IN THE HIGH COURT OF NEW ZEALAND
AUCKLAND REGISTRY
CIV-2015-404-373
[2016] NZHC 346
BETWEEN

PASCAL DIEULANGARD
Plaintiff

AND

JEREMY VERNON DYSON
First Defendant
NELLY MICHELLE SYLVIE DYSON
Second Defendant

Hearing:

4 February 2016

Appearances:

G Bogiatto for the Plaintiff
Defendants in person (part hearing)

Judgment:

4 March 2016

JUDGMENT OF MUIR J
This judgment was delivered by me on Friday 4 March 2016 at 10.00
pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Date:………………………….

Solicitors:
G Bogiatto, Auckland
Copy to the Defendants.

DIEULANGARD v DYSON [2016] NZHC 346 [4 March 2016]

 Introduction
[1]

The plaintiff, Mr Dieulangard, seeks damages/compensation for lost

investment monies totalling $359,000. He says that due to misleading and false
representations he invested his savings with the defendants, Mr and Mrs Dyson. He
says the Dysons told him that he would be part owner of a land holding in
Helensville, Auckland (the property) and co-investor in the development of the
property into an apartment and lifestyle complex. Neither purchase of the property
nor the development proceeded.
[2]

He also seeks recovery of an additional sum of $100,000 which he says was

advanced to the Dysons by way of loan but never repaid.
[3]

The case proceeded by way of a formal proof as the defendants had hitherto

failed to engage with the Court process.1 On the date of the formal proof hearing
they attended Court. I advised them that if they wished to defend the claim at that
point they needed to seek the leave of the Court to do so. I adjourned while they
conferred and sought advice. On their return they advised that they did not intend to
participate further. They then left the court.
[4]

I therefore proceed to consider the merits of Mr Dieulangard’s claim on his

formal proof application.
Background
[5]

Mr Dieulangard is a French osteopath who resides in New Zealand

periodically. While in New Zealand he befriended the Dysons, a married couple
who were in the business of property management and development. The Dysons
were initially his patients and Mrs Dyson was French, providing an additional
connection. Mr Dieulangard often stayed with the couple while in New Zealand.

1

High Court Rules, r 15.9.

 [6]

From the outset Mrs Dyson was involved in the commercial aspects of their

relationship, frequently talking to Mr Dieulangard in French about the property and
the development which was intended for it.
[7]

In May Mr Dieulangard informally joined Mr and Mrs Dyson in partnership.

The purpose of the partnership related initially to acquisition of the property. At the
Dysons’ request Mr Dieulangard made a payment of $91,000 towards what he
describes as “completing the purchase of the land”. There does not appear to have
been any discussion as to how the balance of what was to be an approximately
$3 million purchase price was to be funded. Mr Dieulangard appears to have so
trusted the Dysons and been so naïve in business matters that he was not on inquiry
in this regard.
[8]

In early 2008 Mr Dieulangard returned to New Zealand and lived with the

Dysons for several weeks. Together the Dysons lead Mr Dieulangard to believe that
the purchase of the land had been completed and that he was a co-owner of it.
[9]

The Dysons then persuaded Mr Dieulangard to invest in the development of

the land – a project styled the “Kaipara Mill Project.” Mr Dieulangard was shown
various plans illustrating the proposed development, which was intended to be a
three level apartment complex.

Mr Dieulangard invested $60,000 in the

development in 2008.
[10]

Mr Dieulangard returned to New Zealand in early March 2009 and again

stayed with the Dysons. During the period from March – November 2009 further
investments were made, totalling $208,000.

