Hughes v Fea - [2018] NZHC 2716

IN THE HIGH COURT OF NEW ZEALAND INVERCARGILL REGISTRY

I TE KŌTI MATUA O AOTEAROA WAIHŌPAI ROHE

CIV-2016-425-13

[2018] NZHC 2716

BETWEEN JOHN STANLEY HUGHES AND IRMA AINSLIE HUGHES
Appellants

AND

DUNCAN VERNHAM FEA AND PETER HEENAN

Respondents

Hearing: (On the papers)

Counsel:

C S Withnall QC and C J G Lucas for the Appellants D M Lester for the Respondents

Judgment:

19 October 2018

JUDGMENT OF NICHOLAS DAVIDSON J

A. BACKGROUND

[1]These proceedings have a long and tortuous history.

[2] The appellants Mr and Mrs Hughes, sued the respondent receivers for damages arising from conversion or unlawful interference with tulip bulbs, to which they claimed ownership. They had leased bulbs to Global Bulbs Limited (“Global”) on terms which required bulbs to be replaced, to preserve their capital stock. Global went into receivership.

HUGHES v FEA AND HEENAN [2018] NZHC 2716 [19 October 2018]

[3] Before the fixture in the District Court, a preliminary point went to the High Court and judgment was delivered by Lang J, who held that:1

[27] For the reasons set out above I have concluded that the lease [(of bulbs)] did not create a security interest in terms of the Act in respect of the original or replacement bulbs. The lease did, however, create such an interest in respect of any proceeds of sale of bulbs in circumstances where Global Bulbs did not honour its obligation to replace those bulbs.

[4] The appellants had only limited success in the District Court.2 They established conversion by the respondents, but their claim to damages was essentially rejected for lack of evidence as to which bulbs belonged to them, and the market value of such bulbs. They appealed to the High Court.

[5] By interim judgment of 14 December 2016,3 this Court directed a further hearing to determine the loss which Mr and Mrs Hughes had sustained by the conversion of the bulbs. The judgment recorded:4
If they belonged to the appellants, then they should have the entire proceeds of sale and interest. The costs of sale by the receivers that would not have fallen on the appellants should not be brought to account.

[6] By final judgment save as to costs of 7 December 2017,5 this Court held that Mr and Mrs Hughes were entitled to the proceeds of sales made by the receivers of
$72,000.00, (adjusted by Minute of 11 April 2018 to $76,707.00) with interest at Judicature Act 1908 rates from receipt of the proceeds of sale by the receivers. Costs were reserved.

Interest and Costs

[7] The appellants claim $203,218.97 including interest to 31 August 2018 made up as follows:
(i)The judgment sum of $76,707.00

1      Hughes v Fea [2013] NZHC 2863.
2      Hughes v Fea DC Invercargill CIV-2010-025-348, 17 December 2015.
3      Hughes v Fea [2016] NZHC 3043.
4 At [160].
5      Hughes v Fea [2017] NZHC 3037.

(ii)Interest on judgment sum to 31 August 2018 of $36,387.806

(iii)Interest at 5% on judgment sum from [* to be…

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 Hughes v Fea

Details

AGLC: Hughes v Fea [2018] NZHC 2716
Case: [2018] NZHC 2716
Decision Date: 19 October 2018

CaseChat Overview and Summary

In Hughes v Fea and Heenan, the appellants, John Stanley Hughes and Irma Ainslie Hughes, sued the respondents, Duncan Vernham Fea and Peter Heenan, for damages arising from the alleged conversion or unlawful interference with tulip bulbs, which the appellants claimed ownership of. The case had a lengthy history, with the appellants initially leasing tulip bulbs to Global Bulbs Limited on terms requiring the bulbs to be replaced to preserve their capital stock. When Global Bulbs went into receivership, the appellants sued the receivers for conversion of the bulbs. The legal issues before the court included whether interest should be awarded and the appropriate quantum of costs to be awarded to the appellants.

The court held that the award of interest was appropriate as a compensatory mechanism for the unlawful conversion of the bulbs. The court reasoned that while the appellants had not formally claimed interest in their initial notice of claim, the general purpose of awarding interest is to achieve just compensation for the plaintiff. The court found that the respondents were not prejudiced by the absence of a formal claim for interest and that it was within the court's discretion to award interest as compensation for the wrongful retention of the proceeds from the sale of the bulbs. The court also addressed the issue of costs, concluding that while the appellants had succeeded overall, their claim for damages was significantly reduced, and a great deal of time was spent on an unsupported damages claim and appeal. The court decided that the appellants were entitled to some, but limited, costs, and awarded them $40,000.00 inclusive of disbursements.

Orders