Farrand v Farrand
[2025] NZHC 1527
•19 June 2025
IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY
I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE
CIV-2023-488-121
[2025] NZHC 1527
UNDER the Trusts Act 2019, section 133 BETWEEN
KERRY ALFRED FARRAND
as trustee of the K A and K J Farrand Family TrustPlaintiff/Counterclaim Defendant
AND
KRISTIN JAYNE FARRAND
a trustee of the K A and K J Farrand Family Trust
First Defendant/Counterclaim PlaintiffSCOTT KERRY FARRAND, BRADLEY JAMES FARRAND
and
HAYLEY FIONA FARRANDSecond Defendants / Counterclaim Plaintiffs
Hearing: 27 May 2025 Appearances:
Mr Kerry Farrand is self-represented
Stuart Henderson for the Applicant Mr Bradley Farrand Peter Magee for First Defendant Ms Kristin Farrand
Judgment:
19 June 2025
JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR
[Application for summary judgment for an order for specific performance]
This judgment was delivered by me on 19 June 2025 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules
…………………………. Registrar/Deputy Registrar
FARRAND v FARRAND [2025] NZHC 1527 [19 June 2025]
Introduction
[1] The applicant, Mr Bradley Farrand (Bradley),1 is one of four adult children of the respondent, Kerry Farrand (Kerry). The four children are named as second defendants. Kerry and his former wife, Kristin Farrand (Kristin), mother of the four adult children, are surviving trustees and primary beneficiaries of the KA and KJ Farrand Family Trust (the Trust). The four children and Kerry’s son from a second relationship are secondary beneficiaries.
[2] Kerry and Kristin (Farrands senior) married in June 1982. Kerry settled the Trust in 1996.
[3] The Farrands senior separated in 2008 and divorced in 2013. They have been attempting to agree how to wind up the Trust and distribute the assets based on an equal share for many years.
Background
[4] In October 2023, Kerry commenced proceedings under s 133 of the Trusts Act 2019 for the Court to direct the winding up of the Trust. Kristin was first defendant to those proceedings and the four children of their relationship, second defendants.
[5] The substantive proceedings remain extant in this Court. Kerry claims he is not bound by an agreement reached in a mediation which occurred on 28 February and 1 March 2024 (the Mediation Agreement). These proceedings are defended by all defendants, with counterclaims to the effect that the Mediation Agreement is binding and if any Court approval was required, the approval would relate to the terms of a winding up and distribution in accordance with the Mediation Agreement.
[6] Kerry’s lawyer before and during the mediation, Mr Nicholls, was replaced by Ms Irons, who advised of the respondent’s refusal to be bound by the Mediation Agreement following which, the defendants filed notices of defence and counterclaim.
1 Because of the commonality of surnames, I refer to parties in this judgment by their first names, no disrespect intended.
Barristers were at one point engaged by Kerry in addition to Ms Irons but were granted leave to withdraw on 19 March 2025. Since then, Kerry has represented himself.
[7] A notice of opposition to the application for summary judgment was filed by Kerry on 24 April 2025.
Documents filed by Kerry
[8] Mr Henderson, for Bradley, submits that no sworn evidence has been filed by Kerry which supports an evidential foundation for Kerry’s defence to Bradley’s summary judgment application. He refers to the following passages in the decision in The Cornwall Park Trust Board Inc v Yong Xin Chen and submits that the authorities require sworn evidence from the respondent as to the basis of the defence, referring to the following passages from the judgment:2
[41] In Pemberton v Chappell3 the Court also commented on the position where a defence is not evident on a plaintiff’s pleading and said:
If a defence is not evident on the plaintiff’s pleading I am of opinion that if the defendant wishes to resist summary judgment he must file an affidavit raising an issue of fact or law and give reasonable particulars of the matters which he claims ought to be put in issue. In this way a fair and just balance will be struck between a plaintiff’s right to have his case proceed to judgment without tendentious delay and a defendant’s right to put forward a real defence.
…
[43] Hypothetical possibilities in vague terms, unsupported by any positive assertion or corroborative documents will not frustrate the obligation on a plaintiff to discharge the onus of proof: SH Lock (NZ) Ltd v Oremland.4
[44] In Middleditch v New Zealand Hotel Investments Ltd,5 the Court raised a caution and said:
The courts must of course be alert to the possibility of injustice in cases in which some material facts to establish a defence are not capable of proof without interlocutory procedures such as discovery and interrogatories. That does not mean that defendants are to be allowed to speculate on possible defences which might emerge but for which no realistic evidential basis is put forward.
