It was a local deal: Blenheim-based transport company Smart Assets Ltd quit a truck and trailer unit with the sale financed by a company down the road, Smart Money Ltd.
The two companies appear to have little in common other than similar names, a geographic proximity and now confusion over who owns the truck and trailer.
It currently sits in the yard of purchaser, Auckland scrap metal dealer Brian McDonald.
He says the truck is a lemon. It has a ‘transplanted’ engine under the bonnet and is not fit for its advertised purpose, he claims. Smart Assets can come and pick it up, he says.
Meanwhile, liability for Smart Money’s financing is disputed.
The High Court ruled Mr McDonald is not liable as guarantor on a $70,800 loan paid across to finance the purchase.
Evidence was given of Mr McDonald arranging finance with Smart Money at the time negotiations were underway in 2020 for the purchase of Smart Assets’ Freightliner Argosy truck and trailer unit, being sold on Trade Me ‘as is where is.’
Smart Money was acting as agent for Partners Finance Ltd, a finance company then operating out of Christchurch.
Mr McDonald signed as guarantor on the arranged loan.
The High Court was told Partners Finance did not release the loan moneys to Mr McDonald’s business; the money was paid directly across to Smart Assets.
Partners Finance said Smart Money had relayed a message to it from Smart Assets that the deal was complete and that payment could be made.
This was the wrong way round, Justice Palmer ruled.
It was for Mr McDonald to advise his business loan could be released.
The loan contract was not linked directly to the truck purchase.
Partners Finance had released Mr McDonald’s funds without his approval. He was not liable on any guarantee.
The High Court was told this disputed loan and guarantee was on-sold to Wellington-based Pacific Crest Ltd.
The current state of play: transport company Smart Assets has been paid for its truck and trailer; Pacific Crest’s enforcement of the loan guarantee failed; the identity of the actual borrower is unknown (Mr McDonald says the paperwork did not properly name his business as borrower); and no-one wants the truck and trailer.
Pacific Crest Ltd v. McDonald – High Court (22.08.24)
24.202