RABOBANK has successfully gone to the high court to get a statutory demand thrown out for $3 million it did not owe from someone it did not know.
In June last year, the bank tipped P&M Family Trust into receivership under a loan agreement dating back to December 2009, with its property going on the market in a tender process.
In August last year, Warren Phillips, whose connection to the trust was unclear and not known to the bank, sent Rabobank a document titled “security/negotiable instrument”, claiming he had paid the bank about $2.95m for the debts owed by the trustees.
According to court information, the document was also referred to as a “bill of exchange”, which Rabobank said was not a legally effective form of payment.
It also said it had never received any funds from him.
Later that month, Phillips sent the bank another document, this time claiming to be a statutory demand.
In response, Rabobank’s solicitors at Gibson Sheat sent Phillips a letter saying it did not owe Phillips any debt, it had not received any payment from him or had any dealings with him that would give rise to any debt.
The letter invited Phillips to withdraw the demand and, failing that, it said, the bank reserved its rights to apply to set the demand aside and seek costs.
Phillips responded saying he had the trustees’ endorsement and consent to retrieve the funds.
He also claimed that no high court judge could hear the case as all judges were bankers registered with the “Security and Exchange Commission”, meaning that they had to recuse themselves.
In its affidavit, Rabobank said Phillips was not a customer and it had had no dealings with him until he delivered the “bill of exchange”.
The bank reiterated a point it made earlier that the “bill of exchange” was not a legal form of payment, which meant it was under no obligation to transfer the money of the trust property it held to Phillips.
Also, there was no record on the NZClear system – a real-time, gross settlement platform used for high-value securities and equities transactions restricted to entities involved in the securities market – that Phillips’ alleged payment was ever made.
Phillips tried to say the transaction had taken place on the platform, which retail customers didn’t have access to.
According to his judgment, delivered on December 14 last year, Associate Judge Peter Andrew said Phillips had filed numerous documents in support of his application.
“The documents are difficult to understand and contain many broad-ranging assertions with wide-ranging references to principles of equity, jurisdiction, breach of legal obligation by Rabobank and perversion of the course of justice,” the judgment reads.
Andrew said the “fundamental problem” for Phillips was that he could not establish an arguable case that he was a creditor of the bank.
“On the evidence before me, there is clearly a genuine and substantial dispute as to the existence of any debt and I cannot discern any credible argument to the contrary.”
Therefore, Andrew set aside the demand.
