Banks v Farmer - [2023] NZCA 607

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA531/2021
[2023] NZCA 607

BETWEEN	ADAM DAVID BANKS Appellant
AND	WILLIAM ROBERT FARMER First Respondent SIMON MATHEW GAMBLE Second Respondent CHRISTOPHER JAMES MASSAM Third Respondent DOUGLAS LEROY FREDERICK Fourth Respondent

Court:	Cooper P, Gilbert and Katz JJ
Counsel:	J W A Johnson and G D Simms for Appellant R J Hollyman KC and A J Steel for First Respondent A J Peat for Second to Fourth Respondents
Judgment: (On the papers)	30 November 2023 at 2.30 pm

JUDGMENT OF THE COURT

AThe application for recall is declined.
BThe appellant must pay costs to the respondents for a standard application on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)

Mr Banks applies for recall of this Court’s judgment delivered on 23 August 2023.[1] He contends that the judgment should be recalled because this Court allegedly failed to address one aspect of his appeal. The application is opposed.
[1]Banks v Farmer [2023] NZCA 383 [Court of Appeal judgment].
In his comprehensive judgment (686 paragraphs), Moore J gave his reasons for rejecting Mr Banks’ claims for recovery in respect of investments he made in Mako Networks Holdings Ltd (Mako) from 4 February 2011 to 24 April 2014. Mr Banks pursued four causes of action variously alleging: breaches of s 37 of the Securities Act 1978 (prohibiting offers of securities to the public without a registered prospectus), breaches of s 9 of the Fair Trading Act 1986 (53 alleged misrepresentations), breaches of directors’ duties under ss 131, 135, 136 and 137 of the Companies Act 1993, and breaches of s 55G of the Securities Act (subscriptions to securities on the faith of advertisements containing untrue statements).[2] In summary, the Judge found that the Securities Act did not apply, no misleading or deceptive representations were made, and the directors did not breach their duties as directors except that they ought to have appointed liquidators in or around mid‑May 2014 rather than trading on until August 2015.[3] The Judge found that Mr Banks was not entitled to relief for this breach because he made no further advances after late-April 2014 and “was not at risk of further loss resulting from Mako continuing to trade beyond the end of April to mid‑May 2014”.[4]
[2]Banks v Farmer [2021] NZHC 1922 [High Court judgment].
[3]At [680]–[684].
[4]At [455].
The Judge also considered that Mr Banks was unable to recover directly under s 301(1)(c) of the Companies Act in any event and no recovery could be ordered under s 301(1)(b) because Mako had been removed from the Companies Register:[5] Section 301(1) relevantly reads:
[5]At [585].
301Power of court to require persons to repay money or return property
(1)If, in the course of the liquidation of a company, it appears to the court that a … director … has misapplied, or retained, or become liable or accountable for, money or property of the company, or been guilty…

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.

Continue reading Banks v Farmer

Details

AGLC: Banks v Farmer [2023] NZCA 607
Case: [2023] NZCA 607
Decision Date: 30 November 2023 at 2.30 pm

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, the case of Banks v Farmer was heard by Cooper P, Gilbert, and Katz JJ. Adam David Banks, the appellant, sought recall of the Court's judgment delivered on 23 August 2023, arguing that the Court had allegedly failed to address one aspect of his appeal. William Robert Farmer, Simon Mathew Gamble, Christopher James Massam, and Douglas Leroy Frederick were the respondents. Banks contended that the Court did not decide all necessary issues arising on his appeal, particularly those related to paragraphs 1(c)(viii) and 1(i)-(k) of the Notice of Appeal. The respondents opposed the application for recall.

The legal issues the Court was required to decide involved whether the Court had failed to address all necessary issues in the judgment. Banks argued that the Court should have considered whether to grant relief under s 301 for the confirmed breach of s 135. The Court examined the grounds of appeal and the reasons for the judgment, concluding that the issues raised were adequately addressed in the judgment.

The Court's reasoning and outcome were that the issues raised by Banks were either fully addressed and rejected or did not need to be determined. The Court found that any error in the judgment could only be corrected on appeal, and the narrow recall jurisdiction was not engaged. The application for recall was declined, and the appellant was ordered to pay costs to the respondents for a standard application on a band A basis and usual disbursements.

Orders