2 The Cornwall Park Trust Board v Chen HC Auckland, CIV-2013-404-8 [13 May 2013] at [41] and [43] to [44].
3 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3.
4 SH Lock (NZ) Ltd v Oremland HC Auckland, CP641/86, 19 August 1086.
5 Middleditch v New Zealand Hotel Investments Ltd (1992) 5 PRNZ 392 (CA) at 613.
[9] While Mr Henderson is undoubtedly correct in his assertion that the authorities espouse the position that the respondent to a summary judgment application should file sworn evidence establishing the basis of their defence and “hypothetical possibilities in vague terms, unsupported by any positive assertion or corroborative documents will not frustrate the obligation on the plaintiff to discharge the onus of proof”, in the present instance I will allow the unsworn evidence presented by Kerry for the following reasons:
(a)The passage from The Cornwall Trust Board Inc decision relied upon by Mr Henderson must be balanced by the next passage in the judgment:6
[45] A court is not required to accept uncritically any or every disputed fact: Eng Mee Yong v Letchumanan.7 However, the Court will not reject even dubious affidavit evidence, even if there is suspicion as to the good faith of the deponent, if there is an essential core of complaint that supports a defence. In essence, the inquiry is whether or not the person’s assertion passes the threshold of credibility: Pemberton v Chappell;8 Orrell v Midas Interior Design Group Ltd.9
(b)Kerry is self-represented and it is in the interests of justice that he be able to present his defence to the summary judgment application in the best way he can;
(c)as to the ground of his defence that the validity of the whole Mediation Agreement is being challenged, the grounds of challenge have been documented in the substantive proceedings (discussed later in this judgment);
(d)as to his opposition to the constructive trust assertion by Bradley in respect of 44 River Drive, Kerikeri (discussed later in this judgment) , Kerry has produced a reasonable amount of evidence showing the role of the Trust, Farrand Orchards Limited, and Kerry himself, in the
6 Above, n 2 at [45].
7 Eng Mee Yong v Letchumanan [1980] AC 331 (PC).
8 Above, n 3.
9 Orrell v Midas Interior Design Group Ltd (19910 4 PRNZ 608 (CA) at 613.
development of the two River Drive properties making the terms of the alleged constructive trust unclear (discussed later in this judgment).
The mediation
[10] A mediation in which the four children were participants was agreed to, and the time for filing defences in the substantive proceedings suspended, pending the result of the mediation.
[11] The mediation took place over two days and resulted in an agreement on the terms of the settlement which would conclude the proceedings. The Mediation Agreement is contained in two documents which are exhibited to Bradley’s affidavit in support of his summary judgment application.
[12] Mr Henderson describes the ultimate effect of the Mediation Agreement was that the Trust would be wound up and its assets — land and kiwifruit orchards in Kerikeri — would be divided between the Farrands senior and their four adult children on the basis of percentages (roughly, one third to the four adult children and two thirds between the Farrands senior) with Kerry’s share covering entitlement of his second wife and their son.
[13] To achieve that, there were machinery provisions – including agreement that a third trustee should be appointed who, as an independent trustee, would have executory powers, and that a specialist accountant be appointed.
[14] A property owned by the Trust was acquired by the Trust, Bradley asserts at his request, and was subdivided into two properties – 44 River Drive, Kerikeri (44 River Drive) and 78A River Drive, Kerikeri (78A River Drive). The intention, as expressed at clause 1.1 of the Mediation Agreement, was that 44 River Drive would be distributed by the Trust to Bradley and 78A River Drive would be retained by the Trust in satisfaction of amounts owed by Bradley to the Trust under his current account with the Trust.
[15]Clause 1.1 of the Mediation Agreement provides:
1.1.[Bradley] shall have distributed to him from the Trust the property at 44 River Drive (which is understood to have a value of $1.6 M) free of any encumbrances and his beneficiary current account (BCA) shall be treated as having been repaid in full in full satisfaction of [Bradley]’s claim that 44 River Drive and the adjoining property at 78A River Drive are, notwithstanding they are in legal ownership of the trust, in fact his properties that the trust holds for him.
Provided That in the event the Accounting Referee … determines that [Bradley]’s BCA is greater than the $1.3 million then [Bradley] acknowledges that he owes the trust any sum in excess of $1.5 million
[16] Bradley seeks summary judgment to enforce this term of the Mediation Agreement.
Legal principles
[17] For the purposes of Bradley’s summary judgment application, while he is a defendant in the substantive proceedings, he is in the position of a plaintiff in respect of his application. Rule 12.2(1) of the High Court Rules 2016 provides:
(1)The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[18] The relevant principles governing a summary judgment application are well established:10
The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried: Pemberton v Chappell. The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart. The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable: Eng Mee Yong v Letchumanan. In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel.
