Legal Research
Cases
Wikeley v Jacomb

Wikeley v Jacomb

Case [2014] NZCA 146 16 April 2014

Civil Litigation & Procedure

Insolvency Law

Type to search within this case.

IN THE COURT OF APPEAL OF NEW ZEALAND

CA836/2013
[2014] NZCA 146

BETWEEN	KENNETH DAVID WIKELEY Appellant
AND	MICHAEL JOHN JACOMB, TRENA KATHLEEN JACOMB AND PETER REGINALD RICHARDSON AS TRUSTEES OF THE GENSET TRUST Respondents

Hearing:	12 March 2014
Court:	Ellen France, French and Cooper JJ
Counsel:	A C Sorrell, M J W Lenihan and D O Jones for Appellant N W Ingram QC and C F Foote for Respondents
Judgment:	16 April 2014 at 10.30 am

JUDGMENT OF THE COURT

A The appeal is dismissed and the decision of the High Court confirmed.

BThe appellant must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by French J)

Introduction

Mr Wikeley was served with a bankruptcy notice by the respondents. The respondents had obtained a judgment against him and wanted to enforce it. Mr Wikeley applied to the High Court to have the bankruptcy notice set aside on the ground that he had a cross claim against the judgment debt. His application was heard by Associate Judge Bell. The Judge dismissed the application.[1] Mr Wikeley now appeals that decision.
[1]Jacomb v Wikeley [2013] NZHC 3034.
The key issues raised by the appeal are as follows:
(a)Does Mr Wikeley’s professed cross claim satisfy the elements of an equitable set-off – in particular, is there a sufficient degree of interdependence between the cross claim and the respondents’ judgment debt, as required by the case law?
(b)Was the Associate Judge correct to find that: (i) it was a foregone conclusion the respondents would obtain relief under the oppressed minority shareholder provisions of the Companies Act 1993; and (ii) this was a complete answer to Mr Wikeley’s cross claim argument?
(c)Was the professed cross claim genuinely triable?

Background

The respondents are trustees of the Genset Trust. One of the trustees, Mr Jacomb, was a friend and business associate of Mr Wikeley.
At the centre of the dispute between the parties is a company, Edel Metals Group Ltd (Edel Metals). Edel Metals was incorporated on 18 November 2008 to invest in a Chilean mineral processing operation that Mr Wikeley had promoted to Mr Jacomb.
Edel Metals issued 100 million shares with a face value of $1 each. Of the 100 million shares, 23,750,000 were issued to the respondents. The remaining shares (76,250,000) were issued to Geier Ltd. Geier Ltd held the shares on a bare trust for Mr Wikeley and interests associated with Mr Wikeley.
Neither the respondents nor Geier Ltd paid for the shares they received.
At the time the company was incorporated, the directors were Mr Jacomb and Mr Wikeley’s accountant, a Mr Gibson.
Between 15 December 2008 and 27 May 2009, the respondents advanced a total of USD 1,500,060 to Edel Metals by way of loan. Mr Wikeley gave the respondents a personal guarantee for half of the loan.
The mining venture was unsuccessful and Edel Metals failed to repay the respondents’ advances. It was ultimately…

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 Wikeley v Jacomb

Details

AGLC: Wikeley v Jacomb [2014] NZCA 146
Case: [2014] NZCA 146
Decision Date: 16 April 2014 at 10.30 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard the appeal of Kenneth David Wikeley against Michael John Jacomb, Trena Kathleen Jacomb, and Peter Reginald Richardson, as trustees of the Genset Trust. The appeal concerned the enforcement of a bankruptcy notice served on Mr. Wikeley, which was based on a judgment debt owed by him. Mr. Wikeley sought to have the bankruptcy notice set aside, arguing that he had a cross claim against the respondents that could potentially extinguish the judgment debt. The High Court dismissed his application, and Mr. Wikeley now appeals that decision. The key issues in this appeal revolve around whether Mr. Wikeley's cross claim satisfies the elements of an equitable set-off, whether the Associate Judge correctly found that the respondents would obtain relief under the Companies Act 1993, and whether the cross claim was genuinely triable.

The Court of Appeal dismissed the appeal, upholding the decision of the High Court. The Court found that Mr. Wikeley's cross claim was not a genuine triable claim and did not satisfy the requirements of an equitable set-off. The Court noted that the call-up of the shares had its origins in a series of events engineered by Mr. Wikeley, which were suggestive of bad faith and impropriety. The Court held that Mr. Wikeley had not provided a satisfactory explanation for these actions, and therefore, the cross claim could not be considered genuine and triable. The Court also found that even if the cross claim had been genuinely triable, the two claims were not sufficiently interdependent to satisfy the requirements of an equitable set-off. The Court further concluded that any potential breach of natural justice by the Associate Judge did not materially affect the outcome of the case. Consequently, the appeal was dismissed, and the decision of the High Court was confirmed. The appellant, Mr. Wikeley, must pay the respondents' costs for a standard appeal on a band A basis and usual disbursements.

Orders