BETWEEN	SHANE ANTHONY ENRIGHT First Appellant SOUTHERN LAKES HOLDINGS LIMITED Second Appellant
AND	CATHERINE ANN NEWTON, WILLIAM JAMES YOUNG, WAYNE MICHAEL ENRIGHT, GENE HERSCHEL ENRIGHT First Respondents/First Cross-Appellants SHANE ANTHONY ENRIGHT AS SOLE ADMINISTRATOR AND TRUSTEE OF THE ESTATE OF JOHN JAMES ENRIGHT Second Respondent ERIC JOHN THOMSON Third Respondent TERRENCE JOHN ENRIGHT Second Cross-Appellant

Hearing:	4 March 2020
Court:	Courtney, Ellis and Brewer JJ
Counsel:	DAT Chambers QC and C Upton for First Appellant S L Robertson QC and AHH Choi for Second Appellant T M Molloy and S L McColgan for First Respondents and Second Cross-Appellant No appearance for Third Respondent
Judgment:	29 October 2020 at 9.30 am

JUDGMENT OF THE COURT

AThe first appellant’s appeal is allowed in part. The Judge’s order requiring Tony Enright to account to the first respondents to the extent of $711,095 (four-fifths of $889,869) is quashed and substituted with an order that he account to the first respondents and the second cross-appellant to the extent of $496,285 (five-sixths of $595,542).
BThe second appellant’s appeal is allowed in part.

C The cross-appeals are allowed in part.

DThe Judge’s order that SLH, the second respondent, pay equitable compensation of $995,859 is quashed and substituted with an order that SLH account as a knowing recipient for $382,288, being five-sixths of the total of the interest and management fee ($358,745.68) and 2002 payment ($100,000).
EWe remit the case to the High Court for determination of the following questions:
(a)What are the terms of the declaration required to be made to recognise the respondents’ equitable proprietary interest in Two Mile Station?
(b)What is the correct legal and factual basis on which to determine how SLH’s improvements to Two Mile Station might be recognised?

FAs between the first appellant and the first respondents and second cross-appellant, costs will lie where they fall.
G The first respondents and second cross-appellant are entitled to costs from the second appellant for a standard appeal on a band A basis, with the usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Courtney J)

Table of Contents
Para No
Introduction	[1]
General background	[10]
The Enright family	[11]
The terms of the Trust	[13]
The administration of the Trust	[17]
Dunstan Burn Station and Two Mile Station	[23]
The Trust is wound up	[27]
The aftermath of the handover	[30]
Was Terry’s claim time-barred?
The case in the High Court	[34]
The issue on appeal	[40]
The relevant circumstances	[56]
With reasonable diligence, could Terry have discovered the facts giving rise to the cause of action in 2008?	[66]
Apportionment of the vested income between Tony and the respondents (Tony’s appeal)	[79]
The SLH dividend (Tony’s appeal)
The issue	[82]
What amount vested in the income beneficiaries and what was the benefit to Tony?	[86]
Interest and the management fee paid to SLH (cross-appeal)

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 Enright v Newton

Details

AGLC: Enright v Newton [2020] NZCA 529
Case: [2020] NZCA 529
Decision Date: 29 October 2020 at 9.30 am

CaseChat Overview and Summary

- Parties
This is an appeal against the decision of Palmer J in the High Court of New Zealand in Enright v Enright [2019] NZHC 1124. The first appellant is Shane Anthony Enright (Tony). The second appellant is Southern Lakes Holdings Limited (SLH). The respondents are Catherine Ann Newton (Cathie), William James Young (William), Wayne Michael Enright (Wayne), Gene Herschel Enright (Gene), and Terrence John Enright (Terry). Tony is also the second respondent, in his capacity as the sole administrator and trustee of the estate of John James Enright. Eric John Thomson is the third respondent.

- Nature of dispute
The dispute concerns the administration of the J J Enright Trust (the Trust) and the distribution of its assets. The Trust was established by Jack Enright, the father of the respondents and Tony, and the Trust’s assets were ultimately distributed to Tony. The respondents claim that Tony breached his fiduciary duties as trustee and that SLH acted unconscionably in receiving trust assets that should have been distributed to the respondents.

- Court
The Court of Appeal of New Zealand (Te Kōti Pīra o Aotearoa).

- Legal issues
The court was required to decide several legal issues, including:

1. Whether the respondents’ claims were time-barred.
2. The apportionment of the vested income between Tony and the respondents.
3. Whether Tony should account for the gross or net amount of the dividend received from SLH.
4. Whether it was unconscionable for SLH to retain the interest and management fee payments.
5. The calculation of the vested income received by SLH from the Wye Creek sales.
6. Whether the respondents could trace their share of the vested income into Two Mile Station and assert a proprietary interest in it.
7. The appropriate remedy for the respondents’ claims against SLH.

- Court's reasoning and outcome
The Court of Appeal allowed the first appellant’s appeal in part, the second appellant’s appeal in part, and the cross-appeals in part. The court quashed and substituted the Judge’s order requiring Tony to account to the respondents to the extent of $711,095 (four-fifths of $888,869) with an order that he account to the extent of $496,285 (five-sixths of $595,542). The court also quashed and substituted the Judge’s order that SLH pay equitable compensation of $995,859 with an order that SLH account as a knowing recipient for $382,288, being five-sixths of the total of the interest and management fee ($358,745.68) and 2002 payment ($100,000). The court remitted the case to the High Court for determination of the following questions:

1. What are the terms of the declaration required to be made to recognise the respondents’ equitable proprietary interest in Two Mile Station?
2. What is the correct legal and factual basis on which to determine how SLH’s improvements to Two Mile Station might be recognised?

- Final orders
As between Tony and the respondents, costs will lie where they fall. The respondents are entitled to costs from SLH for a standard appeal on a band A basis, with the usual disbursements.

Orders