/2008
16, 17(3),
82
High Court decision – recalled by minute
dated 06/05/2008.
15
Metropolitan
Advances v
Hollis
[2008]
NZCCLR 30
(HC)
06/03/2008
6, 16, 17(1),
40
Accountant’s authority to deduct invoices
against tax returns did not amount to a
security interest.
Index of New Zealand Personal Property Securities Act Cases – 12
No. Case Citation
Date of
judgment
Section(s) Key point
14
K-Auto v
McGuire
(Unreported)
Associate
Judge
Robinson, HC
Auckland, CIV-
2006-404-
6784 (HC)
11/02/2008 Not specified
Wrongful registering of financing statement
could be a proper basis for a damages
claim.
13.2
Stiassny v
North Shore
City Council
[2009] 1 NZLR
342 (CA)
02/12/2008 17
A trust interest can in substance be a
security interest, depending on the purpose
of the transaction, the role and relationship
of the parties, the practical and commercial
reality and the parties’ intentions.
13.1
Stiassny v
North Shore
City Council
[2008] 1 NZLR
825 (HC)
29/11/2007
17, 23(b),
36, 40(1)(a)
High Court decision later affirmed on
appeal. See Court of Appeal decision
02/12/2008.
12.2
J S Brooksbank
v EXFTX
(2009) 10
NZCLC
264,520 (CA)
06/04/2009
16, 17, 24,
40
Cash on delivery clause, goods delivered
without payment, by agent’s mistake. Title
did not pass, but mere fact it was retained
did not create security interest. “In
substance” test not satisfied. Owner was
bailor and not a secured party.
12.1
J S Brooksbank
v EXFTX
(2008) 10
NZCLC
264,338 (HC)
21/11/2007
16, 17, 18,
23, 24, 40,
73
High Court decision later overturned on
appeal. See Court of Appeal decision
06/04/2009.
11.2
Segard Masurel
v Nicol
(2008) 10
NZCLC
264,386 (HC);
[2008]
NZCCLR 25
12/02/2008 17, 24
Cash on delivery clause, but goods delivered
without payment. SOGA applied to
determine that vendor retained no rights in
the collateral, so held no security interest.
Had title not passed, delivery without
payment would have created a security
interest.
11.1
Segard Masurel
v Nicol
(unreported)
Nicola Mathers
DCJ, DC
Auckland, CIV-
2006-004-
3020 (DC)
23/05/2007 17, 24
District Court decision later affirmed on
appeal. See High Court decision
12/02/2008.
10 Orix v Milne
[2007] 3 NZLR
637 (HC)
17/05/2007 53
When taking goods free of security interest,
seller is deemed to include agents selling
the relevant goods on behalf of the owner.
9
NZ Bloodstock
v Jenkins
(2007) 3
NZCCLR 811
(HC)
19/04/2007
17, 35, 40,
41, 66(1)(a),
69, 73
Guarantors of an agreement were not
released from liability by the lessor’s failure
to register the security interest. The
guarantee’s terms ousted equitable
defences. Court also considered that
refinancing an inadequately registered PMSI
cannot improve the existing priority
position. The substance of the transaction
remains the same.
8
Keybank
National
Association v
The Ship
“Blaze”
[2007] 2 NZLR
271 (HC).
09/02/2007
23, 25(1),
26, 52, 90
PPSA has no application to a ship which falls
directly or indirectly within the Ships
Registration Act.
7
Harvestpro
Logging v
Cordyline
(unreported)
Associate
Judge Doogue,
HC Auckland,
CIV-2006-404-
3107 (HC)
03/10/2006
17, 25, 109,
117
A security interest entitles the secured party
to possession (on default, etc) and so
entitles the secured party to sue in
conversion.
Index of New Zealand Personal Property Securities Act Cases – 13
No. Case Citation
Date of
judgment
Section(s) Key point
6
Asset Traders
v Favas
Sportscar
(2006) 9
NZCLC
264,000 (HC)
03/08/2006
17, 162,
165, 167
The Court should approach applications to
maintain financing statements in the same
manner as applications to sustain caveats
over land.
5.2
Dunphy v
Sleepyhead
[2007] 3 NZLR
602 (CA)
14/06/2007
7, 21, 36,
40, 75, 117,
Pt 3, Pt 9
A liquidator is an agent of the company and
not a “third party” in terms of s 36, meaning
that a security agreement not in writing is
nevertheless enforceable against a
liquidator
5.1
Re King Robb
Ltd
(2006) 9
NZCLC
264,000 (HC)
23/02/2006
16, 17, 36,
40, 41(1),
48(1)(a)
High Court decision later affirmed on
appeal. See Court of Appeal decision
14/06/2007.
4.2
Simpson v NZ
Associated
Refrigerated
Food
[2007] 2 NZLR
130 (CA).
11/12/2006
16, 17, 74,
149, 162,
167
Overly-broad description of collateral will
not render a financing statement “seriously
misleading”, as it does not prevent the
searcher from locating it.
4.1
Service Foods
Manawatu v
NZ Associated
Refrigerated
Food
(2006) 9
NZCLC
263,979 (HC)
30/01/2006
16, 17, 24,
36, 41, 74,
142(1) (e),
149, 150,
Pt 3, Pt 10
High Court decision later affirmed on
appeal. See Court of Appeal decision
11/12/2006.
3
Agnew v
Pardington
[2006] 2 NZLR
520 [2006] 3
NZLR 629 (CA)
22/12/2005
16(1),
45(1), 106,
115, 117
The concept of proceeds extends not only to
proceeds of sale but also to income arising
from the collateral.
2.2
Waller v NZ
Bloodstock
[2005] 3 NZLR
629 (CA)
27/10/2005
3, 16, 17,
23(e)(ix),
34, 35, 36,
40, 41, 43,
45, 52, 66,
135, 193,
194, 195,
196, 197,
198, 199,
200, 201,
Pt 1, Pt 3,
Pt 10
A pre-PPSA debenture created a security
interest over all collateral in which debtor
has rights and not just assets owned by
debtor. It extended to collateral leased to
the debtor. Also, perfection cannot be
achieved by repossession.
2.1
Waller v NZ
Bloodstock
[2005] 2 NZLR
549 (HC)
02/12/2004
4, 16, 17,
23, 24, 36,
40, 41, 43,
45, 66, 73,
Pt 5, Pt 6
High Court decision later affirmed on
appeal. See Court of Appeal decision
27/10/2005.
1
Graham v
Portacom
[2004] 2 NZLR
528 (HC)
17/03/2004
16, 17, 36,
40, 66
Lease for a term of more than one year
creates a security interest regardless of who
holds title to collateral.
Debenture-holder has security interest over
collateral itself, not merely debtor’s
possessory interest.
Contacts
Michael Arthur – Partner
T: +64 9 357 9296
M: +64 27 209 4999
E: michael.arthur@chapmantripp.com
Michael Harper – Partner
T: +64 9 358 9816
M: +64 21 777 681
E: michael.harper@chapmantripp.com
