Martin v Martin - [2023] NZHC 2162

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV 2023-441-006

[2023] NZHC 2162

UNDER Rule 5.49(5) 18 of the High Court Rules 2016 and s 174 of the Companies Act 1993

BETWEEN

ROGER WILLIAM MARTIN

Plaintiff

AND

ANN MARTIN

Defendant

Hearing: 27 July 2023

Appearances:

B Gustafson for the plaintiff

P Chisnall and D MacKenzie for the defendant

Judgment:

11 August 2023

JUDGMENT OF CAMPBELL J

This judgment was delivered by me on 11 August 2023 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

MARTIN v MARTIN [2023] NZHC 2162 [11 August 2023]

[1] The plaintiff, Mr Martin, and the defendant, Mrs Martin, have been married for more than fifty years. They separated three or four years ago.1 Since then, they have been in an acrimonious dispute.

[2] Mr and Mrs Martin each own shares in two companies, Martin Roofing Co. Ltd (Martin Roofing) and AR Equities Ltd (AR Equities). Martin Roofing owns and operates a successful roofing business. AR Equities owns the commercial premises from which Martin Roofing operates its business.

[3] In this proceeding, Mr Martin claims that actions and omissions of Mrs Martin with respect to the two companies are such that he has been oppressed or unfairly prejudiced as a shareholder of the companies. He seeks relief against Mrs Martin under s 174 of the Companies Act 1993.

[4] Mrs Martin filed an appearance objecting to the jurisdiction of this Court to hear and determine the proceeding. She says the Family Court has exclusive jurisdiction. In response, Mr Martin filed an application to set aside Mrs Martin’s appearance. This judgment determines that application.

Mr Martin’s claim in this proceeding

[5] Martin Roofing has two directors, Mr and Mrs Martin. Each owns one-sixth of the shares in the company. The remaining two-thirds are owned by a family trust, of which Mr and Mrs Martin are two of the three trustees.

[6] Mr and Mrs Martin are the two directors of AR Equities. Mr Martin owns two- thirds of the shares in that company, Mrs Martin owns the other third.

[7] In May 2022, after the parties had separated, Mrs Martin made two withdrawals from Martin Roofing’s bank account into her own bank account. The withdrawals totalled $620,000. Mr Martin claims that the withdrawals were unauthorised, and that Mrs Martin breached her duties as a director in making them. In a separate proceeding, Mr Martin brought a derivative action on behalf of Martin

1 The parties dispute the date of their separation. This dispute is immaterial to the present application.

Roofing against Mrs Martin in respect of the withdrawals. He obtained interim relief against Mrs Martin, following which Mrs Martin returned the $620,000 to Martin Roofing. Mr Martin’s claim that Mrs Martin breached her director’s duties in making the withdrawals forms part of his claim in this proceeding that he has been unfairly prejudiced as a shareholder of Martin…

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 Martin v Martin

Details

AGLC: Martin v Martin [2023] NZHC 2162
Case: [2023] NZHC 2162
Decision Date: 11 August 2023

CaseChat Overview and Summary

In the case of Martin v Martin, the plaintiff, Mr Martin, sought relief against the defendant, Mrs Martin, under section 174 of the Companies Act 1993, alleging oppression or unfair prejudice as a shareholder of two companies, Martin Roofing Co. Ltd and AR Equities Ltd. Mrs Martin objected to the jurisdiction of the High Court, asserting that the Family Court has exclusive jurisdiction over matters involving the division of relationship property under the Property (Relationships) Act 1976. Mr Martin applied to set aside Mrs Martin’s objection to the jurisdiction.

The central legal issue was whether the High Court had jurisdiction to hear and determine Mr Martin's claim for relief under the Companies Act, or if the Family Court had exclusive jurisdiction over the matter due to its nature as a dispute concerning relationship property. Mrs Martin argued that the High Court lacked jurisdiction because the claim, in substance, sought a division of relationship property, which should be heard in the Family Court. Mr Martin contended that his claim pertained to shareholder oppression under the Companies Act and was not an application under the Property (Relationships) Act.

The Court considered the nature of the claim and the specific relief sought by Mr Martin. It found that Mr Martin’s claim was not an application under the Property (Relationships) Act, as it did not seek the division of relationship property or any orders concerning the shares owned by Mr and Mrs Martin. Instead, Mr Martin sought orders for the transfer of the businesses of the two companies to him, which are not relationship property under the Act. The Court held that the exclusive jurisdiction of the Family Court applies only where a party has applied for orders under the Property (Relationships) Act. Since Mr Martin’s claim was based on shareholder oppression under the Companies Act and not on the division of relationship property, the High Court had jurisdiction to hear and determine the matter.

The Court set aside Mrs Martin’s objection to jurisdiction and ordered that Mr Martin was entitled to costs. The Court encouraged the parties' counsel to agree on the quantum of costs, with the option to file brief memoranda if an agreement could not be reached.

Orders