Teat v Willcocks

[2013] NZCA 162

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA707/2010
[2013] NZCA 162

BETWEEN  JAMES BUNNEY TEAT
Appellant

AND  ARTHUR WILLCOCKS
Respondent

Hearing:         12 November 2012

Court:             Arnold, French and Miller JJ

Counsel:         R B Stewart QC and M A Karam for Appellant
R O Parmenter for Respondent

Judgment:      21 May 2013 at 11.30 am

JUDGMENT OF THE COURT

AThe appeal is dismissed.

BThe appellant must pay the respondent costs for a standard appeal on a band A basis, plus usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Arnold J)

Table of Contents

Para No
Introduction  [1]
Background  [4]
High Court decision  [14]
     Factual matrix  [16]
     Contemporaneous documents  [18]
     Subsequent conduct  [20]
Basis of appeal  [25]
Was there a contract?  [28]
Was the contract varied?  [49]
Decision  [58]

Introduction

1. The respondent, Mr Willcocks, claimed that in September 1999 he and Mr Teat, who were long-standing friends, agreed orally that they would become equal partners in G B Teat Ltd, a family company of which Mr Teat was the major shareholder and the sole director.  According to Mr Willcocks, the terms of the arrangement were that he would acquire 50 per cent of the shares of the company at a price equal to the book value of the shares. 

2. The arrangement was neither formalised nor implemented at the time.  Mr Willcocks worked for the company for a number of years until he and Mr Teat had a falling out.  Mr Willcocks claimed that when he asked Mr Teat to honour their agreement, Mr Teat denied its existence.  Mr Willcocks said that this denial was an act of repudiation by Mr Teat, which he accepted on 10 November 2008.  He issued proceedings seeking damages for breach of contract in the amount of the fair value of the shares in the company as at November 2008.

3. Wylie J issued an interim judgment dealing with liability.[1]   The Judge found that there was an oral contract between Mr Willcocks and Mr Teat for the sale of 50 per cent of the shares in the company at book value.  Mr Teat now appeals against that finding.

Background

[1]      Willcocks v Teat HC Rotorua CIV-2008-463-784, 27 September 2010 [interim judgment].

1. Mr Teat, an engineer, and Mr Willcocks, a chartered accountant, had been friends for more than 40 years.  G B Teat Ltd was established in 1947 by Mr Teat’s father.  It supplies and installs air conditioning units, under-floor heating systems and refrigeration units.  As at September 1999, the company had a share capital of 37,500 $2 shares, of which Mr Teat held 33,001 and Mrs Teat 4,499.

2. In the mid-1970s, Mr Willcocks became involved an engineering business that had been established by his father-in-law.  He was a director and shareholder, ultimately owning 50 per cent of the shares.  The business was operated by Mr Willcocks and his two brothers-in-law, who were also shareholders.  There were differences between them, which came to a head when Mr Willcocks…