Reynolds v Calvert - [2013] NZHC 3254

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CIV-2012-412-000910 [2013] NZHC 3254

IN THE MATTER OF the liquidation of James Developments
Limited (in liquidation)

BETWEEN GRANT BRUCE REYNOLDS Plaintiff

ANDHILARY JANE CALVERT and HGW TRUSTEES LTD of the Frongopolus Trust Defendant

Hearing: 19 November 2013

Appearances: M J McCartney QC for Plaintiff
M R Sherwood King for Defendants

Judgment: 6 December 2013

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
upon interlocutory applications

Introduction

[1] This judgment relates to a number of interlocutory applications by the parties. At the hearing, the position adopted by the parties on some applications meant that those applications could be disposed of immediately, and a separate judgment has been issued in relation to those matters.1

[2] The applications which are dealt with in this judgment concern:

(a) The plaintiff’s joinder of an additional defendant, Chris James;

1 Reynolds v Calvert [2013] NZHC 3084.

REYNOLDS v CALVERT [2013] NZHC 3254 [6 December 2013]

(b) The plaintiff’s application for discovery orders against the defendants;

(c) The extent to which interrogatories should be answered by the defendants; and

(d) The defendants’ application for discovery orders against the plaintiff.

[3] By agreement of the parties, for convenience at the hearing I heard also an application by Mr James (represented also by Mr Sherwood King) in which Mr James seeks leave to bring a claim against Mr Reynolds (as liquidator of James Developments Ltd) under s 284 Companies Act 1993. I deal with that application in a separate judgment issued contemporaneously with this.

The subject-matter of this proceeding

[4] The subject-matter of this proceeding is central to the issues on the plaintiff’s

joinder application and is also relevant to other interlocutory issues.

[5] That subject-matter has already been considered by the Court when hearing and ultimately dismissing a summary judgment application of the plaintiff.2

[6] In that judgment, on the pleadings as they were filed, I set out the relevant background under a heading “A loan is re-documented”. I then recorded that:3

In 2006, things were going well for the fortunes of Chris James. He had a family trust, the Frongopolus Trust. The trustees (the defendants in this case) decided to purchase an 8,925 m² block of land, at Jacks Point, Queenstown, in order to build there a very substantial home for the James family.

To finance the purchase, Mr James had his company, James Developments Limited (“JDL”), advance $740,000 on 3 October 2006 to the trustees. The money was cleared through another company (Campbell’s Stores Limited), but went to the trustees on the same date.

The advance and credit were recorded in the financial statements of JDL and the Trust respectively for the financial year ending 31 March 2007. And so, too, for the year ending 31 March 2008.

2 Reynolds v Calvert [2013] NZHC 1159.
3 At [1] – [14].

By mid-2009, JDL was heading towards liquidation. It had received an adverse High Court civil judgment in April 2009.

The firm of Harvie Green Wyatt were the accountants…

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 Reynolds v Calvert

Details

AGLC: Reynolds v Calvert [2013] NZHC 3254
Case: [2013] NZHC 3254
Decision Date: 6 December 2013

CaseChat Overview and Summary

In Reynolds v Calvert, the High Court of New Zealand considered interlocutory applications related to the liquidation of James Developments Limited. The plaintiff, Grant Bruce Reynolds, sought to join Chris James as a defendant, obtain discovery orders against the existing defendants, and determine the extent to which interrogatories should be answered by the defendants. The defendants, Hilary Jane Calvert and HGW Trustees Ltd of the Frongopolus Trust, opposed the joinder application and some of the discovery requests. The Court granted the joinder application, finding that Chris James's involvement in the re-documentation of a $740,000 loan necessitated his presence in the proceeding. The Court also ordered specific discovery of certain documents and interrogatory responses, while dismissing some of the defendants' discovery applications against the plaintiff and non-parties. The Court reserved costs for later determination.

Orders