Apark Ltd v Nero Noctis Private Wealth Pty Ltd Hc Ak

JurisdictionNew Zealand
CourtHigh Court
JudgeAbbott
Judgment Date11 March 2013
Neutral Citation[2013] NZHC 468
Docket NumberCIV 2011–404–006981

[2013] NZHC 468

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011–404–006981

BETWEEN
Apark Limited
Plaintiff
and
Nero Noctis Private Wealth Pty Limited
First Defendant
Grant Thomas
Second Defendant

M Kan for plaintiff

K Harkess for defendants

Protest to jurisdiction and application to dismiss claims for breach of the Fair Trading Act 1986 (“FTA”) and breach ofcontract — plaintiff used services of defendants when seeking to raise finance to complete property transactions in New Zealand — plaintiff claimed it invested approximately $4.5 million upgrading properties it had agreed to purchase, in reliace on oral and written representations, statements and promises made by defendants that overseas funds would be available in time to settle the purchases — agreements were subsequently cancelled by receiver of vendor — defendants resided in Australia and were therefore foreign parties — whether there was an arguable case that leave to serve overseas was not required for the claims of breach of the FTA, negligent misstatement, promissory estoppel and breach of contract — whether court should assumejurisdiction having regard to merits of causes of action and appropriate forum for the dispute — if leave required, whether it would have been granted (had it been sought) — whether plaintiff's failure to apply should be excused in the interests of justice.

At issue was: whether there was an arguable case that leave to serve overseas was not required for claims of breach of the FTA, negligent misstatement, promissory estoppel and breach of contract; whether the Court should assume jurisdiction having regard to the merits of the causes of action and the appropriate forum for the dispute; and in respect the causes of action which required leave to serve out of NZ, whether leave would have been granted (had it been sought) and whether Apark's failure to apply should be excused in the interests of justice.

Held: Rule 6.27(2)(j) High Court Rules (“HCR”) (when allowed without leave) set out when a claim for a breach of the FTA (or any enactment) could be served out of NZ without leave. The FTA applied to parties to the extent that their misleading conduct occurred in NZ.

A representation in an email sent by an overseas person to a NZ resident in NZ was an act done in NZ (for the purpose of establishing a good arguable case under r6.27(2)(j)) Wing Hung Printing Co Ltd v Saito Offshore Pty Ltd. There was no valid basis for distinguishing Wing Hung as in this case, as even if the majority of the defendant's acts were carried out in Australia, part of the service was communicating with the NZ client. It was arguable that there was an act to which the claim related, was done in NZ so as to entitle Apark to serve this claim without leave. Additionally, the consequences of the representation were alleged to be loss or damage which clearly had been suffered in NZ and that was also sufficient to constitute a good arguable case for the purpose of service without leave.

The plaintiff's argument that r6.27(2)(j)(iii) and (iv) HCR also applied could not be accepted. Section 3 FTA (application of FTA to conduct outside NZ) extended the FTA's application outside NZ where the defendants were resident or carried on business in NZ. The defendants were not resident or carrying out business in NZ.

Rule 6.27((2)(a) applied to the claim for negligent misstatement (a claim in tort) and the claim for promissory estoppel. There was a good arguable case the Apark did not require leave, both on the basis that the tort was committed in NZ where a negligent misrepresentation was made by a person in a foreign country by email or telephone to a person in NZ, and that the suffering of damage (being part of the cause of action) in NZ was sufficient.

Apark did not have an arguable case for service of its claim for promissory estoppel. A claim brought to recover expenses incurred in reliance on a promise about availability of finance was not a claim affecting a contract with the defendants, or for its breach or other relief in respect of it (a claim for promissory estoppel was predicated upon a contract not coming into existence).

Finally, in relation to claim for breach of contract, it was at least arguable that the place where Apark resided or had its principal place of business was NZ, which was the place of payment and therefore where the contract had been breached. Apark had an arguable case for service of this claim without leave (r6.27(2)(c) HCR).

