Quinn v Toon - [2022] NZSC 53

IN THE SUPREME COURT OF NEW ZEALAND

I TE KŌTI MANA NUI O AOTEAROA

SC 11/2022
[2022] NZSC 53

BETWEEN	CLIVE ANTHONY QUINN AND PHILIP SAMPSON WELLS Applicants
AND	VICTORIA TOON First Respondent BRUCE JAMES THOMPSON Second Respondent CAROLINE MARY THOMPSON AND STEWARTCO TRUSTEE SERVICES LIMITED Third Respondents PAMELA ISABEL QUINN Fourth Respondent

Court:	Glazebrook, O’Regan and Ellen France JJ
Counsel:	S P Bryers for Applicants G P Blanchard QC and J M Alexander for First Respondent
Judgment:	6 May 2022

JUDGMENT OF THE COURT

AThe application for leave to appeal is dismissed.

BThe applicants must pay the first respondent costs of $2,500.

____________________________________________________________________

REASONS

The applicants seek leave to appeal against a decision of the Court of Appeal,[1] which reversed a decision in their favour in the High Court.[2]
[1]Toon v Quinn [2021] NZCA 696 (Cooper, Brown and Courtney JJ) [CA judgment].
[2]Quinn v Toon [2020] NZHC 816 (Associate Judge Bell) [HC judgment].
The decisions of the courts below dealt with an application by the first respondent, Ms Toon, for approval of her remuneration in connection with the liquidation of Investacorp Holdings Ltd (Investacorp). The High Court did not approve the fees and awarded a sum much lower than that claimed by Ms Toon. This was reversed by the Court of Appeal, which awarded her the fees and costs she claimed.
Ms Toon was appointed as liquidator as part of the settlement of a dispute between the shareholders, which is described in further detail below. The background to the dispute leading up to the appointment of Ms Toon is set out in detail in the Court of Appeal’s judgment.[3] We summarise this briefly.
[3]CA judgment, above n 1, at [10]–[56].
At the relevant time the shareholders in Investacorp were three siblings, Pamela Quinn, Bruce Thompson and Elizabeth Bakker, Pamela Quinn’s husband, Clive Quinn, and interests associated with Mr Thompson and Mr and Mrs Quinn, including the applicants. Mr and Mrs Quinn were the only directors, Mr Thompson having been removed as a director in 2015. There was considerable longstanding acrimony between Mr and Mrs Quinn and Mr Thompson. This concerned, among other things, professional, management and directors’ fees charged to Investacorp by Mr and Mrs Quinn.
In 2016, Mr Thompson, the second respondent to the present application, initiated proceedings under s 174 of the Companies Act 1993 (the Act), alleging prejudicial and oppressive conduct by Mr and Mrs Quinn. During the trial in May 2017, a settlement was reached, to which all directors and shareholders were parties. This agreement was “to settle all matters at issue”, including the allegations of overcharging by Mr and Mrs Quinn. Under it, Investacorp was to be placed into liquidation. Consent orders were made in terms envisaged by the settlement agreement. Investacorp itself was not a party to the agreement.
Ms Toon was appointed as liquidator. She gave a fee estimate of approximately $5,000 to $7,500 plus disbursements (of $1,000) and GST. This estimate was given without knowledge of the extent of…

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 Quinn v Toon

Details

AGLC: Quinn v Toon [2022] NZSC 53
Case: [2022] NZSC 53
Decision Date: 6 May 2022

CaseChat Overview and Summary

In the Supreme Court of New Zealand, the applicants, Clive Anthony Quinn and Philip Sampson Wells, sought leave to appeal against a decision of the Court of Appeal that reversed a decision in their favour in the High Court. The Court of Appeal had approved the fees claimed by the first respondent, Victoria Toon, who was appointed liquidator in connection with the liquidation of Investacorp Holdings Ltd. The applicants argued that the Court of Appeal wrongly concluded that the settlement agreement was irrelevant, that Ms Toon could pursue with her legal advisor the extent to which she acted on legal advice, that the Court of Appeal did not address whether it was fair and reasonable for shareholders to be liable for costs associated with an allegedly unnecessary investigation, and that the Court of Appeal’s award of Ms Toon’s full legal expenses contravened principle. The court held that there was no dispute that the settlement agreement was binding on Investacorp and that the legal advice obtained by Ms Toon to the contrary was wrong. The court did not see the proposed appeal as triggering any requirement to evaluate the legal consequences of the settlement agreement. The court found that the proposed appeal would raise an issue as to the limits, if any, on the extent to which a liquidator can claim remuneration for work carried out and expenses incurred on the basis of erroneous legal advice, but did not see this case as an appropriate vehicle for consideration of the issue because the advice itself is not in evidence. The court did not consider there is any basis for granting leave in relation to the other points raised. The application for leave to appeal was dismissed and the applicants must pay the first respondent costs of $2,500.

Orders