Livingstone v CBL Corporation Limited (in liquidation)

[2022] NZHC 1734

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2727

[2022] NZHC 1734

BETWEEN

BASIL IAN LIVINGSTONE

Plaintiff

AND

CBL CORPORATION LIMITED (IN LIQUIDATION)

First Defendant

Continued …

Hearing:

23 May 2022

Appearances:

P Skelton QC for B I Livingstone

JCL Dixon QC, A M Cullinan and N Blomfield for Financial Markets Authority
M Colson QC and F Cuncannon for T.E.A. Custodians Ltd and Argo Investments Ltd
D Chisholm QC (excused) and M Tingey for CBL Insurance Ltd (in liq)

J Goodall and A Colgan for CBL Corporation Ltd (in liq) D M Salmon QC and J Cundy for P A Harris

T J Lindsay and S McNae for Sir J Wells, ACR Hannon, I K Marsh and NGP Donaldson

J Billington QC and T J Wood for A L Hutchison Estate and Federal Pacific Group Ltd

CDSC Morris for C J Mulholland and CM Trustee Services Ltd I Rosic for PricewaterhouseCoopers

Judgment:

21 July 2022

JUDGMENT OF GAULT J

This judgment was delivered by me on 21 July 2022 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

LIVINGSTONE v CBL CORPORATION LTD (IN LIQUIDATION) [2022] NZHC 1734 [21 July 2022]

Continued …

AND

SIR JOHN WELLS

First Third Party

PETER ALAN HARRIS
Second Third Party

ALISTAIR LEIGHTON HUTCHISON (DECEASED)
Third Third Party

ANTHONY CHARLES RUSSEL HANNON

Fourth Third Party

IAN KELVIN MARSH
Fifth Third Party

NORMAN GERALD PAUL DONALDSON

Sixth Third Party

CIV-2019-404-2739

BETWEEN

FINANCIAL MARKETS AUTHORITY
Plaintiff

AND

CBL CORPORATION LIMITED (IN LIQUIDATION)

First Defendant

PETER ALAN HARRIS
Second Defendant

ALISTAIR LEIGHTON HUTCHISON (DECEASED)
Third Defendant

CARDEN JAMES MULHOLLAND

Fourth Defendant

CIV-2019-404-2745

BETWEEN

FINANCIAL MARKETS AUTHORITY

Plaintiff

AND

CBL CORPORATION LIMITED (IN LIQUIDATION)

First Defendant

SIR JOHN WELLS
Second Defendant

PETER ALAN HARRIS
Third Defendant

ANTHONY CHARLES RUSSELL HANNON

Fourth Defendant

ALISTAIR LEIGHTON HUTCHISON (DECEASED)
Fifth Defendant

NORMAN GERALD PAUL DONALDSON

Sixth Defendant

IAN KELVIN MARSH
Seventh Defendant

CARDEN JAMES MULHOLLAND

Eighth Defendant

CIV-2019-404-2792

BETWEEN

CBL INSURANCE LIMITED (IN LIQUIDATION)
First Plaintiff

KARE JOHNSTONE and ANDREW
JOHN GRENFELL as liquidators of CBL INSURANCE LIMITED (IN
LIQUIDATION)

Second Plaintiffs

AND

PETER ALAN HARRIS

First Defendant

ALISTAIR LEIGHTON HUTCHISON (DECEASED)
Second Defendant

SIR JOHN WELLS
Third Defendant

ANTHONY CHARLES RUSSELL HANNON
Fourth Defendant

NORMAN GERALD PAUL DONALDSON

Fifth Defendant

IAN KELVIN MARSH

Sixth Defendant

PRICEWATERHOUSECOOPERS

Seventh Defendant

CIV-2019-485-642

BETWEEN

T.E.A. CUSTODIANS LIMITED as custodian of the Harbour Australasian Equity Fund

First Representative Plaintiff

ARGO INVESTMENTS LIMITED
Second Representative Plaintiff

AND

SIR JOHN WELLS

First Defendant

PETER ALAN HARRIS
Second Defendant

ALISTAIR LEIGHTON HUTCHISON (DECEASED)
Third Defendant

ANTHONY CHARLES RUSSELL HANNON

Fourth Defendant

IAN KELVIN MARSH

Fifth Defendant

NORMAN GERALD PAUL DONALDSON

Sixth Defendant

EURASIA INVESTMENT LIMITED
Seventh Defendant

SUNSHINE NOMINEES LIMITED
Eighth Defendant

OCEANIC SECURITIES PTE LIMITED

Ninth Defendant

FEDERAL PACIFIC GROUP LIMITED
Tenth Defendant

CARDEN JAMES MULHOLLAND
Eleventh Defendant

C M TRUSTEE SERVICES LIMITED
Twelfth Defendant

CBL CORPORATION LIMITED (IN LIQUIDATION)

Thirteenth Defendant

[1]        I convened a one day case management conference in these five CBL related proceedings to consider the extent to which they should be heard together (not consolidated) pursuant to an order under r 10.12 of the High Court Rules 2016.

[2]        The FMA seeks to have its two proceedings heard together before the other proceedings. That application is unopposed. Although the two FMA proceedings are discrete, it makes sense to hear them together.

[3]        However, the defendants in the FMA proceedings and all parties in the two shareholder proceedings seek to have the two shareholder proceedings also heard together with the FMA proceedings. They seek a joint trial of liability issues in the FMA and shareholder proceedings – that is, one hearing in the four proceedings dealing with the nature, extent and timing of the contraventions alleged, with evidence in each proceeding to be evidence in all four proceedings, and one judgment. They propose that any pecuniary penalty hearing in the FMA proceedings, all shareholder class-wide quantum issues and, if necessary, individual shareholder issues be dealt with subsequently (with their respective sequencing left for another day).

[4]        In relation to the fifth proceeding, brought by the liquidators of CBL Insurance Ltd (in liquidation) (CBLI), it is now common ground that – provided quantum is not dealt with in the other four proceedings – the liquidators’ proceeding should not be heard together with the other proceedings.

Factual background

[5]        CBL Corporation Ltd (in liquidation) (CBLC) is the parent company of a group of companies which operated as an international credit surety and financial risk insurer headquartered in Auckland. CBLI is a wholly owned subsidiary of CBLC owned through LBC Holdings New Zealand Ltd.

[6]        On or about 14 February 2012, the Reserve Bank of New Zealand (RBNZ) granted CBLI a provisional insurance licence under the Insurance (Prudential Supervision) Act 2010 (IPSA). From that date, CBLI was required to comply with the

Solvency Standard for Non-life Insurance Business issued by RBNZ in October 2011 (Solvency Standard).1 This included maintaining a solvency margin.

