New Zealand Trust Corporation Limited v Bonnard Lawson Geneve SA

[2024] NZHC 607

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000724

[2024] NZHC 607

BETWEEN

NEW ZEALAND TRUST CORPORATION

LIMITED as trustee of the Elarof Trust, and PASCALE HELOISE SPADONE DE MEURON
Plaintiffs

AND

BONNARD LAWSON GENEVE SA

First Defendant

BONNARD LAWSON SARL
Second Defendant

YVES NOEL DANIEL GEORGES BONNARD

Third Defendant

CEDRIC CHRISTOPHE AGUET

Fourth Defendant

Hearing:

11 September 2023

Appearances:

S Carey for the Plaintiffs

B A Keown / L McNeely for the Defendants

Judgment:

21 March 2024

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 21 March 2024 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

NZ TRUST CORPORATION LTD v BONNARD LAWSON GENEVE SA & Ors [2024] NZHC 607

[21 March 2024]

Introduction

[1]    Pascale Heloise Spadone de Meuron wanted to extricate herself from her family’s Swiss foundation, the Sandoz Family Foundation (the Foundation), of which she was a beneficiary. She engaged Swiss lawyers, Yves Bonnard and Cedric Aguet, to negotiate a final allocation from the Foundation and to advise her on minimising her tax obligations. The fee agreement she agreed with Messrs Bonnard and Aguet provided for a success fee depending on the amount of the allocation.

[2]    Mr Bonnard advised Ms Spadone to receive her distribution from the Foundation through a trust, to avoid paying tax in Switzerland on the distribution. The Elarof Trust was established, and Ms Spadone instructed the Foundation to pay the negotiated CHF 350 million (approximately NZD 648 million) to the trust. The then trustee of the Elarof Trust (Aspen Trust Services Limited (ATSL)) paid a success fee to Messrs Bonnard and Aguet of two per cent of the CHF 350 million: CHF 7 million (approximately NZD 13 million). Subsequently, the Geneva tax authority determined that Ms Spadone was required to pay income tax on any distributions she received from the Elarof Trust.

[3]    New Zealand Trust Corporation Ltd (NZTC), the current corporate trustee of the Elarof Trust, claims that ATSL mistakenly paid Messrs Bonnard and Aguet the success fee based on the amount paid by the Foundation to the Elarof Trust when the fee should have been based on the amount distributed from the Elarof Trust to      Ms Spadone after any taxes payable by her. It claims that the success fee was paid under a mistake of fact (including a mistaken belief that ATSL was obliged and entitled to pay the success fee without accounting for tax) and/or a mistake of law (including that Ms Spadone would not  be  required  to  pay  tax  on  any  distributions  from  the Trust originating from the initial capital paid into the Trust). NZTC claims that because of this mistake Messrs Bonnard  and  Aguet  were  paid  approximately  CHF 3,290,000 (approximately NZD 6,093,997) which they were not entitled to under the fee agreement.

[4]    NZTC and Ms Spadone commenced legal proceedings in New Zealand. The statement of claim asserted a breach of contract and/or money had and received against

Messrs Bonnard and Aguet, their law firm (Bonnard Lawson Geneve SA) and an associated firm, Bonnard Lawson SARL.

[5]    NZTC and Ms Spadone obtained directions from this Court that the proceedings could be served outside New Zealand without the leave of the Court. The statement of claim was sent to Messrs Bonnard and Aguet, and Bonnard Lawson Geneve SA. The four defendants each filed an appearance under protest to the jurisdiction of the New Zealand Court.

[6]    NZTC and Ms Spadone now apply to set aside the defendants’ protest to jurisdiction. Through their written synopsis of submissions, the plaintiffs advise that in view of the defendants’ evidence, they intend to discontinue their claim against the law firms. Accordingly, they no longer seek to set aside the appearances of the first and second defendants. Furthermore, the plaintiffs advise that Ms Spadone intends to discontinue her claim against all the defendants.

[7]    Accordingly, the remaining parties are, or will soon be, NZTC as plaintiff, and Messrs Bonnard and Aguet as defendants. The breach of contract cause of action is not pursued, leaving a single cause of action for money had and received.

[8]    This judgment decides NZTC’s application to set aside Messrs Bonnard and Aguet’s protest to jurisdiction. The issues are:

(a)Does the claim have a real and substantial connection with New Zealand?

(b)Is there a serious issue to be tried on the merits?

(c)Is New Zealand the appropriate forum for the trial?

(d)Do any other relevant circumstances support an assumption of jurisdiction?

Background

[9]The following facts are undisputed except where indicated.

[10]   In 2013, Ms Spadone engaged Mr Bonnard to provide her with legal advice and representation in relation to her desired exit from the Sandoz Family Foundation. Ms Spadone signed a power of attorney dated 19 September 2013 giving Mr Bonnard an individual mandate to represent her and act on her behalf in all relations with the Foundation (the First POA). This document recorded that Ms Spadone agreed to pay Mr Bonnard his fees and disbursements, and further, that:

In the event of any disagreements or disputes arising from this mandate, the Principal declares she expressly agrees to the courts governing the Agent’s region of domicile to hold exclusive jurisdiction and Swiss law to be applicable.

[11]   In 2014, litigation was contemplated in order to secure Ms Spadone’s exit from the Foundation. Ms Spadone jointly engaged Messrs Bonnard and Aguet pursuant to a second power of attorney dated 10 January 2014 (the Second POA). The Second POA was signed by Ms Spadone in Lausanne, Switzerland. The mandate was to act on her behalf in the dispute between herself and the Foundation. Again, Ms Spadone agreed to pay Messrs Bonnard and Aguet’s fees and disbursements. She also agreed that Swiss law applied, and the mandate was subject to the exclusive jurisdiction of the courts of Lausanne, Switzerland.

[12]   On 15 January 2014, Mr Bonnard wrote to Ms Spadone with his advice on the strategy to minimise her tax liability when she received her allocation from the Foundation. He recommended establishing a trust to receive the allocation from the Foundation. He concluded:

I suggest we meet in person to discuss how a trust would operate and how to create one. I am knowledgeable on this subject as I offer a trustee service to our firm’s clients through a company in New Zealand that I created in 2004 and which currently holds over three billion for various family trusts.

[13]   On 16 January 2014, Ms Spadone entered into a fee agreement with Messrs Bonnard and Aguet (the Fee Agreement), which was also signed in Lausanne. The Fee Agreement recorded that Ms Spadone (the Client) tasked Messrs Bonnard and

Aguet with advising, assisting, and representing her before all authorities and/or jurisdictions, after having attempted to reach a transactional solution in the dispute with the Foundation. The Fee Agreement referred to the Second POA, stating that: “This document refers to the power of attorney dated 10 January 2014 setting out the Lawyers’ assignment.”

[14]   The Fee Agreement records that the parties had opted for mixed fees, based on a lower rate and a contingency fee (pactum de palmario). Article 3 sets out the contingency fee:

Article 3: Contingency fee

The total value in dispute, as claimed by the Client, exceeds 630 million Swiss francs.

The parties agree to a contingency fee, being a fixed fee above a certain limit, or, if well below that limit, being equal to a percentage of the total amount allocated to the Client, whether after the signature of a transactional agreement reached outside the courts or following a procedure of whatsoever type, including administrative. If the Lawyers manage to recover a net amount for the Client, BEFORE any taxes the Client may need to pay, that is equal to or greater than CHF 500,000,000 net (five hundred million Swiss francs), the Lawyers will receive a fixed contingency fee of CHF 12,600,000 (twelve million, six hundred thousand Swiss francs).

For any payment (in cash or securities) lower than the net amount of CHF 500,000,000 (five hundred million Swiss francs), the Lawyers will receive a contingency fee limited to 2% (two percent) of the total amount allocated to the Client AFTER any taxes are paid.1

These contingency fees are payable when the amount and/or securities allocated to the Client are banked, transferred, and/or allocated.

In any case, the Lawyers’ assignment is to advise the Client on how to minimise the tax bill of a settlement as much as possible.

(emphasis added)

[15]   On 16 January 2014, Ms Spadone and her husband informed Mr Bonnard that they were prepared to receive the distribution from the Foundation through an entity or by residing outside of Switzerland.

1      These words of the English translation are disputed. This translation is made by KM Translations Ltd and provided through the affidavit of Mr Bonnard. Ms Spadone disputes this translation. Ms Shan, on behalf of NZTC, has provided a translation from Straker Translations who translate the words as “AFTER tax which she would potentially pay.”

[16]   On 30 January 2014, the Elarof Trust was established.2 ATSL was appointed as the corporate trustee of the Elarof Trust. Mr Bonnard was and is a director of ATSL. Ms Spadone is the sole discretionary life beneficiary of the Elarof Trust.

[17]   On 19 February 2014, the Foundation agreed to facilitate Ms Spadone’s desired exit, and to make a one-off payment of CHF 350 million for her benefit.

[18]   Having obtained the  Foundation’s  agreement  to  a  one-off  distribution,  Mr Bonnard sought to confirm various tax consequences with the Geneva tax authority. On 17 April 2014, Mr Bonnard wrote to the Geneva tax authority on behalf of Ms Spadone and her husband. Mr Bonnard submitted that assets held on trust for Ms Spadone (i.e. in the Elarof Trust) should not attract wealth tax in Switzerland, and income tax on distributions from the Trust should not be applied to distributions originating from the initial capital or capital subsequently paid into the Trust, but only to distributions from the Trust’s income and accumulated capital gains.

