Sharrock v Wedd - [2018] NZHC 603

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2016-441-107

[2018] NZHC 603

UNDER the Companies Act 1993

BETWEEN

GERALD ERRINGTON SHARROCK

Plaintiff

AND

STEPHEN CHARLES WEDD

First Defendant

JOHN BRIAN KIPPING
Second Defendant

BRENTON JOHN HUNT
Third Defendant

AFFORDABLE RESIDENTIAL LIMITED
Fourth Defendant

REGISTRAR OF COMPANIES

Fifth Defendant

Hearing: On the Papers

Counsel:

R B Hucker for the Plaintiff Second Defendant in Person

Judgment:

5 April 2018

COSTS JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by Associate Judge Smith on 5 April 2018 at 10.15 am, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Hucker and Associates, Auckland

SHARROCK v WEDD [2018] NZHC 603 [5 April 2018]

Introduction

[1] On 26 July 2017, I entered summary judgment in favour of the plaintiff (Mr Sharrock) (the July judgment).1 I made declarations that Mr Sharrock is a shareholder in the fourth defendant (Affordable) and that the second defendant (Mr Kipping) had not been validly appointed as a director, and was not a director of Affordable. I ordered the Companies Register to be rectified accordingly,2 and also declared that the third defendant (Mr Hunt) was not validly appointed as liquidator of Affordable.

[2] The relevant background to the dispute between the parties is set out in the July judgment.3 On the issue of costs, I noted in the July judgment that Mr Sharrock had sought indemnity costs and/or increased costs. I indicated that my inclination was that costs should be awarded against Mr Kipping on a 2B basis, with disbursements to be fixed by the Registrar.4 However, I allowed Mr Sharrock to file any costs submission within 20 working days of the date of the July judgment. Any submissions in opposition were to be filed within 15 working days after service of Mr Sharrock’s submissions.5

[3] On 21 August 2017, Mr Kipping filed a notice of appeal against the July judgment, contending that the first defendant (Mr Wedd) and Mr Kipping had arguable defences, and that the matters in issue should be referred back to the High Court for a full hearing. The appeal was deemed abandoned on 6 December 2017.

[4]Mr Wedd was adjudicated bankrupt after the hearing, on 27 April 2017.

The applications

[5] Mr Hucker filed a memorandum claiming costs. In it, he noted that Mr Hunt had consented to the order sought removing him as liquidator of Affordable, and that

1      Sharrock v Wedd [2017] NZHC 1739 [“July judgment”].
2      July judgment at [103](c).
3      At [7]–[31].
4      Noting that there had been no purported filing of a notice of discontinuance of Mr Sharrock’s claim; that Mr Wedd has been adjudicated bankrupt; and that neither Mr Wedd nor Mr Kipping had legal representation.
5      At [99]–[102].

the fifth defendant (the Registrar of Companies) had agreed to abide by the Court’s decision. No costs are sought from those parties. Costs are sought against Mr Kipping and Mr Wedd on a joint and several…

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 Sharrock v Wedd

Details

AGLC: Sharrock v Wedd [2018] NZHC 603
Case: [2018] NZHC 603
Decision Date: 5 April 2018

CaseChat Overview and Summary

The case of Sharrock v Wedd involved a dispute regarding the validity of a director's appointment and the rectification of a company register. Gerald Errington Sharrock sought declarations and rectification of the Companies Register concerning his shareholding in Affordable Residential Limited and the validity of the appointment of Stephen Charles Wedd and others as directors. The case was heard by Associate Judge Smith in the High Court of New Zealand, Napier Registry. The primary legal issues revolved around the validity of the defendants' positions and the entitlement to costs, including an uplift above scale costs, against the defendants.

The court found that Stephen Charles Wedd and John Brian Kipping did not have valid defences to the claims. While Mr Kipping had some grounds to challenge Mr Sharrock's shareholding, his conduct in the proceeding was unreasonable and added unnecessary costs. Consequently, the court awarded costs against Mr Kipping on a 2B basis with a 10% uplift and ordered him to pay the full amount of costs and disbursements claimed by Mr Sharrock. Regarding Wedd, the court noted that his bankruptcy had halted the proceeding under the Insolvency Act 2006. The court directed the Registrar to notify the Official Assignee of Mr Wedd's bankruptcy and to seek any objections to the continuation of the costs claim against Wedd. The applications relating to Wedd were adjourned pending further submissions.

In summary, the court awarded costs to Mr Sharrock against Mr Kipping with a modest uplift and directed further consideration of the costs claim against Mr Wedd in light of his bankruptcy.

Orders