Mark Dineen’s departure from Canterbury law firm Tavendale was followed by allegations he had wrongly taken business data with him, poached clients and wrongly appropriated interest paid by clients. The High Court put legal action on hold; the dispute must first go to arbitration.
In 2009, Mark Dineen signed up as a shareholder and director of Tavendale & Partners Ltd, joining with Mark Tavendale and Andrew Leete. In 2014, they merged with Ashburton law firm Cooney Silva Evatt Ltd. In a classic case of the cobbler’s shoes being the last repaired, the combined firm concentrated on getting their clients’ affairs in order rather than first properly documenting business terms for the now larger Tavendale. Argument over what had been agreed was disputed when Mr Dineen left in 2021, joining a rival law firm.
Tavendale alleges Mr Dineen is in breach of fiduciary duties owed the company: setting up loan transactions with Tavendale clients and failing to account to Tavendale for interest received; poaching clients; and taking with him Tavendale electronic records.
Mr Dineen says their business agreement requires all disputes first go to arbitration. Terms of the 2014 merger went no further than signed heads of agreement. The big picture was covered: rules for joining and leaving the business together with funding requirements; but no fine detail. The heads of agreement did itself contain an arbitration clause, Associate judge Paulsen pointed out. Before the court could be asked to rule on what might be the fine detail, the question had to first be considered by an arbitrator. Evidence was given of multiple drafts prepared after the merger of a shareholders’ agreement intended to cover the fine detail. No final agreement was signed. Mr Dineen argues rules agreed in 2009 when he joined Tavendale still apply.
Tavendale & Partners Ltd v. Dineen – High Court (30.06.22)
22.114