[7]        On or about 4 September 2013, RBNZ granted CBLI a full insurance licence under s 19 of IPSA. Pursuant to s 21 of IPSA, RBNZ imposed a condition on CBLI’s licence that it maintain a solvency margin in accordance with the Solvency Standard.

[8]        On or about 7 September 2015, CBLC lodged a product disclosure statement (PDS) with the Registrar of Financial Service Providers in connection with CBLC’s initial public offering (IPO).

[9]        On or about 13 October 2015, following the IPO, CBLC listed on the NZX and ASX. The IPO raised $125 million.

[10]      On 15 November 2017, CBLC’s board advised RBNZ that CBLI was likely to breach its solvency condition as at 31 December 2017 and required further reserve strengthening. In or around November 2017, CBLI’s appointed actuary recommended a further reserve strengthening as at 31 December 2017 of $147 million.

[11]      On or about 2 February 2018, NZX placed a trading halt on trading of CBLC’s shares.

[12]      On or about 8 February 2018, NZX suspended quotation of CBLC’s shares on the basis that it was concerned that CBLC was in breach of its continuous disclosure obligations.

[13]      On or about 23 February 2018, the Court made an order appointing interim liquidators of CBLI on the application of RBNZ, and placed CBLC (and nine of its subsidiaries) into voluntary administration.

[14]      On or about 12 November 2018, the Court made an order placing CBLI into liquidation.

1      This was revoked and replaced by the Solvency Standard for Non-life Insurance Business 2014.

[15]      On or about 13 May 2019, the Court made an order placing CBLC into liquidation.

The four proceedings in issue

T.E.A. Custodians Ltd as custodian of the Harbour Australasian Equity Fund (Harbour) and Anor v Sir John Wells and Ors – CIV-2019-485-642 (Harbour proceeding)

[16]      The Harbour proceeding alleges that from 2013 until its liquidation, at all material times CBLI was balance sheet insolvent, in breach of the minimum required solvency margin, was under-reserved, had not made appropriate provisioning for claims liabilities, and/or was in breach of, or was at material risk of failing to maintain, its licence conditions.

[17]      The first cause of action against the directors alleges false or misleading statements made in connection with the IPO in breach of ss 57 and 82 of the Financial Markets Conduct Act 2013 (FMCA). The second cause of action against CBLC alleges the same breaches. The third cause of action against the directors alleges breach of continuous disclosure obligations in breach of s 270 of the FMCA and the listing rules. The fourth cause of action alleges the same breaches against CBLC. The fifth cause of action against the directors alleges breach of s 19 of the FMCA. The sixth cause of action alleges the same breaches against CBLC.

[18]      The seventh to ninth causes of action allege insider trading (s 241 of the FMCA). The insider trading relates to the sell down by Mr Harris, Mr Hutchison,  Mr Mulholland and entities associated with them of 20,000,000 ordinary shares to New Zealand and Australian investors on or about 5 April 2017.

Livingstone v CBLC and Ors – CIV-2019-404-2727 (Livingstone proceeding)

[19]      The Livingstone proceeding alleges that the following events and information were not disclosed:

(a)that in 2013/2014 CBLI had written two insurance bonds providing defect insurance for apartment complexes in Denmark and had failed

to properly account for them in its solvency margin from May 2013 onwards (the Danish bonds).

(b)That the funds making up a Bank of Samoa deposit were effectively encumbered and not available to CBLI to call upon and not properly accounted for in the solvency margin because of a back-to-back transaction, and Mr Hutchison was a director of the Bank of Samoa (the Samoa transaction).

(c)Receivables from Luxembourg, following a January 2017 acquisition of a shareholding in Securities and Financial Solutions Europe SA, which should have attracted a 100 per cent risk charge when calculating CBLI’s solvency ratio. In October 2017 CBLC agreed to sell the aged receivables to Castlerock Receivables Management Ltd at 50 per cent of their gross value, to be paid in instalments over five years (the Castlerock transaction). The Castlerock transaction was factored into CBLI’s solvency calculations as at 31 July 2017 and 31 August 2017, but this accounting treatment was subsequently not accepted by Deloitte and on 31 January 2018 the board resolved to cancel the Castlerock transaction. Absent the purported effect of the Castlerock transaction, CBLI was in breach of an RBNZ direction dated 25 July 2017 that it increase its minimum solvency ratio from 100 per cent to 170 per cent.

(d)Ongoing concerns about CBLI’s provisioning and regulatory compliance. The regulatory concerns led to a flurry of activity following a draft report by PwC UK on or about 21 June 2017 which found (among other things) that Elite Insurance Ltd (Elite) had a deficiency of €147 million in held reserves gross of reinsurance. Elite was a Gibraltar based company and CBLI’s largest single source of inwards reinsurance business – CBLI reinsured 80 per cent of Elite’s French business policies.

[20]      The first cause of action alleges breach of s 82 of the FMCA in relation to the IPO. In particular, it alleges the PDS and documents included in the register entry were false or misleading or likely to mislead in respect of provisioning for insurance claims, maintaining solvency, assessing and pricing underwritten risks and accuracy of financial information. The second cause of action alleges breaches of continuous disclosure obligations under s 270 of the FMCA and the NZX and ASX listing rules by failing to disclose material information to the market. The third cause of action alleges misleading and deceptive conduct in breach of s 19 of the FMCA and s 9 of the Fair Trading Act 1986. These relate to statements in the PDS and register entry as pleaded in relation to the IPO, and non-disclosure of material information as pleaded in respect of continuous disclosure, together with statements in other documents subsequent to the IPO, and the failure to correct prior statements before 2 February 2018.

FMA v CBLC and Ors – CIV-2019-404-2738 (IPO proceeding)

[21]      In the IPO proceeding the FMA alleges that CBLC, Mr Harris, Mr Hutchison (now his estate) and Mr Mulholland breached ss 57 and 82 of the FMCA through omissions and/or false or misleading statements in offer documents issued by CBLC in connection with its IPO in 2015. Those allegations concern, in particular, the failure to disclose related party information and the impact of inter-related transactions in 2014 involving CBLI, the National Bank of Samoa, Federal Pacific Group Singapore Pte Ltd and Alpha Holdings A/S – the Samoa transaction.

