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Williams v BDO Auckland

Williams v BDO Auckland

Case [2020] NZHC 2886 3 November 2020

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-2097

[2020] NZHC 2886

IN THE MATTER OF FIVE STAR CONSUMER FINANCE LIMITED

BETWEEN

NEILL ALLAN WILLIAMS

Plaintiff

AND

BDO AUCKLAND
First Defendant

RICHARD DALE AGNEW, ANTHONY DAVID KENNETH BOSWELL and COLIN THOMAS McCLOY

Second Defendants

COVENANT TRUSTEE SERVICES LIMITED
Third Defendant

OFFICIAL ASSIGNEE

Fourth Defendant

Hearing: 23 June 2020

Appearances:

The plaintiff in person, with his McKenzie Friend, Mr Balzat MC Smith and HE Savage for the First Defendant

NFD Moffat and RA Morris for the Second Defendants J Adams for the Third Defendant

Judgment:

3 November 2020

JUDGMENT OF ASSOCIATE JUDGE SMITH

This judgment was delivered by me on 3 November 2020 at 5pm

……………………………………….
Registrar/Deputy Registrar

Williams v BDO Auckland & Ors [2020] NZHC 2886 [3 November 2020]

[1] The defendants all apply for summary judgment, or in the alternative, orders striking out Mr Williams’ claims against them. If they are not successful with those applications, they ask for an order fixing security for their costs of the proceeding.

The parties, and Mr Williams’ claims

[2] Mr Williams’ claims arise out of the collapse of a finance company called Five Star Consumer Finance Limited (Five Star). Five Star collapsed and was put into receivership on 29 August 2007.

[3] Five Star was an issuer of debt securities regulated under the Securities Act 1978 and the Securities Regulations 1983. As such, it was required to appoint a statutory trustee to act on behalf of investors. The trustee was the third defendant, Covenant Trustee Services Limited (Covenant), appointed under a debenture trust deed entered into by Five Star and Covenant on 27 April 2001 (the debenture trust deed).

[4] The first defendant, BDO Auckland (BDO), was Five Star’s auditor at all material times up to the date Five Star was put into receivership.

[5] The second defendants (collectively, “the receivers”) are partners or former partners in PriceWaterhouseCoopers, Auckland. At different times, they acted as receivers of Five Star, appointed by Covenant.

[6] The fourth defendant, the Official Assignee (the Assignee), was appointed liquidator of Five Star by order of this Court made on 6 December 2013.

[7] Mr Williams is a gentleman in his eighties. He says in his statement of claim filed on 30 September 2019 that he is the assignee of various debenture securities in Five Star, and that he is entitled to sue in that capacity. He also sues in his capacity as trustee of a trust known as the Antares Consumer Trust (the Trust), which he says holds 4,096,226 shares in a company called Antares Finance Holdings Limited (Antares). Mr Williams pleads that Antares was the sole shareholder of Five Star from November 2005, when it acquired the shareholding of Five Star Finance Limited.

The claim against BDO

[8] Mr Williams’ first claim is against BDO, for alleged breaches of duty as auditor of Five Star’s financial statements in the period before Five Star was put into…

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 Williams v BDO Auckland

Details

AGLC: Williams v BDO Auckland [2020] NZHC 2886
Case: [2020] NZHC 2886
Decision Date: 3 November 2020

CaseChat Overview and Summary

The plaintiff, Neill Williams, sued the defendants for damages for their alleged negligence in connection with the collapse of Five Star Consumer Finance Limited. The defendants applied for summary judgment or, in the alternative, orders striking out Mr Williams’ claims against them, and/or for security for their costs of the proceeding. The High Court held that the claims were statute-barred and that Mr Williams lacked standing to sue the defendants, in any event. The Court entered summary judgment for the defendants and ordered that they were to be paid costs on a 2B basis.

Orders