[19]   On 30 April 2014, Ms Spadone instructed the Foundation to pay CHF 350 million to the Elarof Trust. On 9 May 2014, the payment was made into ATSL’s Elarof Trust bank accounts with Credit Suisse in Switzerland.

[20]   On 19 May 2014, Mr Bonnard prepared three fee statements in relation to his and Mr Aguet’s legal fees under the Fee Agreement. Two of the fee statements related to the success fee. Mr Bonnard calculated that he and Mr Aguet were entitled to CHF 7 million under Article 3 of the Fee Agreement, comprising two per cent of the CHF 350 million payment that had been made by the Foundation to the Trust.

[21]The fee statements for this CHF 7 million success fee comprised:

(a)One statement for CHF 6.25 million, payable to Mr Bonnard’s professional bank account with Credit Suisse in Lausanne.

2 Affidavit of Yves Bonnard in Support of the Defendants' Opposition to Plaintiffs' Interlocutory Application to Set Aside Appearances, at [44]. But note the date on the trust deed is 30 April 2014.

(b)One statement for CHF 750,000 payable to Bonnard Lawson’s Dubai branch bank account with Emirates NBD.

[22]   These two fee statements were addressed to ATSL as trustee of the Elarof Trust. Ms Spadone reviewed and initialled each of the invoices.

[23]   On 20 May 2014, CHF 6,294,698.50 was transferred from ATSL’s Elarof Trust bank account with Credit Suisse in Switzerland to Mr Bonnard’s professional bank account in Switzerland. This amount included the CHF 6.25 million forming part of the CHF 7 million success fee.

[24]   On 21 May 2014, CHF 750,000 was transferred from ATSL’s Elarof Trust bank account with Credit Suisse in Switzerland to Bonnard Lawson’s Dubai branch bank account, and distributed to Messrs Bonnard and Aguet.

[25]   These payments were authorised and actioned by Mr Bonnard, as director of ATSL.

[26]   Negotiations between Ms Spadone (through Mr Bonnard) and the Geneva tax authority continued. On 19 August 2015, a final agreement was reached. The Geneva tax authority accepted that the CHF 350 million transfer from the Foundation to the Elarof Trust would not attract tax. However, it considered that any distributions from the Elarof Trust to Ms Spadone would attract income tax (i.e. not just distributions in respect of income accumulated after the Trust was established).

[27]   In September 2015, ATSL,  as  trustee  of  the  Elarof  Trust,  made  a  CHF 30 million distribution to Ms Spadone. She duly paid income tax on this distribution in Switzerland.

[28]In October 2016, NZTC replaced ATSL as trustee.

[29]   In June 2018, a Swiss lawyer (Pierre de Preux), acting for Ms Spadone and her husband, wrote to Messrs Bonnard and Aguet to inform them that Ms Spadone and her husband intended to hold them liable in connection with the settlement agreed with the Foundation; and specifically, the tax consequences of the settlement, and

overcharging their success fee. The lawyer requested that Messrs Bonnard and Aguet sign a “waiver of limitation period”, failing which legal proceedings would be initiated. Messrs Bonnard and Aguet signed the waivers. The meaning and effect of these waivers is disputed by NZTC.

[30]   By letter dated 22 June 2018, Messrs Bonnard and Aguet rejected the allegations and requested that the Chair of the Lausanne Bar Association be engaged as a mediator. In March 2019, the matter was referred to the President of the Lausanne Bar Association, but was not resolved.

[31]   On 28 May 2019, Messrs Bonnard and Aguet provided fresh waivers for the benefit of Ms Spadone.

[32]   On 29 May 2019, Messrs Bonnard and Aguet obtained a legal opinion which concluded that the success fee had been correctly calculated under the Fee Agreement, and that because Ms Spadone had not purported to nullify the success fee invoices within one year of discovering her error, no error could now be invoked. In June 2019, the legal opinion was provided to Ms Spadone’s Swiss counsel. On 25 September 2019, Messrs Bonnard and Aguet asked Ms Spadone’s counsel to advise of her intentions. No further steps were taken to progress a claim in Switzerland.

[33]   NZTC and Ms Spadone commenced legal proceedings in New Zealand on  19 May 2020.

[34]   On 23 June 2020, Ms Spadone and NZTC applied without notice for directions as to service of the claim under r 7.43A of the High Court Rules 2016 (HCR). They contended that the claim fell within r 6.27 and that they did not require leave to serve the defendants outside of New Zealand. Alternatively, they sought leave under r 6.28 if the Court decided that leave was required. By minute dated 20 July 2020, Associate Judge  Andrew  (as  he  then  was)  decided  that   leave  was  not  required  because  r 6.27(2)(b) applied. The Judge stated that if he was wrong in that conclusion, he would have granted leave under r 6.28.

[35]   In March 2021, the statement of claim was sent to Messrs Bonnard and Aguet, and Bonnard Lawson Geneve SA. On 19 April 2021, they each filed an appearance under protest to the jurisdiction of the New Zealand Court. Bonnard Lawson SARL was provided with the statement of claim later, without prejudice to its rights to dispute the jurisdiction of the New Zealand Court.

Legal principles

[36]   Where jurisdiction is protested, the Court has a discretion  whether  to  assume jurisdiction. The exercise of that discretion is governed by r 6.29 of the HCR.

[37]   Rule 6.29(1) applies where jurisdiction is protested when service has been effected out of New Zealand without leave:

6.29 Court’s discretion whether to assume jurisdiction

(1)If service of process has been effected out of New Zealand without leave, and the court’s jurisdiction is protested under rule 5.49, the court must dismiss the proceeding unless the party effecting service establishes—

(a)that there is—

(i)   a good arguable case that the claim falls wholly within 1 or more of the paragraphs of rule 6.27; and

(ii)    the court should assume jurisdiction by reason of the matters set out in rule 6.28(5)(b) to (d); or

(b)that, had the party applied for leave under rule 6.28,—

(i)  leave would have been granted; and

(ii)  it is in the interests of justice that the failure to apply for leave should be excused.

[38]   Rule 6.27 sets out when an originating document may be served out of New Zealand without leave. Relevantly, the circumstances include:3

(b)when a contract sought to be enforced or rescinded, dissolved, annulled, cancelled, otherwise affected or interpreted in any proceeding, or for the breach of which damages or other relief is demanded in the proceeding—

3 Rule 6.7(2).

(i)   was made or entered into in New Zealand; or

(ii)     was made by or through an agent trading or residing within New Zealand; or

(iii)     was to be wholly or in part performed in New Zealand; or

(iv)    was by its terms or by implication to be governed by New Zealand law:

(c)when there has been a breach in New Zealand of any contract, wherever made:

…

(k)when the person to be served has submitted to the jurisdiction of the court:

(l)when a claim is made for restitution or for the remedy of constructive trust and the defendant’s alleged liability arises out of acts committed within the jurisdiction:

…

[39]   Rule 6.29(2) applies where jurisdiction is protested when service has been effected out of New Zealand with leave:

(2)If service of process has been effected out of New Zealand under rule 6.28, and the court’s jurisdiction is protested under rule 5.49, and it is claimed that leave was wrongly granted under rule 6.28, the court must dismiss the proceeding unless the party effecting service establishes that in the light of the evidence now before the court leave was correctly granted.

[40]   Under r 6.28(5) the Court may grant an application for leave if the applicant establishes that:

(a)the claim has a real and substantial connection with New Zealand; and

(b)there is a serious issue to be tried on the merits; and

(c)New Zealand is the appropriate forum for the trial; and

(d)any other relevant circumstances support an assumption of jurisdiction.

[41]   If leave is granted under r 6.28(5) and the party served protests the Court’s jurisdiction, the onus is on the serving party to establish that all these criteria are met and therefore leave was properly granted. Otherwise, the Court is obliged under r 6.29(2) to dismiss the proceedings.

Does the claim have a real and substantial connection with New Zealand?

[42]   NZTC acknowledges that the present situation does not fit perfectly into either r 6.29(1) or 6.29(2) but submits that as leave was sought and was in  effect granted,   r 6.29(2) more closely reflects the reality and is the more appropriate test. Its application and submissions approach the matter on that basis. The defendants met the application accordingly.

[43]   NZTC further submits that because the Associate Judge considered that the claim came within r 6.27, a sufficient connection to New Zealand is assumed to have been established.4

[44]   In response, the defendants say that assumption does not arise because the plaintiffs omitted material information from the without notice application, and the evidence now before the Court is very different to that presented at that time.

[45]   NZTC further submits that the claim has a real and substantial connection to New Zealand in that:

(a)NZTC is a New Zealand company subject to New Zealand law.

(b)ATSL is also a New Zealand company subject to New Zealand law.

(c)Asiaciti Trust New Zealand Limited, which assisted the defendants to set up the Elarof Trust, is a New Zealand company.

4      Relying on Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd [2010] NZCA 502, [2011] 1 NZLR 754 at [36].

(d)The Elarof Trust is a New Zealand trust, subject to oversight of the New Zealand courts and to New Zealand law, both inherently and expressly under cl 3 of the Trust Deed.

(e)The actions of NZTC and ATSL, as trustees of a New Zealand trust, are subject to New Zealand law and the jurisdiction of the New Zealand courts.

(f)The payments in issue were made on invoices issued by the defendants to ATSL in New Zealand.

(g)The payments in issue were made by ATSL, a New Zealand company, and a New Zealand trustee of a New Zealand trust.

(h)Mr Bonnard authorised payment of the three invoices and actioned those payments in his capacity as director of ATSL (acting as the then trustee of the Elarof Trust). The making of the payments was an exercise of trustee power by a New Zealand trustee (ATSL).

