Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Supreme Court rules on PwC, litigation funding case

Supreme Court rules on PwC, litigation funding case despite out-of-court settlement

By Sophie Boot

Oct. 6 (BusinessDesk) - The Supreme Court has ruled that litigation funder LPF Group was allowed to back a legal claim against PricewaterhouseCoopers, despite the two parties settling their dispute in private.

The lawsuit from the liquidators of David Henderson's failed property development firm Property Ventures (PVL), which was bankrolled by LPF in return for 42.5 percent of any settlement, had alleged PwC and managing partner Maurice Noone advised PVL on ways to continue trading when by some accounts it was insolvent while at the same time giving the company a clean bill of health as auditor. PwC had denied the allegations.

PwC asked the High Court to stay the proceedings, saying the funding was an abuse of process, but that was dismissed in 2015. That ruling was upheld by the Court of Appeal in 2016, and a further appeal was heard in the Supreme Court in March this year.

In August, the parties reached a confidential settlement, though the Supreme Court said it had still chosen to issue its judgment today "because the appeal involves important issues" and the underlying proceeding is continuing against other defendants.

The majority of the bench said they would have allowed the appeal to the extent that they would have allowed the litigation funding to remain, but would have required the funders to enter into a contract which lessened their control of the litigation and ensured it would pay out any money recovered to unsecured creditors.

The litigation funders made undertakings to do both of those things in court submissions, but the undertakings were not presented in the High Court or Court of Appeal hearings, and the Supreme Court said it was undesirable that the court be presented with a position that differs materially from that presented in the lower court and that both issues could and should have been dealt with earlier. The majority of the bench would not have awarded any costs.

Chief Justice Sian Elias gave a dissenting judgment, saying the court should not deliver its findings following the settlement. She said it was "well-arguable that the litigation funding agreement in issue here is contrary to law", though PwC had not asked the courts to consider that, but thought it was "undesirable" for the court to give judgment as the dispute was settled and the scope of the argument had been constrained.

The Chief Justice said that the likely effect of the judgment was that it will be considered a development in litigation funding law, "even though such development was not the subject of argument", and that such a development should only occur after it has been fully argued.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Gordon Campbell: On The Tax Working Group’s Road Map

Trying to analyse the interim report on the Tax Working Group (TWG) is like trying to review an entire All Blacks game, but at the half- time mark… More>>

ALSO:

Cut Before Using: Australian Strawberries Withdrawn

Needles were found in a punnet of strawberries sourced from Western Australia, which was bought in a Countdown supermarket in Auckland. The Choice brand of strawberries was sold nationwide last week. More>>

ALSO:

"Broad-Based Growth": GDP Rises 1 Percent In June Quarter

Gross domestic product (GDP) rose 1.0 percent in the June 2018 quarter, up from 0.5 percent last quarter, Stats NZ said today. This is the largest quarterly rise in two years. More>>

ALSO:

Judicial Review: China Steel Tarrif Rethink Ordered

On 5 July 2017 the Minister determined not to impose duties on Chinese galvanised steel coil imports. NZ Steel applied for judicial review of the Minister’s decision. More>>