[22]      The first cause of action is against CBLC for breach of s 57(1)(a)(i) of the FMCA – failure to disclose material information that Mr Hutchison was a related party. The second cause of action is against the three directors concerning the same alleged  breach.     The  third  cause  of  action  against  CBLC  alleges  breach  of     s 82(1)(a)(ii), relating to the same related party non-disclosure. The fourth cause of action alleges the same breach against the three directors. The fifth cause of action against CBLC is for breach of s 82(1)(a)(i), alleging false or misleading statements relating to the solvency ratio and purpose statement. The solvency ratio was allegedly false or misleading because of the Samoa transaction and the purpose statement was

incorrect because the use of the IPO proceeds was based on the solvency ratio being correct.

FMA v CBLC and Ors – CIV-2019-404-2745 (CD proceeding)

[23]      In the CD proceeding the FMA alleges that the same defendants plus Sir John Wells, Mr Hannon, Mr Marsh and Mr Donaldson (the independent directors) breached ss 19, 22, 23 and 270 of the FMCA, which relate to fair dealing and continuous disclosure obligations. The obligations concern false, misleading, deceptive and/or unsubstantiated statements in information provided to the market in August 2017, and ongoing failures to disclose material information to the market between June 2017 and February 2018.

[24]      The CD proceeding focuses on continuous disclosure from June 2017 onwards through to the trading halt in February 2018. Mr Dixon QC, for the FMA, submitted that the main focus is on the regulatory actions of the Central Bank of Ireland.       He emphasised the focus on CBLC’s market announcement of 24 August 2017, which the FMA says was misleading.

[25]      The first cause of action against CBLC alleges breaches of ss 19, 22 and 23 of the FMCA relating to the August 2017 representation that operating profit was impacted by the decision to take a one-off $16.5 million increase to its reserves against future claim forecasts. The second cause of action alleges the same breach against the directors. The third cause of action against CBLC alleges breach of ss 19 and 22 of the FMCA relating to the represented breakdown of reserves in the August 2017 statement, in particular that $10 million of the $16.5 million related to a decrease in the discount rate for Euro denominated claims which could easily be turned around should Euro bonds yield increase in the future. The fourth cause of action alleges the same breach against the directors.

[26]      The fifth cause of action against CBLC alleges breach of s 270 of the FMCA relating to the need for CBLI to materially strengthen its reserves by 15 November 2017, or alternatively 23 November 2017. The sixth cause of action alleges the same breach against the directors. The seventh cause of action against CBLC alleges a similar breach of s 270 in relation to the need for CBLI to increase reserves by $100

million as at 30 January 2018 (not a week later, Mr Dixon emphasised) following the appointed actuary’s advice (assuming the advice was correct). Mr Dixon submitted this cause of action has important ramifications for corporate governance. The eighth cause of action alleges the same breach against the directors.

[27]      The ninth cause of action against CBLC alleges breach of s 270 relating to the impact of aged receivables on CBLI solvency or CBL group profit, as at August 2017. The tenth cause of action alleges the same breach against the directors. The eleventh cause of action against CBLC alleges breach of s 270 in relation to the Castlerock transaction, as at October 2017. The twelfth cause of action alleges the same breach against the directors. Mr Dixon submitted these causes of action have important ramifications relating to disclosure about a decision to sell when the sale has not actually occurred. The thirteenth cause of action against CBLC alleges breach of s 270 relating to Deloitte’s advice to CBLI that it did not agree with CBLI’s accounting treatment of aged receivables, as at December 2017. The fourteenth cause of action alleges the same breach against the directors.

[28]      The fifteenth to twenty-second causes of action allege breaches of s 270 in relation to directions from the Central Bank of Ireland: in June 2017 (fifteenth and sixteenth causes of action); July 2017 (seventeenth and eighteenth causes of action); November 2017 (nineteenth and twentieth causes of action); and January 2018 (twenty-first and twenty-second causes of action).

[29]      The twenty-third and twenty-fourth causes of action are in the alternative. They allege that each individual event pleaded in the prior causes of action cumulatively and collectively constituted material information that should have been disclosed to the market.

Applicable principles

[30]Rule 10.12 provides:

10.12   When order may be made

The court may order that 2 or more proceedings be consolidated on terms it thinks just, or may order them to be tried at the same time or one immediately

after another, or may order any of them to be stayed until after the determination of any other of them, if the court is satisfied—

(a)that some common question of law or fact arises in both or all of them; or

(b)that the rights to relief claimed therein are in respect of or arise out of—

(i)the same event; or

(ii)the same transaction; or

(iii)the same event and the same transaction; or

(iv)the same series of events; or

(v)the same series of transactions; or

(vi)the same series of events and the same series of transactions; or

(c)that for some other reason it is desirable to make an order under this rule.

[31]      The starting point is that separate proceedings are heard separately.2 But if one of the threshold requirements in r 10.12 is satisfied,3 the discretion to make orders is a wide one, to be exercised broadly in the interests of justice.4 Among the factors which will favour an order (if grounds are made out) are the savings that will be achieved in time and cost to the parties, in judicial resources, and removing the risk of inconsistent decisions.5

[32]      I also note the objective of the High Court Rules is to secure the just, speedy and inexpensive determination of any proceeding (or interlocutory application).6

[33]      Counsel referred particularly to CallPlus Ltd v Telecom New Zealand Ltd,7 which addressed whether a regulatory proceeding by the Commerce Commission should be heard together with a proceeding by CallPlus. The Commission’s claim that

2      Aventis Pharma SA v Pharmaco (NZ) Ltd HC Auckland CIV-2010-404-001670 3 November 2010 at [11].

3      Fairway Holdings Ltd v McCullagh [2019] NZCA 353 at [5].

4      At [6], citing Regan v Gill [2011] NZCA 607 at [10] approving Medlab Hamilton Ltd v Waikato District Health Board (2007) 18 PRNZ 517 (HC) at [8].

5      Medlab Hamilton Ltd v Waikato District Health Board at [8].

6      High Court Rules 2016, r 1.2.

7      CallPlus Ltd v Telecom New Zealand Ltd [2000] 15 PRNZ 14 (HC).

Telecom’s introduction of its 0867 package constituted a breach of s 36 of the Commerce Act 1986 was essentially identical to CallPlus’s first cause of action. However, CallPlus also alleged breach of contract, a separate breach of s 36 and a breach of s 27. CallPlus’s second, third and fourth causes of action had no counterparts in the Commission’s claim. Wild J considered they would involve a substantial amount of evidence and thus hearing time which would not be required if the Commission’s claim was heard by itself.

