Carlsen v Ching - [2024] NZHC 606

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-2101

[2024] NZHC 606

BETWEEN
BJARNE STOKBRO CARLSEN and CARLSEN BUSINESS TRUSTEES
LIMITED as trustees of the CARLSEN BUSINESS TRUST

Plaintiffs

AND

MARK LAWRENCE CHING

First Defendant

GRANT WATSON McCURRACH
Second Defendant

MARK LAWRENCE CHING and GRANT

WATSON McCURRACH as trustees of the RAFFLES FOUNDATION TRUST

Third Defendants

GRANT WATSON McCURRACH, KRISTINE MARIE McCURRACH and JZE TRUSTEE COMPANY LIMITED as

trustees of the OXFORD TRUST Fourth Defendants

Hearing: 27 February 2024

Appearances:

S Jeffs for the Plaintiffs

LCA Farmer and E J Moreton for the Defendants

Judgment:

21 March 2024

JUDGMENT OF GAULT J

(Permission to proceed by originating application)

This judgment was delivered by me on 21 March 2024 at 10:30 am pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………

CARLSEN v CHING [2024] NZHC 606 [21 March 2024]

[1] The plaintiffs (the trustees of the Carlsen Business Trust (CBT)) seek permission for this proceeding to be commenced by originating application.1 In the proceeding, they seek a declaration under the Declaratory Judgments Act 1908 (the Act) that the CBT will be entitled to payment under a “Deed recording payments on the sale of shares in Armacup Maritime Services Ltd and Agencie Maritime Holdings Ltd” (Payment Deed) when the third and fourth defendants sell their remaining shares in Armacup Ltd and Armacup Maritime Services Ltd (the Armacup Companies). That transaction is anticipated to occur on 31 December 2024 and the plaintiffs seek a substantive declaration before that date.

Factual background

[2] The Armacup Companies, based in New Zealand, provide freight and liner services in the Asia-Pacific region.

[3] Mr Ching, the first defendant, is the managing director of the Armacup Companies.

[4] Mr McCurrach, the second defendant, is a director of Armacup Ltd and has acted as the financial controller of the Armacup Companies.

[5] The third defendants are the trustees of the Raffles Foundation Trust and the fourth defendants are the trustees of the Oxford Trust, trusts associated with the first and second defendants (respectively) and shareholders in the Armacup Companies.

[6] In October 2001, Mr Ching employed Mr Carlsen (the first named plaintiff), a trustee and beneficiary of the CBT, as the CEO of Armacup Maritime Services Ltd. In effect, he was the CEO of both the Armacup Companies.

[7] In 2006, Wallenius Wilhelmsen, a large Scandinavian shipping conglomerate, began negotiating with the defendants to acquire shares in the Armacup Companies.

1 High Court Rules 2016, r 19.5(1).

[8] In January 2007, Wallenius Wilhelmsen Logistics AS (WWL) and Eukor Car Carriers Inc (Eukor), as buyers, and the third and fourth defendants, as sellers, entered into an agreement for the sale and purchase of 50 per cent of the shares in the Armacup Companies (Sale Agreement). They also entered a shareholders’ agreement on the same day (2007 SHA).

[9] Mr Carlsen was concerned about how the sale would impact upon his role. He discussed those concerns…

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 Carlsen v Ching

Details

AGLC: Carlsen v Ching [2024] NZHC 606
Case: [2024] NZHC 606
Decision Date: 21 March 2024

CaseChat Overview and Summary

Carlsen and Carlsen Business Trustees Limited, as trustees of the Carlsen Business Trust (the plaintiffs), sought permission from the High Court of New Zealand to commence proceedings by way of originating application. They sought a declaration that they would be entitled to payment under a "Deed recording payments on the sale of shares in Armacup Maritime Services Ltd and Agencie Maritime Holdings Ltd" (the Payment Deed) when the third and fourth defendants sell their remaining shares in Armacup Ltd and Armacup Maritime Services Ltd (the Armacup Companies). The plaintiffs argued that the proceeding should be commenced by originating application to ensure timely resolution before the anticipated sale on 31 December 2024. The defendants opposed the application, arguing that the proceeding involved complex factual issues, required particularised pleadings, and necessitated interlocutory steps such as discovery.

The Court considered the applicable legal principles for permission to proceed by way of originating application under Part 19 of the High Court Rules 2016. The Court noted that while Part 18 of the Rules applied to proceedings claiming relief solely under the Declaratory Judgments Act 1908, Part 19 could be invoked if it was in the interests of justice to do so. The Court assessed whether the proceeding was suitable for the originating application procedure, which was typically limited to cases where particularised pleadings and interlocutory steps were not necessary. The Court found that the plaintiffs' arguments for urgency and the streamlined nature of the originating application procedure were compelling, especially given the need to resolve the matter before the sale of the Armacup Companies' shares.

After considering the submissions from both parties, the Court concluded that the proceeding was suitable for the originating application procedure. The Court accepted that the factual matrix should not be materially in dispute and that particularised pleadings and interlocutory steps such as discovery were unlikely to be necessary for the proper determination of the declaratory relief sought. The Court also noted that the defendants' arguments for case management and security for costs did not necessarily preclude the use of the originating application procedure. The Court granted the plaintiffs permission to proceed by way of originating application and provided detailed timetable directions for the filing and serving of documents and the allocation of a two-day substantive hearing.

The Court granted the plaintiffs permission to proceed by way of originating application and provided detailed timetable directions for the filing and serving of documents and the allocation of a two-day substantive hearing. The plaintiffs were also entitled to 2B costs for an interlocutory application only.

Orders