Curtis v Gibson - [2013] NZHC 2884

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2008-485-2735 [2013] NZHC 2884

BETWEEN RICHARD JOHN CURTIS First Plaintiff

CURTIS HOLDINGS LIMITED Second Plaintiff

ANDRODNEY MARK GIBSON First Defendant

HABODE IP LIMITED Second Defendant

Hearing: 9-11 September 2013

Counsel: P B Churchman QC and S C McIver for Plaintiffs
D D Vincent and A J Watt for Defendants

Judgment: 31 October 2013

RESERVED JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is
4.45 pm on the 31st day of October 2013.

Solicitors: Gault Mitchell, Wellington, for Plaintiffs
Thomas Dewar Sziranyi Letts, Lower Hutt, for Defendants

CURTIS v GIBSON [2013] NZHC 2884 [31 October 2013]

Introduction

[1] In a judgment delivered on 5 August 2011, the Court of Appeal entered judgment in favour of Mr Curtis and his company Curtis Holdings Limited on the issue of liability and remitted their claim to this Court for an accounting of profit in accordance with that judgment.1

The arrangements to market the Habode in Australia

[2] The joint venture which the Court of Appeal held to exist was a joint venture between Mr Curtis and Mr Gibson to explore and develop the business opportunities available for the sale and distribution of the Habode in Australia. The business structures established in Australia would be based on the model already established for the sale and distribution of the Habode in New Zealand. A corporate vehicle would be utilised in Australia to market and distribute the Habode in that country. Habode IP Limited would license the Australian joint venture vehicle along similar lines to the model already developed for the sale and distribution of the Habode in
New Zealand.2

[3] As the Court of Appeal described, the Australian distribution arrangements proceeded in association with a West Australian construction and property development company, referred to as Pindan.3 The corporate vehicle which was used, and which was licensed by Habode IP Limited, was International Housing Solutions Limited (IHSL).4 IHSL was the corporate vehicle for the marketing and distribution of not only the Habode, but also the Ihouz, which was not part of the joint venture.5

[4] The original shareholding of the 9,000 ordinary shares in IHSL was as follows:

(a) UGI1 Limited: 5,100 ordinary shares;

1      Curtis v Gibson [2011] NZCA 373.
2 At [108].
3      At [51]-[57].
4 At [106].
5      At [113](c).

(b) UGI2 Limited: 900 ordinary shares; (c) UGI3 Limited: 1,000 ordinary shares;
(d) Kiwisfly International Limited: 1,000 ordinary shares; (e) Habode Finance Pty Limited: 1,000 ordinary shares;

[5] Kiwisfly International Limited (KIL) was a company owned or controlled by Mr Gibson’s then brother in-law, Mr McMillan. The other four companies were owned or controlled by Mr Gibson or interests associated with him.

[6] The arrangements under which the Pindan interests obtained an interest were documented in a series of agreements dated 20 July 2007. The timing of various payments indicates that the arrangements had been at least partly agreed and implemented before that date.

[7] The trustees of the…

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 [2013] NZHC 2884
Case: [2013] NZHC 2884
Decision Date: 31 October 2013

CaseChat Overview and Summary

In Curtis v Gibson, the High Court of New Zealand determined the accounting for profits resulting from a breach of fiduciary duty by Rodney Mark Gibson. The joint venture between Gibson and Richard John Curtis for the sale and distribution of the Habode product in Australia was breached by Gibson's exploitation of business opportunities for his own gain. The Court was tasked with determining the quantum of the accounting for profits as directed by the Court of Appeal. The Court assessed the gain derived by Gibson from the sale of an interest in the joint venture to Pindan interests, considering the complexities of the business structures and the limited available financial information. The Court calculated the gross gains from the sales, excluded reinvestments and non-joint venture activities, and apportioned the net gains to the joint venture. The Court awarded the plaintiffs NZD 750,000, to be paid with interest from 1 September 2008. Costs were reserved for later determination.

Orders