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Murren v Schaeffer

Murren v Schaeffer

Case [2018] NZCA 318 23 August 2018

Civil Litigation & Procedure

Contract Law

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA363/2018
[2018] NZCA 318

BETWEEN	JAMES JOSEPH MURREN AS TRUSTEE OF THE JAMES J MURREN SPENDTHRIFT TRUST AND DANIEL LEE Appellants
AND	GLENN SCHAEFFER Respondent

Hearing:	2 August 2018 (further material received 15 August 2018)
Court:	French, Simon France and Moore JJ
Counsel:	A J Horne and A E Simkiss for Appellants A R Shaw for Respondent T D Gee for R Schaeffer (non-party)
Judgment:	23 August 2018 at 11 am

JUDGMENT OF THE COURT

AThe application for leave to adduce further evidence is declined.
BThe appeal is allowed. The cross appeal is dismissed.
CThe following freezing order is made (and the interim order thereby cancelled):
Pending resolution of the proceedings in the High Court: if contracts are executed for the sale of any or all of the properties comprised in and CT NL12C/1028, and CT 387916 and 387917, whether with or without the assets owned by the Mahana Estates wine business, from the proceeds of sale after payment of registered security holders (other than the respondent), the sum of $6,291,306.72 is to be paid into the respondent’s solicitors’ trust account and placed on interest bearing deposit.

DLeave to apply to the High Court to vary this order if circumstances change is granted.
EThe respondent must pay the appellants costs for a standard appeal on a band A basis and usual disbursements.
FThe respondent must pay the appellants costs for a standard application on a band A basis and usual disbursements.
GCosts in the High Court are to be fixed by that Court.
HThe appellants must pay Ms R Schaeffer costs associated with the filing of evidence and the appearance of counsel on an indemnity basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Simon France J)

Introduction

The appellants invested in a vineyard venture suggested to them by the respondent, Mr Schaeffer. They have filed proceedings seeking to recover their investment plus interest. The pleaded causes of action are a breach of the Fair Trading Act 1986, negligent misstatement, deceit, fraudulent misrepresentation and a breach of the Nevada Deceptive Trade Practices Act.[1]
[1]Nevada Deceptive Trade Practices Act Nev Rev Stat §41.600.
The proceeding was commenced in 2015. There have been various interlocutory hearings. The trial will take place in October this year. Late in 2017, the appellants came to believe that Mr Schaeffer was divesting himself of his New Zealand assets and relocating back to the United States. In February 2018, not having received undertakings requested, they applied for a freezing order that would attach to the proceeds of the sale of various assets.
The application was heard by Peters J, who declined it and discharged an interim order that had been made earlier on a limited notice basis.[2] The Judge held that while the applicants had established a good arguable case on a prospective cause of action, the evidence was insufficient to establish a real risk of dissipation of assets.
[2]Murren…

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 Murren v Schaeffer

Details

AGLC: Murren v Schaeffer [2018] NZCA 318
Case: [2018] NZCA 318
Decision Date: 23 August 2018 at 11 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal from the decision of the High Court that refused the appellants a freezing order. The appellants sought a freezing order to protect the proceeds of sale of the respondent's assets pending the outcome of their claim for misrepresentation and deceit in relation to a vineyard investment. The Court of Appeal allowed the appeal and dismissed the cross-appeal. The Court held that the appellants had a good arguable case and that there was a real risk of dissipation of the respondent's assets. The Court also held that the appellants did not come with unclean hands and that the registered interests of the respondent's former wife should be recognised. The Court made a freezing order requiring the net proceeds of sale of the respondent's assets to be paid into the respondent's solicitor's trust account. The respondent must pay the appellants' costs of the appeal and the application, while the appellants must pay the costs of the respondent's former wife.

The Court of Appeal of New Zealand heard an appeal from the High Court's decision that refused the appellants a freezing order. The appellants, James Murren and Daniel Lee, sought a freezing order to protect the proceeds of sale of the respondent's assets pending the outcome of their claim for misrepresentation and deceit in relation to a vineyard investment. The Court of Appeal allowed the appeal and dismissed the cross-appeal from the respondent, Glenn Schaeffer. The Court held that the appellants had a good arguable case and that there was a real risk of dissipation of the respondent's assets. The Court also held that the appellants did not come with unclean hands and that the registered interests of the respondent's former wife should be recognised. The Court made a freezing order requiring the net proceeds of sale of the respondent's assets to be paid into the respondent's solicitor's trust account. The Court granted leave to apply to the High Court to vary the order if circumstances change. The respondent must pay the appellants' costs of the appeal and the application, while the appellants must pay the costs of the respondent's former wife.

Orders