Wednesday 23rd November 2011
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NZX has won its bid to pursue compensation from the sellers of the Australian Clear Grain Exchange in the New Zealand courts after the deal went sour last year.
Judge David Gendall ruled in favour of the local stock exchange operator, saying the dispute raises serious issues that need to be tried on their merits, and that New Zealand courts are the appropriate venue.
“At this level the court cannot venture far into the merits once it has found, as I have, that on the material before the court that at this stage there is clearly serious issues to be tried on the merits,” Judge Gendall said in a Wellington High Court judgment delivered yesterday.
“In my judgement it would be wrong to dismiss the plaintiff’s application, with the result that the proceedings would be dismissed in their entirety, when it exercises its contractual right to bring proceedings in the New Zealand court and to apply New Zealand law when it has satisfied all the other prerequisites contained in the rules,” he said.
NZX claims Clear’s former owners Grant Thomas and Dominic Pym, and their companies Ralec Commodities and Ralec Interactive misled NZX when it bought the commodities trading platform for A$6.9 million in October 2009 with “wildly inaccurate” forecasts.
Counsel for Melbourne-based Thomas and Pym tried to have the application set aside, saying Australia was a more appropriate venue, and that the prosecution was without merit.
Judge Gendall said he was persuaded NZX’s claim “has a real and substantial connection with New Zealand, which is neither fleeting nor peripheral,” and was swayed by the non-exclusivity provision for any legal action in the sale agreement.
“In my view these are all matters involving substantial dispute as to facts and as to the law and it is not appropriate nor possible for a mini-trial to be conducted,” the judgment said.
In a hearing in Wellington last week, NZX’s counsel had to convince the court there was a case to answer and that the local courts were the appropriate venue.
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