Counsel: P J Dale, N R Campbell and D W Grove for Appellants
S H Barter for Appellant Herrick
D J Chisholm and G P Blanchard for First Respondent
D J Neutze for Second Respondent
B O'Callahan for Third Respondent

Judgment: 9 August 2012

Reissued: 11 December 2012: see recall judgment [2012] NZSC 112

Effective date of judgment: 9 August 2012

JUDGMENT OF THE COURT

AThe appeals are allowed.
BThe SPAs executed at the same time as, or after, the corresponding Blue Chip investment product agreements were entered into are declared to be unenforceable under s 37 of the Securities Act 1978.
CThe High Court is to determine whether SPAs, entered into before the corresponding Blue Chip investment products were executed, were subscriptions for securities.
DThe cases are otherwise generally remitted to the High Court to make such further orders as may be consistent with this judgment.
EThe respondents are to pay the appellants costs $75,000 and usual disbursements.
FThe existing orders for costs in the High Court and Court of Appeal are set aside.

GOther than those affected by timing issues (being Mr Hutchinson in the case of TWL, and in the case of Greenstone Barclay, Mr and Mrs Bogardus, Ms Janes, Mrs and Mrs Johnson, Mr Crawford-Greene, Mr and Mrs Dick and Mr and Mrs Lester) the appellants are to be awarded costs and disbursements in the High Court and Court of Appeal in sums to be determined by those Courts in light of the judgment of this Court.
HCosts and disbursements in relation to the appellants affected by timing issues are to be addressed in the High Court and Court of Appeal once those timing issues have been resolved.

____________________________________________________________________

REASONS

Para No

Elias CJ, McGrath, William Young and Anderson JJ [1]
Tipping J [124]

ELIAS CJ, McGRATH, WILLIAM YOUNG AND ANDERSON JJ

(Given by William Young J)

Table of Contents
Introduction................................................................................................ [1]
The facts...................................................................................................... [4]
...... Blue Chip and its business model......................................................... [4]
...... The details of the investment products involved in the case............... [10]
...... The Barclay development.................................................................... [17]
...... The Bianco.......................................................................................... [20]
...... Icon..................................................................................................... [23]
...... Blue Chip’s marketing methods.......................................................... [26]

Were the JVA, PIP and PAC products securities for the
purposes of the Securities Act?............................................................... [29]
...... A preliminary comment....................................................................... [29]
...... Relevant provisions and definitions as the debt
...... securities argument............................................................................. [32]
...... The competing approaches of…

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 Hickman v Turn and Wave Ltd

Details

AGLC: Hickman v Turn and Wave Ltd [2012] NZSC 72
Case: [2012] NZSC 72
Decision Date: 9 August 2012

CaseChat Overview and Summary

The Supreme Court of New Zealand allowed the appeals by investors against the developers of property. The investors had entered into agreements to purchase apartments from the developers on terms which included their committing to purchase apartments in developments being marketed by Blue Chip. The investors sought to impeach the agreements for sale and purchase on the basis that Blue Chip's marketing of the investment products was in breach of the Securities Act 1978. The Court of Appeal had rejected the investors' arguments but the Supreme Court allowed the appeals. The Court held that the marketing of the investment products by Blue Chip was in breach of the Securities Act. The Court also held that the agreements for sale and purchase between the investors and the developers were unenforceable on the basis that they were tainted by the illegality of the primary contracts between the investors and Blue Chip.

Orders