Tarr v Sutcliffe - [2017] NZHC 547

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV 2016-404-001350

[2017] NZHC 547

BETWEEN
PHILIP CLAUDE TARR

Plaintiff

AND

DOUGLAS JOHN SUTCLIFFE

First Defendant

AND

TERENCE SUTCLIFFE AND BRADEN MATSON AS PARTNERS OF FROST & SUTCLIFFE LAWYERS

Second Defendant

Hearing: 20 March 2017

Appearances:

G Curry and M Kilham for the Respondent/Plaintiff

P Hunt for the Applicants/First and Second Defendants

Judgment:

24 March 2017

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
24.03.17 at 3:30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

P C TARR v D J SUTCLIFFE AND T SUTCLIFFE AND B MATSON AS PARTNERS OF FROST & SUTCLIFFE LAWYERS [2017] NZHC 547 [24 March 2017]

The application

[1] The first defendant (Mr Sutcliffe) and the second Defendant (Frost & Sutcliffe) (the firm) apply for summary judgment or to strike out causes of action brought by the plaintiff (Mr Tarr) which plead undue influence against Mr Sutcliffe and breach of fiduciary duty against the firm.

[2] Mr Tarr also brought his proceeding against His former wife Mrs Tarr but has now since discontinued those claims by which he pleaded Mrs Tarr acted fraudulently in regard to those matters pleaded against Mr Sutcliffe and the firm.

[3] The defendants also apply for an order that Mr Tarr provide security for payment of costs.

Background

[4] Mr and Mrs Tarr were married in 1979. On 13 April 1993 they separated. Mr Sutcliffe and the firm had been their solicitors throughout their marriage. Despite their separation Mr Tarr pleads he and Mrs Tarr maintained a business relationship. In 1996 Mr Tarr entered into a new personal relationship with a new partner.

[5] Mr Tarr pleads that following their separation he and Mrs Tarr continued to have a harmonious marital relationship and maintained a business relationship and that in 1996 they decided to purchase a property at Kepa Road, Orakei (the property). Of significance to his proceeding is Mr Tarr’s claim that the purchase of the property was to be part of a joint venture. He said they briefed Mr Sutcliffe of the firm to act for them.

[6] He and Mrs Tarr visited Mr Sutcliffe at the firm’s offices on 28 February 1996. He says Mr Sutcliffe advised their meeting was necessary to incorporate a new company to become the purchaser of the property. He advised they chose to call the company the Great Empire Limited (GEL) which had been incorporated the previous

day with Mr Sutcliffe’s assistance. Each was appointed a director of GEL and each was issued 500 shares in GEL. GEL obtained a loan from the Bank of New Zealand (BNZ) to purchase the property. Mr Tarr says BNZ would not advance funds for the purchase unless he and Mrs Tarr were to become equal shareholders and each to sign personal guarantees.

[7] Mr Tarr pleads the property was purchased in order to carry on business in common with a view to making a profit. He says…

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 Tarr v Sutcliffe

Details

AGLC: Tarr v Sutcliffe [2017] NZHC 547
Case: [2017] NZHC 547
Decision Date: 24 March 2017

CaseChat Overview and Summary

Philip Tarr brought a proceeding against Douglas Sutcliffe and the law firm Frost & Sutcliffe, alleging that Mr Sutcliffe exercised undue influence over him in relation to a share transfer and that the firm breached their fiduciary duties. The defendants applied for summary judgment, to strike out the proceeding, and for security for costs. The Court dismissed the summary judgment/strike out applications and granted the security for costs application. The proceeding was stayed pending payment of security into Court by the plaintiff. The defendants were ordered to pay costs and the plaintiff was ordered to pay costs upon their unsuccessful opposition to the plaintiff’s security for costs claim. The Court found the proceeding could not be dismissed as there remained genuine issues for trial. The Court considered the principles of laches, issue estoppel and abuse of process but found that the proceeding could not be dismissed on those grounds. The Court also found that the plaintiff’s impecuniosity was unlikely to be caused by the events he alleged. It was more likely that his current financial position was attributable to factors unrelated to the company and property in question. Security for costs was granted in the amount of $20,000.

Orders