Birnie v Peters - [2010] NZCA 433

IN THE COURT OF APPEAL OF NEW ZEALAND
CA327/2010
[2010] NZCA 433
BETWEENWILLIAM NORMAN BIRNIE

First Appellant
ANDSTEPHEN ROBERT NORRIE

Second Appellant
ANDWILLIAM NORMAN BIRNIE, STEPHEN ROBERT NORRIE AND RICHARD JAMES O’BRYEN HOARE (NAMED AS TRUSTEES OF THE PAONEONE SETTLEMENT TRUST NO. 5)

Third Appellant
ANDPICASSO NOMINEES LIMITED

Fourth Appellant

ANDALLEN PATRICK PETERS

First Respondent
ANDBERNARD PAUL QUINN

Second Respondent
ANDBIRNIE CAPITAL PROPERTY PARTNERSHIP LIMITED

Third Respondent

Hearing:9 September 2010

Court:Glazebrook, Arnold and Ellen France JJ
Counsel:M D O’Brien and T M Horder for Appellants

Z G Kennedy and M D Pascariu for First and Second Respondents

Judgment:21 September 2010 at 4 pm

JUDGMENT OF THE COURT

A The application for leave to admit new evidence is declined.
B The appeal, having been abandoned, is dismissed.
CThe appellants must pay the first and second respondents costs for a standard appeal on a band A basis and usual disbursements. We certify for second counsel.

REASONS OF THE COURT
(Given by Ellen France J)
[1]        After hearing from counsel, we declined an application by the appellants to admit fresh evidence on the appeal. We said we would provide our reasons separately and these now follow.
Background
[2]        In a judgment delivered on 22 April 2010, Asher J granted leave under s 165 of the Companies Act 1993 to Allen Peters and Paul Quinn, the first and second respondents, to bring a derivative action on behalf of Birnie Capital Property Partnership Ltd (BCPP) against the appellants.[1]
[1]      Peters v Birnie [2010] NZAR 494 (HC).
[3]        The background to the application to bring a derivative action is set out in the judgment of Asher J.[2] For present purposes we need only record a brief outline.
[2]     At [2] – [20].
[4]        BCPP was set up as a vehicle through which investors could participate in a number of property projects for which William Birnie, the first appellant, had been developing plans.
[5]        BCPP entered into an agreement to acquire the various property project assets in which Mr Birnie had an interest (the property project assets agreement). The particular transactions relevant in this case relate to the development of the Lion Rock golf course (the Lion Rock assets). That included a purchase of the interest of Mr Birnie under an agreement with a Mr Paterson to buy land on the Purerua Peninsula for $8 million (the Paterson agreement) and the purchase of another part of the Peninsula, also for $8 million (the Birnie agreement).
[6]        The property project assets agreement included a clause providing for the Lion Rock assets to be transferred back from BCPP to the vendors if the conditions in the Paterson and Birnie agreements were not satisfied and BCPP was not able to acquire both Purerua Peninsula properties. In that event, the vendors would repay the $19 million purchase price. The parties called this the “put option”.
[7]        On 30 September 2009 Mr Paterson validly cancelled the Paterson agreement for non-satisfaction of a vendor loan condition and failure to obtain a new title.

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 Birnie v Peters

Details

AGLC: Birnie v Peters [2010] NZCA 433
Case: [2010] NZCA 433
Decision Date: 21 September 2010

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal in the case of Birnie v Peters. The appeal was brought by William Norman Birnie, Stephen Robert Norrie, Birnie Capital Property Partnership Limited, and Picasso Nominees Limited against Allen Patrick Peters, Bernard Paul Quinn, and BCPP. The dispute centred around a derivative action brought by Peters and Quinn on behalf of BCPP against the appellants. The primary issue was whether the appellants should be allowed to adduce new evidence regarding the enforceability of a "put option" clause in an agreement to acquire property project assets. The Court of Appeal declined the application to admit new evidence and dismissed the appeal as it was abandoned following the decision on the new evidence application.

The legal issues before the Court of Appeal were twofold: firstly, whether the new evidence presented by the appellants was fresh, credible, and cogent as required under rule 45 of the Court of Appeal (Civil) Rules 2005, and secondly, whether it was in the interests of justice to admit the new evidence despite it not being fresh. The Court found that the new evidence was not fresh as it was available at the time of the High Court proceedings. Furthermore, the new evidence was intended to support a new argument that had not been previously raised or addressed. The Court concluded that admitting the new evidence would result in addressing a new argument without the benefit of the High Court Judge's views, which was undesirable and not helpful. Therefore, the application to admit further evidence was declined.

The Court of Appeal dismissed the appeal as it was abandoned following the decision on the new evidence application. The first and second respondents were awarded costs for a standard appeal on a band A basis and usual disbursements, with certification for second counsel.

Orders