The Maori Land Court has made an order allowing Matauri-X to refinance and repay its outstanding loan.
The Winter 2005 issue of Financial Services Quarterly covered this case, where Matauri X borrowed $3 million to invest in a water supply business that subsequently failed.
The creditor had taken security over Matauri-X's land but the Court of Appeal found that the mortgage was unauthorised because the company's objects did not allow it to enter into loan and security arrangements for this type of business.
The creditor was granted leave to appeal to the Supreme Court on the basis that it was not required to enquire as to the necessity of the loan or its application.
Since that time, the case has been moved into the Maori Land Court, which has made orders allowing Matauri-X to refinance to repay the outstanding loan. Taking the Court of Appeal's decision into account, the Maori Land Court found that the mortgage was outside Matauri-X's powers and so its constitution had to be altered by the Maori Land Court to allow repayment.
For more information on any of the cases, articles and features in Financial Services Quarterly, please email Rachel Gowing or call on 64 9 916 8825.
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.