Clode v Oliphant - [2019] NZHC 297

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-0647

[2019] NZHC 297

BETWEEN
BRENT DOUGLAS CLODE

Plaintiff / Counterclaim Defendant

AND

DAVID JAMES OLIPHANT

First Defendant / First Counterclaim Plaintiff

AUBURN DEVELOPMENT LIMITED

Second Defendant / Second Counterclaim Plaintiff

RAILSIDE INVESTMENT LIMITED

Third Defendant / Third Counterclaim Plaintiff

Hearing: 7 May 2019

Appearances:

Mr Clode in person

P J Bedogni for the Defendants

Judgment:

10 May 2019

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 10 May 2019 at 10.30am, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors / Counsel:
Martelli McKegg, Auckland

Copy to:
B D Clode

CLODE v OLIPHANT [2019] NZHC 297 [10 May 2019]

[1]The defendants apply for an order for security for their costs.

Background — Mr Clode's claims

[2] Mr Clode is a property developer. He says that, under an agreement he made with the first defendant (Mr Oliphant), he was entitled to participate in all aspects of two residential property developments in Takapuna. The first was the Sargeson Apartments project in Anzac Street, Takapuna (the Development) owned by the second defendant (Auburn), and the second was a planned development at a site owned by the third defendant (Railside) in Lake Road, Takapuna.

[3] In his amended statement of claim dated 20 January 2019, Mr Clode alleges that he was an unregistered 50 per cent shareholder in Auburn and Railside. The first defendant (Mr Oliphant) is the sole director of Auburn and Railside.

[4] Mr Clode says that it was he who devised the Development and the proposed Railside development, and he invited Mr Oliphant to be his 50 per cent business partner, responsible for raising unfinanced capital. He says that, up until 22 December 2017, he had total control of the two developments. After that, he says that Mr Oliphant curtailed his involvement, including his remuneration of $5,000 per week.

[5] Mr Clode responded by filing a proceeding against Auburn and Railside (the shareholder proceeding), seeking to have the share registers for both companies corrected and to have himself appointed as a director (or alternate director) of Auburn and Railside. The shareholder proceeding was settled by written agreement dated 14 March 2018 (the March Agreement).

[6] Under the March Agreement, Mr Oliphant remains the sole director and shareholder of Auburn and Railside. Mr Clode discontinued the shareholder proceeding. Clause 3 of the March Agreement provided that Mr Clode would be entitled to 50 per cent of the net profit from the Development once completed, and under cl 4 Mr Oliphant granted Mr Clode the option to convert that 50 per cent profit share into a 50 per cent shareholding and directorship of Auburn and Railside (but only after a lending facility had been fully repaid and the relevant securities released).

[7]Clause 8 of the March Agreement provided:

[Mr Oliphant] and [Mr Clode] will meet on a weekly basis on an equal footing to review and direct…

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 Clode v Oliphant

Details

AGLC: Clode v Oliphant [2019] NZHC 297
Case: [2019] NZHC 297
Decision Date: 10 May 2019

CaseChat Overview and Summary

In Clode v Oliphant, the defendants sought an order for security for their costs. The plaintiff, Brent Douglas Clode, opposed the application. The court found that the defendants had met the threshold requirement of showing that there was reason to believe that Mr Clode would be unable to pay the defendants' costs if he was unsuccessful in the proceeding. The court found that Mr Clode had previously been bankrupted, had been involved in a bankruptcy proceeding, and had previously been adjudicated bankrupt. The court also found that Mr Clode had failed to provide evidence of his financial position, and that he did not have a bank account. The court considered the merits of the plaintiff's claim, and found that the merits appeared to favour the plaintiff on his claim that he had been shut out of the Development. However, the court also found that the matters raised by the defendants appeared to relate primarily to the quantum of the plaintiff's claims, rather than the liability of the defendants for breach of contract. The court made an order for security for costs in the amount of $25,000, to be paid in two equal instalments of $12,500. The court also made an order for 2B costs on the application.

Orders