(i)The decision by ATSL, a New Zealand company, to make the payments, is also subject to New Zealand companies law.  In addition, under     cl 12(b) of the Trust Deed, the exercise by ATSL of a trustee power or discretion was required to be made by resolution of its board of directors.

(j)The payments were made from, and depleted, the assets of the Elarof Trust, a New Zealand trust, causing loss to the New Zealand trust company.

[46]   NZTC emphasises that there has been a choice of law made in the Trust Deed for the Elarof Trust, and it is the law of New Zealand. Clause 3 of the Deed states:

(a)The proper law of this Trust shall be that of New Zealand and all rights under this Trust and its construction and effect shall be subject to the jurisdiction of and construed according to the laws of New Zealand.

(b)The courts of New Zealand shall be the forum for the administration of these trusts.

[47]   The defendants say that the claim does not have a real and substantial connection with New Zealand, for two main reasons.

[48]   First, that the claim is subject to an exclusive jurisdiction clause in favour of the courts of Lausanne.

[49]   Second, that NZTC’s claim relies entirely on conduct that took place in Switzerland. They submit that the gateway in r 6.27(l) is a good indicator of when a restitutionary claim is considered to have a real and substantial connection with New Zealand. This is when acts committed within New Zealand give rise to the defendant’s alleged liability.

[50]The defendants say that no relevant acts occurred within New Zealand:

(a)The payments were made from a Swiss bank account to another Swiss bank account (and in one instance, a Dubai bank account). No money touched New Zealand.

(b)The payments were approved by Ms Spadone in Switzerland and actioned by Mr Bonnard from his office in Lausanne.

(c)The alleged mistakes concern the proper interpretation of a Swiss law-governed lawyer/client agreement that was performed in Switzerland, and/or an allegedly mistaken belief as to the application of Swiss taxation law.

(d)There is no evidence of a relevant communication being made to a person within New Zealand.

(e)Loss is not an element of a restitutionary claim (which is about the defendant’s unjust enrichment), but even if loss is considered, the loss

occurred in Switzerland, because that is where the funds are physically held.

(f)The relief sought by NZTC does not have a real or substantial connection to New Zealand. The plaintiff seeks an order directing payment of an amount denominated in Swiss currency, or a declaration as to the defendants’ obligations under the (Swiss law-governed) Fee Agreement.

Assessment

[51]   The parties have approached the application on the basis that the Court granted NZTC leave to serve the proceedings overseas. Therefore, r 6.29(2) applies, and NZTC must establish, in light of the evidence now before the Court, that the Court correctly concluded that the claim has a real and substantial connection to New Zealand. This is the gateway or threshold requirement that must be established before the Court considers any other matters.

[52]   However, it is relevant that the Associate Judge, having considered NZTC’s application and affidavit, found first that leave was not required because r 6.27(2)(b) applied. Further, the Associate Judge noted that a claim was made for restitution (money had and received), and the defendants’ alleged liability arose out of acts committed within the jurisdiction, in particular the mistaken payment by a New Zealand company to the defendants, apparently suggesting that this claim came within the specified head of jurisdiction at r 6.27(2)(l). Of course, the Associate Judge reached that decision without the further evidence now put before the Court by the defendants. That evidence includes the first and second POAs which contain choice of law and exclusive jurisdiction clauses, and the location of the bank account from which the money was paid and the accounts into which the money was received.

[53]The learned authors of The Conflict of Laws in New Zealand explain that rules

6.27 and 6.28 are intended to be exclusive.5 Rule 6.27 sets out the circumstances in

5      Maria Hook and Jack Wass The Conflict of Laws in New Zealand (LexisNexis, 2020) at [2.210].

which there would ordinarily be a real and substantial connection to New Zealand.6 The purpose of the open-ended head of jurisdiction of a “real and substantial connection” in r 6.28(5)(a) is to capture any claims with a sufficient connection to New Zealand that do not fit within any of the specified heads of jurisdiction in r 6.27.7 Thus, rule 6.28(5)(a) only applies where a claimant may not effect service as of right under r 6.27.8

[54]   If proceedings are served overseas without leave, and the party served protests jurisdiction, the serving party must establish a good arguable case that the claim falls within one or more of the specified heads of jurisdiction contained within r 6.27.9 Where there is not a good arguable case that the claim falls within one or more of those specific heads of jurisdiction the Court may still assume jurisdiction if leave would have been granted under r 6.28 had the party applied for it,10 one of the requirements of which is that the claim has a real and substantial connection to New Zealand,11 and it is in the interests of justice that the failure to apply for leave should be excused.12

[55]   Consistent with that, the Court of Appeal has said that when determining whether there is “a real and substantial connection” under r 6.28(5)(a), the courts may be guided by r 6.27, but “[a]rguments by analogy” with the r 6.27 cases are “not determinative”.13

[56]   As to the standard required under r 6.28(5)(a), The Conflict of Laws in New Zealand suggests that by analogy with r 6.27, it would appear to be sufficient that the plaintiff establishes the requisite connection to the standard of a “good arguable case”, though r 6.28 does not make this express. 14

6      Hook and Wass, above n 5, at [2.147].

7      Hook and Wass, above n 5, at [2.120].

8      Hook and Wass, above n 5, at [2.120].

9      Rule 6.29(1)(a)(i).

10     Rule 6.29(1)(b)(i).

11     Rule 6.28(5)(a).

12     Rule 6.29(1)(b)(ii).

13     Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [48].

14     Hook and Wass, above n 5, at [2.219]. 94.

[57]   “Claim” is given a broad meaning; it is “an amalgam of the factual and legal basis for the relief sought”.15 It is a separate enquiry from that at r 6.28(5)(c), which is directed at the proceeding.16

[58]   NZTC’s claim is for money had and received. The authors of The Laws of New Zealand explain that:17

An action for money had and received will lie where the plaintiff has voluntarily paid money to the defendant and the money would not have been paid but for a mistake of fact made by the plaintiff. The common law action for money had and received is based on the receipt of money by the defendant who has no right to retain it, and the cause of action is complete when the money is received. However, as the claim is personal and not proprietary, it  is not necessary that the money still be held by the defendant. The action does not depend on proof of any wrongdoing or fault on the  part  of  the  recipient. The onus is on the plaintiff to prove that he or she would not have made the payment but for the mistake. (citations omitted)

[59]   The factual basis for NZTC’s claim is that ATSL voluntarily paid money to Messrs Bonnard and Aguet pursuant to a mistake of fact. The key facts, and in terms of r 6.27(l) the acts that give rise to the alleged liability, are the making of the alleged mistake by ATSL, the payment of the money by ATSL pursuant to the mistake, and the receipt of that money by Messrs Bonnard and Aguet.

[60]To my mind, the claim is connected to New Zealand in the following ways:

(a)The allegedly mistaken payments were made by ATSL, a New Zealand company, on invoices issued by the defendants to ATSL.

(b)ATSL made the payments in its capacity as trustee of the Elarof Trust, a New Zealand-based trust (subject to the oversight of the New Zealand courts and to New Zealand law, both inherently and expressly under  cl 3 of the Trust Deed).

15     Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [51].

16     Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [45]. The rule itself refers to “the trial”.

17     P Twist, J Palmer and Marcus Pawson Laws of New Zealand Restitution (online ed) at [11].

(c)Mr Bonnard authorised payment of the invoices and actioned those payments in his capacity as director of ATSL.

(d)The payments were made from the assets of the New Zealand-based Elarof Trust.

[61]   With respect to the choice of law/exclusive jurisdiction clause in the Second POA (to which the Fee Agreement refers), I accept that this indicates a connection to Switzerland. But that connection does not preclude the claim also having a real and substantial connection with New Zealand for the purposes of r 6.28. I return to the broader ramifications of this clause when considering whether New Zealand is the appropriate forum for the trial.

[62]   I accept the defendants’ submission that New Zealand company and trust law, and the supervision of the New Zealand courts over these matters, are not engaged by NZTC’s claim. Mr Bonnard is not sued in his capacity as director of ATSL, or as trustee of the New Zealand trust. There is no suggestion of a breach of the Companies Act or the Trust Deed, or the Trusts Act 2019. The trustee at the time of the allegedly mistaken payments (ATSL) is not a party to the proceedings, and NZTC has told the Court that “…the former trustee, Aspen, is not sued, and no claim was filed for breach of trust…”

[63]   I also acknowledge that, based on the undisputed evidence of Mr Bonnard, the payment was authorised and made outside New Zealand. Mr Bonnard’s evidence is that he was physically situated in Switzerland when he effected the payments. His evidence is that the Foundation made the distribution to the Swiss bank account of the Elarof  Trust.  The  payments  by  ATSL were  made  from  that  trust  account  to Mr Bonnard’s professional bank account with Credit Suisse, Lausanne, and Bonnard Lawson’s Dubai branch account with Emirates NBD. Therefore, while the act of authorising the payment was made by a New Zealand company as trustee of a New Zealand trust, and the payment was made from the assets of that trust, the physical act of payment did not occur in New Zealand. Nor is there any evidence of any communication with anyone within the New Zealand jurisdiction. The only people

involved in making the payment were Ms Spadone and Mr Bonnard, who were both situated in Switzerland.

[64]   It is important to note that this evidence was not before the Court when judgment was given that leave was not required.

[65]   Nevertheless, the actors involved in making the allegedly mistaken payment have a real and substantial connection to New Zealand. A New Zealand company in its capacity as trustee of a New Zealand-based trust authorised the payment of money of that New Zealand-based trust to another. I find that there is a real and substantial connection to New Zealand, while noting that it is not a strong one.

Is there a serious issue to be tried?

