Yarrow v Finnigan - [2012] NZHC 2281

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV 2011-433-000330 [2012] NZHC 2281

UNDER The Trustee Act 1956

BETWEEN PAUL STEVEN YARROW Plaintiff

ANDMICHAEL CHANEL FINNIGAN Defendant

Hearing: 4 September 2012

Appearances: J S Campion for the Plaintiff/Respondent
L J Taylor for the Defendant/Applicant

Judgment: 6 September 2012

JUDGMENT OF ASSOCIATE JUDGE CHRISTIANSEN

This judgment was delivered by me on
6 September 2012 at 4:30pm, pursuant to
Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar
Date……………

Solicitors/Counsel:
D Connor, Barrister, Auckland – david.connor@davidconnor.co.nz / steve@dukesons.co.nz
L Taylor, Wellington – les.taylor@stoutstreet.co.nz / imatheson@rmy.co.nz

PAUL STEVEN YARROW V MICHAEL CHANEL FINNIGAN HC NWP CIV 2011-433-000330 [6 September
2012]

[1] The defendant (Mr Finnigan) has applied pursuant to Rule 5.45(1)(b) of the High Court Rules for an order that the plaintiff (Mr Yarrow) give security for costs because there is reason to believe that Mr Yarrow will be unable to pay Mr Finnigan’s costs if Mr Yarrow is unsuccessful in his proceeding against Mr Finnigan.

[2] Mr Yarrow appears to concede he would be unable to meet an adverse award of costs. For him it is submitted that his current impecuniosity has been caused by Mr Finnigan and therefore no order should be made. On behalf of Mr Yarrow it is submitted that the Court should decline to make an order for security because such order would prevent Mr Yarrow from bringing his case to Court; further that it would be unjust to impose an order for costs in circumstances where Mr Finnigan’s wrongful actions were arguably the cause of Mr Yarrow’s impecuniosity.

Mr Yarrow’s claim

[3] Mr Yarrow and his No.2 Family Trust are the shareholders of and he is the director of Yarrows Traditional Foods (1923) Limited (Yarrows Traditional Foods) which wholly owns Yarrows (The Bakers Limited) (In Receivership) (YTB).

[4] There are various other trusts and commercial interests associated with Mr

Yarrow.

[5] Mr Yarrow’s claim pleads that Mr Finnigan was his advisor and agent

because:

(a) There was a relationship of at least 30 years between Mr Finnigan and

the plaintiff’s late father Noel.

(b)Mr Finnigan is a chartered accountant and had provided accounting advice to companies in the Yarrow Group including to Yarrows Traditional foods and to YTB.

(c) From about 20 September 2000 Mr Finnigan was appointed Mr

Yarrow’s Power of Attorney.

(d)During 2006/7 Mr Yarrow expressed concerns to Mr Finnigan about the financial management and governance of the Yarrow Group.

(e) Mr Finnigan set up an office in New Plymouth from which the commercial and business dealings of the Yarrow Group, Mr Yarrow’s interests, and Mr Yarrow personally were dealt with.

(f) In 2008 Mr Finnigan agreed he would work from the New Plymouth head office and oversee all corporate and governance matters relating to the Yarrow Group, Mr Yarrow’s interests and Mr Yarrow personally, and would advise Mr Yarrow on matters affecting his commercial and business interests and those of the Yarrow Group including in relation to actions that could be taken…

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 Yarrow v Finnigan

Details

AGLC: Yarrow v Finnigan [2012] NZHC 2281
Case: [2012] NZHC 2281
Decision Date: 6 September 2012

CaseChat Overview and Summary

The case of Yarrow v Finnigan involves a claim by Paul Steven Yarrow against Michael Chanel Finnigan, asserting that Finnigan, who had been Yarrow's advisor and agent, provided negligent and dishonest advice that led to significant financial losses. The High Court of New Zealand was tasked with deciding whether Yarrow should be required to provide security for costs, given that there was reason to believe he would be unable to pay Finnigan's costs if unsuccessful. The court had to balance the interests of both parties, considering whether an order for security would prevent Yarrow from pursuing his claim and whether Finnigan was protected against unjustified litigation.

The key legal issues were the merits and bona fides of Yarrow's case, the probability that Yarrow's impecuniosity was caused by Finnigan's actions, and whether an order for security would prevent Yarrow from proceeding with his claim. The court considered various factors, including the nature of the claims, the lack of clear evidence supporting Yarrow's allegations, and the significant financial stakes involved. The court noted that Yarrow's claims were largely unsupported by detailed evidence, and there was no clear link between the alleged advice and the financial difficulties faced by Yarrow's companies.

The court concluded that it was appropriate to order security for costs, considering the high amount of relief sought, the complexity of the issues, and the probable costs if Yarrow was unsuccessful. The court ordered Yarrow to pay $25,000 into court as security for costs until the trial setting date was fixed, reserving the right for Finnigan to apply for further security once the trial length was clearer. The court also directed that if security was not paid by the scheduled call date, it would consider an application to strike out the proceeding.

Orders