Waller v Davies - [2007] NZCA 51

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IN THE COURT OF APPEAL OF NEW ZEALAND
CA65/05
[2007] NZCA 51
BETWEENJOHN ANTHONY WALLER AND RICHARD DALE AGNEW

Appellants

ANDSTEPHEN JOHN DAVIES

First Respondent
ANDDAVIES & CO SOLICITORS NOMINEE COMPANY LTD

Second Respondent
ANDGEOFFREY ANDREW HITCHINGS AND TERENCE RICHARD HITCHINGS

Third Respondents
ANDDOUGLAS WALTER EDWARDS AND DENISE ANNE EDWARDS

Fourth Respondents
ANDQING SHENG SHI

Fifth Respondent
ANDNICHOLAS LOUISE WADEY AND JEREMY ALAN MILTON

Sixth Respondents

Hearing:24-26 July 2006

Court:Hammond, Randerson and Panckhurst JJ
Counsel:M J Tingey and J C Caird for Appellants

A R Galbraith QC and A R B Barker for First Respondent
S R G Judd and J W Appleby for Second, Third, Fourth, Fifth and Sixth Respondents

Judgment:7 March 2007 at 11 am

JUDGMENT OF THE COURT

AIn the case of the two properties which were the subject of forgeries, and with the consent of the statutory managers, those two claims are struck out of the application for directions. Costs on those two claims are to be fixed by the High Court, if counsel cannot agree on them.
BWith respect to the other ten properties, we dismiss the appeal by the statutory managers. We allow the cross-appeal by the first respondent. We set aside the various orders made by the trial Judge. All the respondents will, in consequence, have judgment against the appellant statutory managers. The costs orders made in the High Court by Harrison J on 1 June 2005 are set aside. Costs are reserved, in the High Court, on these claims. If counsel cannot agree on such costs, they are to be fixed by that Court.
CIn this Court, costs are reserved on these ten claims. If counsel cannot agree on costs, they can file memoranda in this Court.
___________________________________________________________________

REASONS OF THE COURT
(Given by Hammond J)
Table of Contents

Para No

Introduction  [1]
The background in more detail
(i)     The underlying scheme  [6]
(ii)     Mr Davies acts for all parties  [8]
(iii)    CH Finance collapses  [9]
(iv)    The essence of the legal problems created by the CH Finance
                   scheme[12]
(v)     The outcome in the High Court[14]
Some collateral issues on the appeal  [23]
An adverse interest?
(i)     The law  [29]
(ii)     The transactions[34]
(iii)    The pleadings[40]
(iv)    But fraudulent misrepresentation emerges in the judgment
                   as the basis of an adverse interest  [52]
(v)     Common law mortgage  [69]
(vi)    Option to purchase  [75]
Should the case be remitted to the High Court and “reopened”             [77]
The other issues in the case  [96]
Conclusion  [99]

Introduction
[1] We have before us two appeals and a cross-appeal from a substantive decision delivered by Harrison J at Auckland on 24 March 2005 (now reported at [2005] 3 NZLR 814 (HC)) and a costs ruling delivered on 1 June 2005 (now reported at (2005) 17 PRNZ 747 (HC)).
[2] The appellants are the statutory managers appointed under the Corporations (Investigation and Management) Act 1989 in respect of a group of companies we…

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: [2007] NZCA 51
Decision Date: 7 March 2007

CaseChat Overview and Summary

The Court of Appeal of New Zealand considered an appeal and cross-appeal concerning the fraudulent misrepresentation and registration of mortgages by CH Finance on properties owned by ten homeowners. The statutory managers appointed under the Corporations (Investigation and Management) Act 1989 appealed the High Court's decision, while the first respondent, Mr Davies, cross-appealed the same decision. The Court of Appeal found that the original homeowners did not retain any equitable interest in their properties, as the case was never run as a misrepresentation case and there was no basis to establish such an interest. The Court of Appeal dismissed the appeal by the statutory managers and allowed the cross-appeal by Mr Davies. Consequently, the statutory managers' application for an order directing the Registrar of Lands to cancel the mortgages was dismissed. The Court of Appeal set aside the orders made by the High Court and reserved costs in the High Court, with the option for counsel to file memoranda if they could not agree on costs.

Orders