Americhip Inc v Dean - [2014] NZCA 380

IN THE COURT OF APPEAL OF NEW ZEALAND

CA184/2014
[2014] NZCA 380

BETWEEN	AMERICHIP INCORPORATED Appellant
AND	JASON CHARLES DEAN Respondent

Hearing:	9 July 2014
Court:	O’Regan P, Ellen France and Harrison JJ
Counsel:	D J Goddard QC and K Crossland for Appellant D P Jones QC for Respondent
Judgment:	8 August 2014 at 11 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe appearance under protest to jurisdiction is set aside.
CThe order for costs made in the High Court is quashed.
DThe proceeding is remitted to the High Court to determine the appellant’s application for summary judgment.
EThe respondent is ordered to file by 30 August 2014 any notice of opposition and affidavits in answer to the respondent’s application for summary judgment.
FThe respondent must pay costs to the appellant for a standard appeal on a band A basis together with usual disbursements.
____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Introduction

Americhip Inc, an American corporation based in Los Angeles, carries on business worldwide. Jason Dean, a New Zealander, was formerly employed by the company in a senior position in China. Americhip alleges that Mr Dean embezzled substantial amounts of its money and used part of the proceeds to buy a property in Auckland. The company issued a proceeding against Mr Dean in the High Court to recover its alleged losses.
Ellis J dismissed Americhip’s proceeding on the ground that the High Court lacked jurisdiction to hear and determine the claim.[1] The company now appeals.

Facts

[1]Americhip Inc v Dean [2014] NZHC 450.

Americhip relies on these essential facts to bring its proceeding against Mr Dean in New Zealand:
(a)Americhip is in the business of designing and selling marketing and advertising material on promotional products worldwide, for which purpose it outsources its manufacturing operations to other entities.
(b)Americhip employed Mr Dean between 2003 and 2012 as part of its operations in China.
(c)While engaged in employment with Americhip, Mr Dean and his partner, Ms Zita Chan, defrauded the company of about US$10 million, primarily by submitting false or inflated invoices from suppliers (a practice known as “skimming”).
(d)The stolen funds were paid into bank accounts held jointly by Mr Dean and Ms Chan and some of the money was then transferred to an account with the ASB Bank in New Zealand held jointly by Mr Dean and his father, Victor.
(e)In 2013 Mr Dean, Ms Chan and their son returned to New Zealand, where Mr Dean purchased a residential property at Mairangi Bay in Auckland for about $2 million cash traceable back to his ASB account.
(f)At a meeting in New Zealand shortly afterwards, Mr Dean and Ms Chan admitted to Americhip’s chief executive, Timothy Clegg, that they had embezzled the company’s funds which they promised to repay and that they had used some of the money to buy the Mairangi Bay property.
Originally Americhip sued Mr Dean in deceit alone. Ellis J particularised the allegations of fraud pleaded in support as…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NZCA 380
Decision Date: 8 August 2014 at 11 am

CaseChat Overview and Summary

Americhip Inc, an American corporation, brought a proceeding against Jason Dean, a former employee, in the High Court of New Zealand. Americhip claims that Mr Dean embezzled substantial amounts of its money while he was employed in China, and used part of the proceeds to buy a property in Auckland. The High Court dismissed the proceeding on the ground that it lacked jurisdiction to hear and determine the claim. Americhip now appeals.

The legal issue before the Court of Appeal was whether the High Court should have assumed jurisdiction to hear and determine Americhip's claims against Mr Dean. The Court of Appeal found that New Zealand was the appropriate forum for trial of Americhip's constructive trust claim over the Auckland property, as a New Zealand Court alone has power to enforce a judgment on the claim to ownership of the property. The Court of Appeal also found that it would be contrary to the interests of justice and common sense if the constructive trust claim was not tried in New Zealand when a domestic Court alone has power to enforce a judgment on Americhip’s claim to ownership of the Mairangi Bay property.

The Court of Appeal allowed the appeal and set aside the appearance under protest to jurisdiction. The order for costs made in the High Court was quashed. The proceeding was remitted to the High Court to determine Americhip’s application for summary judgment. The respondent was ordered to file by 30 August 2014 any notice of opposition and affidavits in answer to the respondent’s application for summary judgment. The respondent must pay costs to the appellant for a standard appeal on a band A basis together with usual disbursements.

Orders