Houghton v Saunders - [2019] NZHC 2007

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2008-409-348

[2019] NZHC 2007

BETWEEN
ERIC MESERVE HOUGHTON

Plaintiff

AND

TIMOTHY ERNEST CORBETT SAUNDERS, SAMUEL JOHN MAGILL, JOHN MICHAEL FEENEY, CRAIG

EDGEWORTH HORROCKS, PETER DAVID HUNTER, PETER THOMAS and JOAN WITHERS
First Defendants

CREDIT SUISSE PRIVATE EQUITY INCORPORATED

Second Defendant

CREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP

Third Defendant

Hearing: 8 August 2019

Counsel:

C R Carruthers QC and P A B Mills for plaintiff

A R Galbraith QC, D J Cooper and M C Harris for first defendants (except Ms Withers)
B D Gray QC and A E Ferguson for Ms Withers

J B M Smith QC, A S Olney and A J W O Lomas for second and third defendants

Judgment:

15 August 2019

RESERVED JUDGMENT OF DOBSON J

[Stage Two Interlocutories]

HOUGHTON v SAUNDERS [2019] NZHC 2007 [15 August 2019]

Contents

Introduction  [1]
Claimants’ discovery  [4]
ACC  [10]

Hunter Hall [12]

Forsyth Barr [14]

Claims by investors’ estates [19]

Delayed briefs [23]

Particulars of claims [30]

Terms of orders for further discovery, briefs and pleadings [37]

Claimants’ default on security for costs  [41]
Challenge to admissibility of part of Mr Houston’s brief  [56]
Summary  [82]
Costs  [85]

Introduction

[1] This judgment deals with another group of interlocutory applications made on behalf of the defendants affecting the preparation for the stage two trial, which is set down for five weeks commencing on 4 November 2019.

[2] At stage one of the proceeding, all documentation, judgments and minutes referred to Mr Houghton as the representative plaintiff, and this has been the case for the interlocutory documents thus far relating to stage two. However, because it is envisaged that stage two of the proceeding will involve claimants other than Mr Houghton in his representative capacity, Mr Houghton and the stage two claimants will now be referred to as “the claimants”. This is simply for ease of reference and does not require a change in the status of the proceeding.

[3]By application dated 12 July 2019, the defendants sought:

(a)orders consequent on non-compliance with previous discovery orders;

(b)orders consequent on the failure by the claimants to file briefs of evidence in accordance with the timetable;

(c)particulars of individual claims for those claimants whose cases are to be determined at stage two;

(d)further directions given non-compliance by the claimants with existing orders for security for costs in respect of the stage two trial;

(e)a ruling on the admissibility of parts of a brief of evidence served for an economist, Mr Houston, quantifying the impact of the untrue statement on the price of Feltex shares.

Claimants’ discovery

[4]The defendants’ application sought:

(a)confirmation of the exclusion of the claims of those claimants that have not completed discovery;

(b)a direction that further affidavits of documents from the remaining claimants should be filed, containing:

(i)particulars of the steps taken to search for relevant documents, including identification of the categories of documents searched for;

(ii)parts 4 and 5…

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 Houghton v Saunders

Details

AGLC: Houghton v Saunders [2019] NZHC 2007
Case: [2019] NZHC 2007
Decision Date: 15 August 2019

CaseChat Overview and Summary

The case of Houghton v Saunders was heard in the High Court of New Zealand. The dispute revolves around claims made by investors against defendants who were involved in the initial public offering (IPO) of Feltex shares. The investors allege that an untrue statement in the prospectus caused them to suffer financial loss. The court was required to decide on several legal issues, including the adequacy of discovery provided by the claimants, the timeliness of briefs of evidence, and the admissibility of certain expert evidence.

The court found that many claimants had failed to provide adequate discovery, with some only disclosing the opt-in form completed to join the representative action. The court also noted delays in the service of briefs of evidence by the claimants. The court addressed these issues by ordering further discovery, setting deadlines for the service of briefs, and directing that individual pleadings be filed for each claimant whose case was to be advanced at the stage two hearing. The court further ordered that security for costs be provided by the claimants, and rejected the admissibility of certain parts of an expert report on the basis that they were not relevant to the proceedings.

The final orders of the court included directions for further discovery, deadlines for the service of briefs and individual pleadings, orders for security for costs, and rulings on the admissibility of expert evidence. The court also noted that the defendants had substantially succeeded in their applications and would be entitled to an order for costs, the quantification of which was deferred pending further developments.

Orders