Plumpton v Terry - [2019] NZHC 3450

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2015-404-000562

[2019] NZHC 3450

BETWEEN
KEVIN IAN PLUMPTON

First Plaintiff

AND

UCFX LIMITED

Second Plaintiff

AND

JAMES TERRY

First Defendant

AND

BRENT DAVID COLBERT

Second Defendant

AND

SCOTT MAYNARD

Third Defendant

Hearing:
17 September to 5 October 2018 and

29 October 2018 and
17 December 2018

Appearances:

B P Henry & L Player-Bishop for the Plaintiffs T J P Bowler for the Defendants

Judgment:

19 December 2019

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 19 December 2019 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors/Counsel:
B P Henry, Barrister, Auckland Anthony Harper, Auckland Neilsons Lawyers, Auckland

PLUMPTON v TERRY [2019] NZHC 3450 [19 December 2019]

TABLE OF CONTENTS

Introduction 1

The parties 3

Relevant background 5

The plaintiffs’ claim 24

Alleged unlawful disclosures 29

Disclosure to Westpac 30

Telstra disclosure 32

Area 3 disclosure 36
O’Neill disclosure 41

Westcon disclosure 47

What was happening around the times of the unauthorised disclosures? 52

Discussions on 2 and 3 March 2015  53
Conversation on 6 March 2015  61
Skype meeting on 7 March 2015  65
Meeting with Mr O’Neill on 8 March 2015  68

Mr Colbert’s resignation as a director  72
Meetings with Mr Plumpton on 12 and 13 March 2015  73
Further discussions among defendants  82
Aftermath to Westcon disclosure  84

Subsequent events 86

Discussion of alleged disclosures and associated events 90

Westpac disclosure 90

Telstra, Area 3, O’Neill and Westcon disclosures 91

Were Mr Terry and Mr Maynard directors of UCFX?  101
Defendants’ objection to UCFX as plaintiff  118
Have the defendants made out their causes of action?  124

First cause of action: breach of directors’ duties  126
Second cause of action: breach of fiduciary duties to UCFX  136
Third cause of action: intentional interference in contractual relations              140

Fourth cause of action: causing affairs of UCFX to be conducted in a manner oppressive, unfairly discriminatory and unfairly prejudicial to Mr Plumpton  151
Fifth cause of action: breach of confidence  156
Sixth cause of action: injurious falsehood  161
Seventh cause of action: conspiracy to cause harm by unlawful means              178
Eighth cause of action: breach of obligations of good faith and fidelity              190
Conclusions from discussion of causes of action  195

Causation of the damages claimed 196

Have the plaintiffs’ proved that the alleged actions caused the losses claimed? 199 Acting in a conflict of interest situation 199

Disseminating confidential UCFX information to third parties 201
Diverting effort from the business of UCFX 204

Making false statements to UCFX employees that UCFX was about to close down
207

Making false statements to Telstra et al that UCFX’s staff, clients and business opportunities could be acquired by NewCo 211
Conspiring to steal the business of UCFX by unlawful means 212

Proof of damage 220

Assumptions used by Mr Graham 224

Loss of profits 227

Net costs in re-establishing the business…

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 Plumpton v Terry

Details

AGLC: Plumpton v Terry [2019] NZHC 3450
Case: [2019] NZHC 3450
Decision Date: 19 December 2019

CaseChat Overview and Summary

The High Court of New Zealand heard a case between Kevin Plumpton and three other parties, James Terry, Brent Colbert, and Scott Maynard, over a telecommunications and software technology business, UCFX Ltd. The plaintiffs claimed that the defendants planned to steal the business and took steps to protect and restore their business, incurring costs and loss of profits. The defendants argued that there was no plan to steal the business and that the dispute was a disagreement among shareholders about the direction of the business. The court had to decide several legal issues, including whether the defendants breached their duties as directors, breached fiduciary duties, interfered with contractual relations, caused oppressive, discriminatory, and prejudicial conduct, breached confidence, made false statements, conspired to cause harm by unlawful means, and breached obligations of good faith and fidelity. The court also had to determine whether the losses claimed by the plaintiffs were caused by the defendants' actions. The court found that the defendants breached their fiduciary duties as directors, breached obligations of confidence, made false and malicious statements, and conspired to appropriate the staff, clients, and business opportunities of UCFX by unlawful means. The court ordered the defendants to pay UCFX $681,212.00 in damages.

Orders