Whites legal battle drags on
Months after the Whites chain of grocery stores shut their doors, legal battles between the owners and creditors are still rumbling on.In a specially endorsed writ of summons issued on November 22, BGA Ltd and Pitt & Company sought $1,036,349.59 from Gary and Michael White.While the brothers had only formally guaranteed the debts of one company, White and Sons Ltd, the plaintiffs allege they were also liable for the debts of White’s at Southside Ltd and White’s at Hayward’s Ltd.The defendants however applied to have the writ struck down in December, stating the claims were “scandalous, frivolous, vexations and/or an abuse of the process of the court”.The writ was subsequently amended to claim the defendant’s execution of a personal guarantee of the debts of only White and Sons Ltd “constituted a fraudulent or negligent representation” that the debts of all three companies in the group were guaranteed. In addition, or alternately, the writ alleged there was an oral agreement by the defendants to guarantee the debts of all three companies.According to a written judgement by Chief Justice Ian Kawaley following an April 22 hearing, Jai Pachai, representing the plaintiffs, told the Supreme Court that further amendments are still required to particularise the allegations of fraud and negligence.However Kim White, representing the defendants, said the claims could and should have been dealt with during the earlier legal actions. On December 7, the defendants applied to have the writ struck down.The Chief Justice wrote that the plaintiffs had sued all three companies together with the defendants.That case was subsequently pleaded on the basis that the written guarantee signed by them in relation to the debts of White and Sons Ltd extended to the debts of the entire group of companies.That claim was amended when the true position of the defendants, that the claim was limited to the written guarantee, was discovered.In his ruling, Mr Justice Kawaley said the application to strike the writ came down a question of if it was open to the plaintiffs to limit their first claim to enforcing a written agreement and defer pursuing more complicated legal arguments.He wrote that, in his judgement, it was reasonable for the plaintiffs to not add the current claims to the clear-cut matters covered in the written agreement, which was from the outset the basis of the first action.“In the present case, the plaintiff’s case is that they believed the defendants were guaranteeing the group’s debts as a whole,” Mr Justice Kawaley wrote.“The first action eventually proceeded in respect of the discrete issue of the debts of one company subject to a written guarantee. The present action is not only concerned with the indebtedness of separate, albeit related, companies. It is based on wholly different causes of action as well.”However he continued to state that the amended statement of claim is liable to be struck out as embarrassing because it fails to set out sufficient particulars, leaving “bare allegations”.“The usual practice is that a plaintiff is afforded an opportunity to cure these types of pleading deficiencies, unless it is obvious that the defects cannot be cured through an amendment,” he wrote.He said the plaintiffs are at liberty to apply for leave to re-amend the pleading within the following 28 days.The Chief Justice ordered all three White’s stores wound up last summer after 33 creditors came forward in support of petitions to close the stores.