Fickling Limited v Currie HC Auckland CIV-2011-404-003355 [2011] NZHC 597 (23 June 2011)

Last Updated: 3 July 2011

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

_{CIV-2011-404-003355}

IN THE MATTER OF the Evidence Act 2006

AND IN THE MATTER OF an application by FICKLING LIMITED, KINU LIMITED, PARRISH LIMITED, RICFIN LIMITED AND OTITORI INVESTMENTS LIMITED

BETWEEN FICKLING LIMITED, KINU LIMITED, PARRISH LIMITED, RICFIN LIMITED AND OTITORI INVESTMENTS LIMITED

Applicants

AND JOHN DONALD CURRIE Respondent

Hearing: On the Papers

Counsel: F J Thorp for Applicants

Judgment: 23 June 2011

_{JUDGMENT OF WHATA J}

This judgment was delivered by Justice Whata on

23 June 2011 at 11.00 a.m., pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Solicitors:

Lowndes Jordan, POO Box 5966, Wellesley Street, Auckland

FICKLING LIMITED, KINU LIMITED, PARRISH LIMITED, RICFIN LIMITED AND OTITORI INVESTMENTS LIMITED V JOHN DONALD CURRIE HC AK CIV-2011-404-003355 23 June 2011

[1] This is a without notice application for leave to serve a New Zealand subpoena on a witness in Australia.

[2] The applicants are Fickling Limited (Fickling), Kinu Limited (“Kinu”), Parrish Limited (“Parrish”), Ricfin Limited (“Ricfin”) and Otitori Investments Limited (“Otitori”). They are the fortieth, fifty-eighth, eighty-sixth, one hundred and sixth and eighty-second defendants (“Lowndes Jordan defendants”) in the consolidated proceedings of n-Tech Limited and Another v Abooth Ltd (In Receivership) and Others CIV-2006-404-3362 and Totara Investments Limited v Abooth Ltd (In Receivership) and Others CIV-2007-404-990 (“consolidated proceedings”).

[3] I have treated Mr Currie is the respondent given the effect of the order on him. Counsel have leave to address me on this if they think that is necessary. He is the eighth counterclaim defendant in the consolidated proceedings. Mr Currie currently resides in Australia where he is understood to be practising as a solicitor in the firm Currie Law in Beaumaris in Victoria.[1]

[4] By way of background the consolidated proceedings are complex with multiple claims and counterclaims in relation to a sum in excess of $57 million, and involving 120 defendants.

[5] The underlying dispute concerns share purchase agreements that anticipated initial deposits equating to approximately ten per cent of the purchase price were payable upon execution, with further instalments of approximately one per cent being payable over subsequent years and a balance of approximately 82 per cent of the share purchase price being payable on final settlement which was to occur in

2005 and 2007.

[6] As noted by counsel for the applicants, as part of the share purchase transactions, the defendants including the Lowndes Jordan defendants took up loss

_{of profits insurance which had the effect of guaranteeing that the shares being}

purchased would be worth a specified minimum value on final settlement in 2005 or

2007.

[7] The applicants’ counsel also records:

5.7 As set out in their statement of defence dated 22 May 2009 ..., the Lowndes Jordan defendants deny the plaintiffs’ claims. They plead a number of affirmative defences. They contend that the loan agreements were collateral to and interdependent with the share purchase agreements and that they were misled and deceived into entering into the share purchase agreements and the loan agreements and related documents by various persons, including Mr Currie as well as the plaintiffs, Mr John Reid, Mr Hugh Milloy, the company Milloy Reid Tong & Company Limited (subsequently called Milloy Reid Wong & Company Limited, now called CMW & Company Limited) ... Mr John Connolly, AGFL, AFL and others; and that those persons conspired to deceive them.

[8] Counsel further states:

6. The facts giving rise to the Consolidated Proceedings are substantially similar to those that were the subject of criminal proceedings commenced by the Serious Fraud Office against Mr Currie and three other persons, Mr Reid, Mr Connolly and Mr Peter Russel. The hearing of the criminal charges took place in the High Court at Auckland between 12

September 2004 and 14 October 2004 and resulted in the acquittal of all four defendants. Messrs Reid and Connolly are the fourth and ninth counterclaim

defendants respectively in the Consolidated Proceedings.

