Owners of trucking company with $370k debt win brief stay to stop Paccar from seizing their home
By Brad Gardner | July 5, 2010
The owners of a trucking company sent into liquidation over debt have won a brief stay to stop Paccar Financial from seizing their property.
The Federal Court of Australia this month put a halt to proceedings while the directors and shareholders of Menzies Haulage, Ian and Colleen Menzies, appeal the existence of the money owed to Paccar for two trucks and trailers.
Paccar last year won an order to liquidate Menzies Haulage, saying the company owed $373, 541.09 for the equipment.
However, courts can issue a stay on property seizures for up to 21 days where there is a legitimate appeal challenging the existence of a debt.
“It suffices for present purposes to indicate that I do not regard the pending appeal as doomed to fail,” Judge Donnell Ryan says.
Federal Magistrate Norah Hartnett last month issued an order for Paccar to seize the Menzies’ estate to recoup costs.
Hartnett ruled there was no dispute it was owed $373, 541.09.
“Paccar has established the existence and amount of the principle debt owed by the company,” Hartnett ruled on June 11.
The Federal Magistrates Court was told Paccar made four loan agreements with Menzies Haulage in May 2006 for $570,000.
According to court documents, Menzies Haulage fell behind in repayments and from November 2008 it “failed, neglected or refused to make repayments pursuant to the loan agreements…”
Paccar Financial was notified in January 2009 the operator had gone into administration. It sent a letter to Menzies Haulage on March 25 last year terminating the loan agreements and demanding $373,541.09.
During Federal Magistrates Court proceedings, Ian Menzies tabled a letter written on November 25, 2008 where he complained of signing the contract without legal advice.
“When one looks at the documents they are very complicated and seem to be entirely in favour of Paccar and do not on appearance give any rights to us,” the letter reads.
However, Paccar Regional Finance Manager Jeffrey Penter says he witnessed Menzies reviewing the documents and then signing them in his presence.
A Paccar collections manager, David Mueller, says the Menzies never told him they did not understand their repayment obligations.
“At no time did Ian or Colleen Menzies or their solicitors suggest to me that they did not understand how their repayment obligations to Paccar arose,” he says.
According to court documents, the Menzies’ property has an estimated value of $300,000 with a $280,000 mortgage.
The couple entered into a repayment arrangement with the Commonwealth Bank after Ian Menzies injured himself and was unable to work.
“As to their income, the respondents are presently in receipt of Centrelink benefits and there is no evidence as to the likely cessation of receipt of such benefits,” Hartnett ruled.