Graham v McNicholl - [2019] NZHC 1973

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-151

[2019] NZHC 1973

UNDER the Property Law Act 2007 and the Companies Act 1993 and Part 18 of the High Court Rules

IN THE MATTER

of ARENA CAPITAL LIMITED (in

liquidation)

BETWEEN

GRANT ROBERT GRAHAM and NEALE

JACKSON as liquidators of ARENA CAPITAL LIMITED (in liquidation) Plaintiffs

AND

KRIS JAMES MCNICHOLL

Defendant

Hearing: On the Papers

Counsel:

T G H Smith for Plaintiffs

K J McNicholl (currently self-represented) Defendant

Judgment:

27 September 2019

JUDGMENT OF ASSOCIATE JUDGE LESTER

(in relation to plaintiffs’ application to stay proceedings under the Trans-Tasman Proceedings Act 2010)

[1] The defendant, who is a resident of Western Australia, has applied to stay this proceeding commenced by the plaintiffs as the liquidators of Arena Capital Ltd (in liquidation) (“Arena”).

[2] These proceedings were commenced in March 2019 and served on the defendant on 24 June 2019.

GRAHAM and JACKSON (as liquidators) of ARENA CAPITAL LIMITED (in liq) v MCNICHOLL [2019] NZHC 1973 [27 September 2019]

[3] The application filed on 8 August 2019 is made under s 22 of the Trans-Tasman Proceedings Act 2010 (“the Act”). Section 22(1) provides that:

A defendant in a civil proceeding commenced in a New Zealand court may apply to the court for an order staying the proceeding on the grounds that an Australian court is the more appropriate court for the proceeding.

[4]Section 22(3) of the Act provides:

The application must be made –

(a)within 30 working days of the New Zealand court after the day on which the defendant was served with the initiating document for the proceeding; or

(b)if, before or after the end of the period in paragraph (a), the plaintiff or defendant applies to the New Zealand court for a shorter or longer period – within any shorter or longer period the New Zealand court considers appropriate.

[5] The present application filed on 8 August 2019 is therefore just out of time. There is, however, in the evidence an email exchange between counsel where counsel agreed that the matter could be filed on or before 8 August 2019. Given that agreement between counsel and that the application was filed only a few days outside the 30 working days, I grant under s 22(3)(b) an extension of time for the application to be made on 8 August 2019.

Nature of the proceeding

[6] This proceeding has its origins in the liquidation of Arena which was a company operated by Lance Ryan and Jimmy McNicholl, who is the father of the defendant. Jimmy McNicholl was the only director of Arena but as I will explain, it is clear that Mr Ryan was also a controller of the company.

[7] The plaintiffs were appointed receivers and managers of Arena on 27 May 2015 by order of the Court, a role that was superseded by the plaintiffs being appointed liquidators by this Court on 24 July 2015.

[8] In short, Arena operated a…

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 Graham v McNicholl

Details

AGLC: Graham v McNicholl [2019] NZHC 1973
Case: [2019] NZHC 1973
Decision Date: 27 September 2019

CaseChat Overview and Summary

The case of Graham v McNicholl involved a dispute in the High Court of New Zealand, where the plaintiffs, Grant Robert Graham and Neale Jackson as liquidators of Arena Capital Limited (in liquidation), sought to recover funds from the defendant, Kris James McNicholl. The plaintiffs alleged that the defendant received around $171,000 from Arena, a company that operated a Ponzi scheme, and that the defendant had not deposited any funds with Arena. The defendant did not deny receiving the funds but intended to raise affirmative defences. McNicholl, a resident of Western Australia, applied to stay the proceedings under the Trans-Tasman Proceedings Act 2010, arguing that an Australian court was more appropriate.

The primary legal issues were whether the New Zealand court should grant a stay of the proceedings in favour of an Australian court and, if so, what factors should be considered under the Act. Associate Judge Lester considered various factors including the places of residence of the parties, the places of residence of the witnesses, the location of the subject matter of the proceeding, the law most appropriate to apply, related or similar proceedings in Australia, the financial circumstances of the parties, and any other relevant matters.

Associate Judge Lester concluded that the application for a stay was out of time but granted an extension considering the agreement between counsel. The court considered the place of residence of the parties to be relatively neutral. The residence of witnesses and the place where the subject matter of the proceeding was situated also did not significantly favour either party. However, the court found that the law most appropriate to apply in the proceeding was New Zealand law, given the developed body of law in New Zealand in respect of the Property Law Act 2007 and the Companies Act 1993. There were no related or similar proceedings in Australia, making this factor neutral. The financial circumstances of the parties, while marginally in the defendant's favour, did not outweigh the clarity of the law in New Zealand. Given the settled state of the law, the court concluded that the application for a stay should be dismissed.

The court ordered that the defendant pay the plaintiffs’ costs on a 2B basis together with disbursements as fixed by the Registrar.

Orders