LDC Finance Limited v Miller - [2016] NZHC 567

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

CIV-2012-442-000391 [2016] NZHC 567

BETWEEN
LDC FINANCE LIMITED

First Plaintiff

JANET VERENA WILSON, KAYE DENISE WHALAN, ANGUS IAIN MCNEILL and GRETEL MCNEILL as trustees of the McNeill Family Trust Second Plaintiffs

JANET VERENA WILSON, KAYE DENISE WHALAN and ORS

Third Plaintiffs

ANGUS IAIN MCNEILL and GRETA MCNEIL as trustees of the McNeill

Family Trust, FAWDAN SUBDIVISIONS LIMITED and ROLAND LLOYD FAWCETT, JULIE BETHANY MORTON and PAULETTE FAWCETT as trustees of the Fawcett Family Trust

Fourth Plaintiffs

ANGUS IAIN MCNEILL and GRETEL MCNEILL as trustees of the McNeill Family Trust

Fifth Plaintiffs

IAIN BRUCE SHEPHARD and HEATH LESLIE GAIR as interim liquidators of LDC Finance Limited (In Receivership and Interim Liquidation)

Sixth Plaintiffs

AND

DAVID GORDON MILLER, KEVIN ELLIOTT, CHRISTOPHER JOHN HARDIMAN AND JOHN CHARLES JANETTO

First Defendants

CARRAN MILLER STRAWBRIDGE LIMITED

Second Defendant

LDC FINANCE LIMITED v MILLER & ORS [2016] NZHC 567 [5 April 2016]

PERPETUAL TRUST LIMITED Third Defendant

SHERWIN CHAN & WALSHE Fourth Defendant

Hearing: 2 March 2016

Counsel:

H B Rennie QC and J D Haig for Plaintiffs
T H A Spear for First Defendants

M C Smith and O L Ostrovsky for Third Defendant O J Meech and E S McCann for Fourth Defendant No appearance for Second Defendant

Judgment:

5 April 2016

JUDGMENT OF ELLIS J

I direct that the delivery time of this judgment is
11.45 am on the 5th day of April 2016

[1] These proceedings have been set down for a six week trial in Nelson, commencing on 4 July 2016. In essence, they involve representative claims by over
800 investors for losses they have incurred as a result of the failure of LDC Finance

Limited (LDC) (in receivership and in liquidation).

[2] Since the proceedings were filed in 2012, they have been case managed by

Associate Judge Matthews. He made representation orders in November 2013.1 On

11 December 2015 he determined an application by the third defendant for directions as to the mode of trial.2 He directed that there was to be a first trial of all but one of the causes of action pleaded in what was then the plaintiffs’ fourth amended statement of claim.3 He left open the question of whether there would need to be a second trial on quantum but noted that it appeared to be unlikely.

[3] The first, third and fourth defendants now seek a review of that decision. The matter is urgent because of the impending trial.

The parties

[4] The plaintiffs are:

(a) LDC itself and the company’s liquidators (first and sixth plaintiffs respectively);

(b) The second plaintiffs, who plead that they represent a group of LDC

investors who, prior to 19 September 2006:4

(i)invested in new secured debenture stock and/or unsecured deposits (term deposits or on-call deposits); and/or

(ii)renewed existing investments in secured debenture stock and/or unsecured term deposits; and/or

1      LDC Finance Ltd v Miller [2013] NZHC 2993.
2      LDC Finance Ltd v Miller [2015] NZHC 3165.
3      Since…

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.

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Details

Case: [2016] NZHC 567
Decision Date: 5 April 2016

CaseChat Overview and Summary

LDC Finance Limited v Miller [2016] NZHC 567 was a case involving over 800 investors who had incurred losses as a result of the failure of LDC Finance Limited. The investors brought claims against the directors of LDC, the chartered accounting firm Carran Miller, a trustee company Perpetual Trust Limited, and a chartered accountancy partnership Sherwin Chan & Walshe. The defendants sought a review of the Associate Judge's decision on the mode of trial, arguing that a split trial approach should be adopted. The plaintiffs, on the other hand, preferred a single trial. The Associate Judge declined to order the mode of trial sought by the defendants, citing concerns about cost, delay, and the practical problems arising from a staged trial. The defendants filed applications for review, arguing that the Associate Judge's decision involved manifest errors. The court found that the Associate Judge's decision was not wrong, as the pleadings of "reliance" in this case were examined in their wider context. The court also found that the staged approach adopted by the High Court in Houghton was not mandatory, and that the case management decision was within the trial court's discretion. The applications for review were dismissed accordingly, and costs were to follow the event.

Orders