Avon Parnell Limited v Chevin - [2019] NZHC 1398

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-1119

[2019] NZHC 1398

BETWEEN
AVON PARNELL LIMITED

First Plaintiff

RYAN MATTHEW LEGGAT
Second Plaintiff

AND

PETER LOUIS CHEVIN

First Defendant

CLARK VINCENT VALMONT and RUSSELL PKR TRUSTEE LIMITED
Second Defendants

GRAEME HAYWARD SKEATES

Third Defendant

NORTHERN INVESTORS TRUSTEE LIMITED

Fourth Defendant

Hearing: On the papers

Counsel:

D Chisholm QC and M J W Lenihan for the Plaintiffs

Judgment:

19 June 2019

JUDGMENT OF PALMER J

This judgment is delivered by me on 19 June 2019 at 10.00 am
pursuant to r 11.5 of the High Court Rules.

.....................................................
Registrar / Deputy Registrar

Counsel/Solicitors:
David Chisholm QC, Auckland Michael Lenihan, Barrister, Auckland Peter Nolan, Auckland

AVON PARNELL LTD v CHEVIN [2019] NZHC 1398 [19 June 2019]

What has happened?

[1] The first plaintiff, Avon Parnell Ltd (APL), owns two properties in Parnell, Auckland, on trust for Waihapu Ltd. Mr Tim Edney is the principal of Waihapu Ltd. The second plaintiff, Mr Ryan Leggatt, is the sole shareholder and director of APL and is Mr Edney’s son in law.

[2] Mr Peter Chevin has been made bankrupt on four occasions and has criminal convictions for dishonesty offences. The plaintiffs believe Mr Chevin, who assisted with the incorporation of APL in April 2015, retained APL’s log in and/or password details to the Companies Office website for APL. They believe Mr Chevin has fraudulently presented documents concerning APL to the Companies Office, representing that a company, Russell PKR Trustee Ltd, controlled by his associate, Mr Clark Valmont, is now the shareholder of APL. They also believe Mr Chevin and/or Mr Valmont purported to mortgage APL’s two properties to Basecorp Finance Ltd. They believe Mr Skeates, of Skeates Law, was involved with these actions. The plaintiffs provide evidence consistent with their beliefs.

[3] The plaintiffs complained to Mr Skeates, the Police and to the New Zealand Law Society. On Saturday 15 June 2019, Mr Leggatt discovered information suggesting $990,000 was paid by Mr Skeates to a Kiwibank account in the name of APL, with a notation referring to Basecorp Finance Ltd. On the same day the same amount was paid from the Kiwibank account to another account with the notation “PAY Northern Investors Trust”. Mr Valmont is the sole shareholder and director of Northern Investors Trustee Ltd (NIT) and Mr Chevin was a director until he was disqualified.

The applications

[4] On 18 June 2019, the plaintiffs applied, on notice, for an interim injunction and, without notice, for an urgent injunction freezing assets or a freezing order and ancillary orders. They say they have been the victims of fraud and have a proprietary claim to the funds secured against APL’s properties, which they claim are currently held on constructive trust. They submit they have more than a good arguable case and

there is a risk of dissipation of the $990,000 paid to NIT and any other funds secured against the properties. Mr Leggatt gives an undertaking…

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: [2019] NZHC 1398
Decision Date: 19 June 2019

CaseChat Overview and Summary

The plaintiffs, Avon Parnell Limited (APL) and Ryan Matthew Leggatt, filed an application in the High Court of New Zealand against Peter Louis Chevin, Clark Vincent Valmont, Russell PKR Trustee Limited, and Graeme Hayward Skeates, alleging fraud and unauthorized transactions involving APL's properties. The plaintiffs claimed that Mr. Chevin had fraudulently used APL's credentials to present documents to the Companies Office, resulting in Russell PKR Trustee Ltd being listed as the shareholder of APL. Additionally, the plaintiffs alleged that Mr. Chevin and/or Mr. Valmont had mortgaged APL’s properties to Basecorp Finance Ltd and that $990,000 had been transferred from APL’s account to Northern Investors Trustee Ltd (NIT). The plaintiffs sought an interim injunction, an urgent injunction freezing assets, and ancillary orders.

The court was required to determine whether the plaintiffs had established a good arguable case and whether there was a real risk of dissipation of the assets. The plaintiffs argued that they had been victims of fraud and had a proprietary claim to the funds secured against APL’s properties, which they believed were held on constructive trust. The court had to weigh the need to protect the applicants against the prejudice to the respondents.

The court found that the plaintiffs had met the criteria for granting a freezing order without notice under Part 32 of the High Court Rules 2016. The court considered that the proposed claim was capable of tenable argument and was supported by sufficient evidence, despite the early stage of the application. There was a real risk of dissipation of the $990,000 transferred to NIT from APL’s Kiwibank account. The court concluded that it was in the overall interests of justice to make the freezing orders, and it was appropriate to do so without notice to prevent dissipation of the assets. The court also made ancillary orders requiring Mr. Chevin and Mr. Valmont to provide detailed information about the funds allegedly borrowed in APL's name and their whereabouts.

The court granted a freezing order restraining the defendants from disposing of or otherwise dealing with any funds received secured by the mortgages granted to Basecorp Finance Ltd over APL’s properties, including the $990,000 paid to NIT. The court ordered Mr. Chevin and Mr. Valmont to provide detailed information about the funds and their whereabouts. The orders were set to expire on 18 July 2019, with the possibility of renewal upon application by the plaintiffs. The court also granted leave for any party affected by the orders to apply to discharge or vary them on three working days' notice to the other parties.

Orders