Mr Dieulangard was shown

architectural drawings, brochures and plans. He also went to visit the site of the
development during which, he deposes, the Dysons at all times acted as though they
and Mr Dieulangard owned the land.
[11]

Mr Dyson wrote a letter to Immigration New Zealand in support of Mr

Dieulangard’s application for a work visa stating that “Mr Dieulangard is my
principal partner in [the Kaipara Mill Project].” The letter further stated that Mr
Dieulangard has invested a sum “in excess of $250,000” in the project, which was

 expected to be the first of many for the developers. The letter was dated 20 July
2009. Mrs Dyson wrote a letter to similar effect on the same day.
[12]

On 23 June 2009 a further sum was paid to the Dysons but of a different

character, being a one-off $100,000 loan at 12 per cent interest per annum. This was
sought by the Dysons to assist with short term cash flow requirements. The loan was
not recorded in writing, but it was witnessed by Mr Dieulangard’s partner Dagmar
Franke. Ms Franke deposes that she recalls the loan conversation. She says Mr
Dieulangard was initially reluctant to part with such a large sum but that he was
ultimately persuaded to do so on the basis of assurances that it would be repaid in the
near future from other imminent sources.
[13]

In mid-2010 Mr Dieulangard became aware through Ms Franke that the

project had apparently stalled due to the global financial crisis and he confirmed this
over the phone with Mrs Dyson. In December 2011 he returned to New Zealand
where this advice was repeated.
[14]

In October 2012 Mr Dieulangard asked for his investment to be returned and

the Dysons agreed to repay him as soon as possible.
[15]

In January 2014 Mr Dieulangard again returned to New Zealand where he

was told by Mrs Dyson that the project had in fact been “la Berezina” – or a total
write off – and that his investment had been lost.
[16]

Mr Dieulangard insisted on a meeting on 13 May 2014 at the Dyson’s home

during which he demanded the return of his money. He deposes that there were
allegedly threats and abusive comments made towards him and that he left the
property feeling unsafe. A few days later Mrs Dyson acknowledged responsibility
for the debt and agreed to sign an acknowledgement of it. However, Mr Dieulangard
said he had lost confidence in the couple and began investigations. At that point he
discovered that all of Mr Dyson’s companies had been put into liquidation. His
several calls for a proper accounting went unanswered.

 [17]

In August 2014 Mr Dieulangard then consulted a solicitor and discovered that

the Dysons had never owned the property. In fact, although there had been a number
of conditional agreements, there had never been any money paid by the Dysons
towards its purchase.
The pleadings
[18]

[19]

Mr Dieulangard pleaded against both Mr and Mrs Dyson:
(a)

breach of s 9 of the Fair Trading Act 1986 (FTA); and

(b)

breach of an oral agreement to loan $100,000.

Mr Dieulangard also pleaded against Mr Dyson only:
(a)

breach of fiduciary duty; and

(b)

negligent misstatement.

Limitation issues
[20]

At first blush Mr Dieulangard’s claim appears to raise FTA limitation issues,

as some of the alleged breaches date back to May 2007. Ultimately, however, I do
not consider that this precludes the entry of judgment. My reasons are twofold:
(a)

the limitation period operates as an affirmative defence that was not
pleaded in this case; and

(b)

in any event Mr Dieulangard can satisfy the objective threshold in
s 43A.

[21]

Tipping J addressed the nature of s 43(5), the predecessor to s 43A in AMP

Finance NZ Ltd v Heaven in the following terms:2

2

AMP Finance NZ Ltd v Heaven CA151/97, 11 December 1997 at 6.

 Section 43(1) creates the right to claim relief. Section 43(5) does not take
away that right, it simply prescribes a time period for enforcing it.
Conventional limitation provisions use words such as “action shall not be
brought after”. Even against that type of wording (e.g. s 4 of the Limitation
Act 1950), the right is regarded as still subsisting. The words of s 43(5) are
permissive, not prohibitory. Logically, the position under that provision
should be stronger for the survival of the right than when the words are
prohibitory. … Section 43(5) provides a limitation defence which must be
pleaded. It if is not pleaded a defendant cannot rely on the time point.

[22]

In this case no statement of defence has been filed and limitation may, in my

view, therefore be disregarded.
[23]

In any event, I consider that Mr Dieulangard can satisfy the limitation period

in the FTA. Section 43A provides:
43A

Application for order under section 43

A person may apply to a court or a Disputes Tribunal for an order under
section 43 at any time within 3 years after the date on which the loss or
damage, or the likelihood of loss or damage, was discovered or ought
reasonably to have been discovered.

