Goldman v Kiwi Vision Limited

[2015] NZHC 240

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2014-419-231 [2015] NZHC 240

BETWEEN

A GOLDMAN

First Plaintiff

A GOLDMAN AND A GOLDMAN FAMILY TRUSTEE LIMITED as trustees of the Allan Goldman Family Trust

Second Plaintiff

AND

KIWI VISION LIMITED First Defendant

VC INVESTMENTS (2012) LIMITED (IN LIQUIDATION)

Second Defendant

CAMDEN ROSS Third Defendant

IAN DAVID BENTLEY & WAYNE KEITH STARTUP as Executors of the Estate of Roy Wilson

Fourth Defendant

Hearing:	18 February 2015
Appearances:	J D Haig for Plaintiffs M D Branch for the First, Second and Third  Defendants M P Ward-Johnson for Fourth Defendants and proposed Fifth Defendant
Judgment:	23 February 2015

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on

23.02.15 at 4  pm, pursuant to

Rule 11.5  of the High Court Rules. Registrar/Deputy Registrar

Date……………

GOLDMAN & ORS v KIWI VISION LIMITED & ORS [2015] NZHC 240 [23 February 2015]

AILSA HELEN WILSON retired of Matata

Fifth Defendant

[1]      Mr  Roy  Wilson  in  his  lifetime  allegedly  entered  into  a  number  of arrangements that would result in shares that he owned in companies being conferred on other parties.   Those other parties, the plaintiffs, now sue, amongst others, the fourth defendants in their capacities as executors of his estate.

[2]      The plaintiffs now wish to add a further defendant as fifth defendant.  Mrs Ailsa Wilson (“Mrs Wilson”) was the spouse of Roy Wilson.  She was the residuary beneficiary under his will.

[3]      The application which the plaintiff’s make to join Mrs Wilson states that it is

made on the following grounds:

(i)       The plaintiffs’ claim against Mrs Wilson includes a claim for relief

under s 49(1) of the Administration Act 1969;

(j)        The claim brought is for proceeds derived from the first defendant’s shares,  as  well  as  Cornage  (NZ)  Limited’s  shares  that  she  has received as a residuary beneficiary of Mr Wilson’s estate;

(k)       The claim brought is for the proceeds paid six years prior to the date of the claim being filed.  The plaintiffs have good arguable claims for the relief sought based on a notice given to Mr Wilson and the fourth defendants;

(l)        It is in the interests of justice that special leave be granted to bring the claim.

[4]      The plaintiffs elected to serve the application to join Mrs Wilson on her and in due course a notice of opposition was filed dated 18 November 2014.   The grounds are opposed on the following basis:

3.1The plaintiffs seek to join (Mrs Wilson) in order to trace the assets of the estate of Roy Wilson (the estate) as the estate has been fully distributed.

3.2      The  plaintiffs’  claim  was  not  signalled  or  contemplated  before

distribution of the estate;

3.3The estate was fully distributed on account of claims in priority to the plaintiffs and estate and administration costs without notice of the plaintiff’s claim as a contingent liability of the estate;

3.4(Mrs Wilson) holds funds from the estate distributed to her pursuant to s 47 of the Administration Act 1969 and/or by virtue of claims by her and/or others in priority to the plaintiffs’ claims;

3.5The estate had insufficient funds to meet the claims in priority to the plaintiffs’ claim;

3.6If the plaintiff had filed his claim within time or satisfies the Court that special leave should be granted (denied) the estate had insufficient funds to meet the plaintiffs’ claim in the event.

[5]      Amongst other things the statutory grounds for the opposition include the

Administration Act 1969 and Rule 4.56 of the High Court Rules.

[6]      It is not necessary to go through the specific allegations in the statement of claim  alleging  the  various  options  to  purchase  shares  which  are  relied  upon. However it is necessary to note that in addition to conferring options the plaintiffs allege that at least one of the options was exercised by the first plaintiff on 29 July

2008 which was valid but that Mr Wilson’s solicitor denied that the option was valid because certain contingent conditions had not been satisfied.   The first  plaintiff attempted again to exercise the option 6 on 15 April 2009 but with similar results. The plaintiffs allege that from the time notice was given exercising the option the first and or second plaintiffs “had an equitable interest in (the shares) that were its

subject, as against their legal owner Roy Wilson”.1   In regard to the claim against the

fifth defendant the claims are formulated rather differently in the case of the various plaintiffs  but  in  general  terms,  the  allegation  is  that  she  ought  to  have  known “directly or imputed” of the option and the second option and that Mr Wilson was trustee and/or owed fiduciary duties to the first and second plaintiffs and [the plaintiff’s] equitable interest in Mr Wilson’s shares arising through the option and second option.   Further it is alleged that the plaintiffs are entitled to trace the dividends, distributions and entitlements all resulting from the shares and thereafter seeking order pursuant to s 49(1) of the Administration Act 1969 requiring the fifth defendants to pay the dividends etc from the shares or an order tracing the same funds or an order for restitution of the funds.

[7]      The essential points that are taken for the fifth defendant on the merits of the claim which the plaintiffs bring against her are that the executors of the estate did not have any notice of the claimed valid exercise of the option and that therefore they distributed without notice of the plaintiffs’ against the estate and alternatively that

Mrs Wilson received the proceeds in good faith and altered her position in reliance thereon,  both  matters  being  recognised  as  defences  pursuant  to  s 51  of  the Administration Act.

[8]      Against  that  background,  as  I  have  noted,  the  plaintiffs  seek  to  join

Mrs Wilson as a defendant.

[9]      I  have  little  doubt  that  the  traditional  favoured  position  of  plaintiffs  in seeking the joinder of additional defendants means that someone in the position of Mrs Wilson will have considerably difficulty in resisting an application.  I consider that there is jurisdiction to join her and that the discretion ought to be exercised in

favour of doing so.2    An order for joinder satisfies the requirements of Rule 4.56

(1)(b)(ii) that:

(ii)      The  person’s  present  before  the  Court  may  be  necessary  to adjudicate on and settle all questions involved in the proceeding.

[10]     The Court can make no assumptions as to whether the claim against the executors which the plaintiffs have brought will result in judgment being obtained and, if so, what if any assets remain in the estate to satisfy the judgment.  In those circumstances being able to trace estate property to a party such as Mrs Wilson satisfies the requirements of the Rule.

[11]     Mr Ward-Johnson in his clear and helpful submissions further submitted that as a matter of discretion given that the amount that Mrs Wilson received was only

$50,000, the Court ought not to join her as a defendant.  He was not able to refer to any authority which supported such an approach, though.   While the size of the claim very much bears upon the practicality of pursuing it, it is not generally a matter that the courts take into account in deciding whether or not to grant interlocutory applications.  A claimant who has even a small claim is entitled to avail him/herself of the provisions in the Rules that will assist that party to achieve its objective in the proceedings.

[12]     For all of these reasons I consider that the application ought to be granted.

[13]     In the course of the argument before me Mr Ward-Johnson foreshadowed the possibility that if his client is joined as the fifth defendant she may will seek to strike out the statement of claim against her or to seek summary judgment against the plaintiffs.  Therefore timetabling orders are required to deal with that aspect of the proceedings and I direct that any application is to be filed and served within 15 working days.  The proceeding is to be allocated a case management conference for April 2015 and the Registrar is to notify the parties of the relevant date.   The conference can be by telephone.  That conference date is to be the date inserted into any application as the date of first call.  At the next conference further directions will be given to progress those applications and any other matters that are before the Court.

[14]     Costs on the application are reserved.

J.P. Doogue

Associate Judge