WALKER v FORBES [2017] NZHC 1025

WALKER v FORBES [2017] NZHC 1025

The plaintiffs' pleadings were sufficiently particular: they alleged PWC should have expressed inability to form an opinion rather than a positive conclusion that the accounts were not true and fair; plaintiffs need not nominate specific secured creditors or fixed dates but may proceed on the basis that secured creditors would have acted within a reasonable time after qualified audit opinions; the likely date of liquidation is immaterial. Accordingly PWC's application for further particulars is dismissed.

Citation
[2017] NZHC 1025
Parties
First Plaintiffs: Robert Bruce Walker; John Marshall Scutter; Second Plaintiff: Property Ventures Limited (in liquidation); Third Plaintiff: Five Mile Holdings Limited (in receivership and in liquidation); Fourth Plaintiff: Cashel Ventures Limited; Fifth Plaintiff: Tay Ventures Limited (in receivership and in liquidation); Sixth Plaintiff: Livingspace Properties Limited (in receivership and in liquidation); Seventh Plaintiff: Beechnest Ventures Limited (in liquidation); Eighth Plaintiff: Tuam Ventures Limited (in receivership and in liquidation); Ninth Plaintiff: Castle Street Ventures Limited (in receivership and in liquidation); Tenth Plaintiff: Lichfield Ventures Limited (in receivership and in liquidation); Eleventh Plaintiff: 92 Lichfield Limited (in receivership and in liquidation); Twelfth Plaintiff: St Asaph Ventures Limited (in liquidation); Thirteenth Plaintiff: Montecristo Construction Company Limited (in liquidation); First Defendant: Austin John Forbes; Second Defendant: Alister Spedding Johnston; Third Defendant: Gordon Lewis Hansen; Fourth Defendant: David Ian Henderson (a bankrupt); Fifth Defendant: Adolf de Roos; Sixth Defendant: Daniel James Godden; Seventh Defendant: PricewaterhouseCoopers (sued as a firm); Third Party: Vero Liability Insurance
Court
High Court
Jurisdiction
New Zealand
Judgment Date
18 May 2017
Procedural Posture
Proceedings Under the Companies Act 1993 Concerning Liquidation and Auditors' Liability / Interlocutory Application for Further and Better Particulars (application Dismissed)
Outcome
Application for further and better particulars by PricewaterhouseCoopers dismissed
Legal Topics
Audit Qualification, Particulars of Pleading, Receivership, Security Enforcement, Causation, Costs
Companies Law Insolvency Civil Procedure Professional Negligence (audit) Audit Qualification Particulars of Pleading Receivership Security Enforcement +2 more

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Parties

Robert Bruce Walker; John Marshall Scutter

First Plaintiffs

Property Ventures Limited (in liquidation)

Second Plaintiff

Five Mile Holdings Limited (in receivership and in liquidation)

Third Plaintiff

Cashel Ventures Limited

Fourth Plaintiff

Tay Ventures Limited (in receivership and in liquidation)

Fifth Plaintiff

Livingspace Properties Limited (in receivership and in liquidation)

Sixth Plaintiff

Beechnest Ventures Limited (in liquidation)

Seventh Plaintiff

Tuam Ventures Limited (in receivership and in liquidation)

Eighth Plaintiff

Castle Street Ventures Limited (in receivership and in liquidation)

Ninth Plaintiff

Lichfield Ventures Limited (in receivership and in liquidation)

Tenth Plaintiff

92 Lichfield Limited (in receivership and in liquidation)

Eleventh Plaintiff

St Asaph Ventures Limited (in liquidation)

Twelfth Plaintiff

Montecristo Construction Company Limited (in liquidation)

Thirteenth Plaintiff

Austin John Forbes

First Defendant

Alister Spedding Johnston

Second Defendant

Gordon Lewis Hansen

Third Defendant

David Ian Henderson (a bankrupt)

Fourth Defendant

Adolf de Roos

Fifth Defendant

Daniel James Godden

Sixth Defendant

PricewaterhouseCoopers (sued as a firm)

Seventh Defendant

Vero Liability Insurance

Third Party

Procedural Posture

Proceedings Under the Companies Act 1993 Concerning Liquidation and Auditors' Liability / Interlocutory Application for Further and Better Particulars (application Dismissed)

Legal Issues

  1. 1 Whether plaintiffs must particularise the form of qualification PWC should have given to 2006 and 2007 audit opinions
  2. 2 Whether plaintiffs must identify which secured creditors would have appointed receivers or realised securities
  3. 3 When secured creditors would have acted if audit opinions had been qualified

Ratio Decidendi

The plaintiffs' pleadings were sufficiently particular: they alleged PWC should have expressed inability to form an opinion rather than a positive conclusion that the accounts were not true and fair; plaintiffs need not nominate specific secured creditors or fixed dates but may proceed on the basis that secured creditors would have acted within a reasonable time after qualified audit opinions; the likely date of liquidation is immaterial. Accordingly PWC's application for further particulars is dismissed.

Court Disposition

Application for further and better particulars by PricewaterhouseCoopers dismissed

Orders

  • Application for further particulars dismissed
  • No further particulars ordered as to form of qualification beyond plaintiffs' clarification that plaintiffs allege PWC ought to have stated it was unable to reach a view