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Sexton v Rice Craig

Sexton v Rice Craig

Case [2007] NZCA 200 23 May 2007

Civil Litigation & Procedure

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IN THE COURT OF APPEAL OF NEW ZEALAND
CA137/06
[2007] NZCA
BETWEENBARRY DEAN SEXTON

Applicant

ANDRICE CRAIG

First Respondent
ANDRICE CRAIG NOMINEE COMPANY LIMITED

Second Respondent

Hearing:19 February 2007

Court:Hammond, Chambers and Arnold JJ
Counsel:S L Abdale for Applicant

C M Meechan and S V Bonney for First and Second Respondents

Judgment:23 May 2007

JUDGMENT OF THE COURT

Leave to appeal is refused.

REASONS OF THE COURT
(Given by Arnold J)

Introduction
[1]       This is an application for special leave to appeal out of time under r 29(4) of the Court of Appeal (Civil) Rules 2005 against a decision of Winkelmann J striking out the applicant’s claims against the first and second respondents: CIV2004‑404‑2754 3 June 2005. The application follows the deemed abandonment under r 43 of an appeal which was brought within time.
Background
[2]       The applicant filed proceedings against the first and second respondents in May 2004. The statement of claim contained three causes of action, two against the first respondent alleging negligence and a third against the first and second respondents alleging breach of fiduciary duty. In each case the damages claimed were essentially the difference between the market value of a property and the indebtedness secured or proposed to be secured against it.
First cause of action
[3]       The applicant alleges that he has been a client of the first respondent, a legal firm, for 15 years. He says that he entered into an agreement to purchase a property and nominated a company, Positive Projects Limited (PPL), as the purchaser. He was a shareholder and director of PPL, which was set up by the first respondent solely for the purpose of carrying out the subdivision of the property. The second respondent, a nominee mortgage company operated by the first respondent, advanced money for the purchase, secured by a first mortgage over the property.
[4]       Several years later, after some work had been done on the subdivision, the applicant realised that PPL was likely to be placed into liquidation. He sought advice from the first respondent to enable him to secure PPL’s assets, and in particular the property, prior to this occurring.
[5]       The applicant alleges that the first respondent advised him that a company should be incorporated to purchase PPL’s assets. He claims that the first respondent recommended that someone in whom he had confidence hold the shares in the new company on trust for him. He also alleges that the first respondent said it would arrange finance through the second respondent to enable the new company to fund the purchase of the property.
[6]       The applicant says that in reliance on this advice a further company, Miyake Developments Limited (Miyake), was incorporated. An associate of the applicant was the sole shareholder and director, holding the shares on trust for the applicant. Miyake made an offer to purchase the property from PPL, subject to finance. However, two days before PPL was liquidated the second respondent advised that the finance would not available for the purchase. Miyake…

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 Sexton v Rice Craig

Details

AGLC: Sexton v Rice Craig [2007] NZCA 200
Case: [2007] NZCA 200
Decision Date: 23 May 2007

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an application for special leave to appeal out of time under rule 29(4) of the Court of Appeal (Civil) Rules 2005 by Barry Dean Sexton against Rice Craig and Rice Craig Nominee Company Limited. The applicant sought to challenge a decision of Winkelmann J which had struck out his claims against the respondents. The primary legal issues were whether the Court had jurisdiction to grant the application and if so, whether the discretion should be exercised in the applicant’s favour. The Court held that while it had the jurisdiction to grant the application under rule 29(4) even after a deemed abandonment under rule 43, the discretion should not be exercised in this case. The applicant's explanation for the delay in filing the case on appeal and the failure to seek an extension under rule 43 was not satisfactory, and the proposed amended pleadings remained incoherent. The majority of the Court concluded that the necessary compelling case for granting leave under rule 29(4) had not been made out.

The Court of Appeal considered the arguments presented by both parties. Ms Abdale, counsel for the applicant, argued that the applicant had not intended to abandon his appeal and had faced difficulties in securing legal aid. However, the Court was not convinced by the explanation provided and found that the applicant had not shown an intention to abandon the appeal. Regarding the merits of the appeal, the Court found that the applicant's proposed amended pleadings did not provide a clear basis for an arguable claim. The majority of the Court concluded that the necessary compelling case for granting leave under rule 29(4) had not been made out, and the application for special leave to appeal out of time was refused.

Orders