[66]   NZTC submits that there is a serious issue to be tried. The claim is that as the payment attained from the Foundation was less than CHF 500 million, the defendants were entitled to two per cent of the payment after tax payable by Ms Spadone. NZTC claims that due to a mistake of fact (that ATSL was obliged and entitled to pay the success fee without accounting for tax), and/or a mistake of law (that no tax fell to be deducted),  the  success  fee  was  paid  without  accounting  for  tax  payable  by   Ms Spadone. It is not disputed that the defendants invoiced for, and received, payment without accounting for tax payable by Ms Spadone.

[67]   NZTC’s claim is supported by affidavit evidence from Ms Spadone. She deposes that although she was aware of the success fee payments by ATSL, and she did not object to them, she mistakenly believed that she would not be required to pay tax in Switzerland on any distribution from the Elarof Trust to her, because that was what she had been told by Mr Bonnard. Her evidence is that the first time she became aware that, contrary to Mr Bonnard’s advice, she would have to pay tax on a distribution of funds from the trust to her was when the Geneva tax authority made its decision over one year after the success fee was paid.

[68]   Ms Spadone disputes the defendants’ translation of the Fee Agreement and says that the Fee Agreement refers to tax that “she”, i.e. Ms Spadone, would pay. NZTC has put in evidence an alternative translation which translates the phrase as:

For every payment (in cash or shares) lower than the net sum of CHF 500,000,000 (five hundred million Swiss francs), the Lawyers shall be entitled to complementary fees set at 2% (two percent) of the total sum allocated to the Client, AFTER tax which she would potentially pay.

[69]   The defendants submit that there is no serious issue to be tried. Their argument has three threads.

[70]   First, they say that NZTC’s claim is governed by Swiss law. They rely on The Conflict of Laws in New Zealand, which states that the choice of law for a claim in restitution is governed by this rule:18

(1)The obligation to restore the benefit of an enrichment obtained at another person’s expense is governed by the law which has the most significant connection with the obligation or claim.

(2)Unless the circumstances demonstrate otherwise, this law will generally be:

(a)    if the obligation arises in connection with a pre-existing relationship, such as one arising out of contract or tort, the law governing that relationship;

(b)    if the obligation arises in connection with a transaction concerning an immovable, the lex situs, or if it involves the assertion of an interest in specific property, the law applicable to that property; and

(c)    if it arises in any other circumstances, the law of the country where the enrichment occurs.

[71]   They submit that as the claim is that the success fee paid exceeded what Messrs Bonnard and Aguet were entitled to under the Fee Agreement, the obligation to restore arises out of the Fee Agreement. That Fee Agreement, they claim, is governed by Swiss law.

[72]   The defendants further submit that the place of the alleged enrichment was also Switzerland (i.e. where Messrs Bonnard and Aguet resided and received the fees into their bank accounts, noting one payment was received in Dubai).

18     Hook and Wass, above n 5, at [7.319].

[73]   Additionally, they say, the application of Swiss law to the claim accords with common sense. NZTC’s claim concerns the proper construction of Article 3 of the Fee Agreement, which is a Swiss law issue.

[74]   Second, the defendants submit that NZTC’s claim cannot succeed according to Swiss law. Mr Bonnard has exhibited to his affidavit a Swiss law opinion from a Professor Bohnet, a leading commentator on civil disputes in Switzerland. Professor Bohnet expresses the opinion that:

(a)Messrs Bonnard and Aguet correctly calculated the amount of the success fee under the Fee Agreement.

(b)The facts do not suggest that Ms Spadone realised she had made an error.

(c)Ms Spadone is deemed to have ratified the Fee Agreement by not informing the defendants of a decision to not uphold the agreement within one year of finding the so-called error.

(d)Ms Spadone would or should have been aware of any error she had made by the time the ruling negotiated with the Geneva tax authorities on 28 August 2015 was accepted, but had not sought to nullify the invoice as at 29 May 2019 such that “no error whatsoever can now be invoked”.

[75]   In their affidavits, Messrs Bonnard and Aguet say that Professor Bohnet’s opinion reflects the correct position under Swiss law.

[76]   Third, the defendants submit that NZTC’s claims of mistake are not credible, because:

(a)Ms Spadone was a party to the Fee Agreement and approved each of the payments that comprised the success fee under the Agreement.

(b)At the time of approving the payments, Ms Spadone was aware that Mr Bonnard had sought a ruling on the tax position from the Geneva tax authority and that a decision would take a number of months.

(c)When the Geneva tax authority communicated its intended position, an independent tax specialist engaged by Ms Spadone confirmed in writing that the outcome was acceptable, and Ms Spadone and her husband also said the outcome was “ok”.

(d)No complaint was made to Messrs Aguet or Bonnard until more than four years after the payments were made and almost three years after the final tax ruling was agreed.

Assessment

[77]   The requirement that there be a serious issue to be tried is directed at “ensuring that the foreigner will not lightly be subjected to the New Zealand jurisdiction.”19 However, the standard of a serious issue to be tried is not a high one.20 It has been said to be less stringent than that of the good arguable case, although the Court of Appeal has noted that “the distinction between the two standards may be difficult to draw.”21

[78]   The Court of Appeal discussed the approach in Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd:22

[37] Addressing the first of these issues (serious issue to be tried on the merits), the Court must be satisfied there is a serious legal issue to be tried and that there is a sufficiently strong factual basis to support the legal right asserted. In approaching these questions, the Court will not determine credibility issues where there are conflicting affidavits other than in exceptional cases where one version can be demonstrated by objective evidence to be untenable. In most cases where a protest to jurisdiction is being determined, discovery will not have taken place and the evidence is likely to be relatively limited.

19     Jessica Gorman and others McGechan on Procedure (online looseleaf ed, Thomson Reuters) at [HR6.29.02(2)].

20     Carvill America Inc v Camperdown UK Ltd [2005] EWCA Civ 645, [2005] All ER (D) 459 (May) at [24].

21     Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [41].

22     Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [37].

[79]   The parties do not agree on the law governing NZTC’s claim. As noted, the defendants say that the claim is governed by Swiss law. NZTC does not accept that, saying in its written submissions:

37. Mr Bonnard suggests that Swiss law will need to be used. The plaintiff does not accept that that is the case: there was no contractual or statutory relationship between the plaintiff (or its predecessor as trustee) and the defendants, and no choice of law. In such a situation, the court should “undertake a holistic assessment of the country with which the claim has the closest connection”. For reasons given above, the country with the closest connection to the plaintiff’s claim is New Zealand.

[80]    NZTC submits that this is not a claim under the Fee Agreement; it is a claim in restitution. NZTC makes three related submissions:

(a)that by making the payment of the success fee, ATSL was exercising a right under the trust deed, and that trust deed contains a choice of law clause at 3(a);

(b)the pre-existing underlying relationship is the relationship between  Mr Bonnard, as director of ATSL, and the trust itself. NZTC is not a party to the Fee Agreement, and cannot and is not claiming under that contract;

(c)standing back and making a holistic assessment, given there has been a choice of law of New Zealand, and given the underlying relationship, the place of enrichment in Switzerland does not determine matters.

[81]   I am of the view that NZTC’s claim is most likely governed by Swiss law. While NZTC does not bring its claim in contract (and nor could it as it is not a party to the POAs or Fee Agreement), its claim for money had and received nevertheless arises  in  connection  with  the  pre-existing   contractual   relationship   between  Ms Spadone and the defendants. The claim is that the defendants were mistakenly paid more than they were entitled to under the Fee Agreement. Arguably the situation falls within that described at (2)(a) of The Conflict of Laws in New Zealand, referred to at [70] above.

[82]The rule described at (2)(a) appears to be confirmed by Pawson and Young in

The Laws of New Zealand, albeit in somewhat more tentative terms:23

It seems that claims for restitution arising in connection with a contract are governed by the law applicable to the contract. Otherwise, restitutionary claims are governed by the law of the country with which they have their closest and most real connection. (emphasis added; citations omitted)

[83]   According to the terms of the POAs, the law governing the contract between Ms Spadone and the defendants is Swiss law.

[84]   If (2)(a) does not apply, (2)(c) suggests that the applicable law will be the law of the country where the enrichment occurred. Again, this is Switzerland. Alternatively, The Laws of New Zealand suggests that the appropriate law will be that of the place with which NZTC’s claim has the closest and most real connection. That is also, in my view, Switzerland.

[85]   This conclusion accords with common sense. The claim is that the former trustee mistakenly paid the defendants more than they were entitled to under the Fee Agreement. Whether they were paid more than they were entitled to will turn on the correct interpretation and application of the Fee Agreement. The Fee Agreement was made in Switzerland, between Swiss nationals. Even without the choice of law/exclusive jurisdiction provision in the Second POA, it is difficult to conceive how New Zealand law, rather than Swiss law, could be the law governing the interpretation and application of this agreement.

[86]   In terms of NZTC’s submission, the choice of law in the Trust Deed establishing the Elarof Trust is irrelevant – the claim is not that the trustee has breached the terms of this Deed or otherwise acted improperly as a trustee. New Zealand company or trust law is not engaged by NZTC’s claim.

[87]   Therefore, I agree with the defendants that for the purposes of this application, the law governing NZTC’s claim must be considered to be Swiss law.

23     M Pawson and W L Young Laws of New Zealand Quasi-Contract and Restitution (online ed) at [145].

[88]   The next issue is whether there is a serious issue to be tried based on Swiss law. Obviously, this is difficult for the Court to assess without expert evidence on Swiss law provided in accordance with the HCR.