In assessing whether there was a serious issue on the merits of the FTA claim, the court was required to assess whether there was a credible factual basis for the claim. There was no plausible basis in the evidence for a claim under the FTA in respect of the alleged oral representations as there was no evidence that any oral representations went further than the written representations. It was unquestionable that Apark knew that the defendants were acting as intermediaries, and that in most of the emails the defendants were clearly relaying information from the financiers. On an objective view of the emails, an experienced businessman (such as the director of Apark) would not have been misled into believing that there was an unconditional offer of finance. A representation as to future conduct was not misleading just because it did not come to pass. It was also doubtful whether any representation was an effective cause of any loss. Apark had approximately nine months after recognising the possibility that finance might not be available in which to renegotiate with the vendor or obtain finance elsewhere. In those circumstances Apark did not have a serious issue to be tried under the FTA for the purpose of r6.29(2)(a) or (b) HCR.

There was a serious issue to be tried on the cause of action for breach of contract as there was no question that the loan finance was not obtained by a set date. In terms of the principles of forum conveniens, the claim for breach of contract was very straight-forward, and would require little evidence. Auckland Receivers Ltd v Diners Club was authority for the proposition that where place of payment was not specified in the contract, the general rule was that the place of payment (and therefore the alleged breach in this case) was where the creditor resided or had its principle place of business. The currency of payment was neutral. All other factors being neutral, it was appropriate for the court (NZ) to assume jurisdiction.

Application to dismiss claim for breach of contract dismissed. Application to dismiss all other claims granted. Cross-application to dismiss notice of appearance to protest the jurisdiction of the court to hear the claim for breach of contract dismissed.

JUDGMENT OF ASSOCIATE JUDGE Abbott

Abbott
1

The plaintiff, Apark Ltd, is a New Zealand registered company that acts as the trustee of Apark Trust, a trust that trades in property.

2

The first defendant is the trustee of a unit trust that operates from an office in Adelaide, South Australia, and carries on business as a mortgage and finance broking company (under the trading name Adelaide Finance Agency). The second defendant is a director of the first defendant, and is also employed by the unit trust as a finance broker.

3

The plaintiff used the services of the defendants when seeking to raise finance to complete property transactions in New Zealand. It claims that it invested approximately $4.5 million upgrading properties that it had agreed to purchase and agreed to vary the agreements (including payment of additional deposits), before settling the purchases, in reliance on oral and written representations, statements and promises made by the defendants that overseas funds would be available in time to settle the purchases. The plaintiff says that it lost the full amount of its investment when the vendor was placed into receivership, and the receiver cancelled the agreements. It contends that the defendants are liable to it under several causes of action.

4

The defendants have filed a protest to the jurisdiction of the Court, and have applied to dismiss the proceeding, on the grounds that they reside in Adelaide, that the claims pleaded do not come within any of the categories that can be commenced against them without leave, and that the Court should not exercise its discretion to assume jurisdiction as New Zealand is not the appropriate forum for determination of these claims.

5

The plaintiff opposes the defendants' application, and cross-applies for dismissal of their notice of appearance in protest to jurisdiction. It contends that the claims do come within the categories of claims that can be served outside New Zealand without leave, but says that if any claims cannot be brought without leave, and the Court does not exercise its discretion to permit them to proceed, it should be entitled to amend its claim so as to proceed only with claims that can proceed without the need for leave.

Change of name
6

At the time of commencing this proceeding, the plaintiff named the first defendant as ([a-z]+)” the Trustee of the AFA Unit Trust trading in the name of Adelaide Finance Agency”. At the hearing, counsel for the plaintiff sought leave to amend the name of the defendant to Nero Noctis Private Wealth Pty Ltd. That application was not opposed. An order was made, accordingly, in the hearing. However, for ease of reference when referring to the name of the first defendant in this judgment I will use the description AFA.

Background
7

It is necessary to give a brief account of the background to, and history of, the parties' relationship as context for the parties' contentions.

8

Between 18 August and 2 September 2009 the plaintiff agreed to buy three properties at Karapiro, in the North...

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