RJ & MH MCVITTY AND ORS V BANK OF NEW ZEALAND LIMITED AND ANOR HC WN CIV-2010-485-1164

RJ & MH MCVITTY AND ORS V BANK OF NEW ZEALAND LIMITED AND ANOR HC WN CIV-2010-485-1164

The strike-out application was dismissed because the documentary and solicitor evidence established that both directors (including Garrity via solicitor confirmation) authorised PDL to commence proceedings; however the receivers' stay application succeeded in part because the court was not satisfied the indemnities...

Source-derived case information.

Citation
openlaw-81c5d9ca_9818_4400_bc82_58cc53b2228d.pdf
Parties
First Plaintiffs: Robert Julian McVitty and Margaret Helen McVitty; Second Plaintiffs: Robert Julian McVitty and Margaret Helen McVitty as Trustees of the R J McVitty Trust; Third Plaintiff: McVitty Properties Limited (in receivership); Fourth Plaintiff: Patoka Dairies Limited (in receivership); First Defendant: Bank of New Zealand Limited; Second Defendants (as Receivers): Maurice George Noone and John Howard Ross Fisk
Court
High Court
Jurisdiction
New Zealand
Judgment Date
16 November 2010
Procedural Posture
Civil Litigation / Interlocutory Applications (strike Out and Stay)
Outcome
Receivers' strike-out application dismissed; receivers' application to stay MPL and PDL causes of action granted in part
Legal Topics
Authority to Commence Proceedings, Strike Out, Stay, Security for Costs, Indemnity for Costs, Receivers' Duties, Abuse of Process, Directors' Residual Powers
Company Law Insolvency/receivership Civil Procedure Banking Law Equity Authority to Commence Proceedings Strike Out Stay +5 more

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Summary, issues, holding and outcome

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Parties

Robert Julian McVitty and Margaret Helen McVitty

First Plaintiffs

Robert Julian McVitty and Margaret Helen McVitty as Trustees of the R J McVitty Trust

Second Plaintiffs

McVitty Properties Limited (in receivership)

Third Plaintiff

Patoka Dairies Limited (in receivership)

Fourth Plaintiff

Bank of New Zealand Limited

First Defendant

Maurice George Noone and John Howard Ross Fisk

Second Defendants (as Receivers)

Procedural Posture

Civil Litigation / Interlocutory Applications (strike Out and Stay)

Legal Issues

  1. 1 Whether Patoka Dairies Limited (PDL) was properly authorised by its directors to commence proceedings
  2. 2 Whether the receivers could strike out PDL as a plaintiff as an abuse or mistake in joinder
  3. 3 Whether the causes of action by PDL and McVitty Properties Limited (MPL) should be stayed pending satisfactory indemnity or security

Ratio Decidendi

The strike-out application was dismissed because the documentary and solicitor evidence established that both directors (including Garrity via solicitor confirmation) authorised PDL to commence proceedings; however the receivers' stay application succeeded in part because the court was not satisfied the indemnities were demonstrably adequate and therefore stayed PDL's and MPL's causes of action until Mr McVitty provides (1) a signed indemnity, (2) a verified statement of personal assets and liabilities satisfactory to receivers and the Court, and (3) security in an amount and on terms satisfactory to the Court.

Court Disposition

Receivers' strike-out application dismissed; receivers' application to stay MPL and PDL causes of action granted in part

Orders

  • Stay the causes of action brought by PDL and by MPL until: (i) Mr McVitty provides a signed indemnity to PDL and MPL for all costs and liabilities arising from this proceeding; (ii) Mr McVitty provides a statement of his personal assets and liabilities verified by statutory declaration to the reasonable satisfaction...
  • Leave granted to the receivers, to Mr McVitty and to the plaintiffs to apply to the Court on no less than three days' notice in relation to any issues arising out of this decision or the subject matter of this application