Reece v Halse - [2016] NZHC 1438

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-2038 [2016] NZHC 1438

IN THE MATTER
A claim in negligence and associated

causes of action

BETWEEN

ROBERT JAMES REECE of and JZE Trustee Company (No 2) Limited as trustees of the DOUBLE R TRUST First Plaintiffs

RUDYARD HOLDINGS LIMITED Second Plaintiff

AND

GRAHAM WILLIAM HALSE First Defendant

GROVE DARLOW AND PARTNERS Second Defendants

CHRIS ALLAN Third Defendant

Hearing: 16 May 2016 and 1 March 2016

Appearances:

Mr E St John and J Ewart for Plaintiffs
Mr T Cooley for First Defendant
Mr A Ross and H K Wham for Second and Third Defendants

Judgment:

29 June 2016

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

This judgment was delivered by me on
29.06.16 at 4 pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

REECE & Anor v HALSE & Ors [2016] NZHC 1438 [29 June 2016]

Introduction

[1] This judgment concerns an application by the defendants seeking further particulars and security for costs against the plaintiffs. The main proceedings relate to various claims in negligence and breach of trust against the three defendants in relation to a loan transaction with Kiwibank in 2008.

[2] The first plaintiffs in this case are the trustees of the Double R Trust (DRT). One of the trustees, Mr Reece, was personally involved in the loan transaction and is a beneficiary of DRT. Mrs Reece, his estranged wife, was also involved in the loan transaction and is also a beneficiary of DRT; however she is not taking part in these proceedings. The second plaintiff is a company, Rudyard Holdings Ltd (RHL). RHL is a shelf company which was formed to hold certain properties on behalf of DRT. DRT owns 80 per cent of the shares in RHL. There were a number of other entities involved in the Kiwibank loan transaction, including Mr and Mrs Reece’s personal trusts (the Reece entities). However those entities are not party to the present proceedings.

[3] The first defendant in this case is Mr Graeme Halse, a solicitor and previous trustee of DRT. As part of the Kiwibank loan transaction, Mr Halse acquired 20 per cent of the shares in RHL. The second and third defendants are Grove Darlow, a commercial law firm based in Auckland, and Mr Chris Allan, a solicitor in that firm (collectively referred to as the Grove Darlow defendants). The Grove Darlow defendants were retained to provide independent advice to Mr and Mrs Reece regarding the proposed loan.

Background

[4] It is beyond the scope of this judgment to provide a prolonged or detailed examination of the background to these proceedings. However, some consideration of the factual and legal context will be required in order to determine the application for security for costs. Some understanding of the background is also necessary in order to inform the court’s decision on the applications for particulars.

[5] A convenient starting point when discussing the background to the proceeding is the summary of facts which…

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 Reece v Halse

Details

AGLC: Reece v Halse [2016] NZHC 1438
Case: [2016] NZHC 1438
Decision Date: 29 June 2016

CaseChat Overview and Summary

In the High Court of New Zealand, the plaintiffs, Robert James Reece and JZE Trustee Company, brought a claim against the defendants, Graeme Halse, Grove Darlow and Partners, and Chris Allan, in relation to a loan transaction with Kiwibank in 2008. The plaintiffs alleged that the defendants breached their duty of care and fiduciary duty in relation to the transaction. The defendants applied for further particulars and security for costs against the plaintiffs. The court considered the merits of the plaintiffs' claims, the scope of the defendants' obligations, and the plaintiffs' ability to pay costs if their claims failed. The court concluded that the plaintiffs' claims against the defendants had little chance of success, and that the plaintiffs would be unable to pay costs if their claims failed. The court ordered the plaintiffs to provide further particulars and to pay security for costs in the amount of $40,000. The court also reserved leave for the defendants to seek further directions in regard to the particularisation of the plaintiffs' statement of claim. Costs were awarded to the defendants on a 2B basis.

Orders