Court strikes down Paccar attempt to seize Menzies Haulage's estate

Owners of failed transporter Menzies Haulage score victory against Paccar Financial to stop it seizing their home

Court strikes down Paccar attempt to seize Menzies Haulage's estate
Court strikes down Paccar attempt to seize Menzies Haulage’s estate
By Brad Gardner | May 13, 2011

The owners of failed transport company Menzies Haulage have scored a victory against Paccar Financial to stop it from seizing their home over a disputed debt.

The Federal Court of Australia has quashed a ruling in the Federal Magistrates Court in June last year permitting Paccar to take Ian and Colleen Menzies’ property in Kundabung NSW.

In what has been a long-running legal dispute between the parties, Paccar is attempting to recover $390,455 from the Menzies, claiming they defaulted on a loan for two trucks and trailers. The figure it is chasing has grown from $373,541.09 due to legal costs.

The couple have disputed the money owed and have argued they did not have access to all the contractual documents when they signed them.

Federal Court Judge Mordecai Bromberg says Federal Magistrate Norah Hartnett erred when she dismissed the Menzies’ claims and granted the property seizure, which was temporarily deferred the following month.

"Rather than considering and determining whether the Menzies had established an arguable case, her Honour considered and found that the Menzies had no case," Bromberg says in his written judgement.

Bromberg, who had a stint as a St Kilda footballer in the AFL in the late 1970s and early 1980s, says a court is not responsible for determining the success of a dispute but whether an arguable case exists.

"I need not accept uncritically the evidence of the Menzies. However, I am unable to conclude that their evidence is so improbable or so inconsistent with undisputed contemporary documents or other objective surrounding circumstances as to warrant its non-acceptance," Bromberg ruled.

He says the Kundabung couple gave evidence under oath and maintained it during cross examination that they had not signed all the documents or been presented with all the terms.

"Due regard should be given to the fact the Menzies deposed on oath as to the relevant facts, no doubt conscious of the very serious ramifications involved in the giving of false evidence," Bromberg says.

He also threw out Hartnett’s ruling granting Paccar to substitute BP as a creditor against Menzies Haulage.

BP served a bankruptcy notice on the company in 2009 and chased it for $32,125.45. It eventually reached a settlement on the basis its creditor petition would be dismissed.

Courts can substitute a creditor’s petition to another party that is owed money by a debtor.

But Bromberg upheld the Menzies’ claim that the substitution should not have happened because the couple are currently disputing the debt in separate court proceeding against Paccar.

"If the existence of a disputed debt may be the basis for an adjournment of the petition…it makes sense that the assertion of a disputed debt should be taken into account when raised on an application for substitution," he says.

"In my view, her Honour’s discretion miscarried when she granted Paccar’s application for substitution as the petitioning creditor."

The stoush between Paccar Financial and the Menzies stretches back to 2009 and has encompassed multiple legal jurisdictions.

Paccar launched action against the transport company in the Victorian Supreme Court in 2009 over the loan but the case was transferred to the NSW Supreme Court later that year.

Ian and Colleen Menzies have taken their own action against Paccar in the NSW Supreme Court and the Federal Court.

BP pursued the couple through the Victoria Magistrates Court and Federal Magistrates Court before reaching a settlement.

In its separate case currently before the NSW Supreme Court, the Menzies are seeking damages from Paccar.

They claim it agreed not to repossess the trucks and trailers if further payments were made under the loan. According to the couple, Paccar is at fault because of its attempt to repossess the vehicles, it petitioned to wind up Menzies Haulage and reported it as a credit defaulter.

Furthermore, they have accused Paccar of misleading and deceptive conduct for refusing to permit flexible payment terms despite telling them it would do so.

During proceedings in the Federal Magistrates Court last year, Hartnett was told Paccar made four loan agreements of about $570,000 in 2006 to allow Menzies Haulage to buy the trucks and trailers.

Paccar claims the company fell behind in repayments in late 2008. It terminated the loan agreements in 2009.

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.

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