Panckhurst v Cullinane - [2016] NZHC 2774

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-1189 [2016] NZHC 2774

BETWEEN
S C PANCKHURST

Plaintiff

AND

P D CULLINANE, V M CULLINANE, AND N C GOLDIE

First Defendants

A G RAILTON Second Defendant

H DOUGHTY Third Defendant

A RYAN, M GREER, and J RYAN Fourth Defendants

Hearing: 16 November 2016

Appearances:

Mr A H J Commons and Ms N R Miller for the Plaintiff
Mr D J Friar and Mr N F D Moffat for the Defendants

Judgment:

16 November 2016

ORAL JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

PANCKHURST v CULLINANE AND ORS [2016] NZHC 2774 [16 November 2016]

[1] The proceeding which gives rise to the current application is a claim by the plaintiff who entered into an agreement to become the Chief Financial Officer with responsibilities embracing matters such as strategy for a business known as Lewis Road Creamery (“LRC”). The essence of the agreement was that the plaintiff would not be paid for services that he provided to LRC but would instead receive a shareholding which the plaintiff alleges was to be 10 percent.

[2] The arrangement allegedly came to an end when there was a falling out between the plaintiff and the first defendant Mr Cullinane, who appears to have been the founding party responsible for the creation of the Lewis Road business. In 2013, it is alleged, Mr Cullinane, expressed views to the effect that the shareholding which had been negotiated with the plaintiff was actually out of line with the original concept discussed, which Mr Cullinane considered envisaged a 5 percent shareholding. Mr Cullinane has also alleged in October of 2013 to have justified his “rethink” of Mr Panckhurst’s shareholding on the basis that 5 percent would be a better reflection of Mr Panckhurst’s input into the company. Mr Panckhurst regarded the revision of the position on Mr Cullinane’s part as amounting to a repudiation of the agreement that he had entered into and called upon Mr Cullinane to perform what Mr Panckhurst claimed was the original agreement. In the statement of claim it is alleged that Mr Cullinane failed and or refused to confirm and or perform the agreement which lead to Mr Panckhurst resigning 12 October
2013 and thereafter issuing these proceedings. He seeks specific performance of the agreement pursuant to which he was to obtain shares.

[3] Over the period covered by the dispute a further development had occurred in that the shareholding base in the company had expanded from 1000 shares to the point where a total of 4.59 million shares were on offer so that Mr Panckhurst claims a shareholding based upon the diluted figure just mentioned. For various reasons his claim now is that he is entitled to 7.563 percent of the total shares on issue. That is essentially what the claim is about.

[4] The matter has come before the Court today because the plaintiff alleges that the defendants have not complied with the obligation to give initial disclosure required by High Court…

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 Panckhurst v Cullinane

Details

AGLC: Panckhurst v Cullinane [2016] NZHC 2774
Case: [2016] NZHC 2774
Decision Date: 16 November 2016

CaseChat Overview and Summary

The case of Panckhurst v Cullinane involves a claim by the plaintiff, who alleges that he entered into an agreement to become the Chief Financial Officer of Lewis Road Creamery (LRC) and was to receive a 10 percent shareholding. The dispute arose when the first defendant, Mr Cullinane, allegedly altered the terms of the agreement to reflect a 5 percent shareholding. The plaintiff seeks specific performance of the original agreement and a shareholding based on the diluted figure of 7.563 percent of the total shares on issue. The matter came before the court as the plaintiff alleged that the defendants had not complied with the obligation to give initial disclosure required by High Court Rule 8.4. The plaintiff sought an order striking out the statement of defence of the defaulting defendant.

The court considered each category of documents that the plaintiff complained he was not given adequate initial disclosure of. The court found that in one instance, the document in question was already in the possession of the plaintiff and was a letter that the defendants' solicitor had written to the plaintiff well in advance of the commencement of the proceeding. The court concluded that the plaintiff had established only one clear case where there was a breach of the requirements of preliminary disclosure. The other ten alleged breaches of HCR 8.4 were not made out. The court found that it would be wholly disproportionate to any breach of the rule to grant the relief sought and to strike out the defendants' statement of defence. The application was dismissed. As for costs, the court considered that the interests of justice were best served by not making any costs order, as any breaches were not substantial.

Orders