Legal Research
Cases
Gillette v Green

Gillette v Green

Case [2019] NZHC 946 17 May 2019

Contract Formation

Unconscionable Conduct

Breach of Contract

Fiduciary Duty

Oppression

Statutory Interpretation

Restitution

Commercial Law

Corporate Law & Governance

No judgment structure available for this case.

Type to search within this case.

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2017-442-042

[2019] NZHC 946

BETWEEN
NATHAN DANIEL GILLETTE

Plaintiff

AND

THOMAS PATTON GREEN

Defendant

ROOFPOWER INSTALLATIONS LIMITED

Second Defendant

Hearing: 8–10 April 2019

Appearances:

Plaintiff in person

S S Zindel and S M Day for defendant

Judgment:

17 May 2019

JUDGMENT OF COOKE J

Table of Contents

First claims: Misrepresentations inducing contract/breach of Fair Trading Act[16] Second claim: Misleading or deceptive conduct in relation to employment[30] Third claim: Minority oppression under s 174 of the Companies Act 1993[38] Relevant factors[40]

Sale of the business[50]

Mr Green’s explanations[55]

Conclusion[63]

Remedy[64]

Costs[71]

Review of Associate Judge’s costs order[75]

Conclusion[79]

GILLETTE v GREEN [2019] NZHC 946 [17 May 2019]

[1] The plaintiff, Mr Nathan Gillette, and the first defendant, Mr Thomas Green, are both originally from the United States. Mr Green is now a New Zealand citizen, and Mr Gillette has been in New Zealand with his family since 2016. They both live in Nelson.

[2] Mr Green owned and operated the second defendant, then called SunPower Ltd (SunPower) which sold and installed domestic solar power systems. SunPower was formed, and the business established by Mr Green in 2014.

[3] In December 2015 Mr Gillette was travelling through New Zealand and saw an advertisement for a position as a sales manager at SunPower. Mr Gillette then made contact with Mr Green. Following detailed negotiations in December, the parties entered into two agreements under which Mr Gillette would join Mr Green in business.

[4] The first was a Shareholders Agreement between Mr Gillette and Mr Green dated 18 January 2016. The second was an Individual Employment Agreement between Mr Gillette and SunPower dated 21 January 2016. Under the Shareholders Agreement Mr Gillette obtained the rights to acquire up to 49 per cent of the shares of SunPower for a total of $98,000. The acquisition of the shares would take place in tranches between the execution of the agreement and 60 days following the establishment of a sales department for SunPower. There is no dispute that this time period was accelerated, with Mr Gillette paying Mr Green $98,000 for 49 per cent of the shares in SunPower by February 2016.

[5] The Employment Agreement had a 90-day trial period, and involved an annual salary to Mr Gillette of $60,000 with prospective bonuses if certain sales targets were met. The Employment Agreement assisted Mr Gillette to obtain a work visa in New Zealand, which in turn would assist him becoming a New Zealand resident. Mr Green/SunPower assisted in the process of obtaining such a visa. By late February 2016 Mr Gillette and his wife and three children had moved to Nelson from Singapore.

[6] It did not take long before the relationship between Mr Gillette and Mr Green started to deteriorate, however. By the end of March, Mr Green had advised

Mr Gillette that SunPower did not have sufficient money to pay his salary, and no such payments were…

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 Gillette v Green

Details

AGLC: Gillette v Green [2019] NZHC 946
Case: [2019] NZHC 946
Decision Date: 17 May 2019

CaseChat Overview and Summary

The High Court of New Zealand was called upon to resolve a dispute between Nathan Gillette, an American citizen, and Thomas Green, a New Zealand citizen, over the operations of SunPower Ltd, a solar power company. Mr Gillette alleged that he was misled by Mr Green into investing in and joining the company under various agreements, and that he had subsequently been oppressed as a minority shareholder. The court was required to determine whether Mr Green's conduct amounted to misrepresentation, misleading or deceptive conduct, or oppression under the Companies Act 1993.

The court dismissed Mr Gillette's claims of misrepresentation and misleading or deceptive conduct, finding that the evidence did not support his allegations. In particular, the court noted that the Shareholders Agreement was the entire agreement between the parties and contained no warranties about the financial position of the company. The court also found that Mr Green did not have a plan to deceive Mr Gillette into entering the Employment Agreement.

However, the court found that Mr Green had engaged in oppressive conduct under s 174 of the Companies Act 1993. The court held that Mr Green had effectively excluded Mr Gillette from any meaningful involvement in the management of the affairs of the company, and had unilaterally stopped Mr Gillette being paid anything from SunPower whilst taking funds for his own needs. The court also found that Mr Green had breached the Shareholders Agreement by transferring the business of SunPower to a new company he controlled, and then selling the business assets to a third party for a significant profit.

The court ordered that Mr Green purchase Mr Gillette's shares in SunPower for $60,000, reflecting the value of the business at the time of the sale to the third party. The court also made orders for costs, finding that Mr Gillette was entitled to costs for the period he was legally represented, but not thereafter as he had incurred no out-of-pocket legal expenditure. The court declined to review an earlier costs order made in Mr Green's favour, finding that the question of costs was now largely moot given that Mr Gillette is self-represented and Mr Green is on legal aid.

Orders