Burton v Thompson no.3

[2012] NZHC 2688

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-1465 [2012] NZHC 2688

BETWEEN  REBECCA JESSIE BURTON, JAMES RICHARD BURTON AND ANNE MARJORIE BURTON AS TRUSTEES OF THE REBECCA BURTON FAMILY TRUST

Applicants

ANDBRENDAL MAREE THOMPSON First Respondent

ANDGRAEME ROBERT LITTLE Second Respondent

ANDBEBE CORPORATION LTD Third Respondent

ANDDOLLY BOUTIQUE LTD Fourth Respondent

ANDFIRST CHOICE COLLECTIONS (NZ) LTD

Fifth Respondent

Hearing:         (on the papers)

Counsel:         J K Goodall for Applicants

A J Wedekind for First-Fourth Respondents
No appearance by, or on behalf of, Fifth Respondent

Judgment:      15 October 2012

JUDGMENT (NO. 3) OF HEATH J

This judgment was delivered by me on 15 October 2012 at 2.15pm pursuant to Rule

11.5 of the High Court Rules

Registrar/Deputy Registrar

BURTON V THOMPSON HC AK CIV 2012-404-1465 [15 October 2012]

[1]      In a judgment given on 13 June 2012,[1]  I dismissed an application by the trustees of the Rebecca Burton Family Trust (the Trust) to bring a derivative action in the name of First Choice Collections NZ Ltd (First Choice).  I also discharged a preservation order made on 20 March 2012 by Woodhouse J, substituting it with one in different terms and for a limited duration.[2]

[1] Burton v Thompson [2012] NZHC 1610. The judgment was reissued on 9 July 2012.

[2] Ibid, at para [76].

[2]      The purpose of the substituted preservation order was to prevent dissipation of assets allegedly belonging to First Choice for a period of 20 working days so that the receiver of that company could determine, before the expiry of that time, whether to seek an extension of the interim relief.[3]   It was the existence of a receiver that led

me to the view that a derivative action was unnecessary.[4]

[3] Ibid, at para [72].

[4] Ibid, at paras [45]–[52].

[3]      The relevant defendants were described in my judgment as the Thompson interests.  One of the issues raised in support of the interim relief application was one of loss of corporate opportunity, founded on a claim that a director of a company (as a  fiduciary)  ought  not  to  misuse  information  or  opportunities  received  in  that capacity for his or her own benefit.[5]     I assumed, without deciding the point, that there was a seriously arguable question on the corporate opportunity issue but anti- competitive features of injunctive relief militated against its grant.[6]

[5] For example, see G E Smith Ltd v Smith [1952] NZLR 470 (SC) and Canadian Aero Service Ltdv O’Malley (1973) 40 DLR (3rd) 371 (SCC).

[6] Ibid, at para [68].

[4]      Notwithstanding  the   fact   that   both   parties  succeeded   in   part,   cross- applications for increased costs have been made.   The trust contends that it too should be entitled to costs, with an uplift.

[5]      I am not satisfied that this is a case that would require an uplift in costs, either way.   Further, neither party would be disentitled to costs on the applications on which they proceeded.  On the evidence before me, the applications did not warrant the appearance of senior counsel and could have been conducted appropriately and

competently by his junior.  I would not have granted a certificate for second counsel.

[6]      In those circumstances, I have decided to make no order as to costs.  Costs

shall lie where they fall.

Delivered at 2.15pm on 15 October 2012

Solicitors:
Hornabrook MacDonald, PO Box 91845, Auckland
Morgan Coakle, PO Box 114, Auckland
Counsel:

J K Goodall, PO Box 1778, Shortland Street, Auckland

J G Miles QC, PO Box 4338, Shortland Street, Auckland

P R Heath J