[24]

Mr Dieulangard deposes that the defendants’ misleading and deceptive

conduct was not discovered until May 2014 when, on the basis of legal advice, he
discovered that the property had never actually been acquired by the Dysons or the
partnership. However, in my view the discovery of his loss is better fixed at the date
in January 2014 when he was told the prospect was “la Berezina”. The issue is
whether Mr Dieulangard ought to have reasonably discovered the loss earlier than
January 2014. The text is a contextual one based on a consideration of “how a
person carrying on business of the relevant kind would act if he had adequate but not
unlimited staff resources and was motivated by a reasonable, but not excessive, sense
of urgency.”3 In Mr Dieulangard’s case the context is one of a medical professional
and putative investor who put his trust in a long term friendship. I consider that
there were sufficient indicia of reliability that a reasonable person in Mr
Dieulangard’s position would not have taken steps to investigate the title until he/she
was put on notice by the events of 2014.

3

Paragon Finance Plc v DB Thakerar & Co (a firm) [1999] 1 All ER 400 (CA), approved by
Baragwanath J in Carter Holt Harvey Ltd v Commerce Commission [2009] NZLR 535 (CA).

 [25]

With regard to the breach of fiduciary duty claim and the negligent

misstatement claim, the burden to plead the Limitation Act 1950 also rests on the
defendants.4
The Fair Trading Act cause of action
[26]

Mr Dieulangard alleges that the Dyson’s conduct was misleading and

deceptive and in breach of s 9 of the FTA. That section is in familiar terms:
9

Misleading and deceptive conduct generally

No person shall, in trade, engage in conduct that is misleading or deceptive
or is likely to mislead or deceive.

[27]

He seeks compensation from both Mr and Mrs Dyson for their allegedly

misleading conduct. He does so under s 43 of the FTA which provides in relevant
part:
43

Other orders

(1)
Where, in any proceedings under this Part of this Act, or on the
application of any person, the Court finds that a person, whether or not that
person is a party to the proceedings, has suffered, or is likely to suffer, loss
or damage by conduct of any other person that constitutes or would
constitute –
(a)
A contravention of any of the provisions of Parts 1 to 4 of
this Act;
…
The Court may (whether or not it grants an injunction or makes any
other order under this Part of this Act) make all or any of the orders
referred to in subsection (2) of this section.
(2)
For the purposes of subsection (1) of this section, the Court may
make the following orders –
…
(d)
An order directing the person who engaged in the conduct,
referred to in subsection (1) of this section to pay to the person who
suffered the loss or damage the amount of the loss or damage:
…

4

Matai Industries Ltd v Jensen [1989] 1 NZLR 525 at 532; Barberry Holdings Ltd v Bank of New
Zealand HC Wellington CP257/90, 28 July 1993.

 [28]

I find that the parties were in trade for the purposes of the FTA, as they had

formed a partnership first for the acquisition of land and second for the commercial
development of that land.5
[29]

The Supreme Court in Red Eagle Corporation v Ellis held that the

appropriate methodology for a Court to follow in a case such as this is twofold:6
[28]
It is, to begin with, necessary to decide whether the claimant has
proved a breach of s 9. That section is directed to promoting fair dealing in
trade by proscribing conduct which, examined objectively, is deceptive or
misleading in the particular circumstances… The question to be answered in
relation to s 9 in a case of this kind is accordingly whether a reasonable
person in the claimant’s situation – that is, with the characteristics known to
the defendant ought to have been aware – would likely have been misled or
deceived. If so, a breach of s 9 has been established. …
[29]
Then, with breach proved and moving to s 43, the court must look to
see whether it is proved that the claimant has suffered loss or damage “by”
the conduct of the defendant. The court must first ask itself whether the
particular claimant was actually misled or deceived by the defendant’s
conduct. … If the court takes the view, usually by drawing an inference from
the evidence as a whole, that the claimant was indeed misled or deceived, it
needs then to ask whether the defendant’s conduct in breach of s 9 was an
operating cause of the claimant’s loss or damage. … The impugned conduct,
in breach of s 9, does not have to be the sole cause, but it must be an
effective cause, not merely something which was, in the end, immaterial to
the suffering of the loss or damage.

