Fuji Xerox New Zealand Limited v Whittaker

[2021] NZHC 1492

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2073

[2021] NZHC 1492

BETWEEN

FUJI XEROX NEW ZEALAND LIMITED

First plaintiff

FUJI XEROX FINANCE LIMITED
Second plaintiff

FUJI XEROX ASIA PACIFIC PTE LIMITED

Third plaintiff

AND

NEIL WHITTAKER

First defendant

MARK DONALD ALLRIGHT
Second defendant

GAVIN POLLARD
Third defendant

ERNST & YOUNG

Fourth defendant

Hearing:

On the papers

Counsel:

M T Davies, W R Potter and W N Fotherby for plaintiffs J A Craig and A C Poole for first defendant

D P Hoskin and P J Muir for second defendant
S M Hunter QC, M J McGoldrick and M A Bowen for third defendant
R M Stewart and A J Wakeman for fourth defendant

Date of judgment:

22 June 2021

SUPPLEMENTARY JUDGMENT OF JAGOSE J

This judgment was delivered by me on 22 June 2021 at 4.00pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

FUJI XEROX NEW ZEALAND LTD v WHITTAKER [2021] NZHC 1492 [22 June 2021]

[1]                 My 21 June 2021 judgment1 omitted reference to the second defendant’s  (“Mr Allright”) application to strike out the plaintiffs’’ (“Fuji Xerox”) first cause of action, alleging his breach of fiduciary duty. This supplementary judgment — which must be read together with my prior judgment, and particularly the law there expressed at [6]–[10] — belatedly addresses that application.

The pleading

[2]                 As said at [11] of my prior judgment, Mr Allright was Fuji Xerox’s chief financial officer, “responsible for the [New Zealand] Companies’ management and financial accounts, and for ensuring these complied with applicable laws, accounting standards, and FX Group policies and procedures”.

[3]                 The first cause of action alleges Mr Allright “owed the Companies fiduciary duties to avoid conflict between his personal interests and the interests of the Companies”. The duties expressly are said to derive from his position  held  with Fuji Xerox: that he owed those duties “as CFO of the Companies” (emphasis added).

Discussion

[4]                 There is no dispute Mr Allright held his position in employment by Fuji Xerox New Zealand Ltd. The issue is if the first cause of action arises “independently” of his employment relationship with Fuji Xerox. It will not if the ‘essence’ of the claim is employment-related; if the employment relationship is a necessary component of the claim.2

[5]                 For the reasons explained at [17]–[20] of my prior judgment, the issue is if, irrespective of the claim’s pleaded characterisation, it is one in essence arising from the employment relationship (and therefore susceptible to the Authority’s exclusive jurisdiction), or otherwise founded on some independent duty (and therefore not). Except as Fuji Xerox’s chief financial officer, Mr Allright had no fiduciary duty. Absent such employment, Fuji Xerox had no basis on which to repose trust and

1      Fuji Xerox New Zealand Ltd v Whittaker [2021] NZHC 1469.

2      At [9]–[10].

confidence in him.3 Only by his employment may he have assumed any responsibility to Fuji Xerox,4 which relationship takes primacy.5 Where, as here, the claim entirely depends on the employment relationship, Fuji Xerox’s remedies were limited to those available from the employment institutions. It did not “need” to seek equitable relief.6

Result

[6]I strike out Fuji Xerox’s first cause of action.

—Jagose J

Counsel/Solicitors:

S M Hunter QC, Auckland Meredith Connell, Auckland Simpson Grierson, Auckland

Steindle Williams Legal, Auckland SBM Legal, Auckland

Fee Langstone, Auckland A Leopold SC, Australia

3      Chirnside v Fay [2006] NZSC 68, [2007] 1 NZLR 433; Paper Reclaim Ltd v Aotearoa International Ltd [2007] NZSC 26, [2007] 3 NZLR 169; Amaltal Corporation Ltd v Maruha Corporation [2007] NZSC 40, [2007] 3 NZLR 192;

4      Dold v Murphy [2020] NZCA 313 at [52]–[55].

5 At [56].

6      BDM Grange Ltd v Parker [2006] 1 NZLR 353 (HC) at [88].