[9] As set out in the affidavit of Geoffrey Donald Campbell Walker at paragraph

12:

In their Statement of Counterclaim the Lowndes Jordan defendants plead a total of seven separate causes of action against Mr Currie (and other of the counterclaim defendants) as summarised below:

12.1 Deceit

(a) By reason of the misrepresentations and concealments referred to in paragraph 11 above, and as pleaded in the Statement of Counterclaim, the Lowndes Jordan defendants were mislead and deceived and thereby induced to enter into the Digi-Tech and NZIL investments.

12.2 Conspiracy

(a) Mr Currie conspired together with other counterclaim defendants to defraud and/or injure investors, including the Lowndes Jordan defendants, by unlawful means (including deceit, fraud, including false and fraudulent accounting, breaches of duties as trustee, breaches of contract) by

inducing them to enter into and participate in the Digi-Tech and NZIL investments, the purpose of which was to facilitate the obtaining by misappropriation of deposit and instalment payments made by them.

12.3 Breach of trust

(a) Mr Currie (together with others) procured the release by the relevant settlement agent of deposit payments made by investors, including the Lowndes Jordan defendants, in breach of trust, and in breach of written settlement instructions investors, including the Lowndes Jordan defendants, provided by investors to the relevant settlement agent.

(b) Mr Currie was granted a specific power of attorney by investors with respect to the treatment of deposit payments he received from investors, and dealt with those funds in breach of the terms of the power of attorney.

(c) Mr Currie accepted instructions to act for other parties to the transactions, placing him in a position of conflict of interest, and preferred the interests of himself and others above the interests of the relevant investors, including the Lowndes Jordan defendants.

(d) Mr Currie did not advise investors of any of the above.

12.4 Equitable Tracing

(a) As a consequence of the breaches of trust, contract or otherwise referred to above and in the Statement of Counterclaim, funds of the investors, including the Lowndes Jordan defendants, were not used for the purposes for which they were paid and they are entitled in equity to trace their money and/or the proceeds thereof in the hands of Mr Currie and others.

12.5 Money had and received

(a) Mr Currie (and others) was unjustly enriched by his receipt of investors’ funds, including those of the Lowndes Jordan defendants, and is liable to them for such monies had and received to his use.

[10] Mr Walker further says that Mr Currie played a significant role in the transactions forming the subject matter of the consolidated proceedings. He says his evidence is relevant to:

(a) The nature of the relationship between Mr Reid, Mr Milloy, Milloy

Reid Wong, Mr Connolly and himself and the various off-shore

companies involved in the transactions which form the subject matter of the consolidated proceedings.

(b) Mr Currie’s contact and communications with:

(i) Mr Reid, MRW and Mr Connolly in the period leading up to the purported settlement of the first tranche of the investment in Digi-Tech; and

(ii) Kensington Swan (settlement agent) in connection with the settlement of the first tranche of investment in Digi-Tech and subsequently.

(iii) BNY-IMBG in the period leading up to settlement of the first tranche of investment in Digi-Tech and thereafter.[2]

[11] Mr Walker then avers in some detail as to Mr Curries’ role in relation to the

substantive dealings concerning the share transactions and associated loans.[3]

[12] Mr Walker also provides evidence as to Mr Curries’ involvement in the

consolidated proceedings to date, his location and the need for him to attend.

Jurisdiction

[13] Section 154 of the Evidence Act 2006 (the “Act”) requires that in order to

grant leave I must have regard to:

(a) The significance of the oral evidence to be given, or the document or thing to be produced, or both; and

(b) Whether the oral evidence to be given, the document or thing to be produced, or both could be obtained without significantly greater

_{expense by other means and with less inconvenience to the witness.}

[14] I also have a broad discretion to make any leave subject to any conditions that I think appropriate.

