Houghton v Saunders HC Christchurch CIV 2008-409-348 [2010] NZHC 779 (19 May 2010)

Last Updated: 8 June 2010

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

_{CIV-2008-409-000348}

BETWEEN ERIC MESERVE HOUGHTON First Plaintiff

AND DARRYL ALEXANDER JONES Second Plaintiff

AND TIMOTHY ERNEST CORBETT SAUNDERS

SAMUEL JOHN MAGILL JOHN MICHAEL FEENEY

CRAIG EDGEWORTH HORROCKS PETER DAVID HUNTER

PETER THOMAS JOAN WITHERS First Defendants

AND CREDIT SUISSE PRIVATE EQUITY INC (FORMERLY CREDIT SUISSE FIRST BOSTON PRIVATE EQUITY INC)

Second Defendant

AND CREDIT SUISSE FIRST BOSTON ASIAN MERCHANT PARTNERS LP Third Defendant

AND FIRST NEW ZEALAND CAPITAL Fourth Defendant

AND FORSYTH BARR LIMITED Fifth Defendant

Hearing: 17 May 2010

Appearances: A J Forbes QC, J R Eichelbaum & Ms Mills for Plaintiff

D J Cooper for First Defendants

A Olney and N Hegan for Second & Third Defendants

D H McLellan for Fourth Defendants

A Challis for Fifth Defendants

Judgment: 19 May 2010

JUDGMENT OF HON. JUSTICE FRENCH As to outcome of hearing

HOUGHTON AND ANOR V SAUNDERS AND ORS HC CHCH CIV-2008-409-000348 19 May 2010

[1] The stay is lifted for the limited purpose of permitting:

i) The plaintiff to file the draft amended statement of claim tendered at the hearing on 17 May 2010.

ii) Other qualifying shareholders to opt-in.

[2] The lifting of the stay order is subject to the following conditions relating to the content of the statement of claim:

i) In relation to the first pleaded cause of action, the removal of the allegation of accessory liability under the Fair Trading Act

1986 (cl 31.8 and cl 31.9) in respect of the channel stuffing allegation.

ii) In relation to the second pleaded cause of action, the amendment of cl 39A so as to remove the allegation of accessory liability under the Fair Trading Act in respect of the channel stuffing allegation.

[3] The lifting of the stay order is also subject to the following further conditions:

(i) until further order of the Court all material is to be removed from the JAFL web site other than the documents specified at clause 30 of the opt-in notice.

(ii) the deletion of the words in brackets , paragraph 17, second bullet point from the draft opt-in notice filed today

(iii) any communications from Mr Gavigan to prospective members of the class about the proceeding must first be approved by the plaintiff’s legal representatives.

[4] Subject to the amendment specified above, the draft opt-in notice filed today is approved.

[5] The plaintiff shall be entitled to publish a notice in terms of paragraph 7 of Mr Forbes’ memorandum dated 19 May 2010 in one or more of the four main centre newspapers and on the internet.

[6] While I am not prepared to order the fourth and fifth defendants to notify client shareholders as requested by the plaintiff, it is the Court’s expectation that the fourth and fifth defendants will make all reasonable endeavours to do so where they or an associated company acted as the nominee for an investor who purchased Feltex shares pursuant to the public offer.

[7] The plaintiff is to file and serve copies of the documents that are sent out to qualifying shareholders as well as a list of the names and Feltex CRN numbers (if available) of qualifying shareholders who subsequently elect to opt into the proceeding.

[8] Leave is reserved to the plaintiff to apply to the Court on notice for any further directions should the implementation of this order pose any difficulties.

[9] Counsel are to finalise a list of issues for the next hearing, with a conference call to take place at 10 a.m., 16 June 2010.