Francis and Dalton (as liquidators of Podular Housing Systems Ltd (in liq)) v Gross - [2024] 3 NZLR 527

Nature of contracts — Whether contract for sale of goods or work and materials — Difference between provision of goods and services — Construction work done off-site — Off-site work not determinative of contract nature — Whether clause transferred interest in material — Payments not allocated to specific goods or materials — Clause irrelevant.

Equitable lien — Not dependent on possession — Lienor not entitled to possession — No transfer of title — Enforced by sale and payment of the debt — No coherent principle underlying all forms of equitable lien — Three criteria — Potential indebtedness to purchaser for acquisition of pod established — Identification of specific pod met — Third criteria of owner acting unconscientiously or unfairly not met — Consider effect on third parties — Purchaser chose not to contract for purchase money security interest — Would extend layby sale agreement regime without financial limits.

Competing property interests — Relative priority of equitable lien and security interest — Security interest a statutory interest — Statutory interest a legal interest — Security interest has priority over equitable lien — Bona fide purchaser of legal interest without notice — Equitable lien is charge over property — Equitable lien not created or provided for by a transaction — Logical impossibility — Security interest under Personal Property Securities Act 1999 — Companies Act 1993 s 312 and sch 7 cl 2(1)(b).

Equitable lien — No reason in principle to recognise over partly completed pods — Reasons not to recognise — Cautious approach — No New Zealand appellate authority — Inconsistencies with statutory regimes — Not recognised — If equitable lien recognised then costs of preserving and realising assets must be met first.