Dold v Murphy - [2019] NZHC 1232

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-003226

[2019] NZHC 1232

BETWEEN
ROGER MURRAY LORIMER DOLD

First Plaintiff

ROGER MURRAY LORIMER DOLD, PENELOPE ANNE DOLD and

KEVIN DAVID PITFIELD as Trustees of THE DOLD TRUST

Second Plaintiffs

AND

PETER JAMES MURPHY

First Defendant

LUBERON NOMINEES LIMITED

Second Defendant

SIENA CONSULTANTS LIMITED

Third Defendant

Hearing: 4–8 March 2019

Counsel:

D J Heaney QC and K B Dillon for the Plaintiffs S O McAnally and N W Coyle for the Defendants

Judgment:

31 May 2019

JUDGMENT OF EDWARDS J

This judgment was delivered by Justice Edwards on 31 May 2019 at 4.15 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

Counsel: D J Heaney QC, Auckland
K B Dillon, Auckland
Solicitors: Cameron Fleming and Associates Ltd, Auckland Keegan Alexander, Auckland

DOLD v MURPHY [2019] NZHC 1232 [31 May 2019]

[1] When does a demand for money become illegitimate? Mr Dold says it happened when Mr Murphy demanded payment from him before selling his shares in Cruise Whitsundays Pty Ltd (Cruise Whitsundays) to a third party. Mr Dold, and his shareholding entity, seek reimbursement of the AUD$2m he paid to Mr Murphy, and other orders in relation to shares that Mr Murphy’s interests received as consideration for the sale.

[2] Mr Murphy vigorously defends the claims brought against him. He considers the additional payment was fair compensation for the hours of work he put into Cruise Whitsundays, including preparing it for sale. He denies any suggestion that his share allocation was obtained by underhand means. Mr Murphy says he relied on Mr Dold’s promise to pay him when he agreed to sell his shares and he pleads estoppel by way of affirmative defence.

[3] The plaintiffs plead three causes of action: breach of contract, breach of fiduciary duty, and money had and received.1 The three issues to be determined are:

(a)Was there a breach of the shareholders’ agreement?

(b)Did Mr Murphy owe fiduciary duties and if so were they breached?

(c)Was there economic duress?

Events leading up to the dispute

[4] Although this claim is essentially between two men, Mr Dold and Mr Murphy, the background to it involves a third, Mr Christopher (Chris) Jacobs.

[5] Mr Dold and Mr Jacobs owned and operated various companies in New Zealand and overseas offering day cruises and ferry services. These included Fullers Bay of Islands Ltd which operated out of the Bay of Islands, and South Sea Cruises Ltd which operated out of Fiji.

1 A fourth cause of action in negligence was abandoned at the end of the trial. The defendants’ counterclaims were also discontinued.

[6] Mr Murphy was a commercial partner in a large law firm in Auckland and acted for Mr Dold and Mr Jacobs in the late 1980s. He continued to work for them after he left his firm and provided his services through a consultancy company that he owned with his wife.

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 Dold v Murphy

Details

AGLC: Dold v Murphy [2019] NZHC 1232
Case: [2019] NZHC 1232
Decision Date: 31 May 2019

CaseChat Overview and Summary

In Dold v Murphy, the plaintiffs, Roger Dold and his shareholding entity, The Dold Trust, sought to recover AUD$2m paid to Peter Murphy and his shareholding entity, Luberon Nominees Ltd, after Mr Murphy demanded the sum before signing a memorandum of understanding in relation to the sale of shares in Cruise Whitsundays. The plaintiffs pleaded three causes of action: breach of contract, breach of fiduciary duty, and money had and received. The defendants denied the claims and pleaded estoppel by way of affirmative defence. The three issues to be determined were whether there was a breach of the shareholders' agreement, whether Mr Murphy owed fiduciary duties and if so were they breached, and whether there was economic duress. The court held that none of the claims succeeded. The court found that there was no breach of the shareholders' agreement as the plaintiffs could not show any contractual obligations breached by Mr Murphy either making the demand for an additional payment or securing a 100 per cent rollover allocation. The court also found that Mr Murphy did not owe fiduciary duties that were breached in making the demand or securing the rollover allocation. Finally, the court held that there was no economic duress as the pressure exerted was not illegitimate and the plaintiffs' decision to make the payment was a calculated and considered commercial decision.

The final orders of the court were that the plaintiffs' claim was dismissed and the defendants were entitled to an award of costs. If the parties could not agree on the costs, the defendants could submit a memorandum in support within 10 working days of the judgment and the plaintiffs could file a memorandum in response five working days thereafter. Costs would then be determined on the papers.

Orders