Gilles Bakery Limited v Gillespie - [2015] NZCA 93

IN THE COURT OF APPEAL OF NEW ZEALAND

CA506/2013
[2015] NZCA 93

BETWEEN

GILLES BAKERY LIMITED & ORS
Appellants

AND

K J GILLESPIE, W A DUNCAN AND T N PERRY
First Respondents

M C FINNIGAN AND C PETTIGREW
Second Respondents

WESTPAC NEW ZEALAND LIMITED
Third Respondent

Hearing:	7 October 2014
Court:	Stevens, Wild and Goddard JJ
Counsel:	G J Judd QC and K J Patterson for Appellants B P Henry and P J Templeton for Second Respondents M V Robinson and D J Tillett for Third Respondent
Judgment:	25 March 2015 at 12 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe second respondents are entitled to their costs for a standard appeal on a band A basis and usual disbursements.
CThe appellant Gilles Bakery Ltd is to indemnify the third respondent in respect of its costs and expenses on this appeal.

____________________________________________________________________

REASONS OF THE COURT

(Given by Wild J)

Table of Contents

Para No
Introduction	[1]
Factual background	[5]
Evidence	[39]
First cause of action – against Messrs Finnigan and Pettigrew *The pleading*	[46]
Yarrows was a de facto or deemed director of Gilles	[47]
Yarrows owed statutory and fiduciary duties to Gilles and its preference shareholders	[48]
Yarrow breached its statutory and fiduciary duties to Gilles	[50]
Messrs Finnigan and Pettigrew are liable as joint tortfeasors in respect of Yarrows’ breach of its statutory duty and as accessories to Yarrows’ breach of fiduciary duty	[51]
*Appellants’ supporting submissions*	[52]
*Our view*	[59]
Yarrows was a de facto or deemed director of Gilles	[65]
Yarrows owed statutory and fiduciary duties to Gilles and its preference shareholders	[68]
Yarrows breached its statutory and fiduciary duties to Gilles	[70]
Messrs Finnigan and Pettigrew are liable as joint tortfeasors in respect of Yarrows’ breach of its statutory duty and as accessories to Yarrows’ breach of fiduciary duty	[74]
Second cause of action – against Westpac *The pleading*	[76]
*Appellants’ supporting submissions*	[81]
*Our view*	[84]
Result	[92]
Costs	[93]

Introduction

Under appeal is a judgment delivered by Associate Judge Abbott on 28 June 2013.[1] It dealt with applications by the respondents to strike out the appellants’ claims against them, or for summary judgment against the appellants. The Associate Judge held the claims against the respondents could not succeed and, accordingly, entered judgment for the respondents against the appellants.
[1]Gilles Bakery Ltd v Gillespie [2013] NZHC 1608.
On 25 July 2013 the appellants appealed. On 28 May 2014, in support of their appeal, the appellants provided this Court with the draft of a third amended statement of claim (draft 3 ASoC) they propose filing in the High Court if this appeal succeeds. This new pleading was not before the High Court. Indeed, there is no reference in the judgment to any request by the appellants for an opportunity to amend their pleading.
Although he accepted it was inappropriate to strike out a claim if defects in it could be cured by amendment, Mr Henry for the first respondents submitted…

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 Gilles Bakery Limited v Gillespie

Details

AGLC: Gilles Bakery Limited v Gillespie [2015] NZCA 93
Case: [2015] NZCA 93
Decision Date: 25 March 2015 at 12 pm

CaseChat Overview and Summary

Gilles Bakery Limited, along with Mr Boss and Mr Jacquet, appealed against the summary judgment entered in favour of the respondents. The appeal was dismissed. The first respondents, Messrs Finnigan and Pettigrew, were entitled to costs on a band A basis. Gilles Bakery Limited was ordered to indemnify the third respondent, Westpac New Zealand Limited, for its costs and expenses on this appeal. The appeal concerned the liability of the respondents for the failure of Gilles Bakery Limited to repay a loan to Westpac. Gilles had executed a cross-guarantee and a general security agreement in favour of Westpac. The court found that Messrs Finnigan and Pettigrew were not liable for the actions of Yarrows, the holding company of Gilles. The court also found that Westpac was not liable for the actions of Yarrows. The court held that Yarrows, as the holding company of Gilles, was not a de facto director of Gilles. Yarrows owed no statutory or fiduciary duties to Gilles or its preference shareholders. Nor was there any evidence Yarrows breached those duties. The court further held that Westpac was not an accessory to Yarrows’ breach of statutory or fiduciary duty because it had no dishonest state of mind. The appeal was dismissed, and Gilles Bakery Limited was ordered to indemnify Westpac for its costs and expenses.

Orders