[34]      In terms of approach, Wild J said there were four players to be considered: CallPlus, the Commission, Telecom and the Court. Wild J recorded the Commission’s position that, as market regulator, it considered its proceeding was properly heard separately, without the intervention of commercial interests. Wild J said that as the Commission is the market regulator, and the initiator of the proceeding with which CallPlus seeks a joint hearing, he gave its view considerable weight.8

[35]      Telecom also opposed a joint hearing. Wild J said its view was also deserving of considerable weight as the party sought to be regulated and fined, and the party which, if the proceedings are not heard together, would face two likely lengthy, complex and costly hearings – it was the party which one might have expected to seek a single hearing, rather than strongly to oppose it.9

[36]      Wild J also referred to the efficient use of court resources and court time but did not wish to over-emphasise case management. He said the fair and just disposal of proceedings should always take precedence over the most efficient disposal, and the aim of case management should be to make the two synonymous. As to what is fair and just, he said the parties’ views, whilst not decisive, are very important.10

[37]      Wild J concluded that the extent of commonality and time and cost savings favoured the concurrent hearing of the Commission’s proceeding and CallPlus’s first cause of action as to liability only, and a subsequent and separate hearing of the remaining aspects and causes of action in CallPlus’s proceeding.11 The desirability of

8      CallPlus Ltd v Telecom New Zealand Ltd [2000] 15 PRNZ 14 (HC) at [33].

9 At [36].

10     At [37]-[38].

11 At [40].

avoiding inconsistent decisions was a factor strongly favouring a concurrent hearing of Callplus’s first cause of action and the Commission’s proceeding.12

Rule 10.12 threshold

[38]      The plaintiffs in the two shareholder proceedings submitted that the four proceedings have a common factual and legal context and raise overlapping issues. They say the proceedings arise out of the same series of events, in particular the events leading up to and including CBLC’s IPO in 2015 and the events involving CBLC and its directors that followed, until CBLC was placed into liquidation in 2019. Further, common questions of law and fact arise across the proceedings, including in relation to alleged breaches of the fair dealing provisions and continuous disclosure obligations in the FMCA by CBLC and its directors.

[39]      The common defendants agree that the FMA and shareholder proceedings have much in common. Both sets of proceedings concern claims under the FMCA in relation to statements and/or omissions by CBLC about its shares. More specifically, they both relate to two groups of statements and/or omissions by CBLC relating to its shares: IPO-related statements/omissions relating to CBLC’s PDS (and/or related register entries) – the IPO proceeding and both shareholder proceedings each allege breaches of s 82; and public trading period statements/omissions from around June 2016 – the CD proceeding and the two shareholder proceedings each primarily concern alleged breaches by CBLC of s 270 (via r 10.1.1 of the NZX Listing Rules, as it was at the time). There are substantial common questions of fact and law that arise in the FMA and shareholder proceedings, and the rights  to relief claimed are  in respect of or arise out of the same and/or same series of events and/or transactions.

[40]      The FMA emphasised the differences between the two sets of proceedings. These may be important to the exercise of the discretion, but there are clearly some common questions of law and fact, and claims arising out of the same events and/or transactions.  There are sufficient common threads.  The threshold test is not that  the

12  CallPlus Ltd v Telecom New Zealand Ltd [2000] 15 PRNZ 14 (HC) at [54]. Wild J gave CallPlus the option of having the proceedings heard separately since he favoured a more limited order than that sought.

claims are “essentially identical”.13 The threshold requirements in r 10.12(a) and (b) are satisfied.

Extent of commonality and time/cost saving

[41]      As can be seen, counsel for the shareholder plaintiffs and the defendants emphasised the extent of commonality between the FMA proceedings and the shareholder proceedings, the “common spine”, whereas the FMA emphasised the differences.

[42]      Mr Skelton QC, for Mr Livingstone, submitted that the thrust of the Livingstone proceeding is that, by the time of the IPO, provisioning was not done properly.  The  largest   topic   is   the   provisioning   for   the   French   business. The shareholders consider the alleged misstatement of the solvency margin in the IPO / breach of the solvency IPSA licensing condition are important aspects of their proceedings because they support a money back claim.14

[43]      Mr Skelton submitted that both sets of proceedings go back in time before the IPO, and that the FMA proceedings do raise the solvency margin albeit focusing on the Samoa transaction whereas the shareholder proceedings also rely on other matters. He accepted that the shareholder claim will require further evidence but submitted that both the FMA and the shareholders will have to lead evidence as to how the PDS should have looked.

[44]      In relation to continuous disclosure, Mr Skelton emphasised that CLBC was only listed for 28 months before it was suspended. He acknowledged that the claimed breaches relate to some earlier matters, but he submitted they mainly relate to the period from 2017, and he submitted it will be necessary to go back earlier anyway. He submitted that all four proceedings focus on the regulatory action in the period from June 2017 and that determining material information depends on previous information and events.

13     That was simply the phrase used by Wild J to describe the first causes of action in CallPlus Ltd v Telecom New Zealand Ltd [2000] 15 PRNZ 14.

14     Causation and loss would not be part of the proposed joint hearing.

[45]      He submitted the insider trading claims also involved the flipside issue of information, together with trading. He submitted those claims would not add considerably to the time but alternatively acknowledged that they could be carved out.

[46]      Mr Colson QC, for Harbour, submitted there is a high degree of commonality. He accepted this is more so in relation to the CD proceeding but submitted there is also commonality with the IPO proceeding, particularly in relation to the Samoa transaction. He acknowledged that the Danish bonds and provisioning generally are additional but submitted that, despite the broad scope of Harbour’s solvency / provisioning pleading, its focus is on the IPO. It is not intended to be a feature of the continuous disclosure case, which is focused on 2017.

[47]      He submitted that two trials on the continuous disclosure issues would be pretty much the same. Of course, the shareholders are seeking compensation. Pecuniary penalties sought by the FMA will not provide satisfaction.

[48]      Mr Salmon QC, for Mr Harris, led for the common director defendants and supported the shareholders. He submitted the case should be heard once, properly. He submitted there will be multiple efficiencies. He submitted the FMA’s concerns, including about potential cross-examination of its witnesses by the shareholders, actually highlight the position of the shareholders and defendants. Such cross- examination would not be legitimate if the witnesses were jointly briefed but in any event the defendants will cross-examine. He submitted that, in addition to the overlap of issues, there would be overlap in evidence, including the narrative which will take time. The defendants will cross-examine on it.

[49]      Mr Goodall, for CBLC, also supported the shareholders. He noted that the liability trial would also need to address CBLC’s cross-claims against the directors, but he did not anticipate any further evidence (except to put the case to them).

