Estate of Kidd v Van Heeren
[2021] NZHC 2805
•20 October 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA
TĀMAKI MAKAURAU ROHE
CIV-2014-404-725
[2021] NZHC 2805
BETWEEN THE ESTATE OF MICHAEL DAVID KIDD
by its administrator BRYAN JOHN COOPER
Plaintiff
AND
ALEXANDER PIETER VAN HEEREN
Defendant
Remote hearing: 15 October 2021 Appearances:
S J Mills QC, B O’Callahan and EJH Morrison for the plaintiff M D O’Brien QC and S D Williams for the defendant
R C Knight for Ms van Heeren-Hermans
Judgment:
20 October 2021
JUDGMENT OF JAGOSE J
[Stay of interim payment disbursements, pending appeal]
This judgment was delivered by me on 20 October 2021 at 3.00pm.
Pursuant to Rule 11.5 of the High Court Rules.
………………………… Registrar/Deputy Registrar
Counsel/Solicitors:
S J Mills QC, Auckland
M D O’Brien QC, Auckland
B O’Callahan Barrister, Auckland S D Williams Barrister, Auckland R C Knight Barrister, Auckland K3 Legal Limited, Auckland
Fee Langstone, Auckland Bell Gully, Auckland
THE ESTATE OF MICHAEL DAVID KIDD by its administrator BRYAN JOHN COOPER v VAN HEEREN [2021] NZHC 2805 [20 October 2021]
[1] This judgment determines the plaintiff’s (for convenience, “Mr Kidd”, although in fact his estate by its administrator, Bryan Cooper), and the defendant’s (“Mr van Heeren”) informal, interlocutory applications for stay of further disbursements from the interim payment held by the Court, pending appeal(s) against my order for such disbursements.
Background
[2]My interim substantive judgment of 17 June 2021 found:1
… subject to adjustments for cash and interest, the partnership’s value as a whole at 18 January 1991 is USD 50.895 million, for allocation in equal shares of USD 25.448 million to each Mr Kidd and Mr van Heeren.
Noting Mr Kidd already to have the benefit of USD 7.836 million, “I would allow disbursement to him now on that account of USD 17.612 million from the USD 25 million interim payment”,2 the latter being a sum paid into Court on Mr van Heeren’s account,3 and I ordered accordingly “as an advance on a final accounting yet to be concluded”.4 As my interim disbursement judgment of 6 October 2021 recounts,5 that disbursement was made. My interim substantive judgment is subject to appeal and cross-appeal, Mr van Heeren and Mr Kidd respectively claiming for reductions and increases in my determination of the partnership asset value at 18 January 1991.
[3] My further ancillary judgment of 6 October 2021 in part addressed outstanding issues relating to the balance of the interim payment.6 The parties agreed the partnership asset value at 18 January 1991 is to be increased by USD 436,550, effectively taking the value to USD 51.332 million, for allocation in equal shares of USD 25.666 million to each Mr Kidd and Mr van Heeren. Given the disbursement already made, I conditionally ordered disbursement to Mr Kidd in the amount of
1 Kidd v van Heeren [2021] NZHC 1414 [Interim substantive judgment] at [201].
2 At [203].
3 At [15].
4 At [242].
5 Kidd v van Heeren [2021] NZHC 2661 [Interim disbursement judgment] at [5].
6 Kidd v van Heeren [2021] NZHC 2663 [Ancillary judgment].
USD 218,275 from the balance of the interim payment retained by the Court, as a further advance on a final accounting yet to be concluded.7
[4] My ancillary judgment also directed payment of the parties’ further certified litigation expenses, both in this proceeding and in prospective enforcement of its final judgment in offshore proceedings.8 Mr van Heeren certified expenses in the amount of NZD 527,996.35 as incurred in this proceeding; subsequently, Mr Kidd certified expenses of NZD 1,151,771.31, NZD 704,055.86 (including a NZD 15,000 contingency against “currency fluctuation and fees”) incurred in offshore proceedings. Both sought payment, Mr Kidd’s offshore expenses being sought paid in advance of further steps to be taken in Liechtenstein on 22–23 November 2021.
[5] Mr Kidd then appealed against any payment to Mr van Heeren. His present application for stay followed, for which urgent hearing was sought. For that hearing, Mr van Heeren indicated his likely appeal comparably against payment to Mr Kidd (as irrecoverably exceeding his ultimate entitlement on the partnership’s final accounting), and foreshadowed his stay application also. As indicated to counsel, I deal with Mr van Heeren’s foreshadowed application as made informally, more efficiently to address these issues together and recognising hearing time to determine them separately is not immediately available.9
Discussion
[6] Again with reference to well-comprehended principle on stay pending appeal,10 Mr Kidd argues he is likely to be awarded very much more on the partnership’s final accounting, in anticipation of which the interim payment fund should be applied only for his benefit.
[7]I expressed:11
7 At [7], [17] and [22(a)].
8 At [11]–[12] and [22(b)].
9 As at the time of drafting this judgment, Mr van Heeren has confirmed his instructions to cross-appeal and seek a stay of disbursement to Mr Kidd.
