Shannon v Shannon - [2020] NZHC 1026

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2019-404-001381

[2020] NZHC 1026

UNDER Sections 164 and 174 of the Companies Act 1993

BETWEEN

ROSS ELLWOOD SHANNON

First Plaintiff

AND

ROSS ELLWOOD SHANNON, RUTH SHANNON and the SHANNON TRUSTEE

COMPANY LIMITED as trustees of the SHANNON FAMILY TRUST
Second Plaintiffs

AND

JONNY SHANNON

Third Plaintiff

continued overleaf….

Hearing: On the Papers

Appearances:

P C Murray for the Plaintiffs

First and Second Defendants in person

Judgment:

18 May 2020

JUDGMENT OF VAN BOHEMEN J

[as to costs on interlocutory application]

This judgment was delivered by me on 18 May 2020 at 1.00pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Solicitors:
P C Murray, Barrister, Auckland Copies to be provided to:
First and Second Defendants

SHANNON v LOWY [as to costs on interlocutory application] [2020] NZHC 1026 [18 May 2020]

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AND
JONATHON DAVID LOWY

First Defendant

AND

GRANT ANDREW SARGENT

Second Defendant

AND

RIPETIME LIMITED

Third Defendant

Introduction

[1] The plaintiffs and the defendants in this proceeding have filed memoranda seeking costs against each other for interlocutory steps taken to date in this proceeding.

[2] The proceeding concerns a dispute over a company called Ripetime Ltd, of which the plaintiffs are shareholders and some are directors. The first and second defendants, Mr Lowy and Mr Sargent, have also been involved in the establishment of Ripetime and also claim to be directors. Mr Lowy and Mr Sargent are also involved with another company, Salvo Ltd. Both Ripetime and Salvo are involved in the development of technology to monitor and manage the maturation of fruit and vegetables.

The proceeding so far

[3] On 12 July 2019, apparently after a breakdown in commercial negotiations between the parties, the plaintiffs filed a statement of claim seeking orders under s 164 of the Companies Act 1993 restraining Mr Lowy and Mr Sargent from holding meetings of the board of Ripetime and removing Mr Lowy and Mr Sargent from the Ripetime board. On the same date, the plaintiffs filed an interlocutory application without notice for an interim injunction seeking orders against Mr Lowy and Mr Sargent. That application was heard by Lang J who made three of the six orders sought but declined the other three on the grounds they were unnecessary.

[4] On 20 September 2019, the plaintiffs filed and served an on-notice application seeking interim injunctions:

(a)Requiring Mr Lowy to transfer to the plaintiffs or Ripetime, all access codes, keys and log-in details for Ripetime;

(b)Preventing Mr Lowy, Mr Sargent and any company associated with them (other than Ripetime) from dealing with any person who had been a customer or potential customer of Ripetime during the previous 2 months;

(c)Preventing Mr Lowy, Mr Sargent and any company associated with them (other than Ripetime) from engaging with any business that competes with the software, hardware and services Ripetime has developed or is developing;

(d)Requiring Mr Lowy and Mr…

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 Shannon v Shannon

Details

AGLC: Shannon v Shannon [2020] NZHC 1026
Case: [2020] NZHC 1026
Decision Date: 18 May 2020

CaseChat Overview and Summary

This case involved a dispute over Ripetime Ltd, a company involved in the development of technology to monitor and manage the maturation of fruit and vegetables. The plaintiffs, who are shareholders and some are directors of Ripetime, filed a statement of claim and an interlocutory application for an interim injunction seeking orders against the defendants, Mr Lowy and Mr Sargent. The defendants, who were also involved in the establishment of Ripetime and claimed to be directors, opposed the application. The plaintiffs subsequently filed an on-notice application seeking further interim injunctions. The defendants opposed the application and provided new information at the hearing before Palmer J. Palmer J declined to grant the orders sought by the plaintiffs, except for one order which was granted on a procedural basis. The plaintiffs discontinued their on-notice application, and the defendants opposed the vacation of the hearing. The parties then filed memoranda seeking costs for the interlocutory steps taken in the proceeding.

The court had to decide whether the plaintiffs were successful in achieving what they sought in their on-notice application and, if so, whether the defendants should pay their costs. The court also had to consider the defendants' claim for costs.

The court held that the plaintiffs were not successful in achieving what they sought in their on-notice application, as Palmer J declined to grant two of the orders sought and the third order was procedural and not opposed by the defendants. The court further held that the defendants' claim for costs was misconceived, as most of the legal costs claimed were incurred before the on-notice application was filed, the legal costs claimed were actual costs and not calculated in accordance with the principles in the High Court Rules, the defendants were not entitled to recover the costs of their own time when they were not legally represented, and the defendants were not the successful party. The court dismissed the plaintiffs' and defendants' costs applications in relation to the on-notice application and reserved costs in relation to the without notice application.

The court dismissed the plaintiffs' and defendants' costs applications in relation to the on-notice application and ordered that the costs of that application shall lie where they fall, as do the costs incurred in relation to the costs applications. The court reserved costs in relation to the without notice application.

Orders