Premier Events Group Ltd v Beattie

[2013] NZHC 2755

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-003178 [2013] NZHC 2755

BETWEEN  PREMIER EVENTS GROUP LIMITED Plaintiff

ANDMALCOLM JAMES BEATTIE First Defendant

ANTHONY JOSEPH REGAN Second Defendant

CT NZ GROUP LIMITED (PREVIOUSLY KNOWN AS CARTAN GLOBAL LIMITED)

Third Defendant

PARNELL PARTNERS GROUP LIMITED

Fourth Defendant

CARTAN GLOBAL LLP Fifth Defendant

CARTAN TOURS INC Sixth Defendant

CIV-2011-404-000474

BETWEEN  ANTHONY JOSEPH REGAN First Plaintiff

ANTHONY JOSEPH REGAN and JENNIFER ANNE REGAN AS TRUSTEES OF THE PICCADILLY TRUST

Second Plaintiffs

ANDROBERT GILL First Defendant

PREMIER EVENTS GROUP LIMITED Second Defendant

PREMIER EVENTS GROUP LTD v BEATTIE & ORS [2013] NZHC 2755 [22 October 2013]

B A PARTNERS LIMITED Third Defendant

DIGITAL PARTNERS LIMITED Fourth Defendant

CPG YORK LIMITED Fifth Defendant

BRAND ADVANTAGE MEASUREMENT AND CONSULTING LIMITED

Sixth Defendant

DIGITAL PARTNERS (NZ) LIMITED Seventh Defendant

Hearing:                   19 August 2013

Appearances:           M D Pascariu and J A Harrop for Plaintiff in first proceeding J R Eichelbaum for First, Second, Third, Fourth and Fifth Defendants in first proceeding

G S Dunphy for Sixth Defendant in first proceeding
J R Eichelbaum for Plaintiffs in second proceeding

M D Pascariu and J A Harrop for First to Seventh Defendants in second proceeding

Judgment:                22 October 2013

JUDGMENT OF ELLIS J

This judgment was delivered by Justice Ellis on 22 October 2013 at 11.00 am

pursuant to R 11.5 of the High Court Rules.

Registrar / Deputy Registrar

Date...............................

[1]      The first to fifth defendants seek to have the claims brought against them by Premier Events Group Limited (PEG) struck out on the grounds that they are an abuse of process.  The abuse of process contention is founded on the existence of parallel proceedings between themselves, a company called BA Partners Limited (BAP) and PEG that are presently before the Employment Court.1    Essentially the first and second defendants say that they are improperly being vexed with the same matters twice.

Background

[2]      PEG and BA Partners Limited (BAP) are associated companies which form part of the Brand Advantage and Premier Group of companies (the Group).  All the companies in the Group were and are controlled by Mr Robert Gill and were variously involved  in  the  media,  advertising,  brand  development  and  marketing industries.  Prior to 2010 the Group was run by Mr Gill effectively in partnership with the second defendant, Mr Regan, who was also (either personally or through entities associated with him) a minority shareholder in a number of the companies in the Group.

[3]      More particularly, and insofar as PEG is concerned:

(a)      The company was incorporated in June 2003.   It was (and is still) owned  80  per  cent  by  Gill  interests  and  20  per  cent  by  Regan interests;

(b)Mr Beattie (the first defendant) was a director from the date of incorporation until December 2009;

(c)       Mr Regan was a director from November 2003 until 1 April 2010; (d)          Mr Gill has been a director since November 2003; and

(e)       Mr Beattie was also employed as the managing director of PEG from

June 2006 until his resignation on 20 January 2010.

1      BAP is now in receivership liquidation.

[4]      As far as BAP is concerned:

(a)      The company was incorporated in July 2003.   It was (and still is) owned  80  per  cent  by  Gill  interests  and  20  per  cent  by  Regan interests;

(b)      Mr Regan was a director from August 2003 until 1 April 2010; and

(c)       Receivers were appointed to BAP in April 2011.

[5]      Mr Regan was also employed as the Group’s financial director from 2003, and was Chief Operating Officer of BAP and PEG from 2006.   He resigned from those positions in early 2010.

[6]      The parting of ways was not entirely happy.  Messrs Regan and Beattie had a number of grievances about the way in which they had been treated both as employees and as directors.  Then, following their departure, Mr Gill became aware that they had set up a business which (he says) was directly competing with PEG and BAP.  Litigation has proliferated.