10 Keung v GBR Investments Ltd [2010] NZCA 396 at [11]. See also Ancillary judgment, above n 6, at [15].
11 Kidd v van Heeren HC Auckland CIV 2014-404-725, 8 October 2021 (Minute of Jagose J).
… [a] preliminary view — as the decision to be appealed does not relate to any substantive right had by Mr van Heeren to the funds, but rather to my desire to ensure the parties each continue to have counsel for trial’s continuation and conclusion — the necessary balance of considerations may mean stay is justified.
Mr van Heeren responded, as the balance of the interim payment fund remains a partnership asset, he has an equal claim to it (and Mr Kidd already has received some USD 2.510 million in Worldwide Leisure Ltd’s prior payment of his litigation expenses,12 in excess of that equality). I accept payment of parties’ litigation expenses ordinarily are not recoverable from their recipients,13 meaning any shortfall stands to be recovered from partnership assets.
[8] The interim payment fund, while undoubtedly quantified by reference to Mr Kidd’s perceived likely larger ultimate award,14 expressly was to be paid into Court for Mr Kidd’s proposal for its investment and use pending trial’s determination.15 Questions of investment were superseded by the interim payment’s late deposit into Court. So far as Mr Kidd has established his claim, I have ordered disbursement to him from the interim payment.16 I otherwise have directed its use to enable continuation of this proceeding to finality.17
[9] I am reluctant to abandon that objective. Much remains to be done,18 and both parties claim to remain impecunious (disbursement to Mr Kidd thus far having almost entirely been paid over to his litigation funder). On the basis of my interim substantive judgment, disregarding its appeal(s), the balance of an award in Mr Kidd’s favour is likely to exceed the remaining sum of the interim payment, and indeed the realisable value of assets in this jurisdiction. I therefore extended that objective to litigation expenses incurred in my final judgment’s prospective enforcement in other jurisdictions.19
12 Interim substantive judgment, above n 1, at [16].
13 United Mizrahi Bank Ltd v Doherty [1998] 1 WLR 435 (Ch) at 441–445.
14 Kidd v van Heeren [2015] NZHC 517 at [148].
15 Interim substantive judgment, above n 1, at [15].
16 See [2]–[3] above.
17 Interim substantive judgment, above n 1, at [16]; and Ancillary judgment, above n 6, at [11] and [13].
18 Interim substantive judgment, above n 1, at [244]; Interim disbursement judgment, above n 5, at [41]; and Ancillary judgment, above n 6, at [22(c)].
19 Ancillary judgment, above n 6, at [12].
[10]I consider:
(a)the parties’ appeals against my order for disbursement from the interim payment of amounts certified as litigation expenses incurred are liable to be rendered nugatory, at least so far as those amounts are unrecoverable from the (otherwise impecunious) parties, although they are capable of being taken into balance on the parties’ final accounting;
(b)I have no doubt about the bona fides of either party in prosecuting his appeal, as founded either in Mr Kidd’s anticipated additional recovery on a final accounting or Mr van Heeren’s claim to the undisbursed balance of the interim payment presently as a partnership asset;
(c)neither party, if successful on appeal, will be injuriously affected by the stay, which only is to withhold certified litigation expenses from the other pending the appeal’s determination;
(d)that withholding, however, is of substantial effect on third party experts, counsel and solicitors, whose professional services undoubtedly have been provided in anticipation of their remuneration (and likely incentivised by my clearly signalled intention so to remunerate);20
(e)the questions on appeal are not novel or important in any material sense but rather the respective party’s attempt to weight application of the balance of the interim payment in their favour;
(f)the proceeding is essentially private, without engaging any public interest;
(g)neither appeal, being against the exercise of my discretion in the management of this proceeding, is particularly strong; and
(h)the orders sought stayed are for disbursement from the interim payment of litigation expenses certified as properly incurred. On the basis of Stephen Mills QC’s undertaking to seek urgency for hearing of
20 Interim substantive judgment, above n 1, at [16].
Mr Kidd’s appeal against my ancillary judgment, and otherwise diligently to pursue it, I comprehend the parties’ New Zealand effort in the short-term will be concentrated in the Court of Appeal rather than in pursuing my final substantive judgment. And I note Mr Kidd’s continued progress in Liechtenstein.
[11] From those considerations, the overall balance of convenience — by analogy with interim injunction considerations,21 if refusing stay pending appeal would be harder on a prospectively successful appellant than granting it would be on the successful respondent — favours granting the stays to the extent they do not disrupt my management of this proceeding (including making provision for its final judgment’s prospective enforcement).
[12] Pending determination of the parties’ appeals, I therefore stay payment of certified litigation expenses incurred by either party in this proceeding (but not payment of certified litigation expenses incurred by Mr Kidd offshore in prospective enforcement of my final judgment) under my ancillary judgment’s order [22(b)]. Given each party’s respective failure and success,22 costs on the applications are to lie where they fell.
—Jagose J
21 Wellington International Airport Ltd v Air New Zealand Ltd HC Wellington CIV 2007-485-1756, 30 July 2008 at [4], citing Cayne v Global Natural Resources Plc [1984] 1 All ER 225 (CA) at 237.
22 High Court Rules 2016, r 14.2(1)(a).
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