Clarke v Forsyth Barr Ltd - [2017] NZHC 842

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2016-404-2996 [2017] NZHC 842

BETWEEN
MATTHEW SIMON CLARKE

Applicant

AND

FORSYTH BARR LTD Respondent

Hearing: 27 April 2017

Appearances:

Mr Clarke in person
P Churchman QC for Defendant

Judgment:

1 May 2017

JUDGMENT OF DUFFY J

This judgment was delivered by me on 1 May 2017 at 1.00 pm pursuant to
Rule 11.5 of the High Court Rules.
Registrar/ Deputy Registrar

Solicitors/Counsel:
Forsyth Barr Ltd, Wellington
Peter Churchman QC, Barrister, Wellington

CLARKE v FORSYTH BARR LTD [2017] NZHC 842 [1 May 2017]

[1] The plaintiff, Matthew Clarke, seeks summary judgment against the defendant company (Forsyth Barr). It opposes that application and has also applied to strike out the claim against it.

[2] At the commencement of the hearing it was accepted by both parties that the reference in the proceedings to Forsyth Barr Group Ltd is incorrect. The appropriate party is Forsyth Barr Ltd. By consent, I amended the proceedings to cite the appropriate party, Forsyth Barr Ltd, with Forsyth Barr Group Ltd being struck out.

Background

Overview

[3] Forsyth Barr is a company that offers professional investment and portfolio services.

[4] Forsyth Barr entered into an individual employment agreement with Mr Clarke on 7 November 2014. Mr Clarke was employed as an investment advisor. He was previously employed in a similar role at Craig’s Investment Partners for
10 years.

[5] Difficulties arose in the employment relationship early on. In 2015, Mr Clarke was subject to a disciplinary investigation by his employer. As a result of this investigation, Forsyth Barr and Mr Clarke entered into an exit agreement on
2 September 2015, and Mr Clarke resigned from his employment with Forsyth Barr. The exit agreement waived the restraint of trade in Mr Clarke’s employment agreement, but provided for a fee to be paid if a client closed its account with Forsyth Barr and transferred to Mr Clarke after he resigned. It also stated that neither party would disparage the other or take any action that would reasonably be expected to harm the other party or their reputation. Clause 6 of the exit agreement stated:

You agree that this agreement is in full and final settlement of all claims that you may have against Forsyth Barr Ltd or its directors and employees.

[6] On 24 November 2016, Mr Clarke filed a statement of claim in which he sought damages “in the sum range of $2,991,937 – $3,497,062 (including GST)”, as well as damages caused by the distress of losing access to his children. He also filed an interlocutory application for summary judgment, on the grounds that his statement of claim is unanswerable and Forsyth Barr has no genuine or arguable defence to the allegations contained in it.

[7] Forsyth Barr filed a notice of opposition to Mr Clarke’s application for summary judgment, and filed an interlocutory application to strike out Mr Clarke’s statement of claim and dismiss the proceeding. The grounds listed in its strike-out application are, in summary:

(a)…

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 Clarke v Forsyth Barr Ltd

Details

AGLC: Clarke v Forsyth Barr Ltd [2017] NZHC 842
Case: [2017] NZHC 842
Decision Date: 1 May 2017

CaseChat Overview and Summary

The case of Clarke v Forsyth Barr Ltd [2017] NZHC 842 involved Matthew Simon Clarke, the applicant, who sought summary judgment against Forsyth Barr Ltd, the respondent. Clarke's application for summary judgment was opposed by Forsyth Barr, which also filed an application to strike out Clarke's statement of claim and dismiss the proceeding. The court had to determine whether Clarke's application for summary judgment should be granted, and whether Forsyth Barr's application to strike out the claim should be allowed. Clarke alleged that Forsyth Barr had breached several conditions that they had verbally agreed upon in pre-contractual negotiations, and that Forsyth Barr had hindered him in establishing his own business, leading to loss of income and loss of his business. Forsyth Barr argued that the court lacked jurisdiction to hear the matter as it was an employment dispute over which the Employment Relations Authority had exclusive jurisdiction. They also claimed that the exit agreement entered into by Clarke and Forsyth Barr created an issue estoppel, as it stated that the agreement was in full and final settlement of all claims that Clarke may have against Forsyth Barr.

The court held that Clarke's application for summary judgment was dismissed as Forsyth Barr had two arguable defences, namely lack of jurisdiction and issue estoppel. The court also held that Clarke's statement of claim was likely to cause prejudice or delay, and it was struck out. The court found that the first two causes of action alleged by Clarke could not succeed in the High Court as they were fundamentally employment disputes over which the Employment Relations Authority had exclusive jurisdiction. The potential third cause of action, namely breach of the exit agreement, was not an employment dispute as it arose after the employment relationship had ended. However, the court found that there were problems with this third potential cause of action as presently pleaded, and it was struck out.

In conclusion, Clarke's application for summary judgment was dismissed, and Forsyth Barr's application to strike out the statement of claim was allowed. The statement of claim was struck out, and leave was reserved to file memoranda on costs.

Orders