Gowdey v Heseltine - [2021] NZHC 540

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2020-404-129

[2021] NZHC 540

BETWEEN
DAVID RUSSELL GOWDEY

Plaintiff

AND

JOHN DAVID HESELTINE

First Defendant

BRIDGET ALISON MCNEIL
Second Defendant

CB TRUSTEES (2013) LIMITED

Third Defendant

Hearing: 23 July 2020 & 16 March 2021

Appearances:

S E Russell for Plaintiff

C Upton for First Defendant
CJR Baird for Second and Third Defendants

Judgment:

17 March 2021

JUDGMENT OF DUFFY J

This judgment was delivered by me on 17 March 2021 at 2.15 pm pursuant to
Rule 11.5 of the High Court Rules.

Registrar/ Deputy Registrar

Solicitors/Counsel:
Russell Legal, Auckland Castle Brown, Newmarket
Lee Salmon Long, Auckland
CJR Baird, Barrister, Auckland

GOWDEY v HESELTINE [2021] NZHC 540 [17 March 2021]

[1] The plaintiff, David Gowdey, sought summary judgment in New Zealand in relation to the enforcement of a foreign sealed judgment from the state of California, United States of America, issued as a default judgment (the US judgment).

[2] The US judgment named three defendants: John Heseltine; Bridget McNeil; and CB Trustees (2013) Ltd (together the defendants), the latter defendant being a registered company with offices in New Zealand and the former two defendants being business persons residing in New Zealand. The defendants opposed the application for summary judgment and applied for a stay of proceedings pending determination of an appeal in the United States against the US judgment.

The US judgment

[3] The US judgment concerned a loan agreement between the plaintiff and the first defendant whereby the plaintiff loaned Mr Heseltine USD 450,000 under a loan agreement and promissory note executed on 20 December 2017. On that same date security for the loan was arranged by way of a stock pledge agreement. On 12 February 2018 this stock pledge agreement was amended. The amended stock pledge agreement provided that a specified quantum of shares in AIPARC Inc would be transferred to the Jet Miners Trust, of which the second and third defendants, Ms McNeil and CB Trustees (2013) Ltd were trustees.

[4] There were allegedly three defaults on this loan agreement by Mr Heseltine. The first default was alleged to be an attempted transfer of all shares held by Mr Gowdey under the amended stock pledge agreement to another company. Mr Gowdey then demanded full repayment of the loan by 12 July 2018. The second loan default was a failure to pay the loaned sum with interest and late fees, by the demanded date. The third loan default occurred on 2 November 2018 and concerned a termination and release agreement that cancelled all shares that had been transferred to the Jet Miners Trust. As a result, the shares ceased to exist.

[5]On 9 November Mr Gowdey filed his complaint in the California courts. On

21 December 2018 the California court entered a default judgment against the defendants as they failed to file their answer to the complaint in the requisite time frame. On 30 July 2019, following a formal proof…

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 Gowdey v Heseltine

Details

AGLC: Gowdey v Heseltine [2021] NZHC 540
Case: [2021] NZHC 540
Decision Date: 17 March 2021

CaseChat Overview and Summary

The High Court of New Zealand was presented with a case concerning the enforcement of a foreign judgment from the United States. The plaintiff, David Gowdey, sought summary judgment to enforce a default judgment issued in California. The defendants, John Heseltine, Bridget McNeil, and CB Trustees (2013) Ltd, opposed the application and sought a stay of proceedings pending the outcome of an appeal in the United States. The case required the court to determine whether the New Zealand court should enforce the foreign judgment given that the appeal in the United States had resulted in the judgment being set aside.

The legal issues before the court included whether the New Zealand court had jurisdiction to enforce a foreign judgment that had been set aside, and whether the proceedings should be stayed or dismissed in light of the appeal's outcome. The court had to consider the effect of the set aside of the US judgment on the enforceability of that judgment in New Zealand and whether the proceedings should be terminated given the absence of a valid foreign judgment.

The court found that the set aside of the US judgment meant there was no longer a valid judgment for the New Zealand court to enforce. Although Mr Gowdey might pursue other means of enforcing payment of the loan in California, this would be on a different basis from the earlier attempt. Consequently, the court held that there was no basis for allowing the proceedings to continue. The court decided to decline Mr Gowdey's summary judgment application and dismissed the proceeding, striking out the statement of claim. The court also reserved leave for the parties to file memoranda on costs in accordance with the specified timetable.

In summary, the court dismissed Mr Gowdey's application for summary judgment and ordered the statement of claim be struck out. The court also directed the parties to file memoranda on costs within a specified timeframe.

Orders