[30]

The Supreme Court’s approach therefore requires the Court to first ask

whether a reasonable person in Mr Dieulangard’s position would have been mislead
by the Dyson’s conduct.
[31]

Mr Dieulangard’s position was that of a medical professional relatively

unsophisticated in matters of business and property who was in a relationship of trust
and dependency with the Dysons. The Supreme Court noted that:7
Conduct towards a sophisticated businessman may, for instance, be less
likely to be objectively regarded as capable of misleading or deceiving such
a person than similar conduct directed towards a consumer or, to take an
extreme case, towards an individual known by the defendant to have
intellectual difficulties. Richardson J in Goldsboro v Walker said that there
must be an assessment of the circumstances in which the conduct occurred
and the person or persons likely to be affected by it.
5
6
7

Fair Trading Act, s 2(1).
Red Eagle Corporation v Ellis [2010] NZSC 20, [2010] 2 NZLR 492 at [28] (citations omitted).
Red Eagle Corporation, above n 6, at [28] (citations omitted).

 [32]

Mr Dieulangard counted the Dysons as friends. He frequently stayed at their

home for extended periods. He left his motor vehicle in their possession on the
occasions of his return to France and allowed them to use it. They were co-sponsors
of his residency application. The relationship was, at least from Mr Dieulangard’s
perspective, close and trusting. I am left in no doubt that the Dysons would have
been well aware of the limits of his commercial acumen and their ability to trade on
the trust he had invested in them. Their representations were sophisticated. These
included the site visits, at which the property was presented as the partnership’s, the
presentation of architectural drawings, brand and advertising information and
pamphlets.
[33]

I consider a reasonable person with the known characteristics of Mr

Dieulangard would likely have been misled or deceived by the defendants’ conduct.
[34]

Turning to assess the issue of remedy under s 43, I find that Mr Dieulangard

was in fact misled and deceived by the plaintiffs. At the outset the initial investment
of $91,000 was to be used towards “completing the purchase of the land” when in
fact there was at no time an unconditional contract in respect of it, as Mr
Tetley Jones makes clear in his affidavit. The balance of the monies were likewise
invested on a false premise, namely that the partners at that stage co-owned the land.
Together these representations were the material cause of Mr Dieulangard’s loss.
[35]

In the result I find that Mr Dieulangard’s FTA claims are made out against

both defendants. Acting in concert they misled or deceived Mr Dieulangard at each
stage of his investment.
[36]

I therefore make an order for compensation under s 43 of the FTA in the

amount of $359,000 being the total of Mr Dieulangard’s investment.
Breach of fiduciary duty
[37]

Although it is not necessary for the purposes of this judgment I also find the

first cause of action against Mr Dyson for breach of fiduciary duty made out. I
accept that there was a fiduciary relationship between Mr Dyson and Mr
Dieulangard, in my view more in the nature of a partnership than the joint venture

 pleaded, but fiduciary nonetheless. Breaches of that relationship flow inevitably
from the same factual background as supports the FTA claim.
Negligent misstatement
[38]

I do not need to consider the allegations of negligent misstatement against Mr

Dyson.
Loan agreement
[39]

The undisputed evidence is of an on demand loan at an interest rate of 12 per

cent per annum for which demand has been orally made.

Judgment follows

inevitably from that premise.
Result
[40]

I give judgment jointly and severally against the defendants for:
(a)

The sum of $359,000 plus interest calculated in accordance with the
Judicature Act 1908.

(b)

The sum of $100,000 together with simple interest thereon at the rate
of 12 per cent per annum from 23 June 2009.

(c)

Costs follow the event and are awarded on a 2B basis.

__________________________
Muir