Cooke v Butler - [2021] NZHC 2014

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2021-409-124

[2021] NZHC 2014

IN THE MATTER of a claim in debt

BETWEEN

JANET MARIE COOKE, SHARON MARIE COOKE and STANLEY CHARLES

BARKER as trustees of the Cooke Family Trust

Plaintiffs

AND

PENNY LEE-ANN BUTLER

First Defendant

AND

CHARLES ANDREW AXELSEN BUTLER

Second Defendant

Hearing: 30 July 2021

Counsel:

R A Hearn for Plaintiffs/Applicant

S M Grieve and C Mo for Defendants

Judgment:

5 August 2021

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 5 August 2021 at 3.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar
……

COOKE v BUTLER [2021] NZHC 2014 [5 August 2021]

[1] The plaintiffs are trustees of the Cooke Family Trust (the Trust). They seek summary judgment for $100,000 against the first defendant (Penny) in relation to what is documented as a loan made to Penny on 12 June 2015.

[1] Penny acknowledges signing the Deed of Acknowledgment of Debt dated 12 June 2015 relied on by the plaintiffs and acknowledges she received the $100,000 referred to in the Deed. Penny’s position is that, when seen in the wider context of dealings between her and the Trust over a number of years, the acknowledgment of debt is not what it seems to be.

[2] Penny is the daughter of the first named plaintiff, Janet Cooke (Janet) and is a beneficiary of the Trust. The Trust was settled in December 2005. Janet’s husband, Clive, died in 2008 leaving his Estate to the Trust. Janet says Clive’s Estate was limited because his and Janet’s assets were either held jointly or in the Trust.

Original purchase of 91A Memorial Avenue, Christchurch

[3] In late 2008/early 2009, Penny had separated from her then partner and needed to find a home for herself and her children. Penny says she identified 91A Memorial Avenue, Christchurch (Memorial Ave) as a suitable property and produces an Agreement for Sale and Purchase of the property dated 7 January 2009 from the vendors to her. The purchase was completed by the Trust, with the then trustees taking title and their solicitor acting on the purchase. The purchase price was $306,000. A deposit of $30,000 was paid, it seems by Penny. According to the solicitor’s statement, the balance was funded by a sum of $100,000 advanced to the Trust by Janet, a further sum of $20,000 from Penny, and bank finance. The $100,000 advance came from what had been a joint account of Clive and Janet’s. Penny took possession and lived in the home as if it were her own, making the mortgage payments and other outgoings for some years. Penny was single at the time of the purchase but subsequently married the second defendant, Charles. The couple lived at Memorial Ave until they moved out at the end of 2011, after which they let Memorial Ave.

[4] In 2015, the Trust sold Memorial Avenue to Penny and Charles at…

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.

Continue reading Cooke v Butler

Details

AGLC: Cooke v Butler [2021] NZHC 2014
Case: [2021] NZHC 2014
Decision Date: 5 August 2021

CaseChat Overview and Summary

In Cooke v Butler, the plaintiffs, who were trustees of the Cooke Family Trust, sought summary judgment against the first defendant, Penny, for the sum of $100,000, which was documented as a loan made to Penny in June 2015. Penny acknowledged signing the Deed of Acknowledgment of Debt and receiving the funds but argued that the acknowledgment of debt did not reflect the true intention that the money was hers. The central issue before the court was whether the doctrine of promissory estoppel applied to prevent the enforcement of the Deed of Acknowledgment of Debt.

The court found that the plaintiffs' decision to frame the $100,000 advance to Penny as a loan, rather than an outright distribution, was likely motivated by concerns over potential relationship property claims against Penny. This change in framing suggested an understanding that the loan would only be called up if Penny was subject to such claims. Penny's reliance on this representation was considered inherent in her agreement to convert what she understood to be her money into a loan. The court concluded that there were enough indications supporting Penny's position to prevent the granting of summary judgment.

The court dismissed the application for summary judgment, noting that while Penny's affidavit was deficient in some respects, there were enough supporting elements to argue that promissory estoppel applied. The court reserved costs, citing deficiencies in Penny's affidavit and the narrow margin by which the application was dismissed.

This decision highlights the importance of clear documentation and communication in trust transactions, especially when dealing with potential relationship property claims. The court's ruling underscores the need for trustees to thoroughly document their decisions and for beneficiaries to seek independent legal advice when entering into significant financial agreements.

Orders