[15] The High Court Rules also require me to be satisfied on certain matters including affidavit evidence containing:

(a) Whether consideration has been given to requiring the witness to testify from Australia by video link or telephone conference and the reason it is not considered appropriate that the witness do so;

(b) If the applicant is aware of any fact or circumstance that may constitute a ground for setting the subpoena aside under s 160 of the Evidence Act 2006, the fact or circumstance.

[16] I have been assisted by citation of relevant case law dealing with the implication of r 9.60 of the High Court Rules. There is some diverging authority on whether video linking ought to be preferable than in person, oral testimony.[4]

[17] For my part this aspect of the matter is resolved on the facts of the case. By any measure this is a proceeding of both procedural and substantive complexity. Mr Currie is clearly not a witness within the control of the Lowndes Jordan defendants, and his testimony is likely (on the evidence before me) to be highly controversial. I accept further that the cross-examination is likely to take several days and that Mr Curries’ credibility is a matter in respect of which the Judge will need to make an assessment at trial.

[18] I also anticipate that there will be heavy reliance on exhibits and other documentary material, to the effect that any protracted cross-examination will be very difficult to manage by way of video conference. I consider therefore that both procedurally and substantially the efficient and just running of this proceeding calls

_{for oral testimony in person rather than by way of video link.}

Practical issues

[19] I note the submissions of counsel in relation to certain practical issues arising given the timing of the hearing and its overlap with the Rugby World Cup. I accept that it is not currently possible to ascertain with any certainty when in the 12 to 20 week period commencing 1 August 2011 Mr Currie would be required to give evidence pursuant to subpoena. The confluence of this proceeding with the Rugby World Cup will make accommodating the witness potentially difficult.

[20] I therefore accept as sensible the suggestion from counsel that Mr Currie be required to attend the High Court at Auckland on Monday 29 August 2011, being the commencement of the fifth week of trial.

[21] Accordingly, I make the following orders:

(a) That leave be granted to serve a New Zealand subpoena in the form annexed as Exhibit “GDCW 10” to the Walker affidavit on Mr Currie in Australia requiring his physical attendance before the High Court to give evidence;

(b) That by reference to r 9.60(2)(c) of the High Court Rules, it is not appropriate or desirable for Mr Currie’s evidence to be given by video link or telephone conference.

(c) That when Mr Currie is served with the subpoena he also be served with:

(i) A return airline ticket for travel from Melbourne to Auckland on Sunday 28 August 2011 and returning to Melbourne on the evening of Friday 9 September 2011, which permits alteration to travel dates on 24 hours notice.

(ii) Hotel vouchers for Sunday 28 August 2011 and the subsequent

11 nights in a room at the All Seasons Hotel located in

Wyndham Street, Auckland (or equivalent).

(iii) Cash in the amount AU$300 to cover taxi fares from Mr Currie’s place of residence in Beaumaris, Melbourne, Victoria, Australia, to Melbourne Airport and return.

(iv) Cash in the amount NZ$400 to cover taxi fares from Auckland Airport to Auckland central and return and for any necessary travel within Auckland city – noting that it is a short walk from Wyndham Street to the High Court.

[22] I note that counsel has sought a proposed service of the subpoena as 30 June

2011. There has been some delay in getting this matter resolved. On that basis I

extend the time within which to serve the subpoena by two weeks, to 14 July 2011.

[23] I note for completeness that there is nothing in the evidence or memoranda before me to suggest that there is any fact or circumstance that may constitute a ground for setting aside the subpoena under s 160 of the Evidence Act 2006. However, given the without notice nature of this application, I propose to reserve leave to Mr Currie to make an application to have this order set aside, and if he is

_{going to do so to make that application no later than 1 August 2011.}

Whata J

---

[1] Refer paragraphs [1]-[3] of memorandum of counsel in support of the application.

[2] _{Refer paragraphs 14-14.2.}

[3] Refer paragraphs 14.4-14.7.

[4] Refer discussion in Corrigan v Commvault Systems (Australia) Pty Ltd [2011] FCA 107.