Cook v DB and JH Cook Partnership - [2024] NZHC 855

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-421

[2024] NZHC 855

BETWEEN
DAVID BRYAN COOK

Plaintiff

AND

DB AND JH COOK PARTNERSHIP

First Respondent

AND

JUDITH HUNTER COOK

Second Respondent

Hearing: 8 April 2024

Appearances:

M D W King and D K Kemp for the Plaintiff

C A Gibson and N R Fanning for the Respondents

Judgment:

19 April 2024

INTERIM JUDGMENT OF HARLAND J

Introduction

[1] After 42 years of marriage, Mr and Mrs Cook separated in May 2022. Relationship property proceedings have been issued in the Family Court. One of the issues to be decided will be whether a farm property at Staveley, owned by the DB and JH Cook Partnership (now dissolved), can be purchased by Mrs Cook or will need to be sold. Mrs Cook wishes to maintain the option to purchase the farm so that she and the parties’ son can continue to farm it. Mr Cook contends that they will be unable to raise the funds necessary to do so.

[2] In this case, the parties are deadlocked about how the most significant partnership asset (the farm) should be managed pending sale and how their relationship property proceedings should be resolved.

COOK v COOK [2024] NZHC 855 [19 April 2024]

[3] Mr Cook has now applied to this Court for an order appointing an independent accountant as the receiver and manager of the partnership assets. He seeks an order directing that the receiver and manager sell the partnership assets and wind up the partnership. This application is made under s 76 of the Partnership Law Act 2019.

[4] The application is opposed by Mrs Cook. She submits that such an order is not necessary and would be costly but, more importantly, she submits it would prejudice her ability to retain the farm and would defeat the ability of the Family Court to effect a just division of the parties’ relationship property. However, just before the hearing before me, she proposed the following via her counsel:

1. The present proceedings be adjourned, and the parties attend mediation in good faith on or before 1 July 2024;

2. If no agreement is reached by 2 July 2024, then the Staveley farm be listed for sale. To facilitate the Staveley farm being sold for the best possible price it would be listed by 1 August 2024, or later by agreement, to ensure that it is listed during the Spring and Summer months; and

3. The above agreement would be conditional on Ms Cook receiving
$3,000,000.00 in an interim distribution to enable her to purchase a new home while the remainder of the PRA 1976 proceedings are finalised.

[5]Mr Cook did not respond to this proposal.

[6] I must consider whether the appointment of a receiver and manager is necessary pending the resolution of the parties’ relationship property proceedings.

[7] I have decided to grant the application in part. This judgment sets out my reasons for doing so.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2024] NZHC 855
Decision Date: 19 April 2024

CaseChat Overview and Summary

David Bryan Cook applied for an order appointing an independent accountant as the receiver and manager of the partnership assets and directing that the receiver and manager sell the partnership assets and wind up the partnership. Judith Hunter Cook opposed the application. The High Court considered the application and made a partial order for the appointment of a receiver and manager. The court found that the appointment of a receiver and manager was necessary pending the resolution of the parties' relationship property proceedings because Mr Cook had concerns about the maintenance of the farm and there was a breakdown in communication between Mrs Cook, Mr Cook, and their son. The court was not, however, persuaded that it was necessary or appropriate for a receiver and manager to be authorised to sell the partnership assets and wind up the partnership at this point, because the property relationship proceedings had yet to be determined and the ability of Mrs Cook to purchase Mr Cook's share in the partnership was a possibility. The court also noted that Mrs Cook had not, to date, prioritised the arrangements she will need to make to enable her to purchase the property by actively seeking out financing options. The court ordered that Andrew Oorschot be appointed as the receiver and manager of the partnership. The court also directed that a settlement conference be convened to resolve the issues.

Orders