A v D

[2019] NZHC 1891

ORDER PROHIBITING PUBLICATION OF NAMES, ADDRESSES OR IDENTIFYING PARTICULARS OF PLAINTIFFS AND DEFENDANTS

IN THE HIGH COURT OF NEW ZEALAND NAPIER REGISTRY

I TE KŌTI MATUA O AOTEAROA AHURIRI ROHE

CIV-2018-441-60

[2019] NZHC 1891

BETWEEN	A, B and C Plaintiffs
AND	D and E Defendants

Appearances:	M Phillipps for plaintiffs M Wenley for defendants
Judgment:	5 August 2019

JUDGMENT OF ASSOCIATE JUDGE JOHNSTON

[On the papers]

[1]    In my judgment dated 8 May 2019 (and reissued in redacted form on 31 May 2019) I dismissed the defendants’ application for summary judgment. The defendants now seek leave to appeal to the Court of Appeal under s 56(3) of the Senior Courts Act 2016.

[2]    For present purposes, the background to the defendants’ unsuccessful application for summary judgment can be summarised briefly. The plaintiffs are the surviving children of their late father. They say that he subjected them to physical and sexual abuse as children and that this had profound long-term consequences for them. They link this to their difficulty to fend for themselves in later life. No attempt was made to contradict their evidence as to these matters in the hearing before me.

[3]    As I described it in my judgment, their case is that, against that background, their father breached fiduciary obligations that he owed them when, years afterwards, and following a long period of estrangement, he disposed of the lion’s share of his estate to trustees a year or two prior to his death.

A v D [2019] NZHC 1891 [5 August 2019]

[4]    The issue that the plaintiffs’ case brings into sharp focus is whether, in such a situation, the courts will regard their father’s actions as constituting a breach of his fiduciary obligations to them, vitiating his inter vivos disposition to his trustees and imposing a constructive trust on the trustees with the result that the assets disposed of would fall into his estate enabling the plaintiffs to pursue a claim against them pursuant to the Family Protection Act 1955.

[5]    In my judgment, I recognised that there was no authority from New Zealand or abroad to which counsel could point, or which my own research identified, to support the imposition of a fiduciary duty on a parent that continues after his or her children reach adulthood. Nevertheless, I concluded that, assuming that the plaintiffs could prove their allegations of abuse and link that to the long-term consequences, it was not certain that a court would conclude that such a duty did not exist.

[6]On that basis, I dismissed the defendants’ application for summary judgment.

[7]The defendants wish to challenge that conclusion.

[8]    As to the principles that apply to applications for leave to appeal against interlocutory judgments:

(a)The expectation is that reasons for granting or declining leave are expressed in general terms and brief.

(b)The leave requirement is a “filtering mechanism” intended to ensure that only appeals on significant matters are allowed — the process weeds out appeals that are trivial or unmeritorious, or merely tactical.1

(c)The threshold for leave is high and intended to reduce the number of interlocutory appeals.2

1      Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13], affirmed in Fairway Holdings Ltd v McCullagh [2018] NZCA 605 at [11].

2      Finewood Upholstery Ltd v Vaughan, above n 1, at [9](a); and Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [15].

(d)The proposed grounds of appeal should raise matters “of general or public importance” or of sufficient importance to the parties to outweigh the lack of general or public importance.3

(e)Thus, applications for leave involve balancing the substantive merits of the proposed appeal on the one hand against the inevitable delay in the resolution of the litigation that would result from an appeal on the other.

(f)The ultimate question is whether, standing back and assessing matters “in a pragmatic and realistic way”, the interests of justice are served by granting leave to appeal.4

[9]    Given that the plaintiffs’ claim would, if successful, be breaking new ground, this is certainly not a situation in which an appeal would be bound to fail.

[10]However, that in itself is insufficient to satisfy the test as described.

[11]   The leave requirement exists to ensure that appeals against interlocutory judgments are only permitted when it would serve the interests of justice, that is to say where the proposed appeal concerns a matter of general or public importance requiring determination or is of such importance to the parties to outweigh the fact that there is no issue of general or public importance at stake.

[12]   In a case such as this it is important to recognise that the alleged error of law in my judgment is not and cannot be that a fiduciary obligation of the sort propounded by the plaintiffs exists at law, because that is not the conclusion that I reached. The alleged error of law can only be my conclusion that it was not possible to dismiss, at a summary stage, the prospect of such a fiduciary obligation existing.

[13]   Once that is recognised, in my view, it is more difficult to conclude that an appeal is likely to be successful.

3      Finewood Upholstery Ltd v Vaughan, above n 1, at [9](c); and Ngai Te Hapu Inc v Bay of Plenty Regional Council, above n 2, at [17].

4      Finewood Upholstery Ltd v Vaughan, above n 1, at [14].

[14]   On balance, it appears to me that it is more conducive to the interests of justice between the parties, and to achieving finality in this litigation, to allow the matter to proceed to trial so that the plaintiffs’ evidence can be tested and a judgment made not only as to the theoretical possibility of a fiduciary obligation on the part of the plaintiffs’ late father but an actual determination of whether, on the evidence, such a duty did exist.

[15]   Whatever conclusion the Court reaches as to the legal position may then be the subject of an appeal that would be determinative of the matter.

[16]   That is to be contrasted with the prospect of an appeal at this stage followed by a trial and a further appeal. In other words, the importance of the proposed appeal does not justify the delay that would be caused by the appeal process.

[17]   Accordingly, the view I take is that the interests of justice are best served by declining leave to appeal, which I do.

[18]Costs on this application are reserved.

Associate Judge Johnston

Solicitors:

Vicki Ammundsen Trust Law Ltd, Auckland for the plaintiffs Willis Legal, Napier for the defendants