Black v Giltech Precision Castings (2004) Limited HC Dunedin CIV-2010-412-000105

[2011] NZHC 961

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2010-412-000105

UNDER  the Companies Act 1993

IN THE MATTER OF     an application by shareholders under s 174 of the Companies Act 1993

BETWEEN  PAUL BLACK First Plaintiff

ANDPAUL BLACK GLENDA BLACK Second Plaintiffs

ANDWMC TRUSTEE LIMITED Third Plaintiff

ANDGILTECH PRECISION CASTINGS (2004) LIMITED

First Defendant

ANDP & W CONSOLIDATED LIMITED Second Defendant

Counsel:         R Kelly for Plaintiffs

J Farrow for Defendants

Judgment:      5 September 2011

JUDGMENT OF HON JUSTICE FRENCH Interlocutory Applications – Interrogatories and Particulars

Introduction

[1]      The defendants seek orders requiring the plaintiffs to answer an interrogatory and to provide further particulars.

BLACK V GILTECH PRECISION CASTINGS (2004) LIMITED HC DUN CIV-2010-412-000105 5 September

2011

[2]      The applications are made against the background of a dispute between shareholders of a company, the first defendant, Giltech Precision.

[3]      The plaintiffs claim inter alia that the second defendant has conducted the affairs of Giltech Precision in an oppressive manner and that the second defendant has breached the terms of a shareholder agreement.

Interrogatory

[4]      The interrogatory at issue asks the plaintiffs to:

State whether the plaintiffs, their representatives or their agents communicated  with  the  first  and/or  second defendants  or  their representatives the fact that they did not agree with the original or revised Shareholders Agreement, particularly schedule 6.

[5]      The plaintiffs object to answering this question on the grounds it goes to credibility and not a matter in issue.

[6]      However, one of the main questions at issue in this proceeding is what was agreed between the parties.

[7]      Whether agreement was or was not reached, and on what topics, will require an objective assessment of the communications between the parties.  Contrary to a submission made by the plaintiffs, the mere fact the plaintiffs have pleaded they did not agree cannot of itself be grounds for refusing to answer the interrogatory.

[8]      I therefore order the plaintiffs to answer the interrogatory under r 8.5 of the

High Court Rules.

Further particulars

[9]      The defendants seek further particulars in respect of cl 12 of the second amended statement of claim.

[10]     Clause 12 states:

Pursuant to the terms of his employment,1 the first plaintiff was entitled to be remunerated  by way of a  profit  share calculated on  the earnings  of his employer company during the years ended March 2003 and following.

[11]     The statement of claim goes on to plead that in accordance with the profit share calculation, the first plaintiff was paid approximately $11,260 for the March

2003 year, and that he was entitled to be paid a similarly calculated profit share for the years ended 31 March 2004, 31 March 2005, 31 March 2006 and 31 March 2007.

[12]     At paragraphs 27-29, the statement of claim alleges that the first plaintiff forbore to sue or otherwise claim his entitlement for profit share for the years ended

31 March 2004, 31 March 2005 and 31 March 2006 as part of a variation said to be the second and final variation to the terms of the shareholders agreement.

[13]     The defendants’ request for particulars asks the plaintiffs to:

(a)      State what the plaintiffs say the terms of the profit share entitlement was at all times prior to the variation referred to in paragraph 29 of the second amended statement of claim.

(b)State whether the terms of the alleged profit share entitlement were agreed between the parties orally or in writing.

(c)      If agreed orally, state:

(i)the date/s  upon  which  any discussions  regarding the  profit share entitlement took place;

(ii)the person/s who participated in or were present during any discussions.

(d)      If the alleged agreement was recorded in writing, provide a copy.

1      The employment was with another company in the P & W Group.

[14]     The  defendants  have  refused  to  supply  these  further  particulars,  on  the grounds that paragraph 12 is simply the pleading of a background fact, pleaded for completeness to make the narrative intelligible.  Counsel submits there is no more sense to requiring particulars of it than, say, requiring particulars of all of the terms of the employment contract.

[15]     I do not accept that submission.

[16]     The statement of claim of claim has an express ‘Background’ section.  And cl 12 is not in that section.  Rather, cl 12 appears under the heading ‘First Cause of Action – s 174 Companies Act 1993’.  The plaintiffs also expressly rely on it as part of their second cause of action for breach of contract.

[17]     Further, and most importantly, the statement of claim pleads that it was part of a variation to the shareholders agreement.

[18]     In those circumstances, I consider the defendants are entitled to the further particulars sought in terms of r 5.21.

[19]     I accordingly so order.

Costs

[20]     The defendants have succeeded in both applications.  Normally, they would be entitled to costs.

[21]     However, the plaintiffs have also succeeded in another application relating to legal representation.  Costs in respect of that application were reserved pending the outcome of these applications so that a global view could be taken and the parties could have another opportunity to make submissions on costs.

[22]     Subject to those submissions, my provisional view is that given the mixed fortunes, costs in respect of all applications should lie where they fall.

[23]     However, if counsel have a different view and want to be heard, then I would ask submissions to be filed within five working days.

Solicitors:

R Kelly, Dunedin
Webb Farry, Dunedin