In the courts

Possession is nine-tenths of the law: court finds that possession can override ownership
In the first decision under the Personal Property Securities Act, the High Court has found that a lessor of goods can lose ownership of those goods if a third party holding a registered security interest over the lessee's property enforces that security interest.
A summary of the timing and information requirements for registering security interests of lessors at the PPSR is set out at the end of this case summary.

What constitutes an "offer to the public" for the purposes of the Securities Act?
The court has rejected an argument that an offer of a debt security was not an offer to the public because the investors were all participants in a joint venture.

A mortgagee does not have to wait for an opportune time to sell mortgaged property to achieve a better price
The English Court of Appeal has found that a mortgagee is entitled to sell mortgaged property when it likes and is not constrained by the fact that exercise or non-exercise of its power could cause loss or damage to the mortgagor.

A contract is not "oppressive" merely because the obligor is naïve
The High Court has decided that a lender is not acting oppressively simply because it takes a guarantee from an obligor with little understanding of the corporate affairs associated with the borrower it is guaranteeing.

Security over Maori land - is it enforceable?
The High Court has considered the power of a Maori corporation to grant security over its land to secure a loan entered into for a specific investment purpose.

What is the "ordinary course of business" for the purposes of determining whether transactions are voidable?
The High Court has considered the application of section 294(2) of the Companies Act to payments made by a company shortly prior to its liquidation.

Are transactions with a debtor of a company subject to the same voidable preference rules as transactions with a creditor of a company?
The Court of Appeal has determined that section 292 of the Companies Act does not apply to a transaction where a debtor of an insolvent company paid off its debt.

Enquiries and information

For more information on any of the cases, articles and features in Financial Services Quarterly, please email Rachel Gowing or call on 64 9 916 8825.