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Walker v Forbes

Walker v Forbes

Case [2015] NZHC 1730 28 July 2015

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV 2012-409-2486 [2015] NZHC 1730

BETWEEN ROBERT BRUCE WALKER AND JOHN MARSHALL SCUTTER AS LIQUIDATORS OF PROPERTY VENTURES LIMITED (IN LIQUIDATION) AND ROBERT BRUCE WALKER AS LIQUIDATOR OF FIVE MILE HOLDINGS LIMITED (IN RECEIVERSHIP AND LIQUIDATION) AND MONTECRISTO
CONSTRUCTION COMPANY LIMITED (IN LIQUIDATION), CASTLE STREET VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION), LIVINGSPACE PROPERTIES (IN RECEIVERSHIP AND LIQUIDATION) First Plaintiff
PROPERTY VENTURES LIMITED (IN LIQUIDATION)
Second Plaintiff
FIVE MILE HOLDINGS LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Third Plaintiff
CASHEL VENTURES LIMITED (IN LIQUIDATION)
Fourth Plaintiff
TAY VENTURES LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)
Fifth Plaintiff
LIVINGSPACE PROPERTIES LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
Sixth Plaintiff
BEECHNEST VENTURES LIMITED (IN LIQUIDATION)
Sixth Plaintiff

WALKER AND SCUTTER & ORS v FORBES & ORS [2015] NZHC 1730 [28 July 2015]

TUAM VENTURES LIMITED (IN RECEIVERSHIP AND LIQUIDATION) Eighth Plaintiff

CASTLE STREET VENTURES LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)
Ninth Plaintiff

LICHFIELD VENTURES LIMITED (IN RECEIVERSHIP AND IN LIQUIDATION)
Tenth Plaintiff

92 LICHFIELD LIMITED(IN RECEIVERSHIP AND LIQUIDATION) Eleventh Plaintiff

ST ASAPH VENTURES LIMITED (IN LIQUIDATION)
Twelfth Plaintiff

MONTECRISTO CONSTRUCTION COMPANY LIMITED (IN LIQUIDATION)
Thirteenth Plaintiff

ANDAUSTIN JOHN FORBES First Defendant

ALISTER SPEDDING JOHNSTON Second Defendant
GORDON LEWIS HANSEN Third Defendant
DAVID IAN HENDERSON (A BANKRUPT)
Fourth Defendant
ADOLF DE ROOS Fifth Defendant
DANIEL JAMES GODDEN Sixth Defendant
PWC (SUED AS A FIRM) Seventh Defendant
FRIGHT AUBREY LIMITED (IN LIQUIDATION)
Eighth Defendant
RICHARD WILLIAMS GIBBONS Ninth Defendant

ANDVERO LIABILITY INSURANCE LIMITED
Third Party
QBE INSURANCE (INTERNATIONAL LIMITED)
Second Third Party

Hearing: 10-11 June 2015

Counsel: J B M Smith QC and T G H Smith for Plaintiffs
W Palmer for First Defendant
Fourth Defendant in Person
B Gray QC and P M Fee for Seventh Defendant

Judgment: 28 July 2015

JUDGMENT OF BROWN J

Table of Contents

Paragraph No.

Overview [1] The different perspectives [8] PwC’s view [9]
The plaintiffs’ perspective [18] Relevant principles [21] Is the Assignment discrete from the litigation funding arrangement? [27] A manifestation of abuse on traditional grounds? [31] Use of the Court’s process for an improper purpose [34]

Use of the Court’s process in an improper way [56]

Does the funding arrangement effectively constitute the assignment of a cause of action to a third party in
circumstances where such an assignment is not permissible? [63] PwC’s argument [65] The plaintiffs’ rejoinder [73] Discussion [80]

Conclusion [91]

Overview

[1] In 2006 Property Ventures Ltd executed a General Security Agreement (GSA) in favour of Hanover Finance Ltd securing loans by Hanover to Five Mile Holdings Ltd. Three years later Hanover assigned the GSA to Allied Farms Investments Ltd (Allied).

[2] In late November 2009 a receiver was appointed to Five Mile and land in

Queenstown secured under the GSA was realised leaving a balance owed to Allied of

$39 million. Property Ventures Ltd was placed into receivership in March 2010 and Mr Robert Walker (the Liquidator) was appointed liquidator in July 2010. In November 2012 Property Ventures Ltd (in liquidation) (“PVL”) commenced proceedings against the directors…

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 Walker v Forbes

Details

AGLC: Walker v Forbes [2015] NZHC 1730
Case: [2015] NZHC 1730
Decision Date: 28 July 2015

CaseChat Overview and Summary

The case of Walker and Scutter v Forbes and others [2015] NZHC 1730 involved a dispute between various plaintiffs, who were liquidators of companies in liquidation, and the defendants, which included directors, auditors, and other entities. The plaintiffs sought to recover damages from the defendants for alleged breaches of contract and torts. PwC, acting as a litigation funder, sought a stay of the proceedings on the grounds that the funding arrangement was champertous and constituted an abuse of process. The plaintiffs argued that the assignment of a General Security Agreement (GSA) from Allied to SPF, the litigation funder, was irrelevant to the funding arrangement and did not render the proceedings an abuse of process. The court examined whether the arrangement constituted an abuse of process on traditional grounds or if it amounted to the assignment of a cause of action to a third party in circumstances where such an assignment was not permissible. The court found that the arrangement did not amount to an abuse of process on traditional grounds, as the litigation funder's dual interest did not misuse the court's process for an improper purpose. Additionally, the court concluded that the arrangement did not effectively constitute the assignment of a cause of action to a third party in circumstances where such an assignment was not permissible, as the assignment was of a debt, not a bare cause of action. Consequently, the application for a stay of the proceeding was declined, and the plaintiffs were awarded costs and reasonable disbursements on the application.

Orders