Harrison v Keogh - [2016] NZCA 545

IN THE COURT OF APPEAL OF NEW ZEALAND

CA392/2016
[2016] NZCA 545

BETWEEN	AIDAN JOSEPH HARRISON First Applicant
WELLINGTON CITY HELICOPTERS LIMITED Second Applicant
AND	JOHN PATRICK JOSEPH KEOGH Respondent

Court:

Wild, French and Winkelmann JJ

Counsel:

M B Beech and D M Fraundorfer for Applicants
Respondent in person

Judgment:

(On the papers)

21 November 2016 at 2.30 pm

JUDGMENT OF THE COURT

The application for leave to appeal under s 67 of the Judicature Act 1908 is declined.

____________________________________________________________________

REASONS OF THE COURT

(Given by French J)

Introduction

Mr Harrison and Wellington City Helicopters Ltd (Wellington Helicopters) wish to appeal two decisions of Nation J in the High Court at Auckland.[1] Leave is required because it will be a second appeal.[2] Justice Nation’s decisions were themselves decisions on an appeal from the Manukau District Court.[3]
[1]Harrison v Keogh [2015] NZHC 2791 [Judgment No 1]; Harrison v Keogh [2015] NZHC 3323 [Judgment No 2].
[2]Judicature Act 1908, s 67.
[3]Keogh v Harrison [2015] NZDC 11226.
Leave to appeal to this Court was declined by Nation J.[4] Accordingly, Mr Harrison and Wellington Helicopters must now seek leave directly from this Court.

Background

[4]Harrison v Keogh [2016] NZHC 1555.

The proceeding concerns a dispute over company accounts.
Mr Harrison and Mr Keogh are cousins who were shareholders and directors in Wellington Helicopters. The relationship between the two men broke down and Mr Keogh was removed as a director. In August 2011 Mr Harrison and Mr Keogh signed a settlement agreement settling all issues between them. Under the settlement agreement a helicopter belonging to Wellington Helicopters was to be sold and final accounts prepared for the company with a distribution to the shareholders in accordance with their agreed shareholding.
The helicopter was duly sold and in 2012 accounts were prepared by the company’s accountant. On the basis of the accounts Mr Keogh was entitled to payment of US$52,312.26. In October 2012, having received an email from Mr Keogh inquiring when the funds would be paid, the accountant responded by asking Mr Keogh to sign a number of resolutions relating to the winding up of Wellington Helicopters. The accountant advised Mr Keogh that once “we get these signed, I understand we will be looking to releasing the cash on hand”.
In December 2012 Mr Harrison[5] was paid out his shareholding. However, although Mr Keogh had been pressing for his payment, it was not forthcoming. He issued proceedings against Mr Harrison and Wellington Helicopters in the District Court in December 2012. On 31 January 2013 Mr Harrison instructed the accountant to recalculate the shareholder accounts by making adjustments for Mr Keogh’s private use of the helicopter and other alleged expenses.
[5]Mr Harrison’s shareholding was held by another company owned by him.
The adjustment — finalised in November 2013 — resulted in a dramatic reversal of Mr Keogh’s position. He was now shown as owing money to Wellington Helicopters in the sum of $63,037. Wellington Helicopters then filed a counter-claim in the…

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 Harrison v Keogh

Details

AGLC: Harrison v Keogh [2016] NZCA 545
Case: [2016] NZCA 545
Decision Date: 21 November 2016 at 2.30 pm

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, Wild, French and Winkelmann JJ were tasked with reviewing an application for leave to appeal brought by Aidan Joseph Harrison and Wellington City Helicopters Limited against John Patrick Joseph Keogh. The applicants sought to challenge two decisions of Nation J from the High Court at Auckland, which had upheld judgments in favour of Keogh from the Manukau District Court. The primary issue in the underlying dispute was a disagreement over company accounts between Harrison, Keogh, and Wellington City Helicopters, stemming from a settlement agreement that had been signed by the parties in 2011. According to the agreement, Wellington City Helicopters was to sell a helicopter and prepare final accounts, with distributions made to the shareholders based on their agreed shareholding. However, discrepancies arose over the final accounts, leading to the legal proceedings.

The legal issues before the Court of Appeal centred on the applicants' contention that the High Court decisions contained errors in the application of the doctrine of estoppel and the principles governing the personal liability of directors. Specifically, the applicants argued that the detriment suffered by Keogh was insufficient to establish estoppel and that the principles of Trevor Ivory Ltd v Anderson did not apply to representations in equity, thereby rendering Harrison personally liable for the company's actions. The Court of Appeal was required to determine whether the proposed appeal raised a question of law or fact capable of serious argument involving an interest of sufficient importance to warrant a further appeal.

The Court of Appeal declined to grant leave to appeal, finding that the applicants' arguments did not meet the threshold test. The Court reasoned that the High Court's application of the doctrine of estoppel was orthodox, and the detriment suffered by Keogh was clearly established through his actions in reliance on the representations made by Wellington City Helicopters. Additionally, the Court found that the issue of personal liability was not seriously arguable as it pertained to the application of established principles to the specific facts of the case. Consequently, the application for leave to appeal was declined, and no order was made as to costs.

Orders