[89]   Mr Bonnard attaches to his affidavit the opinion of a Swiss legal expert, Professor Bohnet. However, this opinion is not expert evidence to the Court and therefore must be treated with caution. The opinion was issued to Messrs Bonnard and Aguet on 29 May 2019, well before this proceeding commenced, based on their instructions and without any input from Ms Spadone or NZTC.

[90]   Before turning to this opinion, it is helpful to consider the core contemporaneous documents. They are the POAs, the Fee Agreement, correspondence between Mr Bonnard and Ms Spadone and her husband, and correspondence between Mr Bonnard and the Geneva tax authority. In my view, the following points can be discerned from these documents.

[91]   First, the main goal from the outset was to get funds from the Foundation to Ms Spadone. The defendants do not appear to dispute that  - in  his  own  evidence  Mr Bonnard states that the intention was to  get  a one-off distribution of funds to  Ms Spadone.24

[92]   Second, a related objective was to minimise the tax Ms Spadone paid. In his written advice of 15 January 2014 Mr Bonnard opens with “here is a summary of my thoughts on the strategy we should take to minimise your tax bill when you receive your allocation from the family foundation…” Article 3 of the Fee Agreement includes that the defendants’ assignment was to “advise the Client [Ms Spadone] on how to minimise the tax bill of a settlement as much as possible.”

[93]   Third, when the Fee Agreement was prepared and signed, Ms Spadone had not yet decided to accept Mr Bonnard’s advice to receive the payment from the Foundation through a trust. In an email on 16 January 2014, Ms Spadone’s husband said that they would not receive the distribution from the Foundation as income in Switzerland.

24 Affidavit of Yves Bonnard in Support of the Defendants' Opposition to Plaintiffs' Interlocutory Application to Set Aside Appearances at [22].

Rather, they would receive it either through an entity as advised; or while residing outside Switzerland.

[94]   That may explain why the Fee Agreement is expressed in terms of the payment being made from the Foundation to Ms Spadone. The Agreement does not anticipate Ms Spadone receiving the allocation from the Foundation through an entity and does not say how the success fee was to be calculated in that event.

[95]   The Fee Agreement defines Ms Spadone as “the Client”. Article 1 describes the lawyers’ assignment as “advising, assisting, and representing her before all authorities and/or jurisdictions, after having attempted to reach a transactional resolution, in the dispute involving one eleventh of the fortune…”

[96]   Article 3 states that the lawyers would receive their contingency fee, being a fixed fee above a certain limit, or if well below that limit, as a percentage of “the total amount allocated to the Client…” Article 3 also states that “if the Lawyers manage to recover a net amount for the Client, BEFORE any taxes the Client may need to pay, that is equal to or greater than CHF 500,000,000 net…the Lawyers will receive a fixed contingency fee…” But “for any payment (in cash or securities) lower than the net amount of CHF 500,000,000…the Lawyers will receive a contingency fee limited to 2% (two percent) of the total amount allocated to the Client AFTER any taxes are paid”. (emphasis added)

[97]   Thus, the Fee Agreement refers to Ms Spadone receiving the allocation from the Foundation; and the success fee is defined in terms of the tax that Ms Spadone is required to pay.

[98]   Fourth, the parties did not appear to contemplate, when the Fee Agreement was made or the success fee paid, that Ms Spadone would be required to pay tax on any distribution from the Trust originating from the initial or subsequently contributed capital. In his letter of advice dated 15 January 2014, Mr Bonnard advised that as the assets held in such a trust would not form part of Ms Spadone’s assets, she would not pay wealth tax and no inheritance tax would be payable on her death. He further advised that a beneficiary of such a trust residing in Switzerland would pay income

tax on a distribution from the trust if the distribution comprised revenue accumulated in the trust rather than the initial capital allocated, which would be exempt from income tax.

[99]   Consistently, in his letter to the Geneva tax authority dated 17 April  2014, Mr Bonnard confirmed that immediately after the trust was established a substantial amount of the trust capital would be distributed to Ms Spadone and he asked the tax authority to confirm that:

(a)the Trust would not be absorbed by a legal entity for the purposes of taxation in Switzerland, and therefore would not have any tax liability of any kind in Switzerland;

(b)a distribution from the Trust to a beneficiary of the Trust from the initial or subsequently contributed capital would not be considered taxable income of the beneficiary;

(c)a distribution not out of initial or subsequent capital contributed to the Trust, but out of the Trust’s income or realised capital gains, would be subject to income tax.

[100]Against that background, I turn to Professor Bohnet’s opinion. He says:

5.2.1    Under Swiss contract law, the question of whether the parties concluded an agreement is subject to the principle of priority of subjective intention over objective intention.

…

5.2.2     In legal proceedings, the judge must therefore firstly seek the parties' actual and common intention (subjective interpretation), empirically where appropriate, given the indications... Here, indications mean not only the content of declarations of intention (written or oral) but also the general context, meaning all circumstances enabling the parties' actual intentions to be ascertained, whether they are declarations before or facts that occurred after the contract was signed, specifically the subsequent behaviour of the parties which establishes the thinking of those parties to the agreement at the time.

The assessment of those concrete pieces of evidence by the judge, based on their general life experience, is deemed to be part of the facts. If the judge concludes that the parties understood each other or, on the contrary, did not understand each other, this forms a legal finding that binds the Swiss Federal

Supreme Court, unless it is clearly incorrect, meaning arbitrary as defined in Article 9 Cst.

5.2.3   If the judge cannot determine the parties' actual and shared intention, because proof is lacking or is inconclusive, or if the judge finds that one party did not understand the intention expressed by the other at the time the contract was signed, not just based on the simple fact that they are asserting it in a legal case but based on the evidence, the judge must use the prescriptive (or objective) interpretation, meaning seeking their objective intention by determining the meaning which, under the rules of good faith, each party could and should reasonably have understood from the other's declarations of intention. This involves an interpretation using the principle of trust. According to this principle, the declarant's internal intention of commitment is not decisive in and of itself; an obligation on them may arise from their behaviour, from which the other party may in good faith conclude their intention of commitment. The principle of trust therefore enables a party to be assigned the objective meaning of their declaration or behaviour, even if it does not correspond to their internal intention.

Determining the objective intention of the parties, according to the principle of trust, is a legal question that the Swiss Federal Supreme Court freely examines in order to make a decision; however that decision must be based on the content of the expressions of intention and the circumstances, which are based on fact. The determining circumstances in this respect are solely those that preceded or accompanied the expression of intention, not any later events."

In this case, according to the summary of facts provided by Maitres Bonnard and Aguet, the settlement agreement negotiated by them with the Sandoz Family Foundation and signed on 10 April 2014 by Mrs Spadone de Meuron provided for compensation of CHF 350,000,000 to be paid to the Elarof Trust, of which Mrs Spadone de Meuron was named the primary beneficiary. In terms of this case, it would seem fiscally unwise according to the indications from Maitres Bonnard and Aguet for the amount obtained from the Sandoz foundations to be paid directly to Mrs Spadone de Meuron, which is why she and Maitres Bonnard and Aguet preferred the option of payment to a trust.

According to the information provided by Maitres Bonnard and Aguet, from the start of the contractual relationship it was expected that Mrs Spadone de Meuron and her family would live in Monaco or the USA once the Elarof Trust had obtained the amount she could claim, thereby enabling subsequent payments to be made to Mrs Spadone de Meuron by the trust while avoiding income tax. Consequently, it appears that both Mrs Spadone de Meuron and Maitres Bonnard and Aguet took it as read that the Elarof Trust's redistributions to its beneficiary would never be taxed as income in Switzerland, since Mrs Spadone de Meuron would not be living there anymore but would live in a country in which those redistributions would not be taxed at all. This explains why the contingency fee was calculated on the amount paid to the Elarof Trust, which occurred without any dispute from the client, thereby confirming her agreement with that approach, as can be seen in the below facts.

Mr Spadone’s email of 14 January 2014 to Maitres Bonnard and Aguet, in which he indicates in the name and on behalf of his spouse that the contingency fee would be payable even if the capital were paid into an entity,

reinforces this interpretation. The fact that Mrs Spadone de Meuron herself countersigned a fee invoice on 19 May 2014 for the Elarof Trust's trustee which stated the amount of CHF6,250,000, calculated based on the amount received by Elarof Trust against which no income tax had been deducted, is also representative of the parties' intentions at the time in question.

Consequently, this gives rise to the subjective interpretation of Article 3 of the fee agreement of 16 January 2014 that the 2% rate applicable to the amount, determining the contingency fee was in fact intended to be applied to the amount paid by the Sandoz foundations to the Elarof Trust.

Regarding Mrs Spadone de Meuron's expressed intention and the existence of a potential error on her part, the following must be noted. The facts give no rise to any indication that leads us to suspect that she realised she had made an error. Even if that were the case, it should be noted that by the time the ruling negotiated with the Geneva tax authorities on 28 August 2015 was accepted, Mrs Spadone de Meuron would have been, or at least should have been, aware of any error she had made. As such, in accordance with Article 31, parag. 1 and 2 CO, an erroneous contract is upheld as ratified when the unobligated party allows one year to lapse after the time the error is found, without having declared to the other party their decision not to uphold that contract. Given that no nullification of the invoice has yet been sent to Maitres Bonnard and Aguet, no error whatsoever can now be invoked.

Lastly, if we look at the objective interpretation of Article 3 of the agreement, which is superfluous given that a subjective interpretation is possible in this case, the following must be noted. Article 3 cannot reasonably be interpreted in the sense of binding it to Mrs Spadone de Meuron's country of residence, either ad vitam aeternam or at least until all amounts paid to the Elarof Trust had been paid directly to her. An interpretation under the principle of trust would also not support that hypothesis.

