In the courts

Consumer credit test case provides guidance on fees
The dismissal of charges against a finance company in a test case over loan fees should bring greater clarity for an industry that is increasingly under the watch of New Zealand regulators.

What exactly is owed to a vendor PMSI holder when the purchaser goes into receivership?
In this case, the High Court determined how to calculate what was owed to a vendor PMSI holder ahead of a general security holder after receivers were appointed.

Suppliers beware: take the extra step and register your security interest
Two recent High Court decisions highlight the importance for suppliers to ensure that they have a registered security interest in goods supplied to customers but not paid for.

Obtain CCCFA declarations at earliest opportunity
The Court of Appeal has decided that acceptance of a loan offer comprised the credit contract, and not execution of the formal loan agreement. This meant that declarations that the loan was for investment purposes should have been obtained at the time of acceptance of the offer.

Lender has no duty to borrower in relation to a quantity surveyor appointed by a lender
The High Court decided that a lender did not have a fiduciary duty to a borrower when it appointed a quantity surveyor to determine when progress payments under a construction loan were payable.

Solicitors undertakings are assignable
An undertaking given by solicitors to a lender was assignable along with the rest of the loan documentation.

Discharge of mortgage not breach of guarantor's rights
This case was an unsuccessful appeal by a guarantor against summary judgment entered against him after the company whose loan he guaranteed went into liquidation.

Condition precedent to give guarantee insufficient
Where a loan agreement required a separate guarantee as a condition precedent, failure to obtain a separate guarantee meant that no guarantee was given.

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.