Libra Developments Limited v Clark - [2014] NZHC 3148

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV 2002-412-000039 [2014] NZHC 3148

BETWEEN
LIBRA DEVELOPMENTS LIMITED

First Plaintiff

RUSSELL ERNEST HYSLOP Second Plaintiff

AND

LINDSAY ALLAN CLARK Defendant

Hearing: 4 December 2014 (via AVL link)

Counsel:

P B Churchman QC for Plaintiffs
L A Andersen for Defendant

Judgment:

15 December 2014

JUDGMENT OF WHATA J

[1] This is the twelfth year of this litigation, and a judgment, on average, every two years.1 Mr Clark failed to discharge his fiduciary obligations to a partnership known as Southern Developments. Chisholm J made a number of orders requiring Mr Clark to account to the partnership for profits from five projects. His Honour framed the relief on a project by project basis, with the valuation of each project to be fixed by reference to a actual or notional winding up date. Specific orders were
made in relation to the cessation of interest payable to Mr Clark for lending he had

1 Hyslop v Clark HC Dunedin CIV 2002-412-39, 28 July 2003; Hyslop v Clark HC Dunedin CIV
2002-412-39, 25 June 2004; Libra Developments Limited v Clark HC Dunedin CIV 2002-412-
39, 4 February 2005; Libra Developments Limited v Clark HC Dunedin CIV 2002-412-39,
21 March 2005; Clark v Libra Developments Ltd CA CA26.05, 31 October 2006; Libra Developments Ltd v Clark HC Dunedin CIV 2002-412-39, 10 June 2008; Libra Developments Ltd v Clark HC Dunedin CIV 2002-412-39, 30 April 2010; Libra Developments Ltd v Clark HC Dunedin CIV 2002-412-39, 17 June 2010; Libra Developments Ltd v Clark HC Christchurch CIV 2002-412-39, 22 September 2010; Libra Developments Ltd v Clark HC Dunedin CIV
2002-412-39, 21 March 2011; Clark v Libra Developments Ltd [2011] NZCA 493; Libra Developments Ltd v Clark HC Dunedin CIV 2002-412-39, 6 July 2012; Libra Developments Ltd v Clark [2013] NZHC 1578, 27 June 2013;

LIBRA DEVELOPMENTS LIMITED v CLARK [2014] NZHC 3148 [15 December 2014]

made to the partnership. One example of this type of order concerned a project called the St Albans project. It stated:

Any interest payable to the defendant in relation to this project (at the rate of
10%) will cease on that date…

[2] There is a dispute between the parties as to whether the “interest” must relate to project specific lending or simply to the total lending to the partnership. I understand that the majority of the lending relates to one project only, which happens to be the last project to be wound up. The effect of this is that Mr Clark will be deemed to be owed the interest on this lending through to the final dissolution of the partnership. This has significant implications for the partnership profits.

[3] The plaintiffs therefore apply for the following orders:

(a) in respect of three of the partnership projects, the defendant must account to the partnership for the profit received from each project (actual or notional) as at the date determined by the Court being either the actual completion date or the deemed completion…

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 Libra Developments Limited v Clark

Details

AGLC: Libra Developments Limited v Clark [2014] NZHC 3148
Case: [2014] NZHC 3148
Decision Date: 15 December 2014

CaseChat Overview and Summary

The case of Libra Developments Limited v Clark is the latest in a long-running dispute between the plaintiffs, Libra Developments Limited and Russell Ernest Hyslop, and the defendant, Lindsay Allan Clark. The dispute arises out of a partnership between the parties in relation to various property development projects. The plaintiffs seek a number of orders to clarify and implement the orders made by Chisholm J in earlier judgments. The legal issues in this case are whether the orders relating to cessation of interest related only to the lending on the specific projects and, if not, the date upon which interest should cease to run. The court found that the orders should be interpreted as requiring the defendant to account for profits on a project by project basis, with the valuation of each project to be fixed by reference to an actual or notional winding up date. The court held that interest payable to the defendant was to cease on the date the project was wound up, and that interest should not continue to run after the defendant had the full benefit of the assets. The court made the orders sought by the plaintiffs in relation to three of the partnership projects, requiring the defendant to account to the partnership for the profit received from each project as at the date determined by the Court being either the actual completion date or the deemed completion date rather than as at 30 June 2010.

Orders