HOUGHTON v SAUNDERS [2019] NZHC 1061

HOUGHTON v SAUNDERS [2019] NZHC 1061

Strike‑out application dismissed because plaintiff failed to establish s63 was untenable in all circumstances; s63 is a distinct, broader discretionary remedy from the s56(3)(c) due diligence exemption and whether defendants acted honestly and reasonably for s63 must be determined at stage two on full evidence; discovery of existing funding/insurance was declined but any concluded funding or insurance for stage two must be filed confidentially with the Court within five working days of completion.

Citation
[2019] NZHC 1061
Parties
Plaintiff: Eric Meserve Houghton; First Defendants: Timothy Ernest Corbett Saunders; Samuel John Magill; John Michael Feeney; Craig Edgeworth Horrocks; Peter David Hunter; Peter Thomas; Joan Withers; Second Defendant: Credit Suisse Private Equity Incorporated; Third Defendant: Credit Suisse First Boston Asian Merchant Partners LP
Court
High Court
Jurisdiction
New Zealand
Judgment Date
15 May 2019
Procedural Posture
Securities Act Representative Action / Stage Two (interlocutory Issues and Preparation for Trial)
Outcome
Strike‑out application dismissed; discovery application for historical funding/insurance adjourned; defendants' costs position acknowledged but quantification deferred; plaintiff directed to file confidentially any concluded funding or insurance contracts for stage two within five working days of completion;...
Legal Topics
Section 63 Relief, S56(3)(c) Due Diligence Defence, Strike Out Application, Security for Costs, ATE Insurance Disclosure, Identification of Claimants, Discovery of Funding Documents
Securities Law Civil Procedure Costs and Funding Commercial Litigation Insurance Law Section 63 Relief S56(3)(c) Due Diligence Defence Strike Out Application +4 more

Case Brief

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Parties

Eric Meserve Houghton

Plaintiff

Timothy Ernest Corbett Saunders; Samuel John Magill; John Michael Feeney; Craig Edgeworth Horrocks; Peter David Hunter; Peter Thomas; Joan Withers

First Defendants

Credit Suisse Private Equity Incorporated

Second Defendant

Credit Suisse First Boston Asian Merchant Partners LP

Third Defendant

Procedural Posture

Securities Act Representative Action / Stage Two (interlocutory Issues and Preparation for Trial)

Legal Issues

  1. 1 Whether s63 relief is available where s56(3)(c) due diligence defence failed
  2. 2 Whether strike-out of defendants' s63 defence is appropriate at interlocutory stage
  3. 3 Whether the term "default" in s63 excludes conscious inclusion of untrue statements

Ratio Decidendi

Strike‑out application dismissed because plaintiff failed to establish s63 was untenable in all circumstances; s63 is a distinct, broader discretionary remedy from the s56(3)(c) due diligence exemption and whether defendants acted honestly and reasonably for s63 must be determined at stage two on full evidence; discovery of existing funding/insurance was declined but any concluded funding or insurance for stage two must be filed confidentially with the Court within five working days of completion.

Court Disposition

Strike‑out application dismissed; discovery application for historical funding/insurance adjourned; defendants' costs position acknowledged but quantification deferred; plaintiff directed to file confidentially any concluded funding or insurance contracts for stage two within five working days of completion;...

Orders

  • Strike‑out application dismisssed (no order striking out defendants' reliance on s63)
  • Costs on strike‑out application reserved; defendants may be heard on costs quantification later