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IN THE SUPREME COURT OF NEW ZEALAND
SC 89/2016 [2017] NZSC 151
BETWEEN
PRICEWATERHOUSECOOPERS Appellant
AND
ROBERT BRUCE WALKER AND JOHN MARSHALL SCUTTER AS LIQUIDATORS OF PROPERTY VENTURES LIMITED (IN LIQUIDATION) AND ROBERT BRUCE WALKER AS LIQUIDATOR OF FIVE MILE HOLDINGS LIMITED (IN RECEIVERSHIP AND LIQUIDATION), MONTECRISTO CONSTRUCTION COMPANY LIMITED (IN LIQUIDATION), CASTLE STREET VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION) AND LIVINGSPACE PROPERTIES (IN RECEIVERSHIP AND LIQUIDATION) First Respondents
PROPERTY VENTURES LIMITED (IN LIQUIDATION) Second Respondent
Cont’d next page
Hearing:
16 March 2017 (Further submissions received 11 September 2017)
Court:
Elias CJ, Glazebrook, Arnold, OʼRegan and Ellen France JJ
Counsel:
B D Gray QC, P M Fee and M D Atkinson for Appellant J B M Smith QC, R S May and T G H Smith for Respondents D R Bigio QC for SPF No. 10 Limited as Intervener
Judgment:
6 October 2017
FIVE MILE HOLDINGS LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Third Respondent
CASHEL VENTURES LIMITED (IN LIQUIDATION) Fourth Respondent
TAY VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIATION) Fifth Respondent
LIVINGSPACE PROPERTIES LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Sixth Respondent
BEECHNEST VENTURES LIMITED (IN LIQUIDATION) Seventh Respondent
TUAM VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Eighth Respondent
CASTLE STREET VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Ninth Respondent
LICHFIELD VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Tenth Respondent
92 LICHFIELD LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Eleventh Respondent
ST ASAPH VENTURES LIMITED (IN LIQUIDATION) Twelfth Respondent
MONTECRISTO CONSTRUCTION COMPANY LIMITED (IN LIQUIDATION) Thirteenth Respondent
JUDGMENT OF THE COURT
ALeave is granted to the respondents and the intervener to adduce new evidence.
GLAZEBROOK, ARNOLD, O’REGAN AND ELLEN FRANCE JJ (Given by O’Regan J)
Table of Contents
Para No.
Introduction
[1]
Settlement
[4]
Intervener
[5]
Background
[6]
Funding Agreement
[18]
Allied Assignment
[32]
Allied GSA
[34]
New developments
[37]
Dominion Assignment
[38]
Undertakings in written submissions of counsel for SPF
[40]
Undertaking by affidavit
[42]
Impact of new developments
[52]
Waterhouse v Contractors Bonding Ltd
[54]
High Court
[58]
Court of Appeal
[59]
PwC’s case
[62]
The respondents’ position
[70]
Our analysis
[77]
Was there an impermissible assignment of a bare cause of action?
[77]
Was there an assignment of a bare cause of action?
[78]
Does cl 6.3 give SPF control?
[83]
Is SPF entitled to the proceeds of the claim?
[89]
Effect of SPF’s undertakings: no bare assignment
[91]
Exceptions
[92]
Result
[96]
Costs
[97]
Introduction
The respondents commenced proceedings against (among others) the appellant, PricewaterhouseCoopers (PwC). They allege that PwC was in breach of contract and negligent in carrying out its functions as auditor of the second respondent, Property Ventures Limited (in liquidation) (PVL) and other respondents and that they have suffered loss as a result.[1] The other defendants in the respondents’ proceeding are certain directors of PVL.
[1]There are two proceedings, one commenced by the liquidators of PVL…
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.
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AGLC
PricewaterhouseCoopers v Walker [2017] NZSC 151
Case
[2017] NZSC 151
Decision Date
CaseChat Overview and Summary
PricewaterhouseCoopers (PwC) sought to appeal a decision of the Court of Appeal that refused its application to stay proceedings brought against it by Property Ventures Limited (PVL) and other respondents. PVL and the other respondents alleged that PwC was negligent in its performance of its role as auditor of the PVL Group and adviser to PVL on its adoption of international reporting standards. They say if PwC had not been negligent, PVL’s operations would have been wound up earlier than they were, and PVL’s ongoing losses and deepening insolvency would have been avoided. They estimate the loss suffered by PVL is between $256.9 million and $302.7 million up to July 2010. PVL received litigation funding from SPF No. 10 Limited (SPF) under a funding agreement, the details of which are set out in the reasons. SPF also took an assignment of a general security agreement over the assets and undertaking of PVL and other respondents. PwC argued that the combined effect of the funding agreement and the assignment of the general security agreement to SPF was that SPF had effectively taken an assignment of PVL’s cause of action against PwC and that this was an abuse of process. Brown J dismissed the application. His decision was upheld by the Court of Appeal. This Court granted leave to appeal, the approved question being: “Did the Court of Appeal err in upholding the High Court’s refusal to stay the proceeding?”. Since the hearing of the appeal, PwC and the respondents have settled the dispute between them. The Court decided to deliver the judgment, with amendments to reflect the fact that the respondents’ claim against PwC has been settled. The appeal was dismissed. No award of costs was made. The Court considered whether the funding agreement and assignment of the general security agreement amounted to an assignment of a bare cause of action. It found that, in light of the undertakings given by SPF in this Court, the funding agreement and assignment of the general security agreement did not amount to an assignment of a bare cause of action. The Court found that, even if there was an assignment of a bare cause of action, it was not impermissible because it fell within an exception to the law of maintenance and champerty. The Court found that, in any event, the assignment was not impermissible because it was made by a liquidator. The Court concluded that, in the light of the undertakings given by SPF in this Court, the funding agreement and assignment of the general security agreement did not amount to an assignment of a bare cause of action.