Yarrow v Jacquet - [2016] NZCA 345

IN THE COURT OF APPEAL OF NEW ZEALAND

CA720/2015
[2016] NZCA 345

BETWEEN	PAUL STEVEN YARROW First Appellant
AND	PAUL STEVEN YARROW AND MICHAEL CHANEL FINNIGAN AND SALVATORE RUSSO AS TRUSTEES OF THE PS YARROW FAMILY TRUST (NO 2) Second Appellants
AND	JEAN PHILLIPPE THADDEE JACQUET AND ESTHER TCHOUA JACQUET AS TRUSTEES OF THE ESTHER JACQUET FAMILY TRUST First Respondents
AND	JEAN PHILIPPE THADDEE AND TREVOR KEITH BOSS AS TRUSTEES OF THE JEAN PHILLIPPE THADDEE JACQUET FAMILY TRUST Second Respondents
AND	JEAN PHILLIPPE THADDEE JACQUET AND ESTHER TCHOUA JACQUET Third Respondents
AND	TREVOR KEITH BOSS AND BRIAN ERSKINE-SHAW AS TRUSTEES OF THE TREVOR BOSS FAMILY TRUST Fourth Respondents

Hearing:	14 and 17 June 2016
Court:	Harrison, Mallon and Toogood JJ
Counsel:	G M Illingworth QC for Appellant K J Patterson for Respondents
Judgment:	20 July 2016 at 10.30 am

JUDGMENT OF THE COURT

A The application for leave to adduce new evidence is declined.
BThe appeal is allowed and the summary judgment is set aside.
CThere is no order as to costs.

____________________________________________________________________

REASONS OF THE COURT

(Given by Harrison J)

Introduction

Paul Yarrow appeals against a summary judgment entered against him on liability in the High Court in favour of the respondents (collectively “the trustees”).[1] The amount of damages remains to be determined.[2]
[1]Jacquet v Yarrow [2015] NZHC 2873.
[2]The trustees abandoned their application for summary judgment against the nominated second appellants.
Mr Yarrow originally represented himself in this Court. His synopsis of submissions raised numerous grounds of appeal which it is unnecessary for us to address. He also applied for leave to adduce new evidence.
At the last moment Mr Yarrow instructed Mr Illingworth QC to represent him before us. Mr Illingworth developed a ground of appeal which did not feature prominently in Mr Yarrow’s notice of opposition to the trustees’ application for summary judgment or in his own synopsis of submissions. In the result we are satisfied that this ground provides an arguable defence to the trustees’ claim. The appeal must be allowed accordingly.
It is thus unnecessary for us to determine Mr Yarrow’s application for leave to adduce further evidence and it is accordingly declined.

Background

The background is briefly as follows. Gilles Bakery Ltd (GBL) was a commercial baker operating in Rotorua. Initially the trustees held all the company’s shares. In 2001 they sold 75 per cent to Yarrows (the Bakers) Ltd (Yarrows), a Taranaki company. Paul Yarrow, a son of the company’s founder, and his brother, John, were directors.
Yarrows later sought full ownership of GBL. On 30 June 2006 the trustees agreed to sell their remaining 25 per cent shareholding to Yarrows. The agreed purchase price of $2.25 million was to be satisfied by GBL buying its own 25 per cent shareholding. In order to finance the transaction GBL was to issue 2.25 million redeemable preference shares to the trustees, credited as fully paid and redeemable at the trustees’ option on one month’s notice to GBL after 1 July 2012. Yarrows…

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 Jacquet

Details

AGLC: Yarrow v Jacquet [2016] NZCA 345
Case: [2016] NZCA 345
Decision Date: 20 July 2016 at 10.30 am

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, Paul Steven Yarrow and others appealed against a summary judgment entered against them on liability in favour of the respondents, the trustees. The amount of damages remained to be determined. The appeal was brought against the decision of the High Court, and the case was heard by Harrison, Mallon, and Toogood JJ. Counsel for the appellant was G M Illingworth QC, and for the respondents, K J Patterson. The judgment was delivered on 20 July 2016.

The central legal issue before the Court of Appeal was whether the trustees' counsel should have disclosed a 2007 Deed of Settlement when applying for summary judgment and whether the appellant's counsel should have developed an argument based upon it. The Deed of Settlement was an unusual document that purported to cancel the original redeemable preference share issue and substitute a sale to YTB for $2,250,000 with GBL making an advance of that amount to YTB. The Deed of Settlement also ratified and confirmed the issue and paying up of the RPS, the terms of issue, and the redemption of 670,000 of the RPS that had already taken place. The trustees' counsel should have disclosed the 2007 Deed of Settlement when applying for summary judgment, and the appellant's counsel should have developed an argument based upon it. The Deed of Settlement's terms were such as to allow Mr Yarrow an arguable defence that his liability under the guarantee had been discharged.

The Court of Appeal allowed the appeal and set aside the summary judgment entered in favour of the trustees in the High Court. In the normal course, costs would follow the event. However, Mr Yarrow raised a number of grounds of appeal which were unarguable, and the trustees were put to unnecessary expense as a result. Also, his application to adduce further evidence was declined. In these circumstances, costs should lie where they fall. There will be no order as to costs.

Orders