"Now [Pioneer] has come after us trying to get the vehicle saying it's theirs."
The vehicle had not been registered with the Personal Property Securities Register (PPSR), which was introduced in 2002 to give owners a better chance of recovering a debt should their debtor default. Phan had not been aware of the register until now.
"So if anyone gets wronged like us - even fraudulently so - you still lose the vehicle."
In her decision, Justice Christine Gordon said that in registering the vehicle in his name, Lopez did indeed have rights to the Prius. The agreement he'd entered into with Pioneer Finance was enforceable against a third party, she found.
Lopez initially secured a loan for $46,489 using a property he owned in Tokoroa and three cars as collateral.
He then decided to sell the Tokoroa property, telling Pioneer he would repay $25,000 and put up two more cars, including the Prius.
When Pioneer discovered that Lopez had "sold" the cars and that registration of the Prius had been transferred to Green Cars it went about repossessing them.
Phan told the court he had no idea the car had been used to secure a loan until a Pioneer agent turned up at his work.
He said Lopez had hired the Prius from July 2014 to January 2015 and again from January 2015 to January 2016. Green Cars recovered it after he failed to meet his payments.
Pioneer submitted that ownership of the vehicle was "irrelevant to the outcome of the application" as Lopez had "rights in the collateral" for the Prius, the decision said.
Because Lopez had the car for over a year, the judge rejected Green Cars' submission that the hire agreement was a "licence" rather than a "lease" and therefore Pioneer's right to the vehicle was enforceable under the Personal Property Securities Act.
"All that the applicants need prove is that they gave value to the borrowers; that Mr Lopez had rights in the Prius; and that the security agreement is enforceable against third parties," Justice Gordon said.
"Each of these requirements is clearly satisfied on the evidence before the court."
None of the parties had any idea what had happened to Lopez.
A search of the Companies Register reveals his two businesses, Galaxy Private Transport Ltd and MARS.XXX Ltd, are in the process of being removed from the register because they have not filed annual returns.
He is not facing any court charges and police would not reveal whether he is under investigation.
Pioneer Finance joint managing director Paul Hutchinson said he expected the company would pursue Green Cars for the Prius.
"It wasn't as though the vehicle in question had just been registered in his name; it had been in his name for some time.
"[Green Cars] should have registered a security on the securities register if they were the owner and were renting the vehicle."
The company's lawyer, Kevin McDonald, acknowledged Lopez was "the villain in the piece" but said his client was also an "innocent victim" in the matter.
"The problem is it is too easy for people to do things like this," he said.
"Under the basis of the legislation ... this case is not out of line with the authority at all."
He was sympathetic towards Green Cars "which has been the victim of what appears to be fraud".
Geoff Hardy, lawyer for the Hire Industry Association of New Zealand, said despite the apparent unfairness of the decision, the judge had simply followed the law.
"Normal people like you and me would raise our eyebrows and say, 'How can that happen?'
"But there are a lot of hire companies that lose out their ownership because they haven't registered on the PPSR."
Many such businesses were unaware of the law and Hardy urged them to take note of this case and to register.
"The difficulty with hire is you're putting your car into the possession of someone else and have given that person an opportunity to make out that it's theirs."
Green Cars is seeking leave to appeal the decision.
