Yarrow v Noel & Melva Yarrow Charitable Trust - [2017] NZHC 1772

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV-2016-443-000022 [2017] NZHC 1772

BETWEEN
PAUL STEVEN YARROW

Plaintiff

AND

NOEL & MELVA YARROW CHARITABLE TRUST

First Defendant

PETER TENNENT, LINDA MARGARET ROSE WILKINSON, GRANT HASSALL as executors of the estate of NOEL

HENRY YARROW Second Defendants

Hearing: 22 November 2016

Counsel:

P S Yarrow in person
J Long and S J W Devoy for Defendants

Judgment:

28 July 2017

JUDGMENT OF WILLIAMS J

[1] The defendants apply to strike out the plaintiff’s claim or, in the alternative, for an order for security for costs.

[2] The claim is part of a cluster of proceedings brought by the plaintiff in respect of the collapse of the Yarrow group of companies and its aftermath. It relates specifically to the failure of a proposed purchase by Sumitomo Corporation of a
50 per cent share in one of the Yarrow Group’s Australian companies. The plaintiff argues, as far as I can tell, that the failure of that transaction triggered the receivership of the group and the first and second defendants were implicated in that
failure through their common denominator, Mr Michael Finnigan.

YARROW v YARROW CHARITABLE TRUST & ANOR [2017] NZHC 1772 [28 July 2017]

[3] The essential argument by the defendants is that the claim prepared (in its latest iteration at least), without assistance of legal counsel, is incoherent and there is no prospect of that changing through re-pleading. No duty is properly pleaded, no breach is pleaded of any relevant duty, and no causation alleged. Very responsibly, Mr Long accepted that it may be possible to construct a claim in respect of these two defendants arising from the role of Mr Finnigan (the defendant in associated
litigation)1. There is, he accepts, a kernel of a possible pleadable claim, albeit a

novel one with significant difficulties. The problem is that it has not been pleaded.

[4] I have already struck out the related proceeding against Mr Finnigan. In essence, this proceeding is derivative of that in the sense that here the plaintiff imputes Mr Finnigan’s knowledge and alleged wrongful acts (as also pleaded in the related proceeding) to the charitable trust and the executors of Noel Yarrow’s estate. This is because, at relevant times, Mr Finnigan was himself a trustee of the charitable trust and executor of the estate.

[5] The defendants complain about the delay in bringing proceedings – they were not brought until an unless order was made by Muir J on 8 March 2016, triggering the initiation of an arbitration and subsequently these proceedings with respect to the so-called Sumitomo transaction. The defendants complain that the plaintiff advised he would engage counsel to re-shape his claim on 21 June 2016, but never did. The plaintiff, it was said, gave similar advice to the Court on 19 July 2016 and a direction was given by Associate Judge Smith for an amended claim to be filed by 9 August
2016, but this was not done. By minute of 14 September 2016,…

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 Noel & Melva Yarrow Charitable Trust

Details

AGLC: Yarrow v Noel & Melva Yarrow Charitable Trust [2017] NZHC 1772
Case: [2017] NZHC 1772
Decision Date: 28 July 2017

CaseChat Overview and Summary

In the case of Yarrow v Noel & Melva Yarrow Charitable Trust, the plaintiff, Paul Steven Yarrow, filed a claim against the Noel & Melva Yarrow Charitable Trust and the executors of Noel Henry Yarrow's estate, seeking damages related to the collapse of the Yarrow Group of companies. The defendants applied to strike out the plaintiff's claim or, in the alternative, for an order for security for costs. The legal issues the court was required to decide were whether the plaintiff's claim was coherent and whether there was a prospect of the plaintiff re-pleading the claim to make it coherent, and whether there was reason to believe the plaintiff would be unable to pay the costs of the defendants if the plaintiff was unsuccessful in the proceeding.

The court found that while the plaintiff's claim was not coherent in its current state, there was a kernel of a possible pleadable claim. The court decided not to strike out the proceeding at that stage and gave the plaintiff one final opportunity to re-plead the case with clear conditions. The court also found that there was reason to believe the plaintiff would be unable to pay the costs of the defendants if the plaintiff was unsuccessful in the proceeding and made an order for security for costs in two or perhaps three tranches, depending on how matters developed.

The final orders of the court were that the plaintiff must comprehensively re-plead and particularise his claim, file it in the Wellington High Court, and serve it on the defendants' solicitors by 1 pm on Friday, 8 September 2017. The plaintiff must also pay into Court by way of security for costs in cleared funds the sum of $10,000 by 4 pm on Friday, 8 September 2017. If the plaintiff does not comply with these directions, the defendants may file a further application for strike-out. In the event that the plaintiff successfully completes these steps, a case management conference will be held on or before a specified date, and further security may be considered at that stage. Costs on the current applications will lie where they fall.

Orders