NZX Ltd v Ralec Commodities Pty Ltd

[2016] NZHC 2742

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-1299 [2016] NZHC 2742

BETWEEN

NZX LIMITED

Plaintiff/First Counterclaim Defendant

AND

RALEC COMMODITIES PTY LIMITED First Defendant/First Counterclaim Plaintiff

RALEC INTERACTIVE PTY LIMITED Second Defendant/Second Counterclaim Plaintiff

GRANT DAVIS THOMAS Third Defendant

GRANT THOMAS NOMINEES PTY LIMITED

Fourth Defendant

DOMINIC LUKE PYM Fifth Defendant

PYM FAMILY PTY LIMITED Sixth Defendant

NZX HOLDING NO 4 LIMITED Second Counterclaim Defendant

MARK RHYS WELDON Third Counterclaim Defendant

Hearing:

2-6 May; 9-13 May; 16-20 May; 23-27 May; 30 May-2 June;

7-10 June; 13-17 June; 20-24 June; 27-30 June; 11-13 July 2016

Counsel:

B R Latimour, D J Cooper, B M Cash, R D H Massey, J P T Danaher, L R Hardcastle and E J Couper for plaintiff/counterclaim defendants (except Mr Weldon)

T J North QC, J K Scragg, C V Nicholson, G S J Berlic,

C R Gubb and T A V McKeown for defendants/counterclaim plaintiffs

A R Galbraith QC and D J Cooper for third counterclaim defendant

Judgment:

15 November 2016

NZX LTD v RALEC COMMODITIES PTY LTD [2016] NZHC 2742 [15 November 2016]

RESERVED JUDGMENT OF DOBSON J

Contents

Introduction and summary............................................................................................................... [1] A brief history .................................................................................................................................... [7] The Australian grain market in 2009 ............................................................................................ [33] The evidence .................................................................................................................................... [49] NZX’S CLAIMS .............................................................................................................................. [52] Alleged misrepresentations ............................................................................................................. [53] The pre-contractual dealings.......................................................................................................... [62] Assessing the alleged representations ............................................................................................ [77] Support representations............................................................................................................... [83] Alliance representations ............................................................................................................ [103] Volume representations .............................................................................................................. [111] Costs representations ................................................................................................................. [143]

No disputes representation ........................................................................................................ [151] Did any of the representations constitute misrepresentations? ................................................. [154] Support, alliance, volume and costs representations................................................................ [156]

No disputes representations....................................................................................................... [184] Inducement ................................................................................................................................ [200] Second cause of action: Fair Trading Act .................................................................................... [215] Jurisdiction ................................................................................................................................ [217] Was Clear “in trade” as contemplated by s 9?.......................................................................... [230] Were the representations misleading or deceptive? .................................................................. [232] Claims against third to sixth parties ......................................................................................... [234] Third cause of action: breach of warranties ............................................................................... [240] Interpretation of the warranties ................................................................................................ [242] Breach of warranties ................................................................................................................. [250] Limits on scope of the warranties, and time limit on claims for breach .................................. [254] Inducement/reliance .................................................................................................................. [266] Fourth cause of action: key shareholder guarantees .................................................................. [273] Fifth cause of action: extended liability under s 11 CRA ........................................................... [283] Summary as to liability on NZX’s claims .................................................................................... [292] RALEC’S COUNTERCLAIMS .................................................................................................. [294] Earn-out targets ............................................................................................................................ [299] First cause of action: post-completion conduct of the businesses.............................................. [308] Clause 9.6(c) – interpretation.................................................................................................... [310] “reasonable opinion” ............................................................................................................ [319]

“have regard to”.................................................................................................................... [326] Conclusion on interpretation ................................................................................................. [336] Did NZX breach clause 9.6(c)? ................................................................................................. [339] Alleged breach of cl 9.6(a) and (b), and cl 18.10...................................................................... [350] Ralec’s criticisms of NZX’s conduct of the businesses ............................................................. [357] Repudiation?.............................................................................................................................. [379]

Second cause of action: breach of duty of care ........................................................................... [383] Third and fourth causes of action: misleading and deceptive conduct, pre-contractual misrepresentations ........................................................................................................................ [392]

First representations: NZX committed to spending $100 million ............................................ [395]

Second representations: immediate and independent commitment to build the Agri-Portal .. [420] Third representations: extent of NZX’s support for the businesses .........................................