[50]      Mr Lindsey, for the independent directors, supported the shareholders as well. He noted that two of them reside overseas and submitted they should only have to travel to New Zealand once.  Mr  Billington  QC  for  Mr  Hutchison’s  estate  and Mr Morris for Mr Mulholland also supported the shareholders.

[51]      Mr Dixon submitted the FMA was not unsympathetic to the shareholders but said they have brought a raft of claims as they want to maximise their prospects.    He submitted they had also ignored aspects of the FMA’s case. The FMA has determined that other aspects do not warrant proceedings in terms of sanctioning conduct and guiding the market. He said that was not a criticism of the shareholders.

[52]      Mr Dixon acknowledged that the FMA pleads CBLI’s solvency ratio, but he submitted the FMA takes CBLI’s position at face value whereas the shareholders use it as a launching pad. The core thrust of the FMA’s IPO proceeding is the Samoa transaction. He said the FMA does not challenge the CBLI Capital Management Plan except to extract the Samoa transaction.

[53]      Mr Dixon accepted there is overlap in the chronology but he characterised some of the FMA’s pleaded facts as “narrative” and submitted that the FMA did not address the raft of other breaches raised in the shareholder proceedings. He submitted, by reference to CallPlus, that most of the FMA’s claims have no counterpart in the shareholder proceedings and he could not identify any middle ground.

[54]      I consider the position in relation to the degree of commonality is somewhere in between that submitted for the shareholders (and directors and other defendants) on the one hand and the FMA on the other. Commonality in this context is determined by reference to overlapping events and the resulting legal claims. The different approaches to pleading causes of action in the statements of claim makes comparison more difficult. But it is the substance of the claims that matters, rather than their form (whether, for example, treating each false statement or non-disclosure as a separate cause of action or treating them as particulars of a single cause of action for each statutory contravention).

[55]      In terms of events or transactions, the two sets of proceedings overlap. Whether some events or other factual matters are characterised as “narrative” by the FMA or material information by the shareholders, both sets of proceedings put those facts in issue. While the FMA describes its case as narrow and targeted, its six month estimate for its own proceedings indicates that it intends to lead substantial evidence

relating to the business of the CBL group to set a broad factual matrix for its case, as would be expected for a complex case of this nature and scale.

[56]      In terms of the claims, I accept the IPO proceeding focuses on the Samoa transaction in 2014 – 2015. It addresses the solvency ratio, albeit with a focus on what it would have been with proper treatment of the Samoa transaction, and the purpose statement. While there is some commonality of claims, the scope of the shareholder proceedings is considerably wider during the period up to the IPO. Inadequate provisioning for French business is likely to be a significant topic.

[57]      In relation to continuous disclosure, the CD proceeding focuses on events from June 2017. The shareholder proceedings raise additional matters (including prior to June 2017) and do not raise all of the FMA’s matters (for example, CBLC’s market announcement of 24 August 2017). However, there is a reasonably high degree of commonality with most of the issues relating to the regulatory action from June 2017. The Harbour proceeding also raises insider trading in relation to the April 2017 sell-down. As Mr Dixon acknowledged, this too involves questions of material information (the flipside) but the FMA does not have a material non-disclosure claim as at April 2017.

[58]      I accept that the FMA’s case on reserving is different from the shareholders’ case as it is based on the appointed actuary’s advice and does not turn on the competence of that advice. But that difference may be more apparent than real unless the defendants accept the accuracy of the advice.

[59]      There is a high degree of commonality in relation to the nature of the legal claims; namely, contraventions of ss 19, 57, 82 and 270 of the FMCA.15 These raise the same issues as to the applicable legal principles and approach. Further, in substance (despite the different pleading approaches), a number of the FMA’s claims have a counterpart in the shareholder proceedings albeit they form only part of the shareholders’ claims.

15     The Livingstone proceeding also raises s 9 of the Fair Trading Act 1986 but this is not materially different from s 19 of the FMCA.

[60]      In relation to the liability issues, this is not a case where there are different threshold assessments in the different proceedings requiring different evaluations of the evidence.16 Each plaintiff alleges contraventions of the FMCA in relation to the IPO and subsequent continuous disclosure by CLBC and by directors being “involved”. The same threshold assessments apply to the claims by the FMA and the shareholders. Rather, it is the scope of the alleged contraventions that differs between the plaintiffs given their different objectives. Overall, I consider there is a reasonable degree of commonality between the two sets of proceedings.

[61]      I note that both sides submitted that the issues in the shareholder proceedings may change as interlocutory steps continue – the shareholders submitted there is likely to be a closing of differences (alignment) following discovery whereas the FMA submitted the shareholder proceedings may expand following discovery. I do not speculate either way.  Insofar as such submissions suggest that determination under   r 10.12 may be premature, I will address this below.

[62]      The disagreement about the degree of commonality was also reflected in the different trial estimates. Counsel for the shareholder plaintiffs submitted that the proposed joint liability trial will require eight and a half months in order to address duplicated issues (five months), FMA-only issues (one month), and shareholder-only issues (two and a half months). On the other hand, they submitted that separate determination of the two sets of proceedings will take much longer: six months for the FMA proceedings and seven and a half months for the shareholder proceedings. That means an additional five months.

[63]      Mr Dixon submitted that a joint trial would take three and a half to four months extra (beyond the six months for the FMA proceedings alone). However, this was based on a much earlier estimate by counsel for the common defendants that did not have input from counsel for the shareholder plaintiffs. Counsel for the common defendants now estimate a joint trial will take seven and a half months, consistent with the estimate on behalf of the shareholder plaintiffs except that they estimate less time will be required for opening and closing submissions. Even adopting the more

16     Compare Fairway Holdings Ltd v McCullagh [2019] NZCA 353 at [22].

conservative estimate, all counsel involved in the shareholder proceedings – and all counsel in the four proceedings except counsel for the FMA17 – consider the shareholder proceedings will add not more than two and a half months to the FMA proceedings. I expect counsel involved in the shareholder proceedings, and particularly the defendants involved in both sets of proceedings, are better placed to estimate the time required to address the matters not raised by the FMA. Their estimates reinforce my view that there is a reasonable degree of commonality between the two sets of proceedings.

[64]      I am not in a position to second-guess the common estimate of the parties to the shareholder proceedings if those proceedings were to be heard separately. It may be possible for the shareholders to rely on findings of contravention in the FMA proceedings but the extent of any saving is uncertain, particularly in relation to the IPO proceeding given its narrower scope (acknowledged at [56][54] above). Separate hearings would likely still involve a number of the same witnesses giving evidence twice, including about matters that the FMA characterises as “narrative” rather than essential to a finding of contravention.

