NZX Ltd v Ralec Commodities Pty Ltd

[2015] NZHC 3041

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2011-485-1299 [2015] NZHC 3041

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:

12-14 October 2015

Counsel:

B R Latimour, D J Cooper, B M Cash, R J Hollyman,

G M Boos, J P Danaher and L J Hardcastle for Plaintiff/ Counterclaim Defendants

T J North QC, J K Scragg, C V Nicholson, R M McGirr and
A R Williams for Defendants/Counterclaim Plaintiffs

Judgment:

3 December 2015

NZX LTD v RALEC COMMODITIES PTY LTD [2015] NZHC 3041 [3 December 2015]

RESERVED JUDGMENT OF DOBSON J

Contents

Introduction ....................................................................................................................................... [1] Ralec application to strike out NZX’s fifth cause of action; NZX application for joinder of

additional defendants ........................................................................................................................ [7]

The rationale for the fifth cause of action .................................................................................... [12] An equitable assignment? ............................................................................................................. [19] Not a tenable cause of action? ..................................................................................................... [29] Joinder of additional defendants .................................................................................................. [31] The Hightower proceeding ........................................................................................................... [39]

Application to strike out the Ralec counterclaim ......................................................................... [44]

Ralec application to strike out fourth cause of action, and parts of third cause of action ........ [55] Third cause of action .................................................................................................................... [56] Fourth cause of action.................................................................................................................. [63]

NZX application to strike out parts of Ralec’s statement of defence, and that Ralec file a more

explicit statement of defence........................................................................................................... [71] Further particulars of loss/causation ........................................................................................... [104]

Ralec challenge to NZX refusal to answer interrogatories ........................................................ [129] The Weldon notebooks ................................................................................................................ [130] Formation of reasonable opinion as to financing and resourcing obligations ........................... [138]

Ralec access to redacted NZX documents ................................................................................... [144] Ralec application for further discovery ....................................................................................... [171]

Ralec application to regulate the terms on which NZX deals with former employees or contractors ..................................................................................................................................... [201]

Security for costs ........................................................................................................................... [216] Ralec application for costs on an abandoned cause of action .................................................... [222] Summary ........................................................................................................................................ [228] Costs on these applications ........................................................................................................... [229]

Introduction

[1]      The plaintiff (together with the additional counterclaim defendants referred to as NZX) purchased the assets of certain embryonic businesses in Australia from the defendants (Ralec).  These proceedings involve claims and counterclaims in which NZX seeks damages in respect of pre-contractual representations that were allegedly made by or on behalf of Ralec and relied on by NZX in purchasing all the assets of

those businesses.1

[2]      NZX has  pleaded  causes  of action  for misrepresentation,  misleading and deceptive conduct and breach of warranty.   In addition, NZX claims against guarantors of the vendors’ performance for the breaches of the sale and purchase agreement (SPA) alleged against the vendors.  Also, in a fifth cause of action first pleaded in the third amended statement of claim (3ASC) in July 2015, NZX brings a claim under s 11 of the Contractual Remedies Act 1979 (CRA).  It pleads that the shareholders,…