Buxton v Xero Limited - [2021] NZHC 206

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2020-485-390

[2021] NZHC 206

BETWEEN
KRISTINA LOUISE BUXTON

First Plaintiff

AFB TREASURY LIMITED
Second Plaintiff

SPINACH DESIGN LIMITED
Third Plaintiff

AND

XERO LIMITED

Defendant

Hearing: 1 December 2020

Appearances:

J Moss for plaintiffs S Leslie for defendant

Judgment:

18 February 2021

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

Introduction

[1] On the pleadings, the substantive issue for determination in this proceeding is the proper scope of s 171 of the Insolvency Act 2006, and more particularly whether, in response to notices under that section served by the Official Assignee as the assignee of the bankrupt estate of Mr Ian Henderson, the defendant, Xero Ltd, breached duties it owed to the plaintiffs, Mrs Kristina Buxton, who is Mr Henderson’s wife, AFB Treasury Ltd and Spinach Design Ltd, by disclosing their private information.

[2] Xero has applied for an order striking out the plaintiffs’ statement of claim. In the alternative, it seeks summary judgment. This application is opposed.

BUXTON v XERO LIMITED [2021] NZHC 206 [18 February 2021]

Law relating to defendant’s application

[3] Counsel were on common ground insofar as the principles are concerned, and it may be as well to deal with these at the outset.

[4] The application for an order striking out the plaintiffs’ claim is made pursuant to r 15.1 of the High Court Rules.

[5] In this case, the defendant relies on r 15.1(1)(d), that is to say that the plaintiffs’ case is an abuse of process. It says the case is predicated on an allegation that the s 171 notices issued by the Official Assignee were unlawful with the result that the defendant is not entitled to rely on those notices in justifying its disclosure of information that is said to have been private to the plaintiffs, and that the lawfulness of those notices has already been determined by the Court in earlier litigation giving rise to a res judicata.

[6]The principles governing strikeout applications are well settled:1

(a)The Court is to assume that the facts pleaded are true (unless they are entirely speculative and without foundation);

(b)The cause of action must be clearly untenable in the sense that the Court can be certain that it cannot succeed;

(c)The jurisdiction is to be exercised sparingly and only in clear cases;

(d)The jurisdiction is not excluded by the need to decide difficult questions of law, even if requiring extensive argument; and

(e)The Court should be slow to rule on novel categories of duty of care at the strike-out stage.2

1 Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267, as cited in Webster Farm Management Ltd v Dargaville Farms Ltd (in liq) [2020] NZHC 1477 at [37].
2 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].

[7] A properly grounded res judicata plea is a foundation for a contention that a proceeding constitutes an abuse of process, rendering it liable to be struck out.

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 Buxton v Xero Limited

Details

AGLC: Buxton v Xero Limited [2021] NZHC 206
Case: [2021] NZHC 206
Decision Date: 18 February 2021

CaseChat Overview and Summary

In Buxton v Xero Limited, the plaintiff Kristina Buxton, along with her companies AFB Treasury Ltd and Spinach Design Ltd, sought to establish that Xero Ltd had breached their privacy by disclosing their personal information in response to statutory notices from the Official Assignee, acting as the assignee of the bankrupt estate of Kristina Buxton's husband, Mr Ian Henderson. Xero Ltd applied for an order to strike out the plaintiffs' claim or, in the alternative, for summary judgment, contending that the plaintiffs' case was an abuse of process and that the lawfulness of the Official Assignee's notices had already been determined by the Court in earlier litigation, rendering the plaintiffs' case res judicata.

The court found that the core issue of the lawfulness of the Official Assignee's notices was res judicata, as it had been conclusively determined in previous litigation that the notices were lawful. The court held that the plaintiffs' claim amounted to a collateral attack on the lawfulness of the Official Assignee's notices and could not succeed. Consequently, the court made an order striking out the proceeding on the basis that it constituted an abuse of process. The court reserved costs, with a preliminary view that the defendant was entitled to scale costs on a 2B basis.

Orders