Sharechat Logo

Former Feltex shareholder Houghton granted leave to appeal to Supreme Court

Tuesday 2nd May 2017

Text too small?

Former Feltex Carpets shareholder Eric Houghton has been granted leave by the Supreme Court to challenge a Court of Appeal ruling that dismissed his long-running suit against the promoters and directors of the failed carpet-maker.



Supreme Court Chief Justice Sian Elias and Justices Terence Arnold and Mark O'Regan approved the appeal to New Zealand's highest court on the question of "whether the Court of Appeal erred in dismissing the applicant’s appeal."



In dismissing Houghton's appeal to the lower court last year, the bench of the appeal court had found that while there was conduct that could be deemed misleading or deceptive, it wasn't material enough to cause loss.  



Houghton had sued the former Feltex directors, owners and sale managers in a representative action seeking $185 million including interest for shareholders who his suit said had been misled by the 2004 prospectus. In the original High Court suit, Justice Robert Dobson had found in favour of the defendants, while noting some criticisms of the offer documents. The appeal court, in rejecting Houghton's appeal, had noted that the forecast for earnings in the 2004 financial year in the prospectus gave Houghton grounds to pursue a claim that the document contained misleading statements



In seeking leave to appeal to the Supreme Court last month, Houghton's lawyer Patricia Mills argued that because the Feltex prospectus contained an untrue statement it wasn't a valid offer document and meant, therefore, that the company wasn't entitled to offer securities to the public. 



The Supreme Court justices said that "given the complexity of the issues the applicant raises, the court would be grateful for the assistance of senior counsel at the hearing," which they intend to be heard in the last week of July, if possible.



They noted that the respondents - the directors, two Credit Suisse entities and brokerages First NZ Capital and Forsyth Barr - had expressed their intention "to support the Court of Appeal judgment on other grounds".



The respondents are fielding 11 lawyers, including four Queen's Counsels.



Feltex failed in 2006.





  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Asset Plus sells Heinz Watties distribution centre for $29.1 mln
18th July 2019 Morning Report
COMMENT: RBNZ's key political omission in its bank capital proposals
ANZ and Westpac credit rating outlooks downgraded to 'negative' outlook: Fitch
MARKET CLOSE: NZ shares edge higher in quiet trading; weaker currency buoys exporters
NZ dollar stalled amid uncertainty about US rate cuts
RBNZ a 'poor communicator' - CBL's Harris
Methane reduction target could be catastrophic - Fonterra Shareholders' Council
Greater role for gas in electrification of transport, industry
Chorus sees growth in high value gigabit fibre plans

IRG See IRG research reports