Slavich v Hughes - [2012] NZHC 3117

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2011-019-1186 [2012] NZHC 3117

BETWEEN JOHN KENNETH SLAVICH AND ANTHONY NICHOLAS SLAVICH AS TRUSTEES OF THE KAS FAMILY TRUST
Plaintiffs

ANDCHRISTOPHER JOHN HUGHES Defendant

Hearing: 16 November 2012

Counsel: AJ Nolan for plaintiffs
R Scott for defendant

Judgment: 22 November 2012

JUDGMENT OF ASSOCIATE JUDGE FAIRE [on application for summary judgment]

Solicitors: AJ Nolan, PO Box 1268, Hamilton
McElroys, PO Box 835, Auckland 1140

JK SLAVICH AND AN SLAVICH AS TRUSTEES OF THE KAS FAMILY TRUST V HUGHES HC HAM CIV-2011-019-1186 [22 November 2012]

The applications

[1] The defendant applies for an order granting summary judgment against the

plaintiffs in respect of the plaintiffs’ amended statement of claim dated 6 March

2012.

[2] The defendant, in the alternative, applies for an order requiring that the plaintiffs give security for costs in an amount to be fixed by the Court and for a consequential order staying the proceedings until security is given.

The pleadings

[3] The amended statement of claim was drawn by the first-named plaintiff. It is a prolix document. Mr Nolan, who has now been instructed as counsel for the plaintiffs, advised me that I should proceed on the basis that there are two causes of action pleaded in the amended statement of claim. They are that:

(a) The defendant is in breach of a fiduciary duty owed to the plaintiffs arising out of documents created for the purpose of inviting a further share purchase by the plaintiffs in Pacer Print Group Limited, a company in which the plaintiffs held 25 per cent of the shareholding at the time the documents were issued; and

(b) The same circumstances give rise to breach of s 9 of the Fair Trading

Act 1986.

The grounds in support of the application

[4] The defendant asserts that:

(a) The circumstances do not give rise to any fiduciary duty or obligation owed by the defendant to the plaintiffs; and

(b)The defendant has made no representation to the plaintiffs. Therefore it is asserted that no circumstances exist which might ground a claim pursuant to s 9 of the Fair Trading Act 1986. In addition, the defendant says that even if such a claim existed it is now statute- barred by the operation of s 43 of the Fair Trading Act 1986.

The Court’s approach to a defendant’s summary judgment application

[5] Rule 12.2(2) of the High Court Rules requires that the defendant satisfy the court that none of the causes of action in the plaintiff’s statement of claim can succeed.

[6] In Westpac Banking Corp v MM Kembla (New Zealand) Ltd the Court of Appeal noted the following when dealing with r 136(2), the predecessor of r 12.2(2):1

[58] The applications for summary judgment were made under R 136(2) of the High Court Rules which permits the Court to give judgment against the plaintiff “if the defendant satisfies the Court that none of the causes of action in the plaintiff's statement of claim can succeed”.

[59]…

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.

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Details

Case: [2012] NZHC 3117
Decision Date: 22 November 2012

CaseChat Overview and Summary

In Slavich v Hughes, the defendant, Christopher John Hughes, applied for summary judgment against the plaintiffs, John Kenneth Slavich and Anthony Nicholas Slavich as trustees of the KAS Family Trust. The plaintiffs' amended statement of claim alleged that the defendant was in breach of a fiduciary duty and breached s 9 of the Fair Trading Act 1986. The defendant argued that there was no fiduciary duty owed to the plaintiffs and that the claim under the Fair Trading Act 1986 was statute-barred.

The court found that there was no fiduciary duty owed by the defendant to the plaintiffs as there was no relationship that could be classified as inherently fiduciary. Additionally, the court concluded that there was no reasonable cause of action available to the plaintiffs based on breach of s 9 of the Fair Trading Act 1986 as there was no evidence that the defendant made any representation to the plaintiffs that could mislead or deceive them. The court also found that the Fair Trading Act 1986 cause of action was barred by the limitation period under s 43(5) of the Act.

The court granted summary judgment in favour of the defendant and dismissed the plaintiffs' claims. The defendant was also entitled to costs for the proceeding, which were to be determined between the parties or referred to the court if the parties could not agree.

Orders