Introduction [1] The people involved [5] The statement of claim [9] Mr Wouldes’ position [15] The claim for pre-incorporation losses [26] Mr Wouldes’ liability as an accessory [32] The pleading requirements for claims of accessory liability [37] No assumption of personal responsibility [48] Result [49]

[1] Kimble Contracting Ltd sues Graham Wouldes for $923,000.00 it says it lost as a result of misleading and deceptive conduct under s 9 of the Fair Trading Act 1986. Kimble Contracting Ltd does not say that Mr Wouldes himself contravened s 9 of the Fair Trading Act, but rather that he was complicit under the accessory liability provisions, s 43(1)(b) and (d). The second defendant, Anmar Almomen (commonly called “Alex”) is said to have directly engaged in the misleading or deceptive conduct in trade that caused Kimble’s losses. But he has disappeared.

[2] Mr Wouldes has applied for strike-out and summary judgment. The application is made on a number of grounds, but two were the focus of submissions:

[a] Kimble cannot sue for the first $800,000 of its claim because that is for payments made before Kimble was incorporated;

[b] Mr Wouldes did not aid, abet, or procure a contravention of s 9 of the Fair

Trading Act.

[3] Some of the remaining grounds involve contestable questions of fact which are inappropriate for an application for strike-out or summary judgment. Another ground is that Mr Wouldes did not assume personal responsibility, but that is misdirected. While that is relevant to a common law claim in negligence, there is a different test for liability under the Fair Trading Act.

[4] Mr Strauss has only recently been instructed. He is not responsible for the pleadings. During the hearing he accepted that the statement of claim could not be sustained in its current form, but sought the opportunity to amend. On the other hand Mr Skinner for Mr Wouldes pressed for summary judgment to give his client certainty.

The people involved

[5] Kimble Contracting Ltd was incorporated on 3 March 2015 but it went into liquidation on 9 December 2016. Its director was Mr Karnie Smith. He was its sole shareholder. People

said to be associated with the company are Mr Hamish Clarke and Mr Samuel Tolich. The business of Kimble Contracting Ltd…

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 Kimble Contracting Ltd v Wouldes

Details

AGLC: Kimble Contracting Ltd v Wouldes [2017] NZHC 1554
Case: [2017] NZHC 1554
Decision Date: 7 July 2017

CaseChat Overview and Summary

In Kimble Contracting Ltd v Wouldes, the High Court of New Zealand was tasked with determining the validity of a claim brought by Kimble Contracting Ltd against Graham Wouldes for losses allegedly incurred due to misleading and deceptive conduct under the Fair Trading Act 1986. Kimble Contracting Ltd did not allege that Wouldes directly engaged in the misleading conduct, but rather sought to hold him liable as an accessory to the actions of Anmar Almomen, who was said to have directly engaged in the misleading conduct. Wouldes applied for strike-out and summary judgment on the grounds that Kimble Contracting Ltd could not claim for losses incurred before it was incorporated and that Wouldes did not aid, abet, or procure a contravention of the Fair Trading Act. The court found that Kimble Contracting Ltd could not claim for pre-incorporation losses as it did not own the funds that were allegedly paid. Additionally, the court held that the statement of claim did not adequately plead the necessary mens rea for accessory liability under the Fair Trading Act, and there was no evidential foundation for the allegations of fraud against Wouldes. The court struck out the statement of claim but did not dismiss the proceeding against Wouldes, allowing for the possibility of amended pleadings. Wouldes was awarded costs for the strike-out application.

Orders