[101]   I am not persuaded by this opinion that there is no serious issue to be tried. Rather, there are several aspects of the opinion that leave questions in my mind.

[102]   First, Professor Bohnet’s opinion is based on a “summary of facts” and “information” provided by  Messrs  Bonnard  and  Aguet,  without  hearing  from  Ms Spadone. He identifies a number of documents he relies on at the beginning of his opinion (not all of which are in evidence) but it is unclear whether the “information” and “facts” from Messrs Bonnard and Aguet extended beyond those documents. It is also notable that while Professor Bohnet explains that the Swiss approach to contractual interpretation involves discerning the subjective intention of the parties, having regard to their declarations of intention and the general context, he has not heard from Ms Spadone as to what she meant by the Fee Agreement.

[103]   In fact, Ms Spadone disputes one of the key facts on which Professor Bohnet’s opinion is based: that it was expected from the start that she and her family would reside outside Switzerland to avoid paying tax on distributions from the Elarof Trust. Ms Spadone says that she considered living outside Switzerland “for a short window only,” but quickly accepted Mr Bonnard’s advice to set up a trust and receive the allocation from the Foundation through the trust. That is corroborated by the email from her husband dated 16 January 2014 described above, where he stated that they would receive the allocation either by residing outside of Switzerland or through an entity.

[104]   Second, Professor Bohnet concludes that the success fee was calculated based on the amount paid to the Elarof Trust because the parties did not expect the Trust’s distributions to Ms Spadone to be subject to tax. He says this was because it was expected that Ms Spadone would reside outside Switzerland. That is disputed, but his conclusion that the parties did not expect Ms Spadone to pay tax is not. As I have noted, the contemporaneous documents suggest that Ms Spadone and Mr Bonnard did not expect her to pay tax on distributions from the Trust of the initial or subsequently contributed capital, even if she lived in Switzerland. That was Mr Bonnard’s advice to Ms Spadone in his letter dated 15 January 2014.

[105]   So, Professor Bohnet’s conclusion here is consistent with the documents and indeed Ms Spadone’s evidence.  The  success  fee  was  paid  and  “approved”  by Ms Spadone based on that assumption.

[106]   But what is unclear from Professor Bohnet’s opinion is how it was correct for the success fee to be calculated and paid based on that (erroneous) expectation. As noted, the Fee Agreement did not contemplate receipt of the allocation from the Foundation through an entity, and defined the success fee in terms of the amounts that Ms Spadone would receive and the tax that she would be required to pay. Professor Bohnet does not explain how calculation of the success fee based on the amount paid by the Foundation to the Elarof Trust can be reconciled with the express words of the Fee Agreement.

[107]   Third, Professor Bohnet places weight on the fact that Ms Spadone approved, or did not dispute, the success fee. He did not have the benefit of Ms Spadone’s explanation that she did not object to the success fee being paid because she understood, based on Mr Bonnard’s advice, that she would not pay tax on a distribution from the initial  capital  of the trust.  It  must  be recognised  in  this  context  that  Mr Bonnard was at this time her legal adviser, the director of the trustee of the trust making the payment, and the recipient of the payment. Ms Spadone’s evidence is that she relied on Mr Bonnard’s advice that she would not be required to pay tax, and that the success fee was calculated according to the Fee Agreement.

[108]   For these reasons, I am not persuaded by the opinion of Professor Bohnet, or the evidence of Mr Bonnard, that there is no serious issue to be tried. In my view there is a credible case that the defendants received more than they were entitled to under the Fee Agreement because of a mistake as to how the Fee Agreement was to apply in the circumstances that eventuated and/or as to whether Ms Spadone would be required to pay tax on a capital distribution from the Trust to her.

Is New Zealand the appropriate forum for the trial?

[109]   NZTC submits that the following factors, in addition to those already discussed in relation to the connection with New Zealand, make New Zealand the appropriate forum:

(a)The amount in issue is significant, approximately CHF 3,290,000.

(b)No proceedings are underway in Switzerland. NZTC has never commenced proceedings in Switzerland.

(c)The New Zealand proceedings are comparatively advanced, and significant preparatory work has been undertaken, including the filing of multiple affidavits. Most documents are already in evidence.

(d)NZTC has a legitimate juridical advantage in proceeding in New Zealand, as it appears, and the defendants’ evidence is, that it could not bring its claim in Switzerland as it is time-barred. The claim is not

time-barred in New Zealand. The Court of Appeal in Exportrade Corporation v Irie Blue New Zealand Ltd held the risk of a proceeding in the alternative jurisdiction being time-barred to be a factor favouring New Zealand as the appropriate forum.25

(e)While the defendants and Ms Spadone are based in Switzerland and are native French speakers, at least the same number of witnesses are based in New Zealand and are native English speakers, including representatives of NZTC, ATSL, and Asiaciti. Translation services can be arranged, but that does not appear necessary, because Ms Spadone and the defendants also speak English. In terms of disruption to the defendants associated with travelling to Zealand, the issue is comparing the two jurisdictions. A trial in Switzerland will also disrupt their practice.

(f)Mr Bonnard is and has been a director and shareholder of multiple New Zealand companies over the years, all of which appear to be corporate trustees. He has previously taken the benefit of New Zealand’s legal landscape, and it does not sit easily for him to now suggest it is unreasonable he be asked to travel to New Zealand for trial.

(g)Moreover, there is a range of methods by which a witness can give evidence in New Zealand litigation from outside New Zealand, including appearing by AVL or similar.

(h)It is not accepted that Swiss law is the appropriate law for the restitutionary claim. Even if that was the case, as the Court of Appeal noted in Exportrade Corporation v Irie Blue New Zealand Ltd, “there are well-established procedures available for providing the New Zealand court with evidence of the governing foreign law.” 26

25     Exportrade Corporation v Irie Blue New Zealand Ltd [2013] NZCA 675, [2014] NZAR 495 at [56].

26     Exportrade Corporation v Irie Blue New Zealand Ltd, above n 25, at [55(g)].

(i)The documents of the Elarof Trust and its trustees, including in respect of the disputed payments from trust assets, should have been passed by ATSL to NZTC under s 48 of the Trusts Act 2019 or its predecessor, and should be held in New Zealand. Any documents that are not held in New Zealand are likely either to already be in electronic form, or readily capable of being made so. An argument that the trial should not be in New Zealand because of documents located overseas is untenable.27

(j)As to enforcement of the judgment, a judgment need only be enforced if it is not complied with. It is unlikely that Mr Bonnard and Mr Aguet, both of whom are prominent lawyers, would not comply with a judgment against them.

(k)As to costs, there is no evidence that it would cost more to hear the claim in New Zealand than in Switzerland, and the cost of proceeding in New Zealand should be viewed in the context of an overall claim of NZD 6,093,997, and payments received by the defendants from the plaintiff of CHF 7 million.

[110]   The defendants submit that New Zealand is not the appropriate forum for the trial. Relevant arguments advanced by the defendants are discussed below.

[111]   First, the claim is governed by Swiss law and is subject to an exclusive jurisdiction clause in the Second POA, referenced in the Fee Agreement, in favour of the courts of Lausanne. The defendants say it is settled law that a court will give effect to an exclusive jurisdiction clause unless there are exceptional circumstances.28

[112]   The defendants say that the plaintiff’s claim comes squarely within the subject matter of the Second POA and Fee Agreement, because it concerns the fees charged and advice given under these agreements. While NZTC/ATSL was not a party to the Fee Agreement or the POAs, the so-called mistaken payments were made in discharge

27     NZI Insurance New Zealand Ltd v Hinton Hill & Coles Ltd [1996] 1 NZLR 203 at 209.

28     See, for example, Advanced Cardiovascular Systems Inc v Universal Specialities Ltd [1997] 1 NZLR 186 (CA) at 190.

of Ms Spadone’s legal obligations under these agreements. That is, ATSL was acting as Ms Spadone’s agent when making the payments and its successor NZTC must be subject to the exclusive choice of jurisdiction that applies to the principal whose obligations ATSL was discharging.

[113]   Second, as NZTC’s claim is governed by Swiss law, the New Zealand Court will have no independent adjudicative function on any substantive issue at trial. New Zealand company law, New Zealand trust law and the supervision of the New Zealand Court are irrelevant to the proceeding.

[114]   Third, NZTC’s claim does not have a real and substantial connection with New Zealand. It does not rely on any conduct that occurred within New Zealand. No funds passed through New Zealand and the relief sought by NZTC is uniquely related to Switzerland (repayment denominated in Swiss currency and a declaration of obligations under a Swiss law fee agreement).

[115]   Fourth, while Mr Bonnard is a shareholder and director of New Zealand companies, those roles are not in issue in the proceedings and do not provide any support for New Zealand being the most appropriate forum for the trial of NZTC’s claim. Mr Aguet has no connection at all to New Zealand.

[116]   Fifth, considerations of cost and convenience indicate that New Zealand is an inappropriate forum for any trial:

(a)All of the key witnesses reside in Switzerland.

(b)The only witnesses in New Zealand who have filed affidavits in the proceeding (and might therefore be expected to give evidence at trial) are NZTC’s former and current solicitors, who were/are also directors of NZTC.

(c)Expert evidence on Swiss law will be required in respect of every issue to be determined in the proceedings.

(d)The key fact witnesses and the parties’ Swiss law experts would be required to travel to New Zealand for the purpose of trial or give their evidence via AVL for lengthy periods in the middle of the night.

