Curtis v Gibson - [2011] NZCA 373

IN THE COURT OF APPEAL OF NEW ZEALAND

CA368/2010
CA285/2011
[2011] NZCA 373

BETWEEN RICHARD JOHN CURTIS
First Appellant

AND CURTIS HOLDINGS LIMITED
Second Appellant

AND RODNEY MARK GIBSON
First Respondent

AND HABODE IP LIMITED
Second Respondent

Hearing: 23 June 2011

Court: Randerson, Winkelmann and Keane JJ

Counsel: D J Goddard QC and N Caldwell for Appellant
D D Vincent and A Watt for Respondent

Judgment: 5 August 2011 at 11.30 a.m.

JUDGMENT OF THE COURT

AThe substantive appeal (CA368/2010) is allowed. The judgment in CIV-2008-485-2735 in favour of the respondents is set aside. Judgment is entered in favour of the appellants on the issue of liability.
BThe appellants’ claim in CIV-2008-405-2735 is remitted to the High Court for an accounting of profits in accordance with this judgment.
CThe costs appeal (CA285/2011) is allowed and all costs orders made in the High Court in relation to CIV-2007-485-907 and CIV-2008-485-2735 are set aside. The High Court is to determine the costs in that Court in light of this judgment and any further steps necessary in the High Court.
DThe respondents in the substantive appeal (CA368/2010) are to pay to the appellants costs as for a complex appeal on a band A basis with usual disbursements. We certify for second counsel. We make no award for costs in CA285/2011.

REASONS OF THE COURT

(Given by Randerson J)

Table of Contents

Para No
Introduction	[1]
Factual background	[15]
The initial concept and the introduction of Mr Curtis	[18]
Developments in 2004 including Mr Thompson’s involvement	[22]
The termination of the Renhe arrangements and events in 2005	[33]
Contacts with Mr Muir	[36]
The collapse of Habode NZ and the end of the Curtis/Gibson business relationship	[49]
Subsequent events in Australia and the introduction of Mr Pringle	[51]
The Judge’s findings	[58]
Joint venture – legal principles	[75]
Was there sufficient evidence to support a finding of joint venture?	[85]
Was Mr Gibson in breach of fiduciary obligations arising from the joint venture?	[107]
Summary	[108]
What is the appropriate remedy?	[111]
The costs appeal (CA285/2011)	[114]
Result	[115]

Introduction

These appeals arise from the dismissal by Simon France J of two sets of proceedings heard jointly in the High Court.[1] The proceedings arose from a joint venture the first appellant Mr Curtis alleged he entered into with the first respondent Mr Gibson to develop and sell a portable home called the Habode.
[1] Curtis v Gibson HC Wellington CIV-2007-485-907 and CIV-2008-485-2735, 18 May 2010.
The Habode was built in, and formed part of, a standard shipping container, a feature the Judge described as having significant attractions for delivery to remote locations. It was intended that the Habode would be developed and marketed both in New Zealand and internationally. A company, Habode (NZ) Ltd was formed to pursue the development and marketing of the Habode in New Zealand. The Curtis interests were not involved in this company when it was first formed, but later obtained a 45 per cent shareholding in it. There is…

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 Curtis v Gibson

Details

AGLC: Curtis v Gibson [2011] NZCA 373
Case: [2011] NZCA 373
Decision Date: 5 August 2011

CaseChat Overview and Summary

This appeal concerns a dispute between two business associates who had entered into a business relationship to develop and market a product called the Habode. The first appellant, Mr Curtis, was a financier who provided funding and marketing expertise. The first respondent, Mr Gibson, was the designer of the Habode. The second respondent, Habode IP Limited, was a company which held the intellectual property rights for the Habode. The second appellant, Curtis Holdings Limited, was a company owned by Mr Curtis which held a 45 per cent shareholding in Habode (NZ) Limited, a company established to pursue the Habode project in New Zealand.

The dispute arose from the breakdown of the business relationship between Mr Curtis and Mr Gibson in March 2006. Mr Gibson continued to develop the Habode concept and established a business in Australia which attracted substantial investment from an Australian company. Mr Curtis contended that the Habode project, including the benefits gained from the Australian operation, was an asset of a joint venture between himself and Mr Gibson. He sought an accounting of profits in respect of the gains derived by Mr Gibson from the Australian operation.

The Court of Appeal allowed the appeal on the issue of liability and held that there was sufficient evidence to establish the existence of a joint venture between Mr Curtis and Mr Gibson to pursue the international sales opportunities for the Habode. It was intended that the joint venture would share the profits gained equally between them or their respective interests. The joint venture had not acquired ownership of the intellectual property rights held by Habode IP but the joint venturers had been entitled to an international licence to distribute the Habode. The Court held that Mr Gibson had breached his fiduciary obligations by exploiting the information relating to the business opportunity in Australia for his own benefit and to the exclusion of Mr Curtis upon the termination of their business relationship. The Court remitted the matter to the High Court for an accounting of profits in consequence of that breach of fiduciary duty.

The Court of Appeal also allowed the appeal in relation to costs and set aside the costs orders made by Simon France J in the High Court. It ordered the respondents in the substantive appeal to pay the appellants costs on a band A basis with usual disbursements. It certified for second counsel.

Orders