Supreme Court to rule on venue

The Securities Commission is going to the Supreme Court in the battle over whether the Tranz Rail insider trading court case should be heard in Auckland or Wellington.

It is appealing against the Court of Appeal's ruling last week which left the way open for the defendants - including David Richwhite - to seek a hearing on Auckland's commercial list. However, the commission's appeal does not stop the Richwhite camp from pressing ahead with efforts to shift the case.

In a minute issued on Thursday, Justice Forrest Miller of the High Court at Wellington ruled that Richwhite's application for a court order to have the case heard on Auckland's commercial list need not wait.

After the Court of Appeal ruling, Richwhite's lawyers sought an Auckland hearing on April 18.

The commission wanted its appeal to be heard first.

It also wanted a challenge from other defendants - American investment fund Berkshire III, its former managing director and ex-Tranz Rail director Carl Ferenbach and the Australian-based former Tranz Rail finance chief Mark Bloomer - to the New Zealand courts' jurisdiction to be resolved first.

The Wellington-based commission wants the case in the capital, where proceedings were filed last October - a cheaper and more convenient venue. Arguing for its appeal to be heard before the Richwhite camp pressed on, the commission had argued the Court of Appeal's reasoning potentially had "wide ramifications" for other aspects of the case.

These include Midavia's argument that the commission is barred from seeking pecuniary penalties against it because of a two-year statutory limit.

However, Justice Miller said ordering the defendants not to apply to transfer the case to the commercial list would be "tantamount to a stay of the judgment of the Court of Appeal".

He said Richwhite's application must be heard by a commercial list judge, and if it succeeded the pre-trial issues would be dealt with in the commercial list.

Richwhite's affidavit - dated March 14 - said he lived in London but he and his wife were in the Coromandel, along with business partner Sir Michael Fay.

"While I understand issues relating to our convenience may not be of overriding importance, Auckland is much more readily accessible for Sir Michael and me from the Coromandel than Wellington."

Richwhite and Fay's company Midavia Rail Investments BVBA is among the five defendants in the case.

Richwhite said if the pre-trial skirmishes were held in Wellington, the defendants would incur "significant" additional costs sending their Auckland-based lawyers to the capital.

The allegations, which all the defendants deny, stem from $83 million of trades in Tranz Rail shares between February and May 2002.

The commission alleges the defendants avoided losses of up to $33 million by selling shares when they knew Tranz Rail had problems.