R L STICKLAND AND OTHERS AND ANOR V P S DRUMMOND AND OTHERS HC AK CIV2006-404-3078

R L STICKLAND AND OTHERS AND ANOR V P S DRUMMOND AND OTHERS HC AK CIV2006-404-3078

There is no sufficient adverse or conflicting interest between any of the plaintiffs that would engage r41A or the Court's inherent jurisdiction: all plaintiffs share a unified interest in establishing the allotment was void under s37 and any divergence arising from underwrite fees or loan repayments does not create a conflict between plaintiffs because those issues either do not affect the statutory entitlement to repayment from the issuer/directors or do not bring the Illegal Contracts Act into play (s4(5)). Consequently leave under r41A is not required and the defendants' application for separate representation is declined.

Citation
openlaw-d72b6220_2675_447f_a0ce_30cabf4fed0e.pdf
Parties
First Plaintiff (group of Investors): R L Stickland and Others; Second Plaintiff (representative Plaintiff): Terry Properties Limited; Second Plaintiff (named Plaintiff): St Laurence Property and Finance Limited; Second Plaintiff (named Plaintiff): Romulus Investments Limited; Defendants (former Directors): P S Drummond and Others
Court
High Court
Jurisdiction
New Zealand
Judgment Date
15 August 2007
Procedural Posture
Civil – Securities Act (s37) Claim and Related Causes of Action / Interlocutory Application for Separate Legal Representation Under High Court Rules R41 a
Outcome
Application for separate legal representation declined
Legal Topics
Rule 41 a High Court Rules (conflicted Representation), Void Irregular Allotment (s37 Securities Act 1978), Relief Orders (s37 AH Securities Act 1978), Application/limits of Illegal Contracts Act 1970, Validation Relief and Restitution, Costs and Procedural Abuse
Securities Law Civil Procedure Professional Ethics/conflict of Interest Contract/illegal Contracts Act Restitution Rule 41 a High Court Rules (conflicted Representation) Void Irregular Allotment (s37 Securities Act 1978) Relief Orders (s37 AH Securities Act 1978) +3 more

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Parties

R L Stickland and Others

First Plaintiff (group of Investors)

Terry Properties Limited

Second Plaintiff (representative Plaintiff)

St Laurence Property and Finance Limited

Second Plaintiff (named Plaintiff)

Romulus Investments Limited

Second Plaintiff (named Plaintiff)

P S Drummond and Others

Defendants (former Directors)

Procedural Posture

Civil – Securities Act (s37) Claim and Related Causes of Action / Interlocutory Application for Separate Legal Representation Under High Court Rules R41 a

Legal Issues

  1. 1 Whether the first and second plaintiffs (investors and underwriters) have adverse or conflicting interests such that r41A is engaged
  2. 2 Whether St Laurence and Romulus have interests adverse to other plaintiffs because of loan repayments and can conflict arise from alleged entitlement to repayment or validation under Illegal Contracts Act
  3. 3 Whether defendants have standing to bring an application for disqualification/separate representation

Ratio Decidendi

There is no sufficient adverse or conflicting interest between any of the plaintiffs that would engage r41A or the Court's inherent jurisdiction: all plaintiffs share a unified interest in establishing the allotment was void under s37 and any divergence arising from underwrite fees or loan repayments does not create a conflict between plaintiffs because those issues either do not affect the statutory entitlement to repayment from the issuer/directors or do not bring the Illegal Contracts Act into play (s4(5)). Consequently leave under r41A is not required and the defendants' application for separate representation is declined.

Court Disposition

Application for separate legal representation declined

Orders

  • Application for separate legal representation declined
  • Costs awarded to plaintiffs on a 2B scale with a 50% uplift (increased costs)