Stanley Construction Limited v Stanley - [2025] NZHC 717

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2021-419-312 [2025] NZHC 717

UNDER The Companies Act 1993 and the Construction Contracts Act 2002

IN THE MATTER OF

The liquidations of Stanley Construction Ltd and Stanley Construction (Auckland) Limited

BETWEEN

STANLEY CONSTRUCTION LIMITED (in

liquidation) and STANLEY

CONSTRUCTION (Auckland) LIMITED

(in liquidation) First Plaintiffs

DAMIEN MITCHELL GRANT and ADAM STEVENSON BOTTERRILL

Second Plaintiffs

AND

KEVIN THOMAS STANLEY

First Defendant (Discontinued) Cont. over

Hearing: 26 November 2025

Counsel:

F Tuteja and B McGleish for the Plaintiff

C Brick for QBE Insurance (Australia) Limited

Minute:

31 March 2025

MINUTE OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 31 March 2025 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Waterstone Insolvency, Auckland Fee Langstone, Auckland

STANLEY CONSTRUCTION LTD (in liq) v STANLEY [2025] NZHC 717 [31 March 2025]

ROBERT STEPHEN MARSHALL
Second Defendant

CRAIG CHARLES DAVISON
Third Defendant (Discontinued)

ANDQBE INSURANCE (AUSTRALIA) LIMITED
Third Party

CIV-2023-419-140

BETWEEN QBE INSURANCE (AUSTRALIA)
LIMITED
Plaintiff

AND KEVIN THOMAS STANLEY
First Defendant
ROBERT STEPHEN HALL
Second Defendant
CRAIG CHARLES DAVISON
Third Defendant

Introduction

[1] These two proceedings have been consolidated.1 The first proceeding was filed in 2021 by the first plaintiff companies and their liquidators against their three directors (2021 Proceeding). The three directors have filed a third-party claim in those proceedings against QBE Insurance (Australia) Ltd (QBE). QBE then filed separate proceedings in 2023 against the three directors seeking declarations in respect of the directors’ and officers’ (D&O) insurance policy issued by QBE on which the directors rely in their third-party claim in the 2021 Proceeding (2023 Proceeding).

[2] Two of the three directors have settled with the plaintiffs in the 2021 Proceeding but continue to pursue their claim against QBE as a third party.

[3] The plaintiffs in the 2021 Proceeding now seek to join QBE as a defendant to the 2021 Proceeding on the following grounds:
a.[The first plaintiffs] are entitled to make a claim under the Policy; it is the insured party, the payee, and the beneficiary under the Policy.

b.[The first plaintiffs] are companies in liquidation and the Liquidators have brought the 2021 Proceeding as a means of recovery for [the first plaintiffs] and a determination that [the first plaintiffs] are entitled to receive recovery under the Policy ought to be enforceable by the Liquidators on behalf of [the first plaintiffs].

c.The Defendants are understood to be not in a good position to repay in full any adverse judgment order.

d.Whilst the Defendants have brought a claim against QBE, it is in respect of a recovery of their own individual respective liabilities following settlement with the Plaintiffs. It does not account for the Remaining Defendant’s claim. [The first plaintiffs] are not a party to those proceedings.

e.The [2023] Proceedings and 2021 Proceedings have been consolidated, thus recognising the Plaintiff’s interest as against QBE and vice versa.

f.In the event the Defendants do not, or…

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: [2025] NZHC 717
Decision Date: 31 March 2025

CaseChat Overview and Summary

The consolidated proceedings concern claims arising from the liquidations of Stanley Construction Ltd and Stanley Construction (Auckland) Limited. The first plaintiffs, the liquidators of these companies, sought to join QBE Insurance (Australia) Limited as a defendant in their proceedings against the three directors of the companies. The plaintiffs argued that they were entitled to make a claim under the directors’ and officers’ (D&O) insurance policy issued by QBE. QBE opposed the joinder, arguing that the policy did not provide for a direct claim by the plaintiffs and that the issues required to be determined were already before the court.

The court considered the principles of joinder under the High Court Rules 2016, which require a tenable cause of action and that the presence of the proposed party may be necessary to adjudicate on and settle all questions involved in the proceeding. The court found that the plaintiffs had no tenable claim under the D&O policy in respect of the directors’ liability to them. The policy provided cover for the directors in respect of their liabilities incurred in the course of their duties, subject to the company indemnifying them. The plaintiffs had not indemnified the directors and therefore had no claim under the policy. The court also found that the plaintiffs’ interest in the claim under the policy was insufficient to warrant joinder, as the directors had settled with the plaintiffs and were pursuing their own claims against QBE. The court concluded that there was no jurisdiction to join QBE as a defendant.

The plaintiffs’ application for joinder of QBE as a defendant was declined. QBE was entitled to costs, and the parties were directed to confer on the amount of costs to be paid.

Orders