Du Val Group NZ Limited v Servsync Limited - [2024] NZHC 650

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-000232

[2024] NZHC 650

UNDER Parts 19 and 32 of the High Court Rules 2016 and Senior Courts Act 2016

IN THE MATTER OF

A without notice originating application for freezing orders and ancillary orders under

rr 32.2 and 32.3 of the High Court Rules 2016

BETWEEN

DU VAL GROUP NZ LIMITED and DU VAL MANAGEMENT LIMITED

Plaintiffs

AND

SERVSYNC LIMITED

First Defendant

STUART GOODFELLOW

Second Defendant

RED CELL CYBER LIMITED

Third Defendant

Hearing: 27 September 2023

Appearances:

K A Lomas and L H H Hunt for Plaintiffs

C T Patterson and E J Grove for Defendants

Judgment:

22 March 2024

JUDGMENT OF VAN BOHEMEN J

[application to discharge or vary freezing order]

This judgment was delivered by me on 22 March 2024 at 3 pm pursuant to r 11.5 of the High Court Rules 2016.

Counsel/Solicitors:
Braun, Bond & Lomas Ltd, Hamilton C T Patterson and E J Grove, Hamilton Lateral Lawyers Ltd, Auckland

Registrar/Deputy Registrar

……………………………..

DU VAL GROUP NZ LTD v SERVSYNC LTD [2024] NZHC 650 [22 March 2024]

[1] Servsync Ltd, a company incorporated in the British Virgin Islands, Stuart Goodfellow, Servsync’s director and sole shareholder, who is currently resident in the United Kingdom, and Red Cell Cyber Ltd, a company registered in New Zealand and of which Mr Goodfellow is sole director (together, the Goodfellow entities), seek the discharge of a freezing order granted by Lang J on a without notice basis on 29 August 2022. The freezing order restrains the Goodfellow entities from removing assets inside and outside New Zealand or from disposing of, dealing with or diminishing the value of those assets.

[2] If a discharge is not ordered, the defendants seek an order discharging the freezing order upon payment to Du Val Group NZ Ltd (Du Val Group) and Du Val Management Ltd (Du Val Management) (together, Du Val), the sum of $76,691.60, together with interest accrued to the date of payment.

[3] The Goodfellow entities say that, in seeking the freezing order, Du Val failed to comply with their obligation under r 32.2(3) of the High Court Rules 2016 to disclose fully and frankly to the Court all material facts. The Goodfellow entities also say that the freezing order does not comply with r 32.6(2) of the High Court Rules because the value of the assets frozen by the freezing order exceeds the amount of Du Val’s quantified claim against the defendants.

[4] Du Val oppose the discharge of the freezing order. They say the application for discharge is an attempt to obscure gaps and inconsistencies in the evidence of the Goodfellow entities, that the allegations of material non-disclosure are misleading, that the information not disclosed in the application for a freezing order was not material to the proceeding, and that the evidence filed in support of the non-disclosure allegations relates primarily to factual scenarios that are not material to the freezing order application.

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.

Keep reading for free

Create a free CaseChat account to read Du Val Group NZ Limited v Servsync Limited and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2024] NZHC 650
Decision Date: 22 March 2024

CaseChat Overview and Summary

In the High Court of New Zealand, Du Val Group NZ Limited and Du Val Management Limited applied for a freezing order against Servsync Limited, Stuart Goodfellow, and Red Cell Cyber Limited. The plaintiffs sought to freeze the assets of the defendants to prevent them from disposing of or removing assets before the outcome of the substantive proceedings. The defendants opposed the freezing order, arguing that Du Val had failed to disclose material facts and that the freezing order was disproportionate. The court considered the application for discharge based on the principles of full and frank disclosure, the risk of dissipation of assets, and the proportionality of the order. The court found that Du Val had not fully disclosed material facts, including the defendants' intentions and arrangements regarding their assets and employment. The court concluded that the non-disclosure was significant and misrepresented the risk of dissipation of assets. The freezing order was discharged, and the defendants were awarded costs.

Orders