(e)Messrs Bonnard and Aguet are practising Swiss lawyers. A trial in New Zealand would significantly disrupt their professional commitments after they have already answered the complaint in their home jurisdiction in which it belongs.

(f)The key contemporaneous documents – that is, the POAs, the Fee Agreement, correspondence between Messrs Bonnard and Aguet and Ms Spadone, correspondence with the Swiss tax authorities, and correspondence in relation to the plaintiffs’ Swiss claim – are in French. All of the key witnesses are native French speakers.

(g)Against that, the affidavits filed to date indicate that little, if any, relevant documentation is in English and/or held in New Zealand. The defendants’  documents   are   stored   outside   of   New   Zealand.  Ms Spadone, from whom non-party discovery will now be required, is very unlikely to have documents stored in New Zealand.

(h)Realistically, any judgment against the defendants would need to be enforced in Switzerland. It is also questionable what, if any, effect or utility a New Zealand court declaration on a Swiss law-governed Fee Agreement could have in Switzerland.

[117]   Sixth, the defendants submit that considerations of comparative fairness, justice and prejudice confirm that New Zealand is not an appropriate jurisdiction:

(a)NZTC is bringing these proceedings because the applicable limitation period in Switzerland was allowed to lapse, and it is seeking to take advantage of what it considers to be a more generous limitation period. In such cases, the courts have not hesitated in staying proceedings in the jurisdiction with the more favourable limitation period.

(b)Messrs Bonnard and Aguet will suffer an “unfair disadvantage if a New Zealand court assumes jurisdiction”.29 They will be required to re-address allegations as to their professional conduct as Swiss lawyers almost a decade (or more by the time of any trial) after the events in question and around four years after these allegations were properly abandoned in Switzerland. Their professional liability and reputation as Swiss lawyers would be determined by a court that does not speak the language of the Swiss law contract which regulated their professional engagement and the substance of this claim (as well as any other contemporaneous documents) and is foreign to the civil law context in which that contract will need to be interpreted and understood.

Assessment

[118]   NZTC has the onus of establishing that New Zealand is the most appropriate forum for the trial, having regard to all relevant factors, including those set out in Spiliada Maritime Corporation v Cansulex Ltd.30 The goal is to identify the forum where the case “may be tried [most] suitably for the interests of all the parties and the ends of justice”.31

[119]   The first step to determining the appropriate forum is to identify the natural forum, which is the forum “with which the action [has] the most real and substantial connection”.32 Relevant connecting factors may include the relative cost and convenience of proceeding in each jurisdiction (including the location of witnesses or documentary evidence), the place where the relevant conduct occurred, and the place where any judgment would need to be enforced.33

[120]   In my view, the proceeding has a considerably stronger connection to Switzerland than to New Zealand. While there is some connection to New Zealand

29 Relying on Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [46].

30 Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [43]-[46] citing Spiliada Maritime Corporation v Cansulex Ltd [1987] AC 460 (HL). See also Ivanshili v Credit Suisse AG [2018] NZHC 1755 at [106].

31     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 476.

32     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 478.

33     Schumacher v Summergrove Estates Ltd [2014] NZCA 412, [2014] 3 NZLR 599 at [30] and [44].

for the reasons outlined earlier, at its core this is a dispute about the interpretation and application of agreements between Swiss nationals, made while they were in Switzerland, and payments made pursuant to those agreements in Switzerland.

[121]   In terms of the location of the parties and witnesses, NZTC is situated in New Zealand. The directors of NZTC who have filed affidavits (and might therefore be expected to give evidence at trial) are also NZTC’s former and current solicitors and are situated in New Zealand. However, given NZTC was not involved in the matters giving rise to the claim, its evidence will be limited to producing formal documentation relating to the Elarof Trust.

[122]   The defendants are situated in Switzerland. So too is Ms Spadone. Consequently, the key factual witnesses (Ms Spadone, Mr Bonnard and Mr Aguet) all reside in Switzerland.

[123]   Most, if not all of the documents relevant to the issues in dispute will originally have been held in Switzerland. However, I do not place much weight on this consideration as most of the key documents appear to have been translated from French to English already and attached to affidavits filed for this application.

[124]   It is most likely that the claim is governed by Swiss law. That does not preclude the Court assuming jurisdiction, but expert evidence on Swiss law would be required. Those experts are most likely to reside in Switzerland and therefore would be required to travel to New Zealand for the hearing or to give evidence by AVL.

[125]   In this respect, the defendants’ submission that the New Zealand Court will have no independent adjudicative function on any substantive issue at trial has force. The substantive issue concerns the correct interpretation and application of the Fee Agreement. It appears from the opinion of Professor Bohnet that the Swiss courts take a different approach to contractual interpretation to the New Zealand courts. The New Zealand Court would need to rely on expert evidence on the central issue in the case. Further, there is no legal issue concerning New Zealand company or trust law. I agree with the defendants that at its core, the proceeding concerns the proper construction of French-language contracts in light of Swiss law.

[126]   The exclusive jurisdiction clause is not, in my view, conclusive. On this topic, I note that it is unclear whether an exclusive jurisdiction clause is a factor to be considered within the question of which jurisdiction is the appropriate forum; or whether it sits outside that inquiry. In Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd the Court of Appeal said any choice of jurisdiction previously agreed by the parties is a relevant consideration that will bear on the issue of the appropriate forum.34 Hook and Wass suggest that the Court has a discretion not to give effect to an exclusive jurisdiction agreement; however, this discretion is not exercised as a matter of forum non conveniens.35 Either way, it is settled law that the Court will not exercise its discretion to assume jurisdiction contrary to the previous agreement of the parties unless there is strong cause or the existence of exceptional circumstances.36

[127]   Whether or not the choice of law/exclusive jurisdiction clause applies to NZTC’s claim is complicated. The first issue is that the clause is part of the Second POA but not the Fee Agreement. Mr Aguet’s evidence is that the POAs are the framework agreements that set the general boundaries of the mandate; and the Fee Agreement is then an addendum, providing specific detail of the payments the lawyers will receive. He deposes that the choice of law and jurisdiction clauses of the POAs apply to the Fee Agreement. Mr Bonnard’s affidavit makes similar statements.

[128]   Against that, NZTC has filed an affidavit from a Swiss lawyer, Pierre-Dominique Schupp. Mr Schupp deposes that Messrs Bonnard and Aguet are incorrect as a matter of Swiss law. He says:

… Certainly it would be open to a Swiss court to rule that the Fee Agreement incorporated the jurisdiction clause by inference (as opposed to by express inclusion in the Fee Agreement), and if that is what Mr Bonnard and Mr Aguet mean, then I agree, but it is not the case that the Fee Agreement is automatically treated as part of the power of attorney. It would be a matter for argument and decision by a court as to whether it was the parties’ intention to insert the jurisdiction clause into the Fee Agreement.

[129]   Without independent expert evidence on Swiss law, I am unable to reach a conclusion on this issue.

34     Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd, above n 4, at [46].

35     Perpetrual Trustee Company Ltd v Downey (2011) 21 PRNZ 28 at [32], as cited in Hook and Wass, above n 5, at [2.390].

36     Advanced Cardiovascular Systems Inc v Universal Specialities Ltd, above n 28, at 190.

[130]   The second complication is that neither NZTC nor its predecessor ATSL was a party to the POAs or the Fee Agreement. The defendants argue that because ATSL was acting as Ms Spadone’s agent when paying the success fee pursuant to her legal obligations under the Second POA and the Fee Agreement, NZTC is subject to the same exclusive jurisdiction clause that applied to Ms Spadone as principal.

[131]   I am not persuaded by that submission as it seems to ignore the capacity in which NZTC brings its claim. NZTC does not purport to bring a claim as agent of Ms Spadone for breach of the second POA or Fee Agreement to which she was a party. NZTC brings the claim in its capacity as trustee of the Elarof Trust in relation to erroneous payments made by the former trustee, ATSL, allegedly operating under a mistake of fact. These payments were made pursuant to invoices addressed to ATSL and were authorised by Mr Bonnard as director of ATSL.

[132]   For these reasons, I am of the view that it is doubtful that the exclusive jurisdiction clause applies to NZTC’s proceeding.

[133]   In the end this point is moot, as I have concluded, for other reasons, that the natural forum for the proceeding is clearly Switzerland.

[134]   However, that is not the end of the exercise. The second step is to ask whether “there are circumstances by reason of which justice requires” that the New Zealand Court exercise jurisdiction despite New Zealand not being the natural forum.37 For example, if the plaintiff will not obtain substantial justice in the natural forum due to the loss of a particular juridical advantage that would be available in New Zealand, the Court may conclude that New Zealand is the appropriate forum.38

[135]   NZTC says that it has a legitimate juridical advantage in proceeding in New Zealand because it appears that it could not bring its claim in Switzerland as it is time-barred, which is not the case in New Zealand. Mr Bonnard’s evidence is that the restitution claim is time-barred in Switzerland, because under Swiss law at the time, a claim for unjust enrichment was subject to a limitation period of one year after the

37     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 478.

38     Hook and Wass, above n 5, at [2.258].

“victim” realises the payment was unjustly or mistakenly made, and while Messrs Bonnard and Aguet provided two separate one-year waivers or extensions of the Swiss time bar, the plaintiffs did not progress civil court proceedings in Switzerland in that time. Consistent with that, Ms Spadone’s evidence is that she received legal advice in Switzerland that her claim is time-barred in Switzerland due to the one-year limitation period.

