Kidd v Van Heeren

Case [2021] NZCA 244


IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA280/2021
 [2021] NZCA 244

BETWEEN

THE ESTATE OF MICHAEL DAVID KIDD by its administrator BRYAN JOHN COOPER
Appellant

AND

ALEXANDER PIETER VAN HEEREN
Respondent

Hearing:

3 June 2021

Court:

Kós P, Gilbert and Courtney JJ

Counsel:

B O’Callahan for Appellant
M D O’Brien QC and S D Williams for Respondent

Judgment:

11 June 2021 at 9 am

JUDGMENT OF THE COURT

AThe application for leave to adduce further evidence is declined.

BThe appeal is dismissed.

CThere is no order for costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by Kós P)

  1. We are here dealing with fraud by one partner against another, compounded by defiance and delay.  An interim payment of USD 25 million is ordered to be paid into Court within a month.  The respondent delays payment for almost six years.  The appellant dies 14 days after payment is made into Court.  His estate is now struggling to meet the costs of the litigation.  It has a ruinous arrangement with a litigation funder.  It asks the Judge to release the USD 25 million so it may get the funder off its back and continue recovery proceedings in Liechtenstein.  The Judge declines to do so, because security cannot be given.  Was the Judge wrong?

Background

  1. The history of this litigation tells a dispiriting tale.  Between 1975 and 1991 Messrs Kidd and van Heeren had operated in partnership as international steel traders.  Mr Kidd was based in South Africa, Mr van Heeren in this country.  Unknown to Mr Kidd, Mr van Heeren had defrauded him of substantial partnership proceeds and intermixed these with his own assets.  All this was determined conclusively by Satchwell J in the High Court of South Africa in 2013.[1]

    [1]Kidd v van Heeren SGHC Johannesburg 27973/1998, 20 May 2013.

  2. In fact, Mr Kidd had been seeking redress since issuing proceedings in the High Court in New Zealand in 1996.  But those proceedings were stayed because a deed of indemnity relied on by Mr van Heeren required disputes be determined in South Africa.[2] So Mr Kidd commenced proceedings in South Africa in 1998. Fifteen years later, this produced the judgment referred to at [2]. Mr van Heeren had elected not to give evidence in the trial. It may be noted that in the course of that judgment Satchwell J found the deed of indemnity, which had justified the stay, to be procured by fraud and therefore void. The Judge also found that the partnership assets included Genan Trading Co NV, Prime International Ltd, Galaxy Properties (Pty) Ltd, shares in Jocrow Steel Ltd, Huka Lodge, Dolphin Island, shares in Cromwell Corp Ltd/Wellesley Resources Ltd (or the cash substitute thereof), Optech International Ltd, gold bars, bearer certificates and cash in bank accounts. Leave to appeal was denied by the Supreme Court of South Africa.[3]

    [3]Van Heeren v Kidd SCA 717/13, 21 October 2013.

  3. Mr…

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Kidd v Van Heeren [2021] NZCA 244
Case
[2021] NZCA 244
Decision Date

CaseChat Overview and Summary

The Court of Appeal of New Zealand was asked to decide whether the High Court had erred in declining to release an interim payment of USD 25 million into the Court to the estate of the deceased, Michael David Kidd. The money had been paid by Alexander Pieter van Heeren, who had defrauded Kidd of partnership proceeds. Kidd had obtained a judgment for the sum in his favour in 2013, and a further order for the sum to be paid into Court in 2015. Van Heeren paid the sum six years late, and Kidd died 14 days after payment was made. Kidd’s estate then sought release of the funds to pay off debts incurred in litigation funding and to pay security for costs in proceedings in Liechtenstein against two foundations associated with van Heeren into whose control it was said partnership assets had been transferred. The appeal against the High Court’s refusal to release the funds was dismissed. The Court of Appeal held that the High Court had not erred in declining to release the funds. The order for the sum to be paid into Court had required security for repayment of any excess if the ultimate account was for a smaller sum. The estate could no longer provide that security. Furthermore, the likely outcome of the account being undertaken by the Judge was uncertain, and if the funds were disbursed, more than USD 17 million would be consumed by the litigation funder, LCM, with the prospects of recovery of any surplus over and above the ultimate account paid to LCM being somewhere between doubtful and irrecoverable. As to the Liechtenstein proceedings, the estate had not advanced a proposal to enable discrete funding of that proceeding without payment to LCM. Finally, the Judge’s decision in this matter was the exercise of a judicial discretion. The principles in May v May applied. Some degree of appellate deference was appropriate. The appeal will, therefore, be dismissed. There is no order for costs.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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