Holland Corporate Limited v Holland

[2014] NZHC 1584

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-008345 [2014] NZHC 1584

UNDER

the Companies Act 1993

BETWEEN

HOLLAND CORPORATE LIMITED Plaintiff

AND

PETER JESSE HOLLAND First Defendant

NICOLA VIVIAN MANTHEL Second Defendant

Hearing:	30 June, 2, 3 and 4 July 2014
Counsel:	N W Ingram QC for the Plaintiff No Appearance of, or for the First and Second Defendants
Judgment:	8 July 2014

RESULT JUDGMENT OF DUFFY J [Re Formal Proof]

This judgment was delivered by Justice Duffy on 8 July 2014 at 9.30 am, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel:     N W Ingram QC, Auckland

Solicitors:    Graeme Skeates Law (G H Skeates), Auckland

HOLLAND CORPORATE LTD v HOLLAND [2014] NZHC 1584 [8 July 2014]

[1]      Holland  Corporate  Ltd  (“HCL”)  sues  Peter  Jesse  Holland  for  breach  of fiduciary duties that he owed to HCL.

[2] The substantial hearing of the proceeding has proceeded by way of formal proof. Mr Holland was not represented and could not be present at the hearing of the civil proceeding. He is in Australia and he has appointed a controlling trustee under s 188 of the Bankruptcy Act 1966 (Commonwealth of Australia). In Downey v Holland  [2014]  NZHC  1546,  I  ruled  that  under  art  20(2)  of  sch  1  of  the Insolvency (Cross-Border) Act 2006, this proceeding could continue.

[3]      HCL needs to have this proceeding determined promptly if it is to have the judgment recognised by the controlling trustee.   I propose, therefore, to deliver a result judgment with reasons to follow.

[4]      I have given careful consideration to the evidence and the legal submissions presented to me by HCL.  I am satisfied that at all material times:

(a)      Mr Holland, as a director of HCL, owed HCL fiduciary duties of loyalty,  to  act  in  good  faith,  not  to  profit  from  his  position  as  a director of HCL, and not to place himself in a position of conflict with HCL’s interests; and

(b)      Mr Holland breached the fiduciary duties that he owed to HCL;

[5]      The consequences of the said breaches of fiduciary duties for HCL are that Mr Holland has profited at HCL’s expense by receiving payments in the sum of AUD $355,318  (for  identified  invoices)  and  AUD  $85,480  (for  unidentified invoices) that should have gone to HCL:

[6]      Therefore, Mr Holland is liable to account to HCL for those payments in the sum of AUD $440,798.

[7]      In breach of the said fiduciary duties, Mr Holland has performed services for third parties either in his own right, or on behalf of entities other than HCL, thereby depriving HCL from receiving value for those services from the third parties.  Those

services  being  the  services  identified  in  invoices  that  refer  to:  Balena  Forza; JD Herbert; and Apache Services Pty Ltd.  Therefore, HCL is entitled to payment of equitable compensation  from  Mr Holland to  the value of those  services,  which comes to a total of $166.407.50.  Accordingly, for these breaches of fiduciary duties, Mr Holland is liable to pay equitable compensation of AUD $166,407.50.

[8]      In breach of the said fiduciary duties, Mr Holland has performed services for Gleneagles Securities (Aust) Pty Ltd either in his own right, or on behalf of entities other than HCL, thereby depriving HCL from receiving value for those services from Gleneagles Securities (Aust) Pty Ltd.   Therefore, HCL is entitled to payment of equitable compensation from Mr Holland to the value of those services, which is NZD $450,000.  Accordingly, for this breach of fiduciary duty, Mr Holland is liable to pay equitable compensation of NZD $450,000.

[9]      It follows that judgment for HCL is entered against Mr Holland in the total sum of AUD $607,205.50 and NZD $450,000.

Duffy J