[7]      The third, fourth and fifth defendants are companies that are owned and controlled by Messrs Beattie and Regan and which are involved in their new venture.

The various proceedings

[8]      On 18 May 2010 Mr Beattie filed a claim against PEG in the Employment Relations Authority (the Authority).2   Mr Regan later also filed a claim against PEG in the Authority.  The particulars of those claims are not presently important.

[9]      On 27 May 2010 PEG filed these, High Court, proceedings alleging:

(a)      breach  by  Messrs  Beattie  and  Regan  of  their  fiduciary  duties  as directors;

2      File No: 5306290 Malcolm Beattie v Premier Events Group Limited.

(b)breach of restraint of trade by Mr Beattie in relation to the sale of some shares;

(c)      misuse of confidential information by the corporate third, fourth and fifth defendants in these proceedings, by reason of Mr Regan’s and Mr Beattie’s roles as directors and their beneficial ownership of them;

(d)      knowing receipt by the third, fourth, fifth and sixth defendants; and

(e)      that  all  the  defendants  were  participants  in  an  unlawful  means conspiracy.

[10]     A claim was then also filed in the Authority by PEG and BAP against Messrs Beattie and Regan3  alleging breaches of the restraint of trade provisions in their respective employment agreements.  Separate and additional claims are made against Mr   Beattie   in   relation   to   alleged   breach   of   his   employee   obligations   of confidentiality and good faith.

[11]     As I have said, it is not disputed that all of these claims arise out of the same factual matrix.  Nor is it disputed that the losses claimed by PEG in the Employment Court and in this Court are largely (if not wholly) the same.4

[12]     All three claims in the Authority were transferred to the Employment Court under s 178 of the Employment Relations Act 2000 at PEG’s instigation.  The three claims were heard by the Employment Court over 12 days, ending in mid May 2012.

[13]     In March 2013 the proceedings in this Court were set down for a 10 day trial in April 2014.  The present application was filed in April 2013 and amended in May. The defendants seek to strike out the claims on the grounds not only that they are an

abuse of process (on the basis of the “twice vexed” principle) but also on the grounds

3      File No: 5212283I Premier Events Group Limited & BA Partners Limited v Malcolm James

Beattie, Anthony Joseph Regan and Patricia Panapa.

4      The damages claimed in this Court are approximately $13 million.  The damages claimed in the Employment Court have not been quantified in PEG’s notice of claim itself but it is accepted that the business losses into which an inquiry is sought are essentially the same as the losses that are the foundation of the High Court damages claim.

of various estoppels of both “issues” and “facts” which (they say) will arise out of the Employment Court judgment.

[14]     There was, in theory, more than adequate time for the strike out application to be heard and determined before the High Court trial in February 2013.  The outcome of the application could, necessarily, affect that shape and duration of that trial.  But, as I have said, the Court’s ability to determine at least half of the issues raised depended on the content of the Employment Court decision.

[15]     The Employment Court had not issued its decision by the time the strike out application was due to be heard, in August this year.   Rather than prejudicing the February trial Mr Eichelbaum chose manfully to pursue only the abuse of process aspects of the application, although he understandably reserved the right to contend later that any judgment emanating from the Employment Court decision gives rise to various estoppels.

[16]     I, too, have deferred writing this judgment for as long as possible, in the hope that the decision would be forthcoming and that a full and proper determination of all the issues raised by Mr Eichelbaum could then occur before the trial.  But as I write this, the decision is still awaited, some 18 months after the hearing.   The parties and this Court need to know now, whether or not the April trial can proceed. I therefore determine the matter as best I can in the circumstances.

Are these proceedings an abuse of process?

[17]     Mr Eichelbaum cited many authorities which, consistent with the rule in Henderson v Henderson, have held that it is an abuse of process for a party to be vexed twice in the same matter.5    He is quite correct about that.  In the interests of fairness and finality, a plaintiff is required to bring forward his whole case against a defendant in one action.  He submitted (and I accept) that it is not necessary for the

first proceeding to have resulted in a judgment for the doctrine to operate.

