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Fugle v Vance

Fugle v Vance

Case [2023] NZCA 21 16 February 2023

Appeal

Jurisdiction

Reasonableness

Admissibility of Evidence

Limitation Periods

Civil Litigation & Procedure

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA430/2022
[2023] NZCA 21

BETWEEN	LESLIE WILLIAM FUGLE Applicant
AND	DAVID VANCE AND IAN MILLARD AS TRUSTEES OF THE ORANA TRUST First Respondents VEY GROUP LIMITED (IN LIQUIDATION) Second Respondent THE COMMISSIONER OF INLAND REVENUE Third Respondent

Court:	Gilbert and Collins JJ
Counsel:	F E Geiringer for Applicant R L Roff for First Respondents M G Colson KC and R L Pinny for Second Respondent K I S Naik-Leong for Third Respondent
Judgment: (On the papers)	16 February 2023 at 9.30 am

JUDGMENT OF THE COURT

AThe application for leave to appeal is declined.
BCosts are reserved.

____________________________________________________________________

REASONS OF THE COURT

(Given by Collins J)

Introduction

Mr Fugle applies under s 56(5) of the Senior Courts Act 2016 for leave to appeal an interlocutory judgment of Mallon J delivered on 2 February 2022.[1] This is Mr Fugle’s second application for leave to appeal the interlocutory judgment, Mallon J having declined leave to appeal.[2]
[1]Vance v Vey Group Ltd [2022] NZHC 75 (High Court decision); Senior Courts Act 2016, s 56(3).
[2]Vance v Vey Group Ltd [2022] NZHC 1861 (High Court leave decision).
In Greendrake v District Court of New Zealand, this Court affirmed the following factors are engaged when considering an application for leave to appeal an interlocutory judgment:[3]
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;
(d)the circumstances must warrant incurring further delay; and
(e)the ultimate question is whether the interests of justice are served by granting leave.
[3]Greendrake v District Court of New Zealand [2020] NZCA 122 at [6], referring to Finewood Upholstery Ltd v Vaughn [2017] NZHC 1679 at [13].
Contrary to Mr Fugle’s submissions, this is the appropriate test for all applications for leave to appeal interlocutory decisions, even where the issue on an interlocutory application may be dispositive of the underlying proceeding. The nature of the application can be properly assessed under the factors outlined at (c)–(e).

Background

Mr Fugle was the sole director of Vey Group Ltd (Vey). The Orana Trust (the Trust) owned 49 per cent of Vey’s shares. Mr Vance and Mr Millard were appointed as independent trustees of the Trust by the High Court.[4] The trustees successfully brought proceedings under s 174 of the Companies Act 1993, alleging the affairs of Vey were being conducted in a way that was prejudicial to the Trust.[5] The High Court judgment was upheld by this Court.[6] Vey was subsequently placed into receivership and liquidation.[7]
[4]Turvey v Turvey HC Wellington CIV-2017-485-150, 27 October 2017.
[5]Vance v Vey Group Ltd [2019] NZHC 1676.
[6]Vey Group Ltd v Vance [2020] NZCA 232, [2021] 2 NZLR 541.
[7]Vance v Vey Group Ltd [2020] NZHC 2592.

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 Fugle v Vance

Details

AGLC: Fugle v Vance [2023] NZCA 21
Case: [2023] NZCA 21
Decision Date: 16 February 2023 at 9.30 am

CaseChat Overview and Summary

Leslie William Fugle, the sole director of Vey Group Ltd, applied to the Court of Appeal of New Zealand for leave to appeal an interlocutory judgment of Mallon J, who had declined his application for leave to appeal. The first respondents were David Vance and Ian Millard, the trustees of the Orana Trust, which owned 49% of Vey's shares. The second respondent was Vey Group Ltd in liquidation, and the third respondent was the Commissioner of Inland Revenue. The central issue was whether the liquidators' decision to admit a debt of $1,040,810 owed by Vey to the trustees was correct. Fugle argued that the liquidators erred by accepting debts for which a limitation defence was available and by treating transactions between the Trust and Vey as a running current account without a more detailed assessment of their nature and purpose.

The Court of Appeal applied the Greendrake v District Court of New Zealand test for granting leave to appeal an interlocutory judgment, which includes identifying an arguable error of law or fact, the importance of the error, whether further delay is warranted, and whether the interests of justice are served by granting leave. The Court rejected Fugle's proposed grounds of appeal, finding no arguable errors of law or fact. The Court noted that the amount in dispute was a small percentage of the overall debt, and that granting leave would provide Fugle with a sixth hearing to pursue his complaints against the liquidators. The Court was also concerned that Vey's main asset, an apartment building in Wellington, suffered from weathertightness defects and that it was in the interests of the unsecured creditors for the main asset to be promptly liquidated. The Court concluded that the appeal was only of private importance to Fugle and did not raise any legal issues that required consideration by the Court.

The Court declined Fugle's application for leave to appeal and reserved costs. The Commissioner of Inland Revenue sought to be heard on costs, and if the parties could not reach an agreement by 3 March 2023, they were to file memoranda not exceeding three pages setting out their respective positions.

Orders