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 as to damages.

Decision

[5]    I consider the plaintiffs have satisfied the criteria for the Court granting a freezing order without notice under pt  32 of the  High Court Rules 2016,  and under r 32.2 in particular.1 There are assets to which the order can apply: the $990,000 transferred to NIT from APL’s Kiwibank account. I consider the proposed claim is capable of tenable argument and supported by sufficient evidence, bearing in mind the early stage of the application.2 So they have a good arguable case. And I consider there is a real risk of dissipation of the assets, given the pattern of movements of funds to date. Weighing the need to protect the applicants with the prejudice to the respondents, I consider it is in the overall interests of justice for freezing orders to be made. I am also satisfied it is appropriate for the orders to be made without notice as service could trigger dissipation of the assets.  Ancillary orders may be made under   r 32.3.

[6]Accordingly:

(a)I grant a freezing order restraining the first, second and fourth defendants from disposing of or otherwise dealing with any funds received that were secured by the mortgages granted to Basecorp Finance Ltd over APL’s properties, including the $990,000 paid to Northern Investors Trustee Ltd on 24 May 2019.

(b)I make an ancillary order requiring Mr Peter Louis Chevin and Mr Clark Vincent Valmont each to swear an affidavit, within three working days of service of the orders, giving full particulars of and/or exhibiting the following information:

(i)all funds purportedly borrowed in the name of APL, including copies of all loan documentation;

1      Shaw v Narain [1992] 2 NZLR 544 (CA) at 548.

2      Hannay v Mount [2011] NZCA 530 at [22].

(ii)the whereabouts of the funds purported borrowed in the name of APL and/or secured against APL’s properties including funds that were paid to Northern Investors Trustee Ltd, and including bank statements evidencing the flow of funds whether held in the name of APL, Russell PKR Trustee Ltd, Northern Investment Trustee Ltd or any entity or person under the control of or related to Peter Louis Chevin or Clark Vincent Valmont.

(c)Under r 32.7, the orders expire on 18 July 2019.

(d)The applicants may apply, on notice, for renewal of the orders before they expire.

(e)The applicants must serve these orders, and this judgment, on the defendants as soon as practicable.

(f)I grant leave for any party affected by the orders to apply to discharge or vary them on three working days’ notice to the other parties.

(g)Counsel should file memoranda by 4 pm Friday 21 June 2019 with timetabling proposals.

(h)The proceeding will be called in the Duty Judge List on Monday 24 June 2019 for urgent timetable directions.

Palmer J