McCulloch v Quinn - [2012] NZHC 1850

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-3508 [2012] NZHC 1850

BETWEEN DONALD ASPINALL MCCULLOCH, NOLA EVANS AND PETER GLYN EVANS
Plaintiffs

ANDBERNARD PAUL QUINN First Defendant

ANDNGATI AWA ASSET HOLDINGS LIMITED
Second Defendant

ANDALLEN PATRICK PETERS Third Defendant

ANDPETERS CAPITAL LIMITED Fourth Defendant

ANDWILLIAM NORMAN BIRNIE Fifth Defendant

ANDSTEPHEN ROBERT NORRIE Sixth Defendant

ANDBIRNIE CAPITAL PROPERTY PARTNERSHIP LIMITED Seventh Defendant

ANDPICASSO NOMINEES LIMITED Eighth Defendant

ANDWILLIAM NORMAN BIRNIE, STEPHEN ROBERT NORRIE AND RICHARD JAMES O'BRYEN HOARE AS
TRUSTEES OF THE PAONEONE SETTLEMENT TRUST NO.5
Ninth Defendant

ANDBJF PROPERTIES LIMITED Tenth Defendant

MCCULLOCH & ORS V QUINN & ORS HC AK CIV 2011-404-3508 [27 July 2012]

Hearing: 20 July 2012

Appearances: G L Turkington for the plaintiffs
Z G Kennedy and M D Pascariu for the second and fourth defendants
R J Hollyman for the fifth, sixth, eighth and ninth defendants

Judgment: 27 July 2012

JUDGMENT OF ALLAN J

This judgment was delivered by me on 27 July 2012 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules. Registrar/Deputy Registrar

Date: ………………….

Counsel: G L Turkington, Wellington: glturk@xtra.co.nz
R J Hollyman, Auckland: rjhollyman@shortlandchambers.co.nz

Solicitors: Minter Ellison, Auckland: mihai.pascariu@minterellison.co.nz

Introduction

[1] The plaintiffs are shareholders in the seventh defendant (BCPP). They apply for an order requiring the first to fourth defendants to produce for inspection, all documents relating to the settlement of associated derivative proceedings brought by the first and third defendants (Mr Quinn and Mr Peters) on behalf of BCPP. The plaintiffs also seek disclosure of the Court file in related summary judgment proceedings between the second and fourth defendants (Ngati Awa Asset Holdings Limited and Peters Capital Limited) on the one hand, and the fifth defendant (Mr Birnie) on the other. During the course of the hearing, it emerged that the affidavit of Mr Peters in that proceeding, to which the plaintiffs now seek access, does no more than annex documents which are already the subject of the plaintiffs’ principal application.

Procedural background

[2] The parties have for several years been engaged in protracted and complex litigation. It is convenient to draw largely on a judgement given by Venning J on
23 January 2012 for the relevant background.1 Mr Birnie had an interest in various

property projects. BCPP was the vehicle for those investments. BCPP was divided into A and B shareholdings. The Birnie interests were Group A shareholders. A variety of investors constituted the Group B shareholding: Ngati Awa (controlled by Mr Quinn), Peters Capital (controlled by Mr Peters), the Totara Trust, the late Mr Alan Hubbard and Mrs Hubbard, and Gough Capital Limited.

[3] Group A and B shareholders could each appoint a maximum of four directors to the board of BCPP. A valid resolution required a vote of the majority of directors but had to be supported by at least one director from each shareholding group. The property market deteriorated during 2009. BCPP became entitled to require Mr Birnie and his interests to repay BCPP the sum of $19 million…

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 McCulloch v Quinn

Details

AGLC: McCulloch v Quinn [2012] NZHC 1850
Case: [2012] NZHC 1850
Decision Date: 27 July 2012

CaseChat Overview and Summary

The case of McCulloch & Ors v Quinn & Ors was heard by Allan J in the High Court of New Zealand. The plaintiffs, shareholders in a company, sought an order for the first to fourth defendants to produce documents relating to the settlement of associated derivative proceedings. The defendants claimed litigation privilege over certain documents. The plaintiffs argued that the defendants were not entitled to maintain the privilege because the Court's jurisdiction under s 168 of the Companies Act 1993 required it to know the basis upon which a settlement or compromise was reached.

Allan J considered the principles applicable to the privilege arising from without prejudice communications and the circumstances in which exceptions to the privilege will be recognised. The Court found that the case did not fall within the recognised exceptions on grounds of fraud or dishonesty. Allan J also considered the argument that the relevant privilege was that of the first to fourth defendants and not the company itself, and that the plaintiffs were not entitled to view the relevant emails on the basis contended. The Court concluded that the first to fourth defendants were entitled to maintain the privilege and dismissed the plaintiffs' application. The first to fourth defendants were also entitled to costs.

Orders