An orthopaedic surgeon and his Queenstown helicopter pilot son – out of pocket $350,000 from a failed aircraft sale – have won half that amount back, plus other costs, from local lawyer Tom Pryde and his firm.
Stefan Poplawski was chief pilot for Queenstown helicopter company Alpine Choppers, which is now in liquidation and its owner Brendan Thow bankrupt.
In 2009 Stefan and his father, Timaru surgeon Zbigniew Poplawski, wanted to purchase a $1.25 million helicopter from Thow and then lease it back to him.
Around this time, Thow was lining up to buy assets from Te Anau’s South West Helicopters but having difficulty arranging funds.
Thow approached Stefan about getting $350,000 of the helicopter’s purchase price released so he could meet a payment schedule for the South West deal.
The parties verbally agreed that Poplawski senior would pay $350,000 to South West on the condition his son received a 50 per cent shareholding in the Thow entity buying the helicopter company’s assets as “temporary security”.
In July 2009, South West’s lawyer, Queenstown solicitor Tom Pryde, emailed Stefan’s lawyer and recorded details of the arrangement.
Pryde also said the sale of the South West assets to Thow was “unconditional”.
The transfer of the $350,000 went ahead but Thow did not pay a further $1.5 million to settle the South West deal.
In September 2009, South West cancelled the sale agreement and kept the deposits it had received, including the $350,000 from the Poplawskis.
Thow was declared bankrupt in September 2011.
In July last year, the Poplawskis went to the High Court, alleging Pryde’s email misled them into thinking Thow’s purchase of South West was likely to occur.
They contended they were lulled by “various half truths … into a false sense of security” and that the “very shaky state the deal was in” was not disclosed.
The father and son brought a case for compensation under the Fair Trading Act against Pryde and his Cruickshank Pryde firm.
Justice Christian Whata decided in August last year that while Pryde’s email was capable of misleading, he did not consider a reasonable person in Stefan’s position would be likely to have been misled by it.
The judge ruled that the email did not breach the Fair Trading Act but said if he had found an “actionable breach” Pryde and his firm would have been liable for only 50 per cent of the Poplawskis’ $350,000 loss.
The Poplawskis then went to the Court of Appeal, where Justices Mark O’Regan, Terence Arnold and Ellen France set aside the lower court’s decision this month.
The judges ruled it was reasonable for Stefan to rely on the misleading email and that it did constitute a breach of the Fair Trading Act.
While the Poplawskis sought the full $350,000 during their appeal, the judges also decided that Pryde and the law firm should pay only half of what was lost.
They ordered them to pay $175,000 plus interest, and 90 per cent of the Poplawskis’ court costs.