Noyce v Lexus Trustees Limited - [2025] NZHC 1885

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2025-404-1215

[2025] NZHC 1885

UNDER the Insolvency Act 2006

IN THE MATTER

of an application for orders varying a court- approved proposal under s 339 of the Insolvency Act 2006

BETWEEN

DIGBY JOHN NOYCE

Applicant

AND

LEXUS TRUSTEES LIMITED and SALLY

ANNE JUDITH RIDGE as trustees of the 24 TRUST

First Respondent

Continued over page

Hearing: 10 July 2025

Appearances:

E Laven for the Applicant

No appearance for the Respondents

Judgment:

10 July 2025

JUDGMENT OF ROBINSON J

This judgment was delivered by me on 10 July 2025 at 3:00pm pursuant to Rule 11.5 of the High Court Rules

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

Solicitors:
McMahon Butterworth Thompson, Auckland

Copy to:
The Respondents

NOYCE v LEXUS TRUSTEES LIMITED & ORS [2025] NZHC 1885 [10 July 2025]

HEARTLAND BANK LIMITED
Second Respondent

WESTPAC NEW ZEALAND LIMITED
Third Respondent

ASB BANK LIMITED
Fourth Respondent

CAPTAIN SPRINGS CONSORTIUM (A SYNDICATION)
Fifth Respondent

COLIN STEVENS
Sixth Respondent

IAN ALBERT FENNING and WENDY
DAWN FENNING as trustees of the DUDLEY ROAD TRUST
Seventh Respondent

BDO AUCKLAND LIMITED
Eighth Respondent

UDC FINANCE LIMITED
Ninth Respondent

FLETCHER DISTRIBUTION LIMITED
Tenth Respondent

[1] The applicant, Digby Noyce, is the trustee of a court approved proposal calling for the payment of $180,000 to the creditors of Warren Ian Fenning.1 Mr Noyce applies for an order under s 339 of the Insolvency Act 2006 varying the terms of the proposal so that the distribution of $100,000 to Mr Fenning’s creditors will fully and finally settle the proposal and satisfy all his creditors’ claims. Mr Noyce also seeks leave to commence the proceeding by way of originating application.

Background

[2] Mr Noyce instructed Aaron Nicholls to act as his solicitor and counsel in relation to the proposal. Mr Nicholls also acted for Mr Fenning.

[3] Mr Noyce explains that Mr Fenning arranged for $181,666 to be paid into Mr Nicholl’s trust account for the purposes of implementing the proposal. These payments were made to Mr Nicholl between 9 October 2019 and 14 September 2022. Mr Noyce instructed Mr Nicholls to pay out the funds in accordance with the proposal. Mr Noyce says he followed up with Mr Nicholls on numerous occasions, by email and by phone. Mr Noyce says Mr Nicholls assured him all was well, that some creditors had been paid and others would be in due course.

[4] Mr Nicholls was subsequently suspended from practice and then struck off the roll of barristers and solicitors for misappropriating $700,000 of client funds from his trust account. On 2 July 2024 the New Zealand Law Society advised Mr Noyce’s solicitor that as of January 2024 there were no funds in Mr Nicholls’ trust account under Mr Fenning’s name.

[5] On 8 October 2024 the Law Society approved a claim by Mr Noyce with the Lawyers & Conveyancers Fidelity Fund for $100,000.2 However, noting the passage of time and that the compensation payment would not be…

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 Noyce v Lexus Trustees Limited

Details

AGLC: Noyce v Lexus Trustees Limited [2025] NZHC 1885
Case: [2025] NZHC 1885
Decision Date: 10 July 2025

CaseChat Overview and Summary

Digby John Noyce, as trustee of a court-approved proposal, applied to the High Court of New Zealand for an order varying the terms of the proposal under the Insolvency Act 2006. The proposal, which called for the payment of $180,000 to the creditors of Warren Ian Fenning, was affected by the misappropriation of funds by Mr Noyce’s solicitor, Aaron Nicholls. The application sought to vary the proposal so that a distribution of $100,000 to Fenning’s creditors would fully and finally settle the proposal and satisfy all creditors’ claims. Mr Noyce also sought leave to commence the proceeding by way of an originating application.

The legal issues the court was required to decide included whether the circumstances warranted varying the terms of the proposal and whether Mr Noyce was entitled to commence the proceeding by way of an originating application. The court considered whether the misappropriation by Mr Nicholls constituted a sufficient ground for varying the proposal under s 339(2) of the Insolvency Act 2006. The court also assessed whether the straightforward nature of the matter justified using an originating application rather than the usual Part 18 proceeding.

The court granted Mr Noyce leave to commence the proceeding by way of an originating application, finding that the issues were confined and did not require particularised pleadings or interlocutory procedures. The court found that the proposal should be varied as Mr Fenning had arranged for the required funds to be paid, and the failure to implement the proposal was due to the misappropriation by Mr Nicholls. The court emphasised that varying the proposal was in the interests of all parties, particularly given that Mr Noyce could only receive the $100,000 from the Law Society if he could provide the required evidence. The terms of the proposal were varied accordingly.

The court ordered that the distribution of $100,000 to the creditors of Warren Fenning, to be received from the New Zealand Law Society Fidelity Fund, would fully and finally settle the proposal and satisfy all creditors’ claims. This variation was intended to address the failure of the original proposal due to the misappropriation by Mr Nicholls.

Orders