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MB Technology Ltd v Orbis Blockchain Technologies Ltd

MB Technology Ltd v Orbis Blockchain Technologies Ltd

Case [2024] NZHC 3631 2 December 2024

Breach of Contract

Specific Performance

Jurisdiction

Discovery & Disclosure

Admissibility of Evidence

Privilege

Commercial Law

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

COMMERCIAL PANEL

CIV-2020-404-1541

[2024] NZHC 3631

BETWEEN
MB TECHNOLOGY LTD

Plaintiff

AND

ORBIS BLOCKCHAIN TECHNOLOGIES LTD

First defendant

DAVID SHU-HAN YU
Second defendant

DANIEL JOHN CROTHERS
Third defendant

Continued overleaf

Hearing: 25 November 2024

Appearances:

J S Cooper KC, JAR Barrow, B E Marriner and AJA Cameron for plaintiff

M Heard, R M Keane and I K Rollinson for first, fifth and sixth defendants

AJB Holmes for second and third defendants
C P Browne, J P Rea and J J Gosha for fourth defendant

Date of judgment:

2 December 2024

REASONS FOR JUDGMENT OF JAGOSE J

[Pre-trial applications]

This judgment was delivered by me on 2 December 2024 at 2.30pm.
Pursuant to Rule 11.5 of the High Court Rules.

…………………………….. Registrar/Deputy Registrar

MB TECHNOLOGY LTD v ORBIS BLOCKCHAIN TECHNOLOGIES LTD [2024] NZHC 3631 [2 December 2024]

ECOMI TECHNOLOGY PTE LTD
Fourth defendant

DENISE MULLINGS
Fifth defendant

JAHANZAIB KHAN
Sixth defendant

[1] This proceeding’s background is summarised in my 1 June 2022 judgment.1 At material issue for trial now is MB Technology’s retention of title in Orbis shares (or alternative entitlement to damages for their loss).

[2] My 25 November 2024 minute determined various pre-trial applications heard on the first morning of the proceeding’s three-week trial:

(a)MB Technology’s 22 October 2024 application for leave to bring a new cause of action was refused;
(b)MB Technology’s 20 November 2024 amended application to serve:2

(i)supplementary briefs of evidence from Chenzhang Li was granted on conditions; and
(ii)a brief of evidence from Kenneth Tan SC was refused;

(c)Orbis’ 21 November 2024 application to set aside subpoenas was granted, with indemnity costs to Orbis (to include any reasonable expenses incurred by Ernst & Young); and

(d)Orbis’ 17 October 2024 application relating to the admissibility of the December 2020 email was granted, with consequential amendment to Mr Godenzi’s brief—

all with reasons to follow. These are those reasons.

1 MB Technology Ltd v Orbis Blockchain Technologies Ltd [2022] NZHC 1257 at [1]–[6].
2 My minute incorrectly specified “file”, instead of the application’s “serve”.

MB Technology’s 22 October 2024 application (new cause of action)

[3] MB Technology and Orbis each is party to a 13 December 2018 share subscription agreement (with an effective date of 23 October 2018) by which, among other things, Orbis warranted its authorised stock capital consisted of “3,300,000 shares of Ordinary Shares. As of 23 October 2018, there were outstanding 3,300,000 shares of Ordinary Shares”. MB Technology contends some 3.8 million ordinary shares were issued, diluting its shareholding in Orbis, and seeks to amend its claim to include a claim for damages on that breach of warranty.

[4] MB Technology requires leave to amend, because r 7.7(1) of the High Court Rules 2016 prohibits amendment “after the close of pleadings date without the leave of a Judge”. It is common ground leave requires an applicant to cross the “three formidable hurdles” of establishing leave is…

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 MB Technology Ltd v Orbis Blockchain Technologies Ltd

Details

AGLC: MB Technology Ltd v Orbis Blockchain Technologies Ltd [2024] NZHC 3631
Case: [2024] NZHC 3631
Decision Date: 2 December 2024

CaseChat Overview and Summary

In the High Court of New Zealand, Auckland Registry, MB Technology Ltd brought a claim against Orbis Blockchain Technologies Ltd and others. The primary issue at trial was whether MB Technology retained title in Orbis shares or was entitled to damages for their loss. This case summary focuses on the court's decisions on several pre-trial applications. MB Technology sought leave to bring a new cause of action for breach of warranty concerning an alleged over-issue of shares, but the court refused the application. MB Technology's delay in making this claim, despite having knowledge of the share over-issue since June 2021, was deemed not to be in the interests of justice. The court also considered applications concerning supplementary briefs of evidence and subpoenas. MB Technology was granted conditional leave to serve supplementary briefs from Chenzhang Li, focusing on the current valuation of Orbis shares and the value of a dividend, but not to serve a brief from Kenneth Tan SC. Orbis successfully applied to set aside subpoenas served on Ernst & Young personnel, due to their improper service and the lack of admissible evidence they could provide. Lastly, Orbis' application to exclude certain privileged communications from evidence was granted, ensuring confidentiality in settlement discussions.

These rulings highlight the importance of timely and appropriate case management in complex litigation, particularly in balancing the interests of justice and the need to prevent undue delay or prejudice to the defendants. The court's decisions underscore the necessity for parties to prepare their cases thoroughly and to act promptly in addressing any new claims or evidence.

Orders