Houghton v Saunders - [2013] NZHC 2437

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2008-409-348 [2013] NZHC 2437

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 INC (FORMERLY CREDIT SUISSE FIRST BOSTON PRIVATE EQUITY INC)

Second Defendant

CREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP

Third Defendant

FIRST NEW ZEALAND CAPITAL
Fourth Defendant

FORSYTH BARR LIMITED
Fifth Defendant

Hearing:

16 September 2013

Counsel:

A J Forbes QC and P A B Mills for plaintiff

A R Galbraith QC (leave to withdraw), D J Cooper and S V A East for first defendants

A S Olney for second and third defendants D H McLellan QC for fourth defendant

A C Challis for fifth defendant

Judgment:

18 September 2013

RESERVED JUDGMENT OF DOBSON J

HOUGHTON v SAUNDERS [2013] NZHC 2437 [18 September 2013]

[1] A further interlocutory hearing was conducted on 16 September 2013 to advance a number of issues that have arisen.

Leave for Bell Gully to continue acting for the first defendants

[2] By memorandum dated 9 September 2013, Bell Gully, in their capacity as solicitors for the first defendants other than Mr Horrocks, sought leave under the relevant rules to continue acting in light of the prospect that a partner of that firm,
Mr Gilbertson, is likely to be called to give evidence for the first defendants.[1]

[1] Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008, r 13.5.2.

[3] Mr Gilbertson was a member of a due diligence committee formed by Feltex for the purposes of the relevant initial public offering. He attended meetings and prepared documents that are referred to in the statement of defence filed on behalf of the first defendants. There is a reasonable apprehension that he will be called to give evidence of fact, but not opinion evidence.

[4] In the absence of opposition, I have ordered that Bell Gully may continue as solicitors for the first defendants other than Mr Horrocks in these circumstances, on the condition that external counsel will complete the briefing of Mr Gilbertson and leading of any evidence from him that is called at trial.

Security for costs

[5] In my judgment of 19 July 2013,[2] I ordered that further security for costs was to be provided in favour of the defendants against the contingency that the Court might subsequently make costs orders in their favour against the plaintiff.

[2] Houghton v Saunders [2013] NZHC 1824.

[6] As to the mode of security, that judgment specified:

[121] What I direct is that the plaintiff provide a form of security that is unconditionally enforceable on the making of demand by any one or more of the defendants to meet the extent of any costs order in favour of the defendants and against the plaintiff in this proceeding. The commitment has to be one which is enforceable in New Zealand.

[122] It seems likely that the simplest form…

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 [2013] NZHC 2437
Case: [2013] NZHC 2437
Decision Date: 18 September 2013

CaseChat Overview and Summary

The case of Houghton v Saunders is an ongoing legal battle in the High Court of New Zealand. Eric Meserve Houghton is the plaintiff suing several defendants, including Timothy Ernest Corbett Saunders, Samuel John Magill, and others, over issues related to the financial conduct of Feltex, a carpet manufacturing company. The second defendant is Credit Suisse Private Equity Inc, and the third defendant is Credit Suisse First Boston Asian Merchant Partners LP. The case involves complex financial transactions and allegations of misleading and deceptive conduct, negligence, and breaches of the Fair Trading Act 1986.

The court was required to decide on two main issues. The first was whether Bell Gully, the law firm representing the first defendants, could continue to act for them despite a potential conflict of interest due to a partner likely being called to give evidence. The second issue was the form of security for costs that the plaintiff needed to provide to the defendants. The court had previously ordered the plaintiff to provide further security for costs, but the plaintiff proposed alternative arrangements involving commitments from their litigation funder and insurer.

The court allowed Bell Gully to continue acting for the first defendants under certain conditions, including that external counsel would complete the briefing of the partner and lead any evidence from him. Regarding the security for costs, the court was initially skeptical of the proposed alternative arrangements, but after further argument and submissions, the court decided to give the plaintiff more time to settle a form of security that would comply with the requirements. The court directed the plaintiff's counsel to provide complete terms of the proposed undertaking, financial statements, and information on the costs of providing a bond or guarantee.

The court also addressed requests for further particulars from the defendants, ordered the plaintiff to provide certain documents and details of claimed losses, and set deadlines for the completion of discovery. The court acknowledged the need for further discussion on the form of security for costs and scheduled a telephone conference to address any remaining issues.

This case demonstrates the complexities involved in managing ongoing litigation, particularly when it involves multiple parties, significant financial interests, and detailed factual allegations. The court's decisions on these interlocutory matters reflect a careful balance between ensuring that the legal process proceeds efficiently and fairly, while also accommodating the practicalities and constraints faced by the parties involved.

Orders