IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-2819
[2020] NZHC 749
BETWEEN
FRUIT SHIPPERS LIMITED
Plaintiff
AND
ALISTAIR DOUGLAS PETRIE
First Defendant
LUIS A NOBOA Second Defendant
BARTEL HOLDINGS LTD
Third Defendant
Hearing:
2 and 3 December 2019
Appearances:
D J Friar, B A Keown and G S A Morrison for the Plaintiff D Cooper and E Armstrong for the Defendants
Judgment:
28 April 2020
JUDGMENT OF ASSOCIATE JUDGE R M BELL
This judgment was delivered by me on 28 April 2020 at 4:00pm
pursuant to Rule 11.5 of the High Court Rules
………………………………………………….
Registrar/Deputy Registrar
Solicitors:
Bell Gully (David Friar), Auckland for the Plaintiff
Lee Salmon Long (Tim Mullins/Emma Armstrong), Auckland for the Defendants
Counsel:
David Cooper, Barrister, Auckland
FRUIT SHIPPERS LTD v PETRIE [2020] NZHC 749 [28 April 2020]
CONTENTS
Paragraph
Introduction [1]
Fruit Shippers Limited’s case [3]
Fruit Shippers Limited’s causes of action [15] The cause of action against Mr Petrie – breach of fiduciary duty [15] First cause of action against Mr Noboa – breach of fiduciary duty [19] Second cause of action against Mr Noboa – debt [21] Third and fourth causes of action against Mr Noboa
– money had and received/unjust enrichment [23]
Mr Petrie’s strike out application [25]
Derivative claims – general [27]
Can Fruit Shippers Ltd bring a derivative claim against Mr Petrie? [48]
Mr Noboa’s alleged wrongdoing
[51]
Mr Petrie’s alleged wrongdoing [62]
Control [66]
Standing [68]
Alternative remedies [69]
Joinder of Bartel Holdings Ltd as a defendant [77]
Mr Petrie’s challenge to Fruit Shippers Ltd’s compliance with pleading requirements [80]
Mr Petrie’s summary judgment application [88]
Clause 16.1 [100]
Clause 16.4 [112]
Fruit Shippers Ltd’s application to set aside Mr Noboa’s appearance
under protest [117]
Serious issues to be tried [119]
First cause of action against Mr Noboa – breach of fiduciary duty [120]
Second cause of action against Mr Noboa – debt [122]
Third and fourth causes of action – restitution [124]
The gateways in r 6.27 of the High Court Rules [129]
Necessary or proper party [131] Claim under an enactment [133]
Restitution claim [135]
Real and substantial connection with New Zealand [136]
New Zealand the appropriate forum [137]
Outcome [140]
Orders [143]
Costs [144]
Introduction
[1] This case is about alleged defalcations from a company by its director. He is in Florida and protests this court’s jurisdiction to hear this case. Another director, a New Zealander, is sued, but the plaintiff does not allege that he took any money for himself. The company from which the funds were taken is not a party to the proceeding. This decision is on interlocutory applications:
(a)the New Zealand director applies for strike out and summary judgment;
(b)the plaintiff applies to set aside the Florida director’s protest to jurisdiction; and
(c)the plaintiff applies to join the company as a defendant.
For some of its causes of action, the plaintiff is suing derivatively. The defendants challenge its standing to do so.
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.
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AGLC
Fruit Shippers Ltd v Petrie [2020] NZHC 749
Case
[2020] NZHC 749
Decision Date
CaseChat Overview and Summary
Fruit Shippers Limited, a Bahamas company and ultimate holding company of a group of companies dealing in bananas and other products, has sued directors of a New Zealand company, Bartel Holdings Ltd, for alleged defalcations. The directors have applied for strike out and summary judgment. Fruit Shippers Ltd has also applied to set aside the jurisdiction of one of the directors, who lives in Florida, and to join the company as a defendant. The plaintiff has sued derivatively. The defendants challenge its standing to do so. Fruit Shippers Ltd has also sued for breach of trust and for restitution. The court holds that Fruit Shippers Ltd may bring a derivative claim, even though its case does not come within s 165 of the Companies Act 1993. The company is joined as the third defendant. The procedural defects in the plaintiff’s statement of claim can be cured. The court sets aside the Florida director’s appearance protesting the jurisdiction as the plaintiff has met the requirements for serving him outside New Zealand and this is the appropriate jurisdiction to hear the case. The court strikes out the plaintiff’s causes of action for breach of fiduciary duty to the plaintiff and for debt against the Florida director, but allows the derivative claims against the directors to proceed.