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bret@gustafson.co.nz

Contractual disputes

Introduction

Quite often advising and representing parties in relation to breaches of contract also involve advising in relation to other related areas of the law such as misrepresentation, misleading conduct and negligence. For example, suing for breach of a shareholders' agreement may also involve may also involve pre-contractual misrepresentations that encouraged a party to buy or sell shares in the first place or it may also mean that a minority shareholder's rights have been contravened under the Companies Act.

 

It is, therefore, usual, that cases involving breach of contractual  duty necessarily involve experience or expertise in specific areas of law.

 

Contract can impact the ability to bring claims for breaches of common law duties (such as a duty of care that if breached would amount to negligence or deceit) or statutory duties (such as breach of the Fair Trading Act) through exclusion and limitation clauses in agreements. Before bringing a claim or, when advising on a defence, having a clear understanding of the legal effect of exclusion and limitation clauses in agreements is vital. It is an area of law that I am constantly updating myself on due to the nature of my practice.

 

Examples of cases

 

Westpac New Zealand Ltd v Map & Associates Ltd [2011] NZSC 89; 

[2011] NZLJ 273

 

This is now the leading case in New Zealand relating to bank mandates and dishonest assistance in New Zealand. The banking mandate is the contractual agreement governing the bank customer relationship and is made up of explicit agreed terms and terms implied by custom.

I successfully represented Map as senior counsel in  the Supreme Court and the Court unanimously dismissed Westpac’s appeal.

 

The Supreme Court found Westpac could not show that any breach of trust would actually have occurred had it followed the instruction of  its client, MAP, to pay  USD 49.3 million in Map’s Westpac account. There was therefore no dishonest assistance and  Westpac had no defence to MAP’s claim for breach of mandate.     

I had previously successfully appeared for Map in the same matter in the High Court and Court of Appeal.

 

 Bushetts Transport v Lowes & Ors (CIV-2011-485-131, 25 February 2011, MillerJ)

This was an action bought against the defendants by the plaintiff alleging breach of a contractual restraint and misuse of confidential information. The proceedings commenced with a successful injunction application before Miller J.

The claim subsequently settled prior to trial.

 

Argent Networks v Jones 17 July 2007 High Court, Auckland Venning J CIV-2007-404-2944

This case involved ex parte orders to seize computers and restrain competition by a new  company allegedly established by former directors and shareholders of the plaintiff (my client). The allegations involved not just allegations of  breaches of contractual restraints in shareholder's agreements but also claims of breach of fiduciary duty and misuse of confidential information. 

 

BDM Grange v Parker, Frostbland [2006] 1 NZLR 256

I represented Frostbland in this application for interim orders preventing Frostbland and its New Zealand subsidiary from competing with the plaintiff pending trial. Again the case involved The allegations involved not just allegations of  breaches of contractual restraints in shareholder's agreements but also claims of breach of fiduciary duty and misuse of confidential information. 

BDM alleged Parker negotiated employment and shareholding with the third defendant Frostbland and obtained a significant BDM Grange client for Frostbland while owing duties to BDM

 

Northpower v ABB limited 28 August 200 High Court, Auckland, Allan  J CIV-2003-404-563

 

This was case involving an allegation of negligent manufacture of a transformer and an allegation negligent misstatement about its reliability leading to the destruction of a power sub station. The claim involved breach of contract in selling or supplying a defective transformer and a claim that the manufacturer was negligent in designing the transformer.

The defendant, my client, successfully challenged a claim for privilege claimed by Northpower over documents and resisted a claim for interrogatories on the grounds they were oppressive.

The claim subsequently settled prior to trial.

 

Angas Securities Limited v Quotable Value Limited- settled 2010

This was an action by Angas Securities Limited against Quotable Value Limited issued in early 2010 alleging breach of duty (both contractual and arising from a genreal duty of care) in undervaluing a property that Angas used as security for a multimillion dollar loan that case settled in late 2010.

StockCo v Tawhiti- Ariki Limited, (CIV2009-404-3413, 9 June 2010, Harrison J)

My Client sought and obtained interim freezing orders to prevent distribution of assets that my client had a perfected security interest in. The defendants were third parties that had entered into agreements with my client’s debtor that gave those third parties interim possession of the stock subsequently sold by the third parties. Orders were also obtained as to disclosure of details of the defendants assets and recent payments from accounts of three different financial institutions.  

Vision Securities Ltd v Capital + Merchant Finance Ltd (in Rec) [2010] NZCCLR 21 (HC) . This case involved the interpretation of security sharing agreement and receivers’ liability -summary judgment.

Sovereign Yachts (NZ) Limited v Hanover Group Holdings Limited CIV-2007-404-491 Lang J successfully prevented the removal of receivers appointed to sell super yacht that was subject to a tripartite ownership agreement and a security interest in favour of one of the owners.  

 

Reliance Environmental Services (BVI) Ltd v Schaeffer 20 December 1999 High Court, Auckland Elias CJ CL10/96. This was an  11 week High Court trial concerning alleged breach of sale and purchase agreement of a company's shares and its business. It also contained over a 120 pleaded misleading misrepresentations that apparently induced the plaintiff to purchase the shares. the claim exceeded $8 million. I appeared as junior counsel for the defendants and we succeeded in totally defeating all of the plaintiff's claims and obtaining significant costs.