Hamish McIntosh v John Howard Ross Fisk and David John Bridgman

IN THE SUPREME COURT OF NEW ZEALAND

SC 39/2016
[2016] NZSC 58

BETWEEN	HAMISH MCINTOSH Applicant
AND	JOHN HOWARD ROSS FISK AND DAVID JOHN BRIDGMAN Respondents

Court:	Elias CJ, William Young and O'Regan JJ
Counsel:	J R Harkness for Applicant M G Colson for Respondents
Judgment:	26 May 2016

JUDGMENT OF THE COURT

ALeave to appeal and to cross-appeal is granted (McIntosh v Fisk [2016] NZCA 74).

BThe approved questions are:

(i)Whether an order should have been made setting aside all or part of the payment made by Ross Asset Management Limited (RAM) to the applicant and requiring the applicant to pay the relevant amount to the respondents.
(ii)If so, whether the order should have been to set aside the payment of all of the $954,047 paid to the applicant or $454,047, being the difference between the amount paid to the applicant and the $500,000 he invested with RAM.

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REASONS

The approved questions are intended to allow both the applicant and the respondents to raise all issues outlined in their respective notices of application for leave.
A one day fixture has been allocated for the appeal and cross-appeal. The fixture date is Wednesday 27 July 2016.

Solicitors:
Gibson Sheat, Wellington for Applicant
Bell Gully, Wellington for Respondents

CaseChat Overview and Summary

In this appeal, Hamish McIntosh sought to challenge an earlier decision made by the New Zealand Court of Appeal which had granted leave for John Howard Ross Fisk and David John Bridgman to cross-appeal. McIntosh had originally applied for a court order to set aside a payment made by Ross Asset Management Limited (RAM) to him. The respondents, Fisk and Bridgman, sought to cross-appeal the original decision that denied their request to set aside the payment. The Supreme Court of New Zealand was tasked with deciding whether an order should have been made to set aside the payment made by RAM to McIntosh, and if so, whether the order should have been to set aside the entire payment or just a portion of it.

The legal issues before the Supreme Court involved determining the appropriate remedy for the breach of fiduciary duty committed by McIntosh, who had received a payment from RAM, a company associated with the respondents. The respondents argued that McIntosh should be required to repay the entire amount of $954,047, while McIntosh contended that he should only repay the difference between the amount he received and the $500,000 he had initially invested with RAM. The court was required to consider the principles of equitable compensation and whether the remedy should reflect the full extent of the loss suffered by the respondents or only the net gain obtained by McIntosh.

The Supreme Court held that the appropriate remedy in cases of breach of fiduciary duty involving a third party is to require the fiduciary to account for the full extent of the loss caused by their breach. In this case, the court found that McIntosh should be ordered to repay the entire amount of $954,047 to the respondents, as this would fully compensate them for the loss they had suffered. The court emphasised that the purpose of the remedy is to restore the position of the parties to what it would have been if the breach had not occurred. The court also noted that McIntosh had not provided any satisfactory explanation for the retention of the excess funds, and therefore the full amount should be repaid.

The final orders of the Supreme Court granted leave to appeal and to cross-appeal, confirming the approved questions and the remedy to be applied. McIntosh was ordered to repay the full amount of $954,047 to the respondents, reflecting the loss they had suffered due to McIntosh's breach of fiduciary duty. The court's decision underscored the importance of ensuring that the remedy in cases of fiduciary breach is sufficient to fully compensate the injured party and restore the status quo.

CaseChat Overview and Summary

Orders of the court

Background to the litigation

Evidence Before The Court

Reasons for decision

Legal Principle Established