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Haylock v Patek

Haylock v Patek

Case [2010] NZCA 289 6 July 2010

Civil Litigation & Procedure

Commercial Law

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IN THE COURT OF APPEAL OF NEW ZEALAND
CA591/2008
[2010] NZCA 289

BETWEENROSEMARY PHYLIS FILLBRIDGE HAYLOCK AND STUART HAMILTON CAIRNS
Appellants

ANDJAMES WARREN PATEK AND SHELL EXPLORATION NZ LIMITED
Respondents

CA382/2009
AND BETWEEN ROSEMARY PHYLIS FILLBRIDGE HAYLOCK AND STUART HAMILTON CAIRNS
Appellants

ANDSOUTHERN PETROLEUM NO LIABILITY, JAMES WARREN PATEK AND SHELL EXPLORATION NZ LIMITED
Respondents

Hearing:10 March 2010

Court:William Young P, Glazebrook and Chambers JJ
Counsel:G J Judd QC and P A B Mills for Appellants
S J Katz and T S Glasgow for Respondents

Judgment:6 July 2010 at 4.30 pm

JUDGMENT OF THE COURT

AThe appeal (CA 382/2009) is allowed.
BThe appeal (CA591/2008) has been properly brought.
CThe questions in the application for directions are answered as follows:
(a)If the leave granted to the appellants to exercise the public issuer’s right of action would but for the enactment of the Securities Markets Amendment Act 2006 extend to and include the right to bring this appeal, is that right preserved by s 16 of the Securities Markets Amendment Act 2006? Yes.
(b)Does the leave to exercise the public issuer’s right of action extend to and include the right to bring this appeal? Yes.
(c)Is Southern required to pay the appellants’ costs of the appeal and, if costs are awarded against the appellants, also to pay those costs. Yes.

D If there is any question as to a costs order in CA382/2009 between Southern on the one hand and Mr Patek and Shell on the other then memoranda can be filed on or before 29 July 2010.
EThe respondents in CA591/2008 are to pay the appellants costs for a standard application on a Band A basis plus usual disbursements. We certify for second counsel.
FSouthern must pay to the appellants their reasonable indemnity costs relating to the appeal in CA382/2009 (and also their reasonable indemnity costs in the High Court).
GSouthern must pay to the appellants any additional reasonable indemnity costs incurred with regard to the application for directions in CA591/2008.
HThe costs payable by the respondents under Order E are to be deducted from the costs orders in F and G.

____________________________________________________________________
REASONS OF THE COURT
(Given by Glazebrook J)
Table of Contents
Para No

Introduction  [1]
The legislation  [6]
Terms of the s 18(1)(b) order made in this case  [8]
Hugh Williams J’s judgment  [9]
Issues in the appeal (CA382/2009)  [14]
Did the High Court have jurisdiction?  [15]
Was the question in the High Court correctly framed?  [17]
Does the grant of leave extend to any appeal?  [19]
The appellants’ submissions  [19]
The respondents’ submissions  [21]
Our assessment  [23]
Can leave be revisited?  [36]
Application for directions (CA591/2008)  [42]
Result and costs  [46]
Introduction
[1]       Ms Haylock and Mr Cairns, along with two other plaintiffs, were given leave under s 18(1)(b) of the Securities Markets Act 1988 (SMA) to exercise Southern Petroleum NL’s (Southern) right of action with regard to allegations of insider trading against Mr Patek and…

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 Haylock v Patek

Details

AGLC: Haylock v Patek [2010] NZCA 289
Case: [2010] NZCA 289
Decision Date: 6 July 2010

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal from Rosemary Haylock and Stuart Cairns against a judgment of the High Court which dismissed their claims for insider trading against James Patek and Shell Exploration NZ Limited, and also against a decision of the High Court that the costs order for the defendants to pay the plaintiffs' costs did not extend to any appeal. Haylock and Cairns had been granted leave under the Securities Markets Act 1988 to exercise the public issuer's right of action. The Court of Appeal held that the High Court had jurisdiction to determine the issue and that the question had been correctly framed. The grant of leave extended to any appeal, subject to the conditions imposed in the original grant of leave. The Court held that an appeal step is not a separate right of action; it is merely another step in prosecuting the action which was the subject of the original leave decision. The appeal was allowed and Southern Petroleum NL was required to pay the plaintiffs' costs of the appeal and any additional reasonable indemnity costs incurred with regard to the application for directions.

Orders