Agribusiness dispute

 

The Client is a cattle station owner who took on Agistment cattle for his Neighbour. Unknown to the Client, the Cattle were subject to a stock mortgage in favour of a Bank. The Neighbours subsequently divorced with the wife claiming rights to the cattle. The Client was owed a substantial amount for Agistments fees. The Bank had also issued notices making claim to the cattle for unpaid loans owing by the Neighbour.

 

Issue:

The issue was who had a right to the cattle and to be paid first? Was it the bank, who had a registered stock mortgage, the wife who had a legitimate family law claim, or the client who was owed agistment fees? Did the Client have any rights to the Cattle or could the Bank enter the Client’s land and take the Cattle.

 

Action: 

Rather than litigating the issue, the Client opted for a mediation with all competing parties in attendance. The Client claimed a Possessory Lien over the stock following breach of the Agistment Agreement by the Neighbour, and further that the possessory Lien prevailed over the Banks registered Mortgage. The Law on whether the Bank’s registered Lien prevailed over the possessory Lien was uncertain.

 

Not favouring the Client was whether his agistment obligations improved the stock or whether his efforts went merely to the maintenance of stock. The former gave a  right to a possessory Lien, the later did not. The advice to the client was to not under any circumstance relinquish possessory rights to the cattle but to force the hand of the bank and the Neighbours. The Client also claimed a Statutory Lien under the Storage Liens Act 1973 claiming a right to sell after giving notice.

 

Result: 

The Bank contributed feed and lick to the cattle at no charge and released their interest in the cattle to the Client, who purchased same in satisfaction of the Neighbours debt, later on selling it for a substantial profit. Achieving the result required a thorough understanding on the law of securities and the precise terms of the Agistment Agreement.

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