5      Henderson v Henderson (1843) 3 Hare 100.

[18]     But  none  of  those  cases  involve  circumstances  where  there  are  parallel, mutually exclusive, jurisdictions such as the respective jurisdictions of this Court and the Employment Court.  It is because of the separate jurisdictions that PEG, in the present case, is simply unable to bring all its claims in one proceeding.   The Employment Court has exclusive jurisdiction to determine matters relating to “employment relationship problems” and so those claims by PEG against Messrs Beattie and Regan that stem from their employment cannot be brought in this Court. Equally,  PEG’s  tortious  claims  (which involve  other parties) and  its  claims  for breach of directors’ duties cannot be brought in the Employment Court.  PEG cannot be required to elect to pursue only half of its potential claims simply by dint of the fact that the complexity of the relationships between the parties engage the jurisdictions of two different Courts.

[19]     Mr Eichelbaum referred me to three cases involving the parallel jurisdictions of the Employment Court and the High Court which, he said, supported his application: Anderson v Northland Health Ltd, NZ Fire Service Commission v McCulloch and Transpacific All Brite Ltd v Sanko.6   In the first and third of these the proceedings were stayed pending the determination of the parallel proceedings (in the Employment Court and the High Court respectively).   In the second, the High

Court proceedings were struck out on the grounds that their subject  matter fell properly within the jurisdiction of the Employment Court.   But that decision was partly overturned on review, when Lang J held that the proper course was to order a stay pending further order of the Court, rather than to strike out the proceedings.7   In my respectful view that was, indeed, the appropriate course.

[20]     Mr Eichelbaum also relied on those cases on election and merger which make it clear that, where the same facts support rights to different remedies against the same defendant, a plaintiff cannot recover a judgment giving a remedy in respect of

more than one right.8

6      Anderson v Northland Health Ltd HC Whangarei CP2/96, 13 October 1997, NZ Fire Service

Commission v McCulloch and Transpacific All Brite Ltd v Sanko [2012] NZEmpC 7.

7      NZ Fire Service Commission v McCulloch (2010) 8 NZELR 460.

8      United Australia Ltd v Barclays Bank Ltd [1941] AC 1 (HL); Mahesan v Malaysia Housing

Society [1979] AC 374 (PC).

[21]     He is indisputably correct that PEG is not able to recover the same damages twice (by which I mean in both the Employment Court and this Court).  But unless and until the Employment Court judgment is released it will not be possible to take that point further.  I do not accept that any kind of “election” needs to, or can, be made at an earlier stage.

[22]     In practical terms what this means is that:

(a)      If PEG’s damages/compensation claim succeeds in the Employment Court it would not be able to pursue its claims for the same damages in this Court.

(b)If PEG’s damages claim partly or wholly fails in the Employment Court it will, most likely, be able to pursue its different causes of action in this Court.  The extent to which it is able to do so, and the extent which it can revisit some matters, will of course depend (inter alia) on the operation of any relevant estoppels arising from the Employment Court decision.   A determination of the parameters of any such estoppels may not necessarily be straightforward.

[23]     I accept that this is unsatisfactory because it means that there is at least a prospect that some of the trial in the Employment Court may have to be re-run in this Court.  But that is a long-acknowledged feature of the parallel jurisdictions.  On the other hand it is possible that the Employment Court decision will (subject to any appeal) finally resolve some or all of the dispute.

[24]     In my view there are no grounds upon which I am able properly to strike out the proceedings at this stage.   The defendants are not twice vexed in the relevant sense because the existence of parallel jurisdictions, and the nature and variety of the claims against them, require two sets of proceedings.   As I have said, however, I accept that double recovery is not permitted.   I did not understand Mr Pescariu to disagree with that.

[25]     What is, in my view, clear is that the prospect of the proceedings in this Court going to trial in the absence of a decision from the Employment Court ought not be countenanced.  The parties, and this Court, have proceeded to date on the reasonable assumption that it would be available in time, but that assumption has unfortunately proved to be misplaced.  It has therefore become necessary to stay these proceedings pending its release and I make that order now.

[26]     Hearing time of  some  duration  in  this Court, particularly in  proceedings involving a number of parties whose counsel have varied and not necessarily compatible commitments, is not easy to come by.  It will be most unfortunate if the long-standing trial date is vacated because of delays elsewhere.  But whether or not that becomes necessary I will leave for Wylie J (who is managing the file).

[27]     In the meantime, these proceedings are stayed, pending further order of the

Court.

Rebecca Ellis J