[65]      Even allowing a month for this and some margin in relation to estimates,    the extra Court time required for separate hearings is very substantial, likely in the region of four to five months. I therefore do not accept the FMA’s submission that the time and cost is evenly balanced. But the fair and just disposal of proceedings should take precedence over the most efficient disposal, so I turn to consider prejudice.

Prejudice

[66]      Mr Dixon submitted that injustice can also result from the extra costs imposed on a party if it has to face a trial that is substantially longer and different from the one that it initiated. I accept that a combined trial would impose a substantial burden on the FMA of an extra two and a half months in Court (albeit with the possibility of not needing to attend when the shareholder plaintiffs are calling separate evidence beyond the scope of the FMA’s case).

17     Even the FMA estimated eight and a half months for a joint trial of the FMA and shareholder proceedings in its memorandum dated 21 March 2022.

[67]      Mr Dixon also submitted there is a high risk of injustice from the sheer scale of a combined trial. He submitted the FMA proceedings on their own are unusually complex and lengthy involving one plaintiff and eight defendants, with 32 causes of action, and an estimated trial duration of six months. They also concern novel issues of law that will set an important precedent under the FMCA. Given this, the Court should be particularly cautious about further extending the length and complexity of the trial. A joint trial of the FMA proceedings and shareholder proceedings would require the Court to hear and determine 45 causes of action (many more if broken down by individual defendant) between four plaintiffs and 13 defendants.

[68]      I accept that when considering shortcuts care is needed to avoid unintended consequences. I also do not underestimate the scale of such a long trial and the complexity arising from more than one claimant. But I do not consider the sheer scale of a combined trial is inherently too difficult to manage. Aggregate sitting days is a better proxy for scale than the number of causes of action given the different approaches to pleading in the statements of claim. With the six month estimate for the FMA’s own proceedings, I do not consider the additional two and half months for a combined trial would make it unmanageable for the parties or the Court. I accept that additional plaintiffs will cause some procedural complexity, but with senior and experienced counsel and solicitors this should also be manageable for the parties and the Court.

[69]      The FMA also raises concern about a high risk of injustice from competing interests, with the plaintiff shareholders seeking to cross-examine FMA witnesses on reserving and insider trading outside the scope of their evidence, suggesting this may affect their cooperation to give evidence. The FMA and shareholder interests are different as reflected in the different scope of claims, but they are not really competing. I accept there will likely be instances of witnesses called by the FMA who the shareholders seek to rely on in part but undermine in part. I do not consider this presents an unmanageable risk for the FMA, for several reasons. It is an issue that counsel should be able to manage, with Court directions if needed. Much of the case will be document focused. Cooperation between experienced counsel and solicitors during preparation and/or staging of evidence (to reduce the need for joint briefing of witnesses) should avoid difficulties. Directions can minimise the risk of surprise.

The Court will also be able to monitor the scope of expert evidence. This may be a case requiring a greater level of judicial oversight of the scope of expert evidence  (as more routinely occurs in Australian cases). Expert witnesses should be able to indicate if they are not qualified or prepared to give evidence on extraneous topics. Also, the concern regarding lack of witness cooperation was not particularised.

[70]      Mr Dixon submitted that the FMA should be given priority and go first because of its broader public interest regulatory role, to  sanction and  guide  the  market.  The FMA says there are both public interest factors and practical considerations related to its position as a regulator which weigh against a joint trial. It is pursuing its statutory objectives and functions in bringing its proceedings in the public interest, compared with the shareholders who are focused on their own private interests. It says the FMCA regime already provides for claimants to be able to use any declarations of contravention obtained by the FMA in pursuing compensation. The FMA says this will be the first time the Court has considered key parts of the FMCA, and the decision will be highly relevant as to the level of disclosure listed companies must provide to investors both in an IPO process and after listing.

[71]      The shareholders and defendants submitted that the FMCA does not give the FMA priority. They said that the shareholders filed proceedings before the FMA. They acknowledged that they could sit back and rely on contraventions proved by the FMA but said they would be narrow in scope and the shareholders are not required to sit back.

[72]      I acknowledge the FMA’s important role as market regulator and accept its submission that there is public interest in having public confidence in the markets. The FMA’s views are entitled to considerable weight (like the Commerce Commission’s views in CallPlus) but they are not decisive. I also accept there is a public interest in the Court’s consideration of key parts of the FMCA, but not because the FMA as a litigant in the Courts is entitled to priority access to justice. Court consideration giving rise to public confidence in the markets may also be sought by shareholders or other market participants. Indeed, declarations of contravention are available to the FMA and others, and such declarations enable the FMA and others to

seek civil liability orders without having to prove the contravention.18 In addition, the FMA expects its proceedings alone to take six months and, even if the current trial date is reserved for it, Court determination cannot be expected before the end of 2024. I do not accept that a joint trial would negate what is otherwise an effective regulatory tool for the FMA.

[73]      The FMA also submitted an order requiring that the proceedings be heard together could have a precedent effect for future regulatory proceedings that become tied to broadly related class actions (and liquidator claims). But any proposed combination of proceedings sought under r 10.12 needs to be considered on its own merits. Here, the proposal is a joint trial of liability issues in the two FMA proceedings and the two shareholder proceedings, not with the CBLI liquidators’ proceeding.

[74]      Another aspect of the proposed joint liability trial is that it would not address the pecuniary penalty orders sought by the FMA. As Mr Dixon submitted, a penalty hearing need not await determination of compensation even though the nature and extent of the loss suffered because of the contravention and whether any compensation has been paid to investors are mandatory considerations for the Court in determining the appropriate quantum of pecuniary penalties.19 This issue was not fully argued (and I will return to it below) but I accept the force of Mr Dixon’s submission on the basis that s 492(d) requires consideration of compensation that has already been paid (voluntarily or otherwise) without meaning that civil proceedings for compensation must be determined first.

[75]      On that basis, I consider the only real prejudice to the FMA in having a joint liability trial (plus penalties) is the burden and cost of some pre-trial coordination and the extra hearing time of up to two and a half months. There would be further prejudice to the FMA if other parties could not be ready for trial commencing in April 2024, but that is no longer suggested.

