Legal Research
Cases
Parkinson v O'Brien

Parkinson v O'Brien

Case [2021] NZCA 309 12 July 2021

Breach of Fiduciary Duty

Derivative Action

Statutory Interpretation

Appeal

Corporate Law & Governance

Type to search within this case.

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA442/2020
[2021] NZCA 309

BETWEEN	KEVIN PARKINSON First Appellant KEVIN PARKINSON AS TRUSTEE OF KEVIN PARKINSON FAMILY TRUST Second Appellant ANNA VALERIENA KEDRINSKAIA AND LISTON TRUSTEE SERVICES LIMITED AS TRUSTEES OF ANNA KEDRINSKAIA FAMILY TRUST Third Appellants
AND	LOUISA JANE O’BRIEN ON BEHALF OF GENERAL DYNAMICS CORPORATION LIMITED First Respondent LOUISA JANE O’BRIEN AS TRUSTEE OF LOUISA O’BRIEN FAMILY TRUST Second Respondent

Hearing:	24 February 2021
Court:	Brown, Katz and Edwards JJ
Counsel:	Z G Kennedy and S R Morris for Appellants M J McCartney QC for Respondents
Judgment:	12 July 2021 at 10.00 am

JUDGMENT OF THE COURT

AThe application to adduce further evidence on appeal is allowed in part and an order is made admitting Mr Parkinson’s affidavit of 18 February 2021 as evidence.
BThe appeal is dismissed.
CThe appellants must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

Table of Contents

Para No
Introduction  [1]
Relevant background  [5]
GDC and subsequent entities  [5]
The Wanaka property  [9]
The relationship property proceeding  [14]
The High Court judgment  [16]
Issues for determination on appeal  [21]
Is leave to appeal required?  [24]
Principles applicable to s 165 applications  [33]
Application to adduce further evidence  [38]
First and second causes of action: prospects of success  [53]
Third and fifth causes of action: prospects of success  [68]
Weighing costs of proceedings against relief  [79]
Other considerations  [86]
Our assessment  [89]
Result  [92]

REASONS OF THE COURT

(Given by Brown J)

Introduction

The first appellant (Mr Parkinson) and the respondent (Ms O’Brien) are the directors of General Dynamics Corporation Ltd (GDC) and, together with their respective family trusts, own all the shares in that company.[1] They were in a relationship for 29 years, marrying in 1994. After their separation in 2013 Mr Parkinson commenced a de facto relationship with the first-named third appellant (Ms Kedrinskaia).
[1]Since 2003 the Kevin Parkinson Family Trust and the Louisa Parkinson Family Trust have each held 249 shares while Mr Parkinson and Ms O’Brien each held one share.
Pursuant to s 165 of the Companies Act 1993 Ms O’Brien applied for leave to bring a shareholder derivative action on behalf of GDC against Mr Parkinson, both in his personal and trustee capacities. The proposed claim also alleged that the third appellants, Ms Kedrinskaia and Liston Trustee Services Ltd, the trustees of the Anna Kedrinskaia Family Trust (the Trustees), had received property and profits of GDC and had participated dishonestly in Mr Parkinson’s breach of fiduciary duty.
That application was granted by Associate Judge Andrew on 14 July 2020.[2] The appellants now appeal.
[2]O’Brien v Parkinson [2020] NZHC 1681 [High Court judgment].
The respondents raise a jurisdictional issue, contending that the application under s 165 was an interlocutory application and hence the appellants are first required to obtain leave to appeal from the High Court under s 56(3) of the Senior Courts Act 2016. The…

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 Parkinson v O'Brien

Details

AGLC: Parkinson v O'Brien [2021] NZCA 309
Case: [2021] NZCA 309
Decision Date: 12 July 2021 at 10.00 am

CaseChat Overview and Summary

In Parkinson v O'Brien the Court of Appeal considered an appeal against the grant of leave to bring a derivative action on behalf of a company. The Court considered a number of issues including the application to adduce further evidence on appeal, the prospects of success and the costs of proceedings against the relief. The Court rejected the contention that leave to appeal was required and dismissed the appeal. The Court found that the respondents had made out an arguable case in respect of the four surviving causes of action. The relief which was likely to be obtained if the claim was successful warranted the costs of the proceedings, particularly having regard to the efficiency which should flow from the concurrent pursuit of the relationship property proceedings.

Orders