In the courts

Failure to register security interest did not affect guarantors’ obligations
The guarantors of a debt sought to avoid liability under the guarantee, arguing that the claimants would not have had to recover a loss under the guarantee if they had properly protected their interests by registering a financing statement under the Personal Property Securities Act.

Undue influence claim avoids summary judgment against mortgagor
A creditor failed to obtain summary judgment against a mortgagor because the mortgagor successfully argued undue influence by her husband.

Priority of security interests in foreign registered vessels in New Zealand
A security interest over a vessel registered first in time on the Personal Property Securities Register failed to defeat a foreign registered security interest.

Guarantor’s liability must be determined before the right to an indemnity arises
The High Court has determined that “the general rule is that the right to an indemnity does not usually arise until the person entitled to be indemnified has been called upon to pay and his or her liability has been ascertained”.

Beware of crediting cheques to one entity when they are made payable to another
The UK High Court has decided that the onus of disproving bad faith and negligence in the context of crediting a cheque payment lies with the bank.

Two companies liquidated as one
The High Court has ordered that the liquidations of two related companies proceed together as if the companies were one under section 271(1)(b) of the Companies Act 1993.

Payment to associated company recovered by liquidator
The Court of Appeal refused an appeal against a summary judgment ordering recovery of an amount paid to an associated company by a company in liquidation.

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.