Fish Man Ltd (in liq) v Hadfield

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA432/2016
[2017] NZCA 589

BETWEEN

THE FISH MAN LIMITED (IN LIQUIDATION)
Appellant

AND

MARK RICHARD HADFIELD
First Respondent

HALEY PETRINA HADFIELD
Second Respondent

Hearing:	5 September 2017
Court:	Asher, Courtney and Gendall JJ
Counsel:	K H Morrison and G A Campbell for Appellant J D Noble for First Respondent A R B Barker QC as Counsel to assist the Court
Judgment:	14 December 2017 at 11 am

JUDGMENT OF THE COURT

AThe appeal in relation to the substantive orders and directions made by Fogarty J is dismissed.

BThe appeal against the costs orders made by Fogarty J is allowed.

CThe orders that the liquidators pay the costs of counsel assisting and the first respondent are quashed.

DThe costs awarded to the first respondent in the High Court are to be paid by the appellant.

EThe costs of the second respondent in the High Court, in the sum of $4,484.41, are to be paid by the appellant. 

FThe appellant must pay the first respondent costs for a standard appeal on a band A basis and usual disbursements.

GThe costs of counsel assisting in both the High Court and this Court are to be paid out of public funds under s 99A(1)(b) of the Judicature Act 1908.

HThe determination of the final vesting orders to be made is remitted back to the High Court, to be determined in accordance with Fogarty J’s judgment.

___________________________________________________________________

REASONS OF THE COURT

(Given by Asher J)

Table of Contents

Para No

Introduction
Background
The claims in brief
High Court judgment
Claim that The Fish Man has suffered a loss under s 119
The effect of disclaimer
Loss or damage

When is loss or damage assessed?
Conclusion on loss or damage
Application of ss 290 and 304(1) of the Act

The Fish Man’s proprietary claims

Constructive trust
An equitable lien
Conclusion on proprietary interest

Subrogation
Mr and Mrs Hadfield’s claims

Mr Hadfield’s claim
Mrs Hadfield’s claim

Costs

The costs of Mrs Hadfield and counsel assisting
Mr Hadfield’s costs

Result

[1]
[3]
[16]
[24]
[27]
[28]
[38]
[42]
[49]
[50]
[56]
[60]
[74]
[78]
[79]
[82]
[85]
[86]
[93]
[94]
[98]
[104]

Introduction

1. This appeal concerns a residential property at 1/16 Cameron Place, Ranui, Auckland (the Property).  The first respondent, Mr Hadfield, purchased the Property in 2004 with the help of a mortgage.  Mr Hadfield was adjudicated bankrupt on 6 June 2013.  Five months later the Official Assignee (the Assignee) formed the view that, taking into account the mortgage sum, the Property had no net value.  On 27 November 2013 the Assignee formally disclaimed the Property.  Now, following the property value boom of the last three years, the Property has acquired a significant net value.  Each of the parties to this appeal claims the benefit of that increase in value. 

2. There are two broad issues.  First, there is a claim by the appellant, The Fish Man Ltd (in liq)…