Schaeffer v Murren [2020] NZSC 98 is a judgment from the New Zealand Supreme Court dated 22 September 2020. The case dealt with an amalgamation of laws including civil procedure, private international law, and negligent misstatement in the context of an investment in a vineyard.

The Applicant, Mr Scaeffer, applied for leave to appeal to the Supreme Court to argue that the High Court, at trial, should have determined whether New Zealand or Nevada law applied.[1] This argument was intended to be asked to the Supreme Court despite no party pleading that Nevada law applied.[2]

The Supreme Court dismissed this application for leave to appeal as it was not in the interests of justice to do so.[3].

Facts

Mr Schaeffer, Mr Murren and Mr Lee were residents of Nevada, United States.[4] Mr Schaeffer supposedly acquired 80% of an interest in a Nelson vineyard through a Nevada limited partnership.

Mr Murren invested more than a million dollars and Mr Lee more than half a million dollars.[5] Agreements in 2002 and 2006 stipulated the terms of the limited partnership.[6] Not only did the Mr Murren and Mr Lee lose their investments, but what also came to the fore was that Mr Schaeffer had not transferred his 80% interest to the limited partnership. Despite this, Mr Schaeffer treated the assets, planned to be owned by the limited partnership, as his.[7].

Background

In 2015, Mr Murren and Mr Lee initiated proceedings against Mr Schaeffer in the New Zealand High Court.[8] Mr Schaeffer’s protest to jurisdiction and dismissal or stay application were rejected in this forum.[9]

The High Court, the case went ahead with New Zealand law being applied.[10] The Court found for Mr Murren and Mr Lee in the regard of Mr Schaeffer being liable for negligent misstatement under the Fair Trading Act 1986 and the Nevada Deceptive Trade Practices Act NRS 598.[11]

Mr Schaeffer exercised his right to appeal to the Court of Appeal. The ground of appeal was that the High Court should have applied Nevada law and, since applicability of Nevada law was unproved by Mr Murren and Mr Lee, their claims should have been dismissed.[12] The Court of Appeal dismissed the appeal.[13]

Supreme Court

The application for leave was based the argument that the issues were matters were of general and public importance. And that if leave was not granted, a substantial miscarriage of justice would occur.[14]

After relevant considerations, the Supreme Court confidently concluded that the applicant’s argument in intending to appeal had an insufficient chance of success. As such, the cost and expense of an appeal was unjustified.

Concluding Remarks

An interesting case which displayed the confidence of the Supreme Court. Although Mr Murren and Mr Lee lost their respective investments in the Nelson vineyards, now that litigation has reached the highest level, they can perhaps sit back and enjoy a wine or two.

Copyright Steve Keall, all rights reserved, 2020

[1] Schaeffer v Murren [2020] NZSC 98 at [7].

[2] At [4] and [9].

[3] At [15].

[4] At [2].

[5] At [2].

[6] At [2].

[7] At [2].

[8] At [3].

[9] At [3] and Murren v Schaeffer [2015] NZHC 2759 (Associate Judge Matthews).

[10] Schaeffer v Murren, above n 1, at [4].

[11] Murren v Schaeffer [2018] NZHC 3176 (Collins J) at [236].

[12] Schaeffer v Murren [2020] NZCA 224 at [7].

[13] Schaeffer v Murren, above n 1, at [6].

[14] At [8].