[76]      I turn to the prejudice to other parties if the FMA proceedings are heard first, commencing in April 2024. For the shareholder plaintiffs, there would be inevitable

18     FMCA, ss 486-488 and 497.

19     Section 492(c) and (d).

delay, and extra cost monitoring the FMA proceedings and resulting from the delay. At best, their proceedings would be heard in 2025, relatively soon after the FMA proceedings, but an appeal in the FMA proceedings may extend the delay well beyond 2025. Also, the additional defence costs of the separate trial would reduce any shareholder recovery from a finite pot.

[77]      The common defendants would have to defend each set of proceedings separately, with  the  additional  cost,  delay  to  finality  and  emotional  burden.  The defendants should not be unnecessarily burdened by successive proceedings concerning common issues. An additional four to five months of Court time, including giving evidence more than once, is a very heavy burden.

[78]      The defendants also raise the risk of shareholder claims being reframed to avoid findings in the FMA proceedings, but as Mr Dixon submitted this risk may be answered by a combination of limitation bars and imposing a timely close of pleadings date.

Risk of inconsistent findings

[79]      Mr Skelton (and others) referred to the risk of inconsistent findings and the prospect of a separate Judge dealing with the second set of proceedings, including because of a possible bias challenge.20

[80]      Mr Dixon submitted that the cumulative nature of the pleadings in the shareholder proceedings means it is not even possible to isolate specific causes of action that are essentially the same and therefore there is little if any prospect of inconsistent decisions.

[81]      As indicated, I accept the different pleading techniques make comparison more difficult. But it is the substance of the claims that matters, rather than their form. Insofar as there is overlap between the FMA and shareholder claims as I have found, I accept there is a risk of inconsistent findings. The FMA’s concern about cross- examination by the shareholder plaintiffs tends to support such a risk. Also, the FMA

20     GetSwift Ltd v Webb [2021] FCAFC 26.

emphasises that this will be the first time the Court has considered key parts of the FMCA. It cannot be assumed the subsequent proceedings would be heard by the same Judge.

Balancing

[82]      An unusual feature of this case is that all parties except the FMA seek to have the shareholder proceedings heard together with the FMA proceedings. Balancing the prejudice to the FMA and to the shareholders might favour the FMA’s position. But also taking into account the prejudice to the defendants, I consider a joint hearing of as many liability issues as possible is in the interests of justice.

[83]      From the Court’s perspective, as the FMA acknowledges, the saving of time and resources in a joint hearing is also significant. To date, the proceedings have been case managed together in a relatively efficient way with a good level of coordination between counsel for the various parties.

[84]      As mentioned, both sides submitted that the issues in the shareholder proceedings may change following discovery. I considered whether to defer determination under r 10.12 until the cases were more advanced, when the degree of commonality should be clearer. However, the scale and lead time involved for a fixture or fixtures of such length means that unless the parties and the Court continue to work towards the currently allocated trial date, it will not be possible to order a joint liability trial at a later date. I have concluded it is preferable to make an order now, but reserve leave to enable particular issues to be severed and moved to a separate stage two hearing if it becomes clear they do not overlap with other issues and are time consuming (resulting in a hybrid as occurred in CallPlus). Harbour’s insider trading claims may be an example. While this reservation particularly applies to issues in the shareholder proceedings, I also reserve leave to enable further consideration to be given to whether pecuniary penalties in the FMA proceedings should be moved to a separate hearing (and, if so, when).

[85]      For these reasons, I consider it is in the interests of justice to make an order that the FMA proceedings and liability issues in the shareholder proceedings be heard

together, but reserving leave to sever particular issues. That will best contribute to achieving the just, speedy, and inexpensive determination of all four proceedings.

Result

[86]I make directions that:

(a) the FMA proceedings (CIV-2019-404-2738 and CIV-2019-404-2745)  and liability issues in the shareholder proceedings (CIV-2019-485-642 and CIV-2019-404-2727) be heard together;

(b)evidence in each of the four proceedings be evidence in each of the other proceedings; and

(c)leave is reserved to the parties to apply for particular issues to be severed and moved to a separate hearing.

Gault J

Solicitors / Counsel:

CIV-2019-404-2727

Mr P Skelton QC, Mr S Jeffs, and Mr C Pearce (for the plaintiff Basil Ian Livingstone), Barristers, Auckland

Mr J Porus and Mr M Singh (plaintiff’s instructing solicitor), Glaister Ennor, Auckland Mr J K Goodall (for the defendant CBL Corporation Ltd (in liq)), Barrister, Auckland Ms A Challis and Mr A Colgan (defendant’s instructing solicitor), McElroys, Auckland

Mr M Corlett QC (for the 1st third party Sir John Wells, the 4th third party Anthony Charles Russel Hannon, the 5th third party Ian Kelvin Marsh and the 6th third party Norman Gerald Paul Donaldson), Barrister, Auckland
Mr T J Lindsay and Mr S McNae (1st, 4th, 5th and 6th third parties instructing solicitor), Lindsay & Francis, Auckland

Mr D M Salmon QC (for the 2nd third party Peter Alan Harris), Barrister, Auckland

Mr T Mullins and Mr J Cundy (2nd third party’s instructing solicitor), LeeSalmonLong, Auckland Mr J Billington QC and Ms C M Meechan QC (for the 3rd third party Alistair Leighton Hutchison (deceased)), Barristers, Auckland

Mr G Turner and Ms T Wood (3rd third party’s instructing counsel), Duncan Cotterill, Auckland

CIV-2019-404-2739

Mr J A Farmer QC and Mr JCL Dixon QC (for the plaintiff Financial Markets Authority), Barristers, Auckland
Ms A Callinan, Mr J Caird and Ms N Blomfield (plaintiff’s instructing solicitors), Simpson Grierson, Auckland

Mr J K Goodall (for the 1st defendant CBL Corporation Ltd (in liq)), Barrister, Auckland Ms A Challis and Mr A Colgan (1st defendant’s instructing solicitor), McElroys, Auckland Mr D M Salmon QC (for the 2nd defendant Peter Alan Harris), Barrister, Auckland

Mr T Mullins and Mr J Cundy (2nd defendant’s instructing solicitor), LeeSalmonLong, Auckland Mr J Billington QC and Ms C M Meechan QC (for the 3rd defendant Alistair Leighton Hutchison (deceased)), Barristers, Auckland

Mr G Turner and Ms T Wood (3rd defendant’s instructing counsel), Duncan Cotterill, Auckland Mr DPH Jones QC (for the 4th defendant Carden James Mulholland), Barrister, Auckland

Mr CDSC Morris (4th defendant’s instructing solicitor), CMQ Law, Auckland

CIV-2019-404-2745

Mr J A Farmer QC and Mr JCL Dixon QC (for the plaintiff Financial Markets Authority), Barristers, Auckland

