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Plumpton v Terry

Plumpton v Terry

Case [2016] NZHC 988 16 May 2016

Breach of Contract

Breach of Fiduciary Duties

Misrepresentation

Unconscionable Conduct

Jurisdiction

Specific Performance

Commercial Law

Corporate Law & Governance

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-562 [2016] NZHC 988

BETWEEN
KEVIN IAN PLUMPTON

First Plaintiff

UCFX LIMITED Second Plaintiff

AND

JAMES TERRY First Defendant

BRENT DAVID COLBERT Second Defendant

SCOTT MAYNARD Third Defendant

Hearing: 16 May 2016 at 10:00am

Appearances:

J V R James for Plaintiffs
S O McAnally for First Defendant
No appearances for Second and Third Defendants

Judgment:

16 May 2016

ORAL JUDGMENT OF ASSOCIATE JUDGE R M BELL

Solicitors:
Antony Harper, Auckland, for Plaintiff
Keegan Alexander, Auckland, for First Defendant
Armstrong Murray, Takapuna, for Third Defendant

KEVIN IAN PLUMPTON v JAMES TERRY [2016] NZHC 988 [16 May 2016]

[1] The plaintiffs apply under r 8.19 of the High Court Rules for further and better discovery of documents by the first defendant. Specifically, they target personal emails of the first defendant and also documents relating to an entity called “FEDER8”.

[2] At the outset, the plaintiffs sought orders against all defendants. The second and third defendants filed affidavits in response. Their affidavits showed that they had no documents in their control within the scope of the plaintiffs’ application. The plaintiffs accept that and therefore seek no orders against them. The first defendant, on the other hand, opposes the application but he has not filed any affidavits.

What the case is about

[3] To understand the discovery application, it is necessary to set out background to the plaintiffs’ claims and the course of this proceeding so far. UCFX Ltd says that it carries on business in New Zealand as a provider of hosted unified communication services. The first plaintiff, Mr Plumpton, is a director and CEO of the company and its majority shareholder. The defendants are all shareholders and worked in the company up until March 2015.

[4] The plaintiffs plead their case against all the defendants as directors of the company. Mr Terry and Mr Maynard were never formally directors of the company but the plaintiffs say that they were de facto directors under s 126(1)(a) of the Companies Act 1993. Mr Terry’s background is in human resources. Mr Colbert was marketing director and Mr Maynard was a principal consultant. He apparently has an IT background.

[5] The plaintiffs’ case is that towards the end of 2014 and in the early part of

2015 (up until March 2015) the defendants were disenchanted with UCFX Ltd. Mr Plumpton became aware that Mr Terry was actively soliciting investors for a new venture. The defendants had met with a prospective client of UCFX Ltd, Westcon, on 13 March 2016 to pitch for investment opportunities in an entity to be established by the defendants. That was done without Mr Plumpton’s knowledge. At that

meeting documents were used which were almost identical to the UCFX documents. The defendants are also alleged to have told Westcon that UCFX was winding up and restructuring, but that the new company they were establishing and UCFX were one and the same. The achievements and accolades that UCFX had achieved and client testimonials…

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 [2016] NZHC 988
Case: [2016] NZHC 988
Decision Date: 16 May 2016

CaseChat Overview and Summary

The plaintiffs, Kevin Ian Plumpton and UCFX Limited, sought further and better discovery of documents from the first defendant, James Terry, including personal emails and documents relating to an entity called “FEDER8”. The case involves allegations of breaches of duty under the Companies Act, breach of fiduciary duties, interference with contractual relations, and oppressive or unfairly prejudicial conduct. The defendants, including James Terry, were previously directors of UCFX Ltd, but they ceased to have any influence on the company's management after the proceedings started. The plaintiffs argued that the defendants had not discovered documents that should have been discovered, but the court found no grounds to believe that James Terry had failed to discover documents which should have been discovered. The court also found no basis to order discovery of any documents relating to Feder8, as there were no relevant pleadings putting that in issue. The plaintiffs' application for further and better discovery was dismissed with costs to the first defendant. The court suggested that the plaintiffs should amend their pleadings and finalise the quantum of the financial relief they seek. The case is to be called in chambers list on further case management.

Orders