SCOTT BARRIE V NATURE DISCOVERIES LIMITED HC WN CIV 2008-485-2530

SCOTT BARRIE V NATURE DISCOVERIES LIMITED HC WN CIV 2008-485-2530

Court found the Disclosure Document contained an unintended misrepresentation that some Nature Discoveries stores had previously achieved $800,000 and $950,000 turnovers, but plaintiffs did not rely on that misrepresentation in deciding to purchase; projections and the $800,000 email prediction were honestly held and reasonably based; plaintiffs failed to show they took all reasonable steps to obtain landlord consents for lease assignments and therefore could not cancel contracts and recover settlement funds; no fiduciary duty was established beyond contractual obligations; defendants' counterclaims for unpaid accounts succeeded and judgment entered for specified amounts.

Citation
openlaw-8b535e8c_64f7_44f9_9c31_7a34732bde4e.pdf
Parties
First Plaintiff: Scott Barrie; Second Plaintiff: Anita Wood; Third Plaintiff: Nature Discoveries Queensgate Limited; Fourth Plaintiff: Nadis Porirua Limited; Fifth Plaintiff: Dakaris Limited; Sixth Plaintiff: Nadis Glenfield Limited; Seventh Plaintiff: Scott Barrie and Robin James Barrie as Trustees of the Barriches Trusts; First Defendant: Nature Discoveries Limited; Second Defendant: Nature by Design Limited; Third Defendant: Nature Foundation Limited; Fourth Defendant: Douglas Pflaum; Fifth Defendant: Blaxall & Steven Distributors Limited; Sixth Defendant: John Garlick; Seventh Defendant: Mark Chan; Eighth Defendant: Daniel Garrette
Court
High Court
Jurisdiction
New Zealand
Judgment Date
30 August 2012
Procedural Posture
Franchise Dispute Misrepresentation, Contract and Fiduciary Claims / High Court Judgment Trial Concluded
Outcome
All plaintiffs' claims dismissed. Judgment entered for defendants on counterclaims for unpaid accounts. Costs to defendants; separate counsel (Mark Chan) entitled to costs.
Legal Topics
Misrepresentation, Contractual Conditions Subsequent and Landlord Consent, Franchise Disclosure Obligations, Breach of Fiduciary Duty, Inducing Breach of Contract, Conversion, Damages and Costs
Contract Franchise Law Tort Consumer Protection (fair Trading Act 1986) Equity (fiduciary Duty) Property/leases Misrepresentation Contractual Conditions Subsequent and Landlord Consent +5 more

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Parties

Scott Barrie

First Plaintiff

Anita Wood

Second Plaintiff

Nature Discoveries Queensgate Limited

Third Plaintiff

Nadis Porirua Limited

Fourth Plaintiff

Dakaris Limited

Fifth Plaintiff

Nadis Glenfield Limited

Sixth Plaintiff

Scott Barrie and Robin James Barrie as Trustees of the Barriches Trusts

Seventh Plaintiff

Nature Discoveries Limited

First Defendant

Nature by Design Limited

Second Defendant

Nature Foundation Limited

Third Defendant

Douglas Pflaum

Fourth Defendant

Blaxall & Steven Distributors Limited

Fifth Defendant

John Garlick

Sixth Defendant

Mark Chan

Seventh Defendant

Daniel Garrette

Eighth Defendant

Procedural Posture

Franchise Dispute Misrepresentation, Contract and Fiduciary Claims / High Court Judgment Trial Concluded

Legal Issues

  1. 1 Whether the Disclosure Document and communications contained actionable misrepresentations
  2. 2 Whether plaintiffs relied on any misrepresentations when purchasing franchises
  3. 3 Whether franchisor owed fiduciary duties to franchisee and breached them

Ratio Decidendi

Court found the Disclosure Document contained an unintended misrepresentation that some Nature Discoveries stores had previously achieved $800,000 and $950,000 turnovers, but plaintiffs did not rely on that misrepresentation in deciding to purchase; projections and the $800,000 email prediction were honestly held and reasonably based; plaintiffs failed to show they took all reasonable steps to obtain landlord consents for lease assignments and therefore could not cancel contracts and recover settlement funds; no fiduciary duty was established beyond contractual obligations; defendants' counterclaims for unpaid accounts succeeded and judgment entered for specified amounts.

Court Disposition

All plaintiffs' claims dismissed. Judgment entered for defendants on counterclaims for unpaid accounts. Costs to defendants; separate counsel (Mark Chan) entitled to costs.

Orders

  • All causes of action pleaded by the plaintiffs are dismissed and judgment is entered for the defendants on those claims
  • Judgment for counterclaim amounts: Nature Discoveries Queensgate Ltd NZD 115310.71; Nadis Porirua Ltd NZD 68880.81; Dakoris Ltd NZD 150791.12; Nadis Glenfield Ltd NZD 131182.69