10 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26] (citations omitted).
[19]The wording of r 12.2 “may give judgment” indicates a residual discretion.
Having regard to the various authorities, the position appears to be as follows:11
(a)The discretion implied by the use of the word “may” is to be restrictively applied. In a great majority of cases, once the court is satisfied the defendant has no defence, there is no room for the exercise of discretion.
(b)The residual discretion may be invoked to avoid oppression or injustice to the defendant where:
(i)The proceeding involves the actions or possible liability of a third party which is not before the court;
(ii)The proceedings are such that the opportunity should be given to allow discovery or other interlocutory applications to be concluded;
(iii)The circumstances of the case disclose very unusual features, the presence of which leads the court to conclude that the entry of summary judgment would be oppressive or unjust; or
(iv)The combination of complex issues of fact and law justify the dismissal of the application for summary judgment, either as a matter of discretion or because the court cannot be satisfied that the defendant has no defence.
(c)Even where the court is not satisfied that a defence has been made out, in exceptional circumstances the application may be adjourned to allow for other processes to be followed.
Bradley’s submissions
[20] Bradley seeks orders that 44 River Drive be transferred to him. 78A River Drive is to be retained by the Trust to reimburse the Trust for costs incurred by it in supporting the development.
[21] Mr Henderson submits that the recording of the exchange of the River Drive properties in the Mediation Agreement was not a proposal that was new to the parties. He submits:
(a)Bradley has deposed that his original intention was to use $120,000 of his own money to buy and develop two residential properties with
11 Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at [HR12.2.11].
assistance of his brother, who is a builder. One of these properties was to be sold to pay for the cost of both. The changes to that plan, necessitated by his being resident overseas and bank lending requirements, required the Trust to become legal owners and mortgagors of the property. This was confirmed in exhibits to Bradley’s affidavit in support of his application for summary judgment, which shows financial workings which he says were agreed between Bradley and Kerry, as precursors to the Mediation Agreement.
(b)Additionally, Mr Henderson says that of the two trustees, Kristin will sign the conveyancing documents to transfer 44 River Drive. She supports Bradley in his application for summary judgment. However, Kerry refuses to provide his signature to complete the transfer.
[22] Mr Henderson submits no resort is needed to arguments based on whether or not the transfer of 44 River Road has been earned by Bradley and the summary judgment application is simply to enforce an agreement formally reached in the Mediation Agreement.
[23] Mr Henderson submits there is a separate constructive trust in favour of Bradley in respect of 44 River Drive to which the trustees of the Trust are subject – “a trust within a trust”. He submits this arises because:
(a)the Trust purchased the original parcel of land at River Drive to be subdivided at Bradley’s request;
(b)Bradley undertook the development and funded it from his own capital and borrowings from the Trust; and
(c)Bradley accordingly has a claim to ownership of 44 River Drive as a result of a constructive trust arising from his contribution to 44 River Drive.
[24] Mr Henderson submits the following support the granting of the summary judgment sought:
(a)Kerry is abusing his power as trustee and breaching his obligations as fiduciary in the refusal to implement the discreet transaction with regard to the two River Drive properties;
(b)this is evidenced in the necessity that Bradley had to make an application for an interim interlocutory injunction so that he could have the benefit of the property he had invested in;
(c)it is in the interests of the Farrand family and also of justice generally for the enforcement of agreements formally entered into (being the Mediation Agreement); and
(d)the fact that this part of the Mediation Agreement is separate and discrete from the remainder will not affect the interests of other parties, nor be affected by whatever outcome emerges from the substantive proceedings.
[25] Mr Henderson submits that if the resolution of the transfer of 44 River Drive to Bradley has to await the outcome of the substantive proceedings, there will be considerable delay before it can be resolved.
Kerry’s opposition
[26] While not quite expressed in these terms, because he is self-represented, Kerry’s opposition to Bradley’s application appears to be based on two grounds:
(a)First, Kerry challenges the validity of the Mediation Agreement on a number of grounds, as set out in his replies to the defendants’ counterclaims in the substantive proceedings. One part of the Mediation Agreement should not be enforced if the whole Mediation Agreement is subject to challenge.
(b)Second, Kerry disputes that 44 River Drive is held on trust for Bradley as, in his view, the development of the River Drive properties was, to a significant extent, carried out by him and financed by the Trust, with the Trust providing security for the external borrowings in relation to the development. He asserts the development was more in the nature of a joint venture, whereby the profit is split according to the capital and physical contributions by the Trust, