George v Dilks

[2020] NZHC 37

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-2139

[2019] NZHC 37

BETWEEN

ARIANA CAILEEN GEORGE

First Plaintiff

RODNEY LEE TE WAKA TOTO HOLLAND

Second Plaintiff

AND

SELL SMART.BIZ LIMITED

First Defendant (Discontinued)

DAVID CHARLES PADFIELD
Second Defendant (Discontinued)

PAUL DILKS

Third Defendant

Hearing:

29, 30 and 31 October 2019

Appearances:

R S Pidgeon for plaintiffs

P Dilks (third defendant) in person

Judgment:

29 January 2020

JUDGMENT OF KATZ J

This judgment was delivered by me on 29 January 2020 at 5:00pm pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:      Integritas Law Firm, Auckland

Counsel:        R S Pidgeon, Barrister, Auckland Copy to:    Mr P Dilks

GEORGE & HOLLAND v DILKS [2019] NZHC 37 [29 January 2020]

TEA CUSTODIANS (BLUESTONE) LIMITED

Fourth Defendant (Discontinued)

PRENDOS NEW ZEALAND LIMITED
Fifth Defendant (Discontinued)

Table of Contents

Introduction and overview.................................................................................. [1]

The procedural history........................................................................................ [7]

NZMBA decision  [7]

The proceedings against Bluestone  [9]

This proceeding  [11]

The pleadings..................................................................................................... [12]

The plaintiffs’ causes of action  [12]

Mr Dilks’ defence and counterclaim  [13]
Pleadings issues  [15]

Limitation issues................................................................................................ [22]

Limitation pleadings  [22]

The first three causes of action  [25]
The fourth cause of action (breach of fiduciary duty)  [28]
Does s 25 of the Limitation Act apply?  [35]

Does s 28 of the Limitation Act apply?  [43]

Conclusion on limitation issues  [44]

Factual findings................................................................................................. [46]

General impressions of the key witnesses  [46] Ms George and Mr Holland acquire an interest in the Weymouth property [50] Ms George enters into an agreement to purchase a TouchNZ franchise [52] Unsuccessful attempt to obtain financing from the National Bank  [56] Mr Dilks is introduced to the plaintiffs by Mr Padfield  [57]

Mr Dilks’ representation to Bluestone about the purpose of the

refinancing loan  [61]
Did Mr Dilks misrepresent the employment status of Mr Holland to
Bluestone?  [74]

Did Mr Dilks misrepresent the employment status of Ms George to

Bluestone?  [82]

Loan approval  [92]
Failure of the franchise business  [92]

Did Mr Dilks give advice to the plaintiffs as to the merits of the franchise business?     [95]

Causation/inducement..................................................................................... [100]

Mr Dilks’ counterclaim.................................................................................... [105]

Result................................................................................................................ [106]

Introduction and overview

[1]    In February 2007 Ariana George entered into two agreements with Sell Smart.Biz Limited (“Sell Smart”), a company owned and operated by David Padfield. Under the first agreement she purchased a licence to sell tourism advertising using touch screen electronic kiosks owned by Sell Smart. Under the second agreement (which was unconditional) she purchased the related TouchNZ franchise for $105,000. The purchase price was to be paid by way of a $50,000 deposit, with the balance to be paid by instalments to be agreed later.

[2]    Ms George then set about raising the required finance. Ms George and her then partner, Rodney Holland, had recently borrowed from the National Bank to purchase a two-thirds interest in Mr Holland’s mother’s home in Weymouth. The National Bank, however, was not willing to advance them any further funds. Mr Padfield then referred Ms…