Davis v Santos Ponsonby Limited - [2015] NZHC 2508

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-001216 [2015] NZHC 2508

BETWEEN
VICTOR CLIFFORD SCOTT DAVIS

AND KERRY SEAN DAVIS AS TRUSTEES OF THE SCOTT DAVIS FAMILY TRUST

Plaintiff

AND

SANTOS PONSONBY LIMITED Defendant

Hearing: 28 September 2015

Appearances:

R B Hucker and J L Schwarcz for the Plaintiffs
J Ussher for the Defendant

Judgment:

13 October 2015

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 13 October 2015 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date.......................................

Solicitors:

Hucker & Associates, Auckland

J Ussher, Auckland

DAVIS & Anor v SANTOS PONSONBY LIMITED [2015] NZHC 2508 [13 October 2015]

Summary

[1] The plaintiffs, Scott and Kerry Davis, are brothers. They are also the trustees of the Scott Davis Family Trust. They apply for summary judgment on their claim against the defendant company, Santos Ponsonby Limited. Their claim is in essence that Santos is liable to repay them for on-demand loans that they say they made to Santos in their capacity as trustees of the trust in 2013. They say that they have made demand for repayment, and that Santos has failed to repay.

[2] It is not in dispute that advances were made that have not been repaid despite demand. Santos’s case is that the advances are not repayable, and in any case that it has no liability to repay trust monies or, consequently, the plaintiffs as trustees. Additionally, Santos disputes the quantum of the advances, particularly those relating to legal fees and a few other invoices.

Background

[3] The defendant, Santos, is a company whose sole director and shareholder is one Anne Sim. Santos operates a café trading as Santos Café.

[4] In late 2011, while Ms Sim and Scott Davis were living together, Ms Sim decided that the café needed to be refurbished. She made up a budget for the required works, which amounted to $63,077.50. She could not pay that sum herself. Mr Davis agreed to lend it to her. By the time that the work got underway, in early
2013, Ms Sim and Mr Davis had separated. He, however, honoured the earlier agreement to provide funding.

[5] The agreement, it appears, was an oral one. Its terms are in dispute. Ms Sim says that the loan was to be repaid only if the café began to turn a profit; and in that case, only 50% of the principal sum was to be repaid. Mr Davis says otherwise. According to him, no term was specified for repayment; as such, the loan was repayable on demand. It is also in dispute where the funds came from: Ms Sim says they were Mr Davis’ personal funds, while Mr Davis says he made the loan in his capacity as a trustee and the money was trust money. In any event, an advance of

$62,913.58 was advanced to Santos through payments made directly to contractors and other creditors, and by cash advances to the joint bank account of Mr…

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: [2015] NZHC 2508
Decision Date: 13 October 2015

CaseChat Overview and Summary

The plaintiffs, Scott and Kerry Davis, seek summary judgment against Santos Ponsonby Limited for repayment of advances made in 2013. They claim that they made on-demand loans to Santos in their capacity as trustees of the Scott Davis Family Trust, and that Santos has failed to repay despite demand. Santos disputes the amount of the advances and the terms of repayment, particularly as to whether repayment is contingent on the café making a profit. Additionally, Santos contends that it has no liability to repay trust monies or the plaintiffs as trustees. The central dispute revolves around the terms of the advances and whether they were repayable on demand or contingent upon certain conditions.

The court must determine whether there is a genuine dispute as to liability that stands as an impediment to summary judgment. The primary conflict is a direct contradiction in the evidence regarding the terms of repayment of the advances. Ms Sim asserts that repayment was conditional on the café making a profit, while Mr Davis contends that repayment was due on demand. This factual conflict is critical to the outcome of the case and affects both liability and the quantum of repayments. Additionally, Ms Sim argues that the plaintiffs are estopped from claiming repayment due to a representation made after the original agreement, which Mr Davis denies.

The court found that it was not appropriate to resolve such a major conflict of evidence in a summary judgment application, especially where the assessment of credibility would determine the matter in its entirety. The court noted that while there are sensible explanations for the arrangement entered into between the parties, and some supporting evidence for Ms Sim's contentions, unanswered questions remain. The court concluded that the matter should be fully tested at a hearing, where the evidence and credibility of the parties could be assessed. Consequently, the application for summary judgment was declined.

The court reserved the issue of costs in accordance with the Court of Appeal’s judgment in NZI Bank Ltd v Philpott. The case will proceed to a full hearing to determine the terms of repayment, the quantum of advances, and the liability of Santos Ponsonby Limited to the plaintiffs.

Orders