[136]   The mere fact that the plaintiff has a juridical or personal advantage in proceedings in the New Zealand forum is not decisive.39 That is because “an advantage to the plaintiff will ordinarily give rise to a comparable disadvantage to the defendant”.40 The Court must take an “objective approach” to identify the appropriate forum, so it would be wrong “simply to give the plaintiff his advantage at the expense of the defendant”.41

[137]   Where the advantage to the plaintiff is a more generous limitation period (than that in the natural forum), the Court needs to enquire whether the plaintiff acted reasonably in failing to issue proceedings in the natural forum within the limitation period applicable there.42 Lord Goff’s discussion of this scenario in Spiliada is instructive:43

Let me consider how the principle of forum non conveniens should be applied in a case in which the plaintiff has started proceedings in England where his claim was not time barred, but there is some other jurisdiction which, in the opinion of the court, is clearly more appropriate for the trial of the action, but where the plaintiff has not commenced proceedings and where his claim is now time barred. Now, to take some extreme examples, suppose that the plaintiff allowed the limitation period to elapse in the appropriate jurisdiction, and came here simply because he wanted to take advantage of a more generous time bar applicable in this country; or suppose that it was obvious that the plaintiff should have commenced proceedings in the appropriate jurisdiction, and yet he did not trouble to issue a protective writ there; in cases such as these, I cannot see that the court should hesitate to stay the proceedings in this country, even though the effect would be that the plaintiff's claim would inevitably be defeated by a plea of the time bar in the appropriate jurisdiction. Indeed a strong theoretical argument can be advanced for the proposition that, if there is another clearly more appropriate forum for the trial of the action, a stay should generally be granted even though the plaintiff's action would be

39     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 482.

40     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 482.

41     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 482.

42     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 483– 484.

43     Spiliada Maritime Corporation v Cansulex Ltd, above n 30, at 483–484.

time barred there. But, in my opinion, this is a case where practical justice should be done. And practical justice demands that, if the court considers that the plaintiff acted reasonably in commencing proceedings in this country, and that, although it appears that (putting on one side the time bar point) the appropriate forum for the trial of the action is elsewhere than England, the plaintiff did not act unreasonably in failing to commence proceedings (for example, by issuing a protective writ) in that jurisdiction within the limitation period applicable there, it would not, I think, be just to deprive the plaintiff of the benefit of having started proceedings within the limitation period applicable in this country. (emphasis added)

[138]   Therefore, I must consider whether NZTC acted reasonably in allowing the limitation period in Switzerland (the natural forum) to expire.

[139]The timeline of events is:

(a)ATSL paid the success fee to the defendants in May 2014.

(b)The Geneva tax authority decided that Ms Spadone was required to pay income tax on any distribution from the Elarof Trust on 28 August 2015.

(c)Ms Spadone’s evidence is that in February 2016, an entity called Memento was created to act as her family’s office. Memento is owned and managed by a Mr Alessandro Mauceri.

(d)Ms Spadone says that by April 2016, Mr Mauceri  advised  her that Mr Bonnard and ASTL were not acting fairly and were overcharging. In May 2016, Mr Mauceri approached Mr Bonnard.

(e)On 24 June 2016 Mr Bonnard gave notice to terminate his and ASTL’s roles as trustee of the Elarof Trust.

(f)On 31 October 2016, ASTL formally retired as trustee and was replaced by NZTC.

(g)Ms Spadone’s evidence is that it was after ASTL was removed as trustee and NZTC was appointed that she received advice that the success fee had been wrongly calculated.44

(h)On 7 June 2018, Mr de Preux wrote to the defendants alleging that they had been overpaid the success fee  and  asking  for  their  response. Mr de Preux stated that he was acting for Ms Spadone and her husband. The letter does not refer to NZTC. Mr de Preux requested that the defendants sign waivers of their right to invoke the limitation period in relation to any claim Ms Spadone or her husband may have, for one year. On 13 June 2018, the defendants signed the waivers.

(i)One 22 June 2018, Mr Bonnard responded to Mr de Preux’s letter, denying the allegations.

(j)In March 2019, Ms Spadone’s claim was referred to the President of the Lausanne Bar Association.

(k)In May 2019, at Mr de Preux’s request, the defendants provided further one-year waivers of limitation.

(l)In June 2019, the defendants shared Professor Bohnet’s opinion with Ms Spadone’s Swiss lawyers. In September 2019, Mr Aguet followed up to request an indication of Ms Spadone’s intentions. No response was given.

(m)NZTC filed its claim in this Court in May 2020, filed its interlocutory application for service out of New Zealand in June 2020 and served the defendants in March 2021.

[140]   NZTC seeks to distance itself from the letters sent by Mr de Preux in June 2018 and the “waivers of limitation”. Claudia Shan, director of NZTC, deposes that:

44 Reply Affidavit of Pascale Heloise Spadone de Meuron in Support of Plaintiffs’ Application to Set Aside Appearances at [35].

3.  The defendants frequently refer to "the plaintiffs", and to NZTC, bringing or threatening a civil claim against the defendants in Switzerland.

4.  NZTC did not do so. NZTC was advised that Ms Spadone was involved in a dispute with the defendants in Switzerland and that she intended to instruct Mr de Preux as her lawyer. NZTC was asked to sign a power of attorney to assist Ms Spadone/Mr de Preux (presumably because any funds returned by the defendants would have been returned to the Elarof Trust). NZTC did so on 12 June 2018, and thereafter had no involvement. All dealings with Mr de Preux were between him and Ms Spadone - NZTC was not party to communications with Mr de Preux. NZTC did not sign a letter of engagement or instruct Mr de Preux, or any lawyer in Switzerland, in respect of the matters in issue in these proceedings, and NZTC did not threaten or bring a civil claim against the defendants in Switzerland. We have recently been through our files to reconfirm that that is the case.

5.  NZTC did not instruct Mr de Preux to write to the defendants in 2018, or at any time. Mr de Preux's letter of 7 June 2018, cited by Mr Bonnard at his paragraph 71 and exhibit page 059, states that he is engaged by Ms Spadone and her husband. NZTC was not party to the drafting of that letter.

6.    References by the defendants to "the plaintiffs", plural, or to NZTC specifically, threatening/bringing a civil action against the defendants in Switzerland are incorrect. Those references are most common from paragraph 70 of Mr Bonnard's affidavit, but wherever they appear, they are incorrect.

7.    NZTC did not instruct Mr de Preux, or anyone, to draft 'waivers' in favour of NZTC.

…

8.  We have no copy of the 'NZTC waivers' on our file, and no record of having been involved in their preparation or of being made aware that they had been drafted. As far as we can ascertain after a thorough review of our files, the first time NZTC became aware of the waivers in NZTC's favour was when they were attached to Mr Bonnard's affidavit.

[141]   NZTC also appears to seek to cast doubt on the legal effect of the waivers. In his affidavit, Mr Schupp states that the documents Messrs Bonnard and Aguet describe as “waivers of limitation” were only legal declarations under which the signatories waived their right to refuse payment based on a statute of limitation for a certain period of time, and that these documents did not authorise Ms Spadone to bring proceedings against Messrs Bonnard and Aguet out of time.

[142]   Ms Shan does not address when NZTC became aware of the alleged mistaken payment by the former trustee of the trust, or why it waited until May 2020 to bring proceedings in New Zealand. Ms Spadone’s evidence is that she became aware that the defendants had been overpaid after NZTC replaced ATSL as trustee in

October 2016. In the absence of evidence from NZTC, it is reasonable to infer that NZTC also became aware of the mistaken payment at that stage, or at the latest, in June 2018 when it signed the power of attorney described by Ms Shan. Ms Shan offers no explanation for why NZTC allowed the one-year limitation period in Switzerland to expire without issuing protective proceedings there.

[143]   The onus is on NZTC to persuade the Court that New Zealand is the appropriate forum. Where the natural forum is not New Zealand, it is for the plaintiff to persuade the Court that it should nevertheless assume jurisdiction. In this context, the fact that the limitation period has expired in the natural forum could present a reason why the Court should do so. But NZTC has failed to persuade me that it did not act unreasonably by allowing that to happen.

[144]   I reach the conclusion that New Zealand is not the appropriate forum for the proceeding. It is not the natural forum. The proceeding is considerably more strongly connected to Switzerland than it is to New Zealand. The applicable law is almost certainly Swiss law. Expert evidence of Swiss law would be required. The key factual witnesses are French-speaking Swiss residents. The fact that the claim is seemingly time-barred in Switzerland and therefore NZTC has an advantage in proceeding in New Zealand might have trumped the natural forum. However, NZTC has not persuaded me that it acted reasonably in allowing the limitation period to expire in Switzerland. In these circumstances, I have no basis for concluding that the disadvantage to the defendants of defending allegations about their professional conduct, almost a decade after the events in question and almost four  years  after  Ms Spadone ceased advancing her complaint in Switzerland, is outweighed by the advantage to NZTC of being able to bring a claim in New Zealand.

[145]   I conclude that the Court should not assume jurisdiction, because New Zealand is not the appropriate forum.

Do any other relevant circumstances support an assumption of jurisdiction?

[146]   NZTC does not identify any circumstances supporting an assumption of jurisdiction beyond those discussed already.

Result

[147]The application to set aside the appearance under protest to jurisdiction

is dismissed.

[148]Consequently, I dismiss the proceeding pursuant to r 6.29(2) of the HCR.

[149]   As to costs I am of the preliminary view that, having succeeded, the defendants are entitled to costs, and on a 2B basis. If costs cannot be agreed, then the parties are to file written submissions within 14 days.

Associate Judge Gardiner

Solicitors:

Bell Gully, Auckland

Cone Marshall Ltd, Auckland S Carey, Auckland