Wilding v Te Mania Livestock Ltd - [2017] NZHC 649

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2014-409-899 [2017] NZHC 649

BETWEEN
TIMOTHY WILDING

First Plaintiff

TE MANIA PROPERTIES LIMITED Second Plaintiff

AND

TE MANIA LIVESTOCK LIMITED First Defendant

WH HOLDINGS LIMITED Second Defendant

JOHN HARRINGTON Third Defendant

HOONG BEE TECK Fourth Defendant

WONG CHUN WIN Fifth Defendant

HONG WEIGOU Sixth Defendant

Hearing:
21, 22, 23, 24, 27, 28, 29, 30 June 2016, 1, 4, 6, 7, 8 July 2016,

7, 8, 9, 10, 14, 15, 16, 17, 18, 21, 22, 23, 24, 25, 28, 29, 30

November 2016, 1, 2 December 2016 to March 2017 (further memoranda and evidence and submissions)

Appearances:

P J Dale and V E Fletcher for First and Second Plaintiffs
T J Mackenzie for First Defendant
B M Russell and R J Hopkins for Second, Fourth and Fifth
Defendants
I G Hunt and C Light for Third Defendant

Interim Judgment:

5 April 2017

INTERIM JUDGMENT OF NICHOLAS DAVIDSON J (WITH REASONS FOR INTERIM JUDGMENT TO FOLLOW)

WILDING & ANOR v TE MANIA LIVESTOCK LTD & ORS [2017] NZHC 649 [5 April 2017]

Introduction

[1] Te Mania Livestock Limited (“TML”) owns the famous Te Mania Aberdeen Angus Stud in North Canterbury. This litigation concerns the future of TML, and thus the Stud.

[2] The principal issue in the litigation is whether the first plaintiff, Timothy Wilding (“Mr Wilding”), should have the opportunity to acquire the shares of the defendant shareholders, or whether, as the third defendant John Harrington seeks, TML should be liquidated. The other defendants, bar the sixth defendant, prefer that their shares be purchased by Mr Wilding at a fair value determined by the Court. If liquidation is not ordered, Mr Harrington adopts the same position. The sixth defendant has taken no part in the litigation.

[3] There are multiple issues for determination relevant to the principal issue, and valuation. This Interim Judgment is delivered shortly before the Reasons for Interim Judgment, because of the governance and operational exigencies facing TML, and the unavoidable length of the Reasons for Interim Judgment. TML, and the parties, must know now the outcome of the litigation. That outcome is as follows.

Disposition

Election

[4] The first plaintiff, Timothy Wilding has the opportunity to purchase the shareholding of the defendants at a fair value which is for immediate “first phase” calculation pursuant to the Schedule to this Interim Judgment, but which will require a “second phase” of consideration if Mr Wilding elects to purchase the shares.

Value of shares – “first phase”

[5] The “first phase” valuation requires some minor calculations and reflected as requiring such in the Schedule, which should be agreed, or the parties may revert to the Court for direction. The parties have expert assistance available to them.

The Lansdowne Lease Settlement

[6] The settlement leaves money which was held in trust for inclusion in the balance sheet reflected in the Schedule, and the plant valuation may require adjustment. The parties should be able to agree on…

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: [2017] NZHC 649
Decision Date: 5 April 2017

CaseChat Overview and Summary

In Wilding v Te Mania Livestock Limited, the High Court of New Zealand was asked to decide whether the first plaintiff, Timothy Wilding, should have the opportunity to acquire the shares of the defendant shareholders, or whether, as the third defendant John Harrington seeks, Te Mania Livestock Limited should be liquidated. Te Mania Livestock Limited owns the famous Te Mania Aberdeen Angus Stud in North Canterbury. The other defendants, bar the sixth defendant, prefer that their shares be purchased by Mr Wilding at a fair value determined by the Court. If liquidation is not ordered, Mr Harrington adopts the same position. The sixth defendant has taken no part in the litigation. The principal issue in the litigation is whether Mr Wilding should have the opportunity to acquire the shares of the defendant shareholders, or whether, as Mr Harrington seeks, Te Mania Livestock Limited should be liquidated.

The Court found that Mr Wilding should have the right to purchase the shareholding of the defendants. The Court found that Te Mania Livestock Limited is not liable to Te Mania Properties Limited. The Court found that no defendant is liable to Te Mania Livestock Limited in respect of the property owned by the second defendant, Lagoon Flat, not being leased to Te Mania Livestock Limited in 2014–2015. The Court found that no defendant is liable to Te Mania Livestock Limited arising from stock mismanagement. The Court found that the land held under licence by Mr Wilding is held in trust for Te Mania Livestock Limited and has the value to Te Mania Livestock Limited attributed in the Schedule attached. The Court found that Mr Wilding is not liable to Mr Harrington in the torts of malicious prosecution or abuse of process. The Court found that there was no overall strategy adopted by the defendants in breach of their obligations to Te Mania Livestock Limited, but elements of conduct by all parties are reviewed in the Reasons for Interim Judgment.

The Court ordered that Mr Wilding has the opportunity to acquire the shares of the defendants at a fair value which is for immediate “first phase” calculation pursuant to the Schedule to this Interim Judgment, but which will require a “second phase” of consideration if Mr Wilding elects to purchase the shares. The Court ordered that Mr Wilding must make an election within 10 working days, based on this Interim Judgment. The election must be made in writing, and advised to the Court and the other parties. If Mr Wilding elects to acquire the shares at fair value he must pay for them, at a price calculated according to the Schedule attached, and the minor adjustments agreed, or further directed, within 10 working days of election. If directions are needed this may be extended, but the intent of this Interim Judgment is that election and payment be made at or close to the timetable dates ordered. It is an express condition of this Interim Judgment that if Mr Wilding elects to purchase the shares, he will not bring any claim in the name of Te Mania Livestock Limited, or Te Mania Properties Limited, against any of the defendants, and it is a further condition that all disputes or potential disputes arising out of the relationship between the parties are at an end. It is a further express condition of this Interim Judgment that none of the defendants will have any liability under any guarantee or otherwise in relation to the liabilities of Te Mania Livestock Limited and that must be established to the satisfaction of the Court before Mr Wilding’s election becomes operative. Should Mr Wilding elect to purchase the shares then a teleconference will be convened to fix a timetable to address residual issues relevant to share value in “phase one” or “phase two”, implementation, and costs. Should Mr Wilding not so elect, then an in-person conference will be convened with urgency. Any party may revert to the Court for urgent clarification or direction as required to effect this Interim Judgment. The timetable may warrant variation, as a matter of fair process or necessity, if a third party is involved in the implementation process, or some unforeseen event arises.

Orders