Spark New Zealand Trading Limited v Bryan - [2025] NZCA 153
Date of Judgment
08 May 2025
Decision
Spark New Zealand Trading Limited v Bryan (PDF 306 KB)
Summary
Fraud — dishonest assistance — unlawful means conspiracy — res judicata — cause of action estoppel — issue estoppel — Evidence Act 2006, s 47 — Limitation Act 2010, ss 11 and 14
Spark New Zealand Trading Ltd, in an arbitration, obtained $3,578,365 in damages against Victory I.T Ltd and a Mr Mark Lester. The damages represented the sum of secret payments made by Victory to Mr Lester, when Mr Lester was working for Spark, and in return for which Mr Lester took steps to secure work for Victory from Spark, at inflated prices. Victory was owned and controlled solely by Mr Sean Bryan.
Spark then issued High Court proceedings against Mr Bryan personally, seeking summary judgment based on the causes of action that succeeded against Victory in the arbitration, and for the same sum. Spark said Mr Bryan, though not party to the arbitration, was a privy of Victory and accordingly bound. The
High Court declined summary judgment and directed that Spark’s claim go to trial.
Having been declined leave in the High Court, the Court granted Spark leave to appeal.
Subsequent to the appeal being filed, Mr Bryan was convicted of criminal offences related to the payments. Spark thus sought leave to rely on s 47 of the Evidence Act 2006, to the effect that the convictions were conclusive proof of the facts underlying its claims. Mr Bryan also sought to raise a new arguable defence that Spark’s claim was partially time-barred under the Limitation Act 2010. Both parties were granted leave to raise these matters.
Was Mr Bryan the privy of Victory?
Held: Yes
It was common ground that the arbitral award was a final judicial decision, and so the key issue was about privity. Although the Court accepted that caution was needed in making a finding of privity between a company and its shareholders or directors, it nevertheless found that it was unarguable that privity existed between Mr Bryan and Victory. Mr Bryan was Victory’s alter ego, the only vessel through which Victory could act, had actively participated in the arbitration, and it would, the Court said, be very unjust for
Mr Bryan to be able to distance himself from Victory and require Spark to incur the cost of re-litigation.
The Court went on to hold that the causes of action proved in the arbitration were identical to those claimed against Mr Bryan and that, in any event, there was identity as to the issues.
Were Mr Bryan’s convictions conclusive proof of the facts constituting the elements of the offences?
Held: Yes
The Court held that applying s 47 of the Evidence Act, Mr Bryan’s convictions, provided conclusive proof of the fact the impugned payments were made by him using the vehicle of his company and that those payments were made corruptly in order for Victory to obtain a lucrative work stream.
Was it arguable that Spark’s claims were partially time-barred?
Held: Yes
As Spark’s claim was filed on 20 December 2021, it had to rely on late knowledge, under the Limitation Act, for payments made before 20 December 2015, totalling some $1,852,365. The Court accepted that it was at least arguable that Spark was precluded from relying on late knowledge, and that Mr Bryan had an arguable limitation defence.
The appeal was allowed in part and Spark was awarded $645,650, plus interest, with the remainder of its claim being left to trial. Spark was also awarded costs on the appeal, less 10 per cent, as it was not entirely successful. Costs in the High Court were to be determined in light of the Court’s judgment, and costs on the applications to raise the new appeal grounds, and new defence, were to lie where they fell.
Spark New Zealand Trading Ltd, in an arbitration, obtained $3,578,365 in damages against Victory I.T Ltd and a Mr Mark Lester. The damages represented the sum of secret payments made by Victory to Mr Lester, when Mr Lester was working for Spark, and in return for which Mr Lester took steps to secure work for Victory from Spark, at inflated prices. Victory was owned and controlled solely by Mr Sean Bryan.
Spark then issued High Court proceedings against Mr Bryan personally, seeking summary judgment based on the causes of action that succeeded against Victory in the arbitration, and for the same sum. Spark said Mr Bryan, though not party to the arbitration, was a privy of Victory and accordingly bound. The
High Court declined summary judgment and directed that Spark’s claim go to trial.
Having been declined leave in the High Court, the Court granted Spark leave to appeal.
Subsequent to the appeal being filed, Mr Bryan was convicted of criminal offences related to the payments. Spark thus sought leave to rely on s 47 of the Evidence Act 2006, to the effect that the convictions were conclusive proof of the facts underlying its claims. Mr Bryan also sought to raise a new arguable defence that Spark’s claim was partially time-barred under the Limitation Act 2010. Both parties were granted leave to raise these matters.
Was Mr Bryan the privy of Victory?
Held: Yes
It was common ground that the arbitral award was a final judicial decision, and so the key issue was about privity. Although the Court accepted that caution was needed in making a finding of privity between a company and its shareholders or directors, it nevertheless found that it was unarguable that privity existed between Mr Bryan and Victory. Mr Bryan was Victory’s alter ego, the only vessel through which Victory could act, had actively participated in the arbitration, and it would, the Court said, be very unjust for
Mr Bryan to be able to distance himself from Victory and require Spark to incur the cost of re-litigation.
The Court went on to hold that the causes of action proved in the arbitration were identical to those claimed against Mr Bryan and that, in any event, there was identity as to the issues.
Were Mr Bryan’s convictions conclusive proof of the facts constituting the elements of the offences?
Held: Yes
The Court held that applying s 47 of the Evidence Act, Mr Bryan’s convictions, provided conclusive proof of the fact the impugned payments were made by him using the vehicle of his company and that those payments were made corruptly in order for Victory to obtain a lucrative work stream.
Was it arguable that Spark’s claims were partially time-barred?
Held: Yes
As Spark’s claim was filed on 20 December 2021, it had to rely on late knowledge, under the Limitation Act, for payments made before 20 December 2015, totalling some $1,852,365. The Court accepted that it was at least arguable that Spark was precluded from relying on late knowledge, and that Mr Bryan had an arguable limitation defence.
The appeal was allowed in part and Spark was awarded $645,650, plus interest, with the remainder of its claim being left to trial. Spark was also awarded costs on the appeal, less 10 per cent, as it was not entirely successful. Costs in the High Court were to be determined in light of the Court’s judgment, and costs on the applications to raise the new appeal grounds, and new defence, were to lie where they fell.