Green v Gillette - [2022] NZCA 49

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA278/2019
[2022] NZCA 49

BETWEEN	THOMAS PATTON GREEN Appellant
AND	NATHAN DANIEL GILLETTE Respondent

Court:	Clifford and Collins JJ
Counsel:	Appellant in person Respondent in person
Judgment: (On the papers)	11 March 2022 at 9.30 am

JUDGMENT OF THE COURT

AThe application to strike out is dismissed.
BThere is no order for costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by Collins J)

Introduction

Mr Gillette has applied to strike out Mr Green’s appeal. The application is made under r 44A of the Court of Appeal (Civil) Rules 2005 (the Rules), and alleges Mr Green:
(a)is continuing to default in complying with procedural directions made by this Court;
(b)has failed to prosecute the appeal with due diligence; and
(c)is pursuing an appeal that is frivolous, vexatious, or otherwise an abuse of process.

Background

In 2014, Mr Green formed a company called SunPower Ltd (SunPower). In January 2016, Mr Green and Mr Gillette entered into a shareholders’ agreement under which Mr Gillette obtained the right to acquire up to 49 per cent of the shares of SunPower for $98,000. Mr Gillette duly paid Mr Green for the shares.
Also in January 2016, Mr Gillette became employed by SunPower as its sales manager on a salary of $60,000.
By the end of March 2016, Mr Green told Mr Gillette that SunPower did not have sufficient money to pay his salary. Numerous disputes then developed between Mr Green and Mr Gillette. Mr Gillette ceased working for SunPower in July 2016.
Mr Gillette commenced proceedings before the Employment Relations Authority (the ERA) alleging he had been unjustifiably dismissed from SunPower. The ERA awarded Mr Gillette $26,043.96 for arrears of salary. The ERA also directed SunPower pay to Mr Gillette $10,000 by way of additional penalty.[1]
[1]Gillette v Sunpower Ltd [2017] NZERA Christchurch 1.
In the meantime, Mr Green sold SunPower to another company he owned for a sum well below the true value of the company. He later onsold the business to another entity for $120,000, which was its true market value.
In November 2017, the ERA ordered Mr Green pay $20,067.20 to Mr Gillette for aiding and abetting the breach of employment contract by SunPower.[2]
[2]Gillette v Roofpower Installations Ltd (previously named Sunpower Ltd) [2017] NZERA Christchurch 198.
Mr Gillette also commenced proceedings alleging, amongst other matters, oppression of a minority shareholder contrary to s 174 of the Companies Act 1993.
In a judgment delivered in May 2019, Cooke J said that Mr Green’s conduct was a straightforward case of unfair prejudice directed towards Mr Gillette. The Judge explained:[3]
… The majority shareholder has utilised his control of the company to effectively take the whole business operation owned by the company, transferred it to his own company at under value, and then sold those assets for the true value to a third party. He has then kept all the proceeds of sale. No resolutions approving such a major…

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 Green v Gillette

Details

AGLC: Green v Gillette [2022] NZCA 49
Case: [2022] NZCA 49
Decision Date: 11 March 2022 at 9.30 am

CaseChat Overview and Summary

In the case of Green v Gillette, the Court of Appeal of New Zealand was presented with an application by Nathan Daniel Gillette to strike out an appeal filed by Thomas Patton Green. The appeal was related to disputes arising from a shareholders' agreement and subsequent employment issues between the parties. The Court of Appeal, consisting of Clifford and Collins JJ, dismissed the application to strike out the appeal. The court held that while the prospects of success on appeal were weak, the appeal was not frivolous, vexatious, or an abuse of process. The court emphasised that the appeal should be allowed to proceed to a hearing and determination.

The legal issues the Court of Appeal needed to decide were whether Mr Green was in continuing default in complying with procedural directions, whether he had failed to prosecute the appeal with due diligence, and whether the appeal was frivolous, vexatious, or an abuse of process. The court found that the delays in prosecuting the appeal, while unfortunate, did not amount to a continuing default in complying with procedural directions. Additionally, the court found that the delays did not warrant striking out the appeal for failure to prosecute with due diligence. Finally, the court concluded that the appeal was not frivolous, vexatious, or an abuse of process, as the grounds of appeal, while weak, still had a slim prospect of success.

The Court of Appeal's reasoning was based on its previous judgments, which had examined the delays in prosecuting the appeal and concluded that Mr Green should be allowed to pursue his appeal. The court reiterated that the prospects of success on appeal were weak, but this did not equate to the appeal being frivolous, vexatious, or an abuse of process. The court found that the appeal should be permitted to proceed to hearing and determination in the usual way. The Court of Appeal dismissed the application to strike out the appeal, and there was no order for costs.

Orders