GTV Holdings Ltd v Harris - [2018] NZCA 95

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA53/2017
[2018] NZCA 95

BETWEEN	GTV HOLDINGS LIMITED First Appellant MICHAEL ALAN HEINRICH CORDELL Second Appellant NICHOLAS HARVEY MURRAY Third Appellant GREENSTONE TV LIMITED Fourth Appellant
AND	JOHN EVAN HARRIS AND SARAH LOUISE JONES AS TRUSTEES OF THE DELARGEY TRUST First Respondent JOHN EVAN HARRIS Second Respondent

Hearing:	7 November 2017
Court:	Kós P, Courtney and Toogood JJ
Counsel:	A J Horne and A E Simkiss for Appellants N R Campbell QC and M A E Sullivan for Respondents
Judgment:	8 May 2018 at 3 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
B The appellants are jointly and severally liable to pay the respondents one set of costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Kós P)

Shares in a production company specialising in reality television shows were sold, with nearly 20 per cent of the purchase price deferred. Payment of the deferred portion was subject to an adjustment formula. If full adjustment must be made, as the appellant purchasers contend, the purchase price reduces by $554,720. The respondent vendors say no adjustment should be made.
In a claim brought by the respondents for the deferred portion, Heath J held no adjustment was required, so that the deferred portion was payable, with interest, from the date it fell due.[1] He also rejected warranty counterclaims made by the appellants.[2]

Background

[1]Harris v GTV Holdings Ltd [2016] NZHC 3123 [HC judgment] at [81].

[2]At [99] and [112].

The facts are set out in detail in the judgment appealed.[3] We summarise them here.
[3]At [1]–[12].
Greenstone TV Ltd (Greenstone) produces and licenses reality television programmes, most of which show police and customs officers undertaking their duties. It was owned by the respondents. GTV Holdings Ltd (GTV), the principal appellant, was incorporated for the purpose of acquiring Greenstone. Its parent, Cordell Jigsaw Zapruder Productions Pty Ltd, produces similar shows to Greenstone in Australia.
The parties entered into negotiations for the purchase and sale of the shares in Greenstone. Late in those negotiations an issue arose about the entitlement of each party to benefits Greenstone expected to obtain from the licensing of a second series of Highway Cops (Highway Cops 2) to the Australian Seven Network (Operations) Ltd (Seven). That licensing deal had not been formalised. The series was in production during negotiations between Greenstone and Seven. Estimated income from licensing that series to Seven was included in projections for the 2014 financial year.
The respondents took the view GTV should pay for the value of the expected licence. GTV however did not want to overpay in case Seven backed away, either altogether or if it deferred the licence income from the 2014 financial year. The parties agreed to insert a clause specifying the way that licence income would be treated.
To deal with this, the share purchase agreement (the Agreement) provided a purchase…

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.

Keep reading for free

Create a free CaseChat account to read GTV Holdings Ltd v Harris and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2018] NZCA 95
Decision Date: 8 May 2018 at 3 pm

CaseChat Overview and Summary

The Court of Appeal of New Zealand dismissed an appeal brought by GTV Holdings Ltd and others against a decision of the High Court. The High Court had ruled that the appellants were liable to pay the respondents a deferred portion of the purchase price for shares in Greenstone TV Ltd, a reality television production company, and had rejected warranty counterclaims brought by the appellants. The appellants argued that the High Court had erred in interpreting a formula in the share purchase agreement which determined the amount of the adjustment to the deferred portion of the purchase price. They also argued that the High Court had erred in rejecting their warranty claims. The Court of Appeal held that the High Court was correct in its interpretation of the adjustment formula and in rejecting the warranty claims. It held that the sale of the Highway Cops 2 series satisfied the requirements of the formula, and that the HC2 Licence was not outside the ordinary course of business for Greenstone. The Court of Appeal also held that the evidence did not support the appellants' claims that the respondents had breached the information warranties.

The appeal was dismissed, and the appellants were ordered to pay the respondents' costs.

Orders