Maunier v Rouast - [2024] NZHC 1517

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2023-419-250

[2024] NZHC 1517

UNDER Part 18 of the High Court Rules 2016 and s 149 of the Companies Act 1993

BETWEEN

CHRISTOPHE CLOVIS MAUNIER

Plaintiff

AND

MAXIME GEORGES JEAN ROUAST

Defendant

Hearing: 21 May 2024 (further submissions received 5 June 2024)

Appearances:

T Chubb for Plaintiff

D M O’Neill for Defendant

Judgment:

11 June 2024

JUDGMENT OF WILKINSON-SMITH J

This judgment was delivered by me on 11 June 2024 at 3.30pm..
Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Solicitors/Counsel:
Beattie Rickman Legal, Hamilton D M O’Neill, Hamilton
Sumpter Law, Auckland T Chubb, Auckland

MAUNIER v ROUAST [2024] NZHC 1517 [11 June 2024]

Introduction

[1] The defendant Mr Rouast applies for security for costs in respect of a proceeding brought by the plaintiff Mr Maunier alleging breach of s 149 of the Companies Act 1993. The basis for the application is that Mr Maunier is resident outside New Zealand and holds no assets in New Zealand

[2] Mr Maunier, is from Noumea, New Caledonia. He currently lives in France. Mr Rouast lives in Hamilton.

[3] Messrs Maunier and Rouast met and became friends when they were both at school together in New Caledonia. After high school, Mr Rouast moved to New Zealand and he and Mr Maunier lost touch. They reconnected as adults, with Mr Maunier visiting Mr Rouast in New Zealand, and Mr Rouast visiting Mr Maunier in New Caledonia.

[4] Eventually they decided to start a business together, New Zealand Guidance Plus Ltd (NZGP). NZGP was incorporated on 31 March 2016. The purpose of the business was to assist Francophones to invest in New Zealand. The initial shareholdings allocated 60 per cent of shares to Mr Rouast (equating 600 shares, making him the majority shareholder) and 40 per cent to Mr Maunier. Both contributed a modest initial investment. Mr Maunier’s contribution was $500. Mr Rouast was the sole director of NZGP.

[5] The parties operated the business until June 2021 when for various reasons the personal and business relationship soured.

[6] On 30 June 2021, Messrs Maunier and Rouast signed an agreement by which Mr Maunier agreed to transfer his interest in NZGP including shares and the current account to Mr Rouast in return for:

(a)Payment of $20,000 by Mr Rouast to Mr Maunier.

(b)Mr Rouast agreeing to meet any New Zealand income tax obligations for the current financial year in respect of the income from NZGP.

(c)Mr Rouast agreeing to facilitate the completion and filing of the personal tax return for Mr Maunier for the 31 March 2022 year including accountancy fees.

[7] On 7 September 2023, Mr Maunier brought the proceeding against Mr Rouast alleging a breach of s 149 of the Companies Act 1993 namely that Mr Rouast did not pay a fair value when he purchased Mr Maunier’s shares in NZGP.

[8] Mr Rouast has filed a statement of defence and the…

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 Maunier v Rouast

Details

AGLC: Maunier v Rouast [2024] NZHC 1517
Case: [2024] NZHC 1517
Decision Date: 11 June 2024

CaseChat Overview and Summary

In the High Court of New Zealand, Christophe Clovis Maunier has filed a proceeding against Maxime Georges Jean Rouast, alleging a breach of s 149 of the Companies Act 1993, specifically claiming that Rouast did not pay a fair value when he purchased Maunier’s shares in New Zealand Guidance Plus Ltd. Rouast has applied for security for costs, arguing that Maunier, who resides in France, lacks assets in New Zealand and might avoid paying the costs if ordered. The case involves a business relationship that turned sour, with allegations of underpayment and disputes over the value of shares. The court must balance the need to protect Rouast from potential costs if Maunier is unsuccessful against the risk of impeding Maunier's ability to pursue a claim that has some merit.

The court found that the threshold for an order of security for costs is met because Maunier resides outside New Zealand, making it likely that Rouast would face difficulties in enforcing a costs order there. The merits of Maunier’s claim are complex, with significant factual disputes and conflicting expert evidence on the value of the shares. The court also considered the offer by Maunier’s grandparents to provide security, though it was not deemed sufficient due to the complications of enforcing such an undertaking given their overseas residence. The court recognised that an order for security could hinder Maunier’s ability to proceed with his claim, but also noted that Rouast has legitimate concerns about potential costs and the need for security. The court decided on a balanced approach, ordering security for costs of $50,000 to be paid in two instalments, supplemented by a signed undertaking from Maunier’s grandparents to cover any excess costs. Failure to comply with the payment schedule will result in the proceedings being stayed or potentially struck out. The court reserved costs of this application to the end of the substantive proceeding.

Orders