19 April 2016

Relationship Agreement: Monocrane NZ Ltd v. Moncur

Having carried out her part of a separation agreement by paying off family company secured debts, it would be unconscionable for the company to then sue her on an unsecured current account debt of $130,700 which her errant husband had agreed to take over, the Court of Appeal ruled.
Angela Moncur, with her former husband Paul now in Australia, was sued by liquidators of their family company on a debt she thought had been sorted out in a 2010 relationship property agreement following the end of a 25 year marriage.
The court was told the Moncurs’ financial affairs were covered in fine detail in the 2010 separation agreement.  She agreed to surrender her interest in family company Monocrane NZ Ltd.  She refinanced loans to Sovereign Finance secured over both the family home and company assets, with her husband agreeing to pay her $200,000 as his share of the secured debt.  Paul ageed to take over full liability for the $130,700 company current account debt arising from personal drawings. 
Five months after signing the agreement, Mr Moncur, now in full control of Monocrane NZ, put the company into liquidation.  Evidence was given that company assets were then sold to a new company owned by the father of his then girlfriend with Mr Moncur becoming an employee of the new company.  Mr Moncur did not pay the promised $200,000 to his former wife.
Liquidators of Monocrane NZ sued Mrs Moncur, alleging she was liable to repay the company $130,700 in current account drawings, a debt her former husband had agreed to take over.
The Court of Appeal blocked the liquidators from suing Mrs Moncur.  The Court ruled it would be unconscionable for the company to sue for the debt when Mrs Moncur had paid off the company’s secured debt in return for an agreement with her husband that she was not liable on the debt to the company for current account drawings.
The Court emphasised its ruling did not weaken the position of companies suing for debts due.  The case was unusual, it said.  Mrs Moncur had paid the company’s secured debts in return for an understanding that there would be a “clean break” and she was free of any further claims from the company.  
Monocrane NZ Ltd v. Moncur – Court of Appeal (19.04.16)

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