Kwok v Torrance - [2017] NZHC 1510

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2015-404-001808

[2017] NZHC 1510

BETWEEN
SHING CHUNG (DANIEL) KWOK

First Plaintiff

CASSCO LIMITED
Second Plaintiff

AND

SELWYN CLARK TORRANCE

First Defendant

DAVID ALAN KEITH CLARK

Second Defendant

Hearing: 20–23 March 2017

Appearances:

M I S Phillips for the Plaintiffs

S C Torrance (Self-represented First Defendant) in Person D A K Clark (Self-represented Second Defendant) in Person

Judgment:

3 July 2017

JUDGMENT OF EDWARDS J

This judgment was delivered by Justice Edwards on 3 July 2017 at 10.00 am, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Vicki Ammundsen Trust Law Limited, Auckland Carson Fox Legal, Auckland

Copies To: S C Torrance, Lower Hutt
D A K Clark, Lower Hutt

KWOK v TORRANCE [2017] NZHC 1510 [3 July 2017]

Introduction

[1] Mr Kwok, and his company, Cassco Ltd, seek to recover their investment in a failed venture to bottle and sell water from an underground spring.

[2] They claim that Mr Torrance and Mr Clark failed to transfer water rights and intellectual property in breach of an agreement to do so. They also say they were induced to enter into an agreement by misrepresentations made about an offer from another potential investor, and the amount already invested in the project by both defendants.

[3] Mr Torrance and Mr Clark say that there was no contractual obligation to transfer the water rights and intellectual property, and that the representations were true. They also say that Mr Kwok did not pay the full price agreed for his shares in the joint venture company, and acted in an unconscionable way by trying to appropriate the venture for his own company.

[4] The plaintiffs plead three causes of action: breach of contract, misrepresentation under the Contractual Remedies Act 1979, and misleading and deceptive conduct under the Fair Trading Act 1986. The defendants deny each claim and also plead two affirmative defences: set-off and estoppel.

[5] Resolution of the plaintiffs’ claims depends on the answers to the following questions:

(a)Was there a contract?

(b)Was there a breach?

(c)What caused the loss?

(d)Were there misrepresentations?

(e)Did the plaintiffs rely on those misrepresentations?

[6] I consider each of these questions first, and then go on to consider each cause of action in turn, addressing any residual issues in the process.

The key events

[7] The underground spring at the centre of the proposed venture is on a farm owned by Mr Ian Stewart on the West Coast of the South Island.

[8] Alpha Aqua Ltd, a company owned by Mr Torrance and Mr Clark, was party to a lease and licence agreement with Mr Stewart which secured access to the land and the water. Alpha Aqua Ltd also owned intellectual property in the name “Aqua NZ”. Mr Torrance and Mr Clark’s initial idea for the project involved the bottling and marketing of the water under the Aqua NZ brand name.

[9] Mr Kwok learned about the proposed water venture from Mr Cobb,…

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 Kwok v Torrance

Details

AGLC: Kwok v Torrance [2017] NZHC 1510
Case: [2017] NZHC 1510
Decision Date: 3 July 2017

CaseChat Overview and Summary

In Kwok v Torrance, the plaintiffs, Mr Kwok and his company Cassco Ltd, sought to recover their investment in a proposed water bottling venture from the defendants, Mr Torrance and Mr Clark. The plaintiffs alleged that the defendants breached a contract to transfer water rights and intellectual property, made misrepresentations, and engaged in misleading and deceptive conduct. The defendants denied the claims and asserted set-off and estoppel as affirmative defences. The court considered whether there was a contract, whether there was a breach, what caused the loss, whether there were misrepresentations, and whether the plaintiffs relied on those misrepresentations. The court found that there was a contract to enter into a joint venture, but no contractual obligation to transfer the water rights and intellectual property. The court also found that there was no breach because the parties intended to negotiate a new lease and licence. The court held that the loss was caused by the failure to agree on a new lease and licence with the landowner, not by the failure to transfer the water rights and intellectual property. The court further found that there were misrepresentations but that the plaintiffs were not induced by them to enter into the contract. Finally, the court dismissed all three causes of action and awarded costs to the defendants.

Orders