Legal Research
Cases
Detection Services Ltd v Pickering

Detection Services Ltd v Pickering

Case [2018] NZHC 3310 14 December 2018

Breach of Contract

Duty of Loyalty

Fiduciary Obligations

Joint Venture

Unconscionable Conduct

Commercial Law

Contract Law

No judgment structure available for this case.

Type to search within this case.

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-003135

[2018] NZHC 3310

BETWEEN
DETECTION SERVICES LIMITED

First Plaintiff

DETECTION SOLUTIONS LIMITED
Second Plaintiff

DETECTION SERVICES PTY LIMITED
Third Plaintiff

DETECTION SOLUTIONS PTY LIMITED
Fourth Plaintiff

STEPHEN CARL JOHN SIMMONS
Fifth Plaintiff

AND

CHRISTOPHER LORRAINE PICKERING

First Defendant

AQATAR LIMITED
Second Defendant

JAKE VAN DER PEYL

Third Defendant

Hearing: 10 – 19 September 2018

Appearances:

M Corlett QC and R Butler for the Plaintiffs

A Barker QC and J Grimmer for the Defendants

Judgment:

14 December 2018

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Friday, 14 December 2018 at 1.00 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

DETECTION SERVICES LIMITED v PICKERING [2018] NZHC 3310 [14 December 2018]

TABLE OF CONTENTS

Background [1]

Parties [5]

Causes of action [8]

Employment proceedings [10]

The law – fiduciary obligations [12]

Fiduciary obligations  [12]
Duty of loyalty  [18]
Duty of good faith  [19]

Did fiduciary obligations arise in the present case? [25]

The relationship between the parties  [25]
Did the parties’ relationship give rise to fiduciary obligations?  [39]
Relational contract  [47]

Breach [48]

Estoppel by representation [70]

Counterclaim [76]

Loss [86]

Result [92]

Background

[1] The fifth plaintiff, Stephen Carl John Simmons, and the first defendant, Christopher Lorraine Pickering, were once good friends. They worked together from around 2007 to develop a leak detection system for use in high pressure water mains. The association between the parties got even closer when Mr Simmons employed Mr Pickering as General Manager of his companies (Detection Services group) in January 2010.

[2] Unfortunately, they had a falling out in 2011 and Mr Simmons fired Mr Pickering. The dispute between them revolved around ownership of the leak detection system. They were unable to agree who was to have the system and it was placed in storage. It remains there today.

[3] Mr Simmons proceeded to build a new leak detection system. He and his companies now sue Mr Pickering and his company for the cost of building the new system, including componentry and staff costs, as well as for loss of profits. In total,
$3,165,850 is claimed. Mr Pickering counterclaims for $257,170, which he says is the sum Mr Simmons agreed but refused to pay for the original leak detection system.

[4] I expand on the facts and make findings where appropriate in my reasons below.

Parties

[5] The statement of claim names five plaintiffs. At the outset of the hearing, counsel acknowledged only two suffered loss and are the proper plaintiffs for the purpose of the proceedings:

(a)The third plaintiff, Detection Services Pty Ltd, is the company which incurred staff time on the rebuild and is alleged to have suffered the loss of profits that are claimed.

(b)The fourth plaintiff, Detection Solutions Pty Ltd, is the company which incurred most of the costs to build the new leak detection system.

[6] Likewise, counsel advised the Court the plaintiff…

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 Detection Services Ltd v Pickering

Details

AGLC: Detection Services Ltd v Pickering [2018] NZHC 3310
Case: [2018] NZHC 3310
Decision Date: 14 December 2018

CaseChat Overview and Summary

The plaintiffs, Detection Services Limited, Detection Services Pty Ltd, and Detection Solutions Pty Ltd, commenced proceedings against the defendants, Christopher Lorraine Pickering and Aqatar Limited, for breach of fiduciary duty and estoppel. The plaintiffs claimed $3,165,850 in damages, while the defendants counterclaimed for $257,170. The plaintiffs alleged that they had a joint venture relationship with the defendants, and that the defendants breached their fiduciary obligations by refusing to transfer the completed leak detection system to the plaintiffs. The defendants denied any breach of fiduciary duty and counterclaimed that the plaintiffs had agreed to purchase the system for $257,170. The Court found that the plaintiffs and defendants were in a fiduciary relationship, but both parties had breached their fiduciary obligations. The Court held that the plaintiffs' claims and the defendants' counterclaims should be dismissed, as both parties had acted in their own interests rather than in good faith to negotiate and settle the terms of the transfer of the system. The Court also found that the plaintiffs' claims for damages were exaggerated and speculative. The leak detection system remained in storage, and the defendants were free to dispose of it as they saw fit. Costs on a 2B basis should follow the event in the case of both the plaintiffs' claim and the defendants' counterclaim.

Orders