BNZ fights $157k claim by freight firm liquidator

Photo / Richard Robinson.

Money collected by receiver to reduce company debt ‘unjustly enriched’ BNZ.

Bank of New Zealand is facing a lawsuit over $157,000 which a liquidator of a freight-forwarding company says should have gone to the New Zealand Customs Service for import duty.

A High Court judge, however, believes the litigation is "largely uneconomic" and said once costs and fees are taken into account there could be nothing left for Customs.

The major driver of the action, says Justice Timothy Brewer, is the liquidator's hope to get money to pay for his services.

Retail Ready Logistics, an Auckland-based freight forwarding business, acted as a broker for importers of retail goods. The company was part of scheme where approved brokers could collect duty on an importer's behalf and account for it regularly to Customs. Retail Ready Logistics would invoice its customers for this import duty but did not keep it in a separate bank account on Customs' behalf.

The firm, in 2008, entered into a debtor finance facility with BNZ which agreed to buy its accounts receivable. The facility represented secured finance and the following year BNZ appointed receivers Peter Chatfield and Stephen Tietjens to the business.

The pair collected $532,869 from Retail Ready Logistics' customers during May to July 2009, with the money used to reduce the debt owed to BNZ.

The firm was put into liquidation at the request of Customs in August 2009 and six years on, liquidator Robert Walker has launched High Court action against BNZ and the receivers.

The lawsuit alleges that $157,240 of the money collected by the receivers in 2009 represented import duty and that Customs has priority over that portion of the funds.

Walker claims payments of the import duty to reduce the company's debt was a mistake and that BNZ has been unjustly enriched. He has argued the bank and/or the receivers have "misappropriated the import duty knowingly in breach of trust".

Customs is not financing the case, although Walker says it "strongly supports" the action.

BNZ and the receivers in September applied for security for costs, which involves money being set aside to go towards their legal bills if they successfully defend the case. They argued the liquidator's claim lacked merit, although Justice Brewer was not persuaded on this point. However, he was swayed by their argument that the litigation was largely uneconomic.

"Given the relatively modest amount of money which the plaintiff is pursuing, I cannot see how the proceeding will be of real benefit to Customs if the plaintiff wins," Justice Brewer said. "There is a real risk of there being nothing left over for Customs as a creditor. ... it is clear to me that the major impetus for bringing the proceeding is the hope by the liquidator of getting monies to pay for his services as liquidator."

He ordered Walker to pay $30,000 by December 1 and said the case would be put on hold if the funds had not come in by that date.

Walker told the Herald he would pay the costs when it was convenient to do so. BNZ declined to comment.