H v S - [2016] NZHC 409

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-002404 [2016] NZHC 409

BETWEEN
H AND H

First Plaintiffs

XYZ LIMITED Second Plaintiff

AND

S
First Defendant

S and others as trustees of the T TRUST Second Defendants

Hearing: 5 February 2016

Counsel:

C Meechan QC for Plaintiffs
J Katz QC for Defendants

Judgment:

14 March 2016

JUDGMENT OF ASHER J (relating to counsel who may appear)

This judgment was delivered by me on Monday, 14 March 2016 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Davenports Harbour Lawyers, Auckland. Lowndes, Auckland.
C Meechan QC, Auckland. J Katz QC, Auckland.

H v S [2016] NZHC 409 [14 March 2016]

Introduction

[1] In this judgment I must determine whether senior counsel for the plaintiffs may continue to act as counsel for the plaintiffs. Ms Davenport QC acts as the senior barrister for the plaintiffs Mr H and Mrs H, and a company they control, XYZ Ltd (collectively referred to as Mr and Mrs H or the Hs). They bring proceedings against their former solicitor Mr S and S Ltd, a trustee company that he controlled. Mr and Mrs S and the company were trustees of the T Trust, which was involved in business dealings with Mr and Mrs H. For the purposes of this judgment I will refer to the defendants collectively as Mr S and the Trust.

[2] In a third amended statement of claim, of 126 paragraphs, Mr and Mrs H allege that Mr S as their solicitor induced them to enter into various investments and a joint venture agreement to their detriment. They allege Mr S breached fiduciary duties arising from his duty as a solicitor and as a joint venturer, as well as alleging breach of the Fair Trading Act and breach of confidence. Damages in the amount of
$1,585,500 are sought, alongside other relief.

[3] In a statement of defence, of 223 paragraphs, Mr S denies the allegations of breach of duty. There are affirmative defences and a counterclaim filed. Amongst the matters raised in defence and in support of the counterclaim, it is alleged that the funds that the Hs invested in the joint venture were acquired illegally, and for that reason cannot be recovered. The illegality is said to arise in the manner in which the initial shares forming the investment were obtained and sold in Country A.

[4] The proceedings have been hard fought. The plaintiffs applied to strike out parts of the defendants’ statement of defence and counterclaim which alleged illegality. In a reserved judgment of 2 April 2015, Associate Judge Smith dismissed that strike out application.1 The defendants subsequently registered a caveat against the Hs’ property, claiming an equitable lien arising out of the trustees’ right of recourse to the trust assets to discharge liabilities incurred, and to recoup expenses
paid as a trustee. There was an alternative constructive trust claim. Following a

contested application under s 145A of the Land Transfer Act 1952,…

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 H v S

Details

AGLC: H v S [2016] NZHC 409
Case: [2016] NZHC 409
Decision Date: 14 March 2016

CaseChat Overview and Summary

This case involved a legal dispute between H and H, a company they control, XYZ Ltd, and their former solicitor S and S Ltd, a trustee company that he controlled. The plaintiffs brought proceedings against the defendants, alleging that the solicitor had induced them to enter into various investments and a joint venture agreement to their detriment, and that he had breached fiduciary duties arising from his duty as a solicitor and as a joint venturer. The defendants denied the allegations and filed a counterclaim. The plaintiffs sought an order that their senior counsel, Kathryn Davenport QC, may appropriately retain the brief to act as their counsel in the conduct of these proceedings. The defendants asserted that Ms Davenport had provided evidence to the Court in relation to matters of fact directly in issue in the proceedings, and that she would be relevant for determination at the substantive trial. It was submitted that Ms Davenport could not be both counsel and witness in the proceeding. The Court held that the application for Ms Davenport to be able to retain the brief was not premature and that there was no relevant evidence that Ms Davenport could give. Therefore, she would not be called on to give any evidence and certainly could not be called to give any contentious evidence. The Hs were accordingly entitled to an order that Ms Davenport may retain the brief. The defendants will pay the plaintiffs costs of this application on a 2B basis with increased costs amounting to a further 50 per cent, together with all reasonable disbursements.

Orders