Ms A Callinan, Mr J Caird and Ms N Blomfield, Simpson Grierson, Auckland (plaintiff’s instructing solicitors)

Mr J K Goodall (for the 1st defendant CBL Corporation Ltd (in liq)), Barrister, Auckland Ms A Challis and Mr A Colgan (1st defendant’s instructing solicitor), McElroys, Auckland

Mr M Corlett QC (for the 2nd defendant Sir John Wells, the 4th defendant Anthony Charles Russell Hannon, the 6th defendant Norman Gerald Paul Donaldson and the 7th defendant Ian Kelvin Marsh), Barrister, Auckland
Mr T J Lindsay and Mr S McNae (1st, 4th, 5th and 6th defendants’ instructing solicitor), Lindsay & Francis, Auckland

Mr D M Salmon QC (for the 3rd defendant Peter Alan Harris), Barrister, Auckland

Mr T Mullins and Mr J Cundy (3rd defendant’s instructing solicitor), LeeSalmonLong, Auckland Mr J Billington QC and Ms C M Meechan QC (for the 5th defendant Alistair Leighton Hutchison (deceased)), Barristers, Auckland

Mr G Turner and Ms T Wood (5th defendant’s instructing counsel), Duncan Cotterill, Auckland Mr DPH Jones QC (for the 8th defendant Carden James Mulholland), Barrister, Auckland

Mr CDSC Morris (8th defendant’s instructing solicitor), CMQ Law, Auckland

CIV-2019-404-2792

Mr D Chisholm QC and Mr M J Tingey (for the 1st plaintiff CBL Insurance Ltd (in liq) and 2nd plaintiffs Johnstone and Grenfell as liquidators of CBL Insurance Ltd (in liq)), Barristers, Auckland Mr D M Hughes, Ms L M Van Mr J James (plaintiffs’ instructing solicitor), Anthony Harper, Auckland

Mr D M Salmon QC (for the 1st defendant Peter Alan Harris), Barrister, Auckland

Mr T Mullins and Mr J Cundy (1st defendant’s instructing solicitor), LeeSalmonLong, Auckland Mr J Billington QC and Ms C M Meechan QC (for the 2nd defendant Alistair Leighton Hutchison (deceased)), Barristers, Auckland

Mr G Turner and Ms T Wood (2nd defendant’s instructing counsel), Duncan Cotterill, Auckland

Mr M Corlett QC (for the 3rd defendant Sir John Wells, the 4th defendant Anthony Charles Russell, the 5th defendant Norman Gerald Paul Donaldson and the 6th defendant Ian Kelvin Marsh), Barrister, Auckland

Mr T J Lindsay, Mr K Francis and Mr S McNae (1st, 4th, 5th and 6th defendants’ instructing solicitor), Lindsay & Francis, Auckland

Mr M D O’Brien QC (for the 7th defendant PricewaterhouseCoopers), Barrister, Auckland

Ms I Rosic, Mr H McQueen and Mr A Bradley (7th defendant’s instructing solicitor), Gilbert Walker, Auckland

CIV-2019-485-642

Mr J Smith QC, Mr M Colson QC and Mr J Orpin-Dowell, Barristers, Auckland/Wellington (for the first representative plaintiff T.E.A. Custodians Ltd and the second representative plaintiff Argo Investments Ltd)

Ms F Cuncannon, Ms K Muirhead and Ms T Jenkin (representative plaintiffs’ instructing solicitors), Meredith Connell, Auckland

Mr M Corlett QC (for the 1st defendant Sir John Wells, the 4th defendant Anthony Charles Russell Hannon, the 5th defendant Ian Kelvin Marsh and the 6th defendant Norman Gerald Paul Donaldson), Barrister, Auckland
Mr T J Lindsay and Mr S McNae (1st, 4th, 5th and 6th defendant’s instructing solicitor), Lindsay & Francis, Auckland

Mr D M Salmon QC (for the 2nd defendant Peter Alan Harris), Barrister, Auckland

Mr T Mullins and Mr J Cundy (2nd defendant’s instructing solicitor), LeeSalmonLong, Auckland Mr J Billington QC and Ms C M Meechan QC (for the 3rd defendant Alistair Leighton Hutchison (deceased) and 10th defendant Federal Pacific Group Ltd), Barristers, Auckland

Mr G Turner and Ms T Wood (3rd and 10th defendants’ instructing counsel), Duncan Cotterill, Auckland

Mr J K Goodall (for the 8th defendant Sunshine Nominees Ltd and the 13th defendant CBL Corporation Ltd (in liq)), Barrister, Auckland

Ms A Challis and Mr A Colgan (8th and 13th defendants’ instructing solicitor), McElroys, Auckland Mr DPH Jones QC (for the 11th defendant Carden James Mulholland and the 12th defendant

CM Trustee Services Ltd), Barrister, Auckland

Mr CDSC Morris (11th and 12th defendant’s instructing solicitor), CMQ Law, Auckland

CIV-2022-404-100

Mr J K Goodall (for the plaintiffs CBL Corporation Ltd (in liq), Brendon James Gibson and Neale Jackson as liquidators of CBL Corporation Ltd (in liq)), Barrister, Auckland

Ms A Challis and Mr A Colgan (plaintiffs’ instructing solicitor), McElroys, Auckland Mr D M Salmon QC (for the 1st defendant Peter Alan Harris), Barrister, Auckland

Mr J Cundy and Ms J Beverwijk (1st defendant’s instructing solicitor), LeeSalmonLong, Auckland Mr J Billington QC (for the 2nd defendant the Estate of Alistair Leighton Hutchison (deceased)),

Barristers, Auckland

Ms T Wood and Mr D Robinson (2nd defendant’s instructing counsel), Duncan Cotterill, Auckland Mr M Corlett QC (for the 3rd defendant Sir John Wells, the 4th defendant Anthony Charles Russell Hannon, the 5th defendant Norman Gerald Paul Donaldson and the 6th defendant Ian Kelvin Marsh), Barrister, Auckland

Mr T J Lindsay (3rd, 4th, 5th and 6th defendants’ instructing solicitor), Lindsay & Francis, Auckland Mr C Walker QC and Mr C Robertson (for the 7th defendant Bancorp Corporate Finance Ltd),

Barristers, Auckland

Ms C Bryant (7th defendant’s instructing solicitor), Hesketh Henry, Auckland

Copy to media present at hearing:

Ms V Young, BusinessDesk, Auckland

Mr T Hunter, National Business Review, Auckland