Birchfield v Birchfield - [2022] NZHC 124

IN THE HIGH COURT OF NEW ZEALAND GREYMOUTH REGISTRY

I TE KŌTI MATUA O AOTEAROA MĀWHERA ROHE

CIV-2019-418-29

[2022] NZHC 124

UNDER Part 18 of the High Court Rules and the Companies Act 1993

AND

IN THE MATTER

of an application under s 174 of the Companies Act 1993

BETWEEN

ALLAN JOHN BIRCHFIELD, LEIGH ELLEN BIRCHFIELD, CHRISTOPHER PAUL BIRCHFIELD, PAULETTE

MICHELLE BIRCHFIELD and NGAIRE

ELIZABETH BIRCHFIELD, as trustees of the PLC Trust

First Plaintiff

AND

ALLAN JOHN BIRCHFIELD

Second Plaintiff

AND

BIRCHFIELD HOLDINGS LIMITED

First Defendant

continued …

Hearing: (Determined on the papers)

Counsel:

K G Davenport QC and A M Cameron for Plaintiffs

S O Munro and A L Davidson for First to Fourth Defendants
R J Hollyman QC and G K Riach for Fifth to Ninth Defendants

Judgment:

9 February 2022

JUDGMENT OF ASSOCIATE JUDGE LESTER

(Costs)

BIRCHFIELD v BIRCHFIELD HOLDINGS LIMITED [2022] NZHC 124 [9 February 2022]

AND
BIRCHFIELD COAL MINES LIMITED

Second Defendant

AND

BIRCHFIELD ENERGY AND RESOURCES LIMITED

Third Defendant

AND

NORTH WEST COAL COMPANY LIMITED

Fourth Defendant

AND

GARY PAUL BIRCHFIELD

Fifth Defendant

AND

KAREN ANNE BIRCHFIELD

Sixth Defendant

AND

EVAN RAYMOND BIRCHFIELD

Seventh Defendant

AND

JOELENE ANNE JAMIESON, KAREN ANNE BIRCHFIELD and STEFFAN

NIGEL JAMIESON, as trustees of the SJC Trust

Eighth Defendants

AND

DONNA JOYCE BIRCHFIELD, EILISH PAULINA BIRCHFIELD and GARY PAUL

BIRCHFIELD, as trustees of the EMB Trust Ninth Defendants

[1] In this proceeding, the plaintiffs claimed, pursuant to s 174 of the Companies Act 1993, that the affairs of Birchfield Holdings Limited, along with the affairs of the second, third and fourth defendants, were being conducted in a manner that was oppressive, unfairly discriminatory or unfairly prejudicial to their interests.

[2] The defendants successfully applied for summary judgment against the plaintiffs on the basis that even if the matters complained of by the plaintiffs were established, such were cured by the defendants’ offer to purchase the plaintiffs’ shares. Costs on the defendants’ successful application for summary judgment were reserved.

[3] The plaintiffs’ appeal against the judgment of 30 June 20201 was dismissed by the Court of Appeal on 2 September 2021.2

[4] The defendants now seek costs in respect of the summary judgment application on a 2B basis on the grounds there is no reason to depart from the usual rule reflected in r 14.2(1)(a) of the High Court Rules 2016, that costs should follow the event. The defendants say they were successful in obtaining an order for summary judgment and that is not altered by the fact the offer to purchase the plaintiffs’ shares, upon which the application for summary judgment was based, was amended during the hearing.

[5] The plaintiffs resist an order for costs, submitting that, while the defendants are correct to say they were granted summary judgment, it was only during the hearing that the defendants’ offer was amended to become capable of curing any and all prejudice complained of by the plaintiffs. The offer developed during the submissions at the hearing and the plaintiffs say…

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 Birchfield v Birchfield

Details

AGLC: Birchfield v Birchfield [2022] NZHC 124
Case: [2022] NZHC 124
Decision Date: 9 February 2022

CaseChat Overview and Summary

In the case of Birchfield v Birchfield Holdings Limited, the plaintiffs sought a declaration that the affairs of the defendants were being conducted in a manner oppressive to their interests. The defendants applied for summary judgment on the basis that even if the plaintiffs’ complaints were established, they were cured by the offer to purchase the plaintiffs' shares. The plaintiffs appealed the grant of summary judgment, but their appeal was dismissed. The defendants now seek costs on the basis that they were successful in obtaining summary judgment.

The court found that the defendants were successful in obtaining summary judgment, and that the plaintiffs failed to recognise that the defendants’ offer would cure their complaints. While the offer was developed during the hearing, the modifications were minor. The court also found that the plaintiffs' written submissions for the summary judgment hearing should not attract separate costs as they were not directed at the pleaded basis for summary judgment. Further, the court found that the defendants' counterclaims remain alive and undetermined, and that no costs are allowed for them in this context.

The court disallowed the corporate defendants' claim for second counsel but allowed the shareholder defendants' claim. The court also disallowed the corporate defendants' claim for the joint memorandum of 29 April 2021 but allowed the shareholder defendants' claim. The court found that the January 2020 memorandum filed by the defendants was prepared by the shareholders’ solicitor and disallowed the corporate defendants' claim for this item. Finally, the court directed counsel for the defendants to prepare amended cost schedules reflecting the above matters and table them for the plaintiffs' counsel's consideration.

Orders