Clayton v Jackson - [2020] NZHC 2666

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-001729

[2020] NZHC 2666

UNDER the Receiverships Act 1993

BETWEEN

MARK ARNOLD CLAYTON

Plaintiff

AND

NEALE JACKSON, BRENDAN JAMES GIBSON AND GRANT GRAHAM (of CALIBRE PARTNERS)

First Defendants

AND

BANK OF NEW ZEALAND

Second Defendant

AND

PAUL ARNE PEDERSEN

Third Defendant

AND

WADE STEVEN GLASS

Fourth Defendant

Hearing: 29 September 2020

Appearances:

S R G Judd for the Plaintiff

S M Hunter QC & J Marcetic for the First Defendants

Z G Kennedy & A C van Ammers for the Second Defendant T Cooley for the Third Defendant

C A Murphy for the Fourth Defendant

Judgment:

29 September 2020

Reasons:

09 October 2020

Reissued:

12 October 2020

REASONS FOR JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 09 October 2020 and
re-delivered by me on 12 October 2020 in accordance with High Court Rules 2016, r 11.10
…………………………
Registrar/Deputy Registrar

CLAYTON v JACKSON [2020] NZHC 2666 [29 September 2020]

Introduction

[1] Mark Clayton, the plaintiff, founded the Claymark group of companies and businesses (the Claymark business). The business is a New Zealand based wood products business with a global customer base. The most profitable part of the business is the sale of wood products to Home Depot stores in the Unites States through one of the group companies, Claymark USA Inc.

[2] Mr Clayton established the Claymark business in 1988. He built it up over a period of more than 30 years. He says it is his life’s work.

[3] The Bank of New Zealand (the BNZ), the second defendant, provided finance to the Claymark business. The BNZ held security over most of the business. Mr Clayton provided a personal guarantee to the BNZ.

[4] On October 2018 the BNZ informed Mr Clayton that the Claymark business was in breach of covenants. Mr Clayton decided to put the Claymark business on the market by tender. The tender process resulted in a conditional agreement, dated 29 August 2019, to sell the business to a company called NZFFP. Mr Clayton said that the purchase price was $127 million, and that if the agreement had been performed, the BNZ would have been repaid in full with a surplus of about $73 million.

[5] The settlement date for the NZFFP agreement was 31 October 2019. Settlement did not occur then. The settlement date was extended twice, the second time to 20 December 2019.

[6] On 4 December 2019 the BNZ appointed the first defendants as receivers over the New Zealand companies in the Claymark group. At that time the amount owing to the BNZ was approximately $54 million.

[7] The NZFFP agreement did not settle. NZFFP terminated the agreement for non-satisfaction of a condition on 19 December 2019.

[8] After their appointment the receivers continued to operate the Claymark business while they conducted a sale process. Mr Clayton participated in the sale process as a potential purchaser. In December 2019 he had…

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.

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Details

Case: [2020] NZHC 2666
Decision Date: 29 September 2020

CaseChat Overview and Summary

Clayton v Jackson [2020] NZHC 2666 involved a claim by Mark Clayton, the founder of the Claymark business, against various defendants, including the receivers of the Claymark business, the Bank of New Zealand (BNZ), and other parties. Clayton sought an interim injunction to restrain the defendants from completing the sale of the Claymark business, alleging breaches of duty by the receivers, unjust conduct by the BNZ, and breaches of confidence and fiduciary duties by other defendants. The court found that Clayton's claims were not seriously arguable, as the receivers had followed a thorough sale process, the BNZ had no liability for the receivers' conduct, and there was no evidence supporting Clayton's allegations against the other defendants. Consequently, the court declined to grant the interim injunction and outlined provisional views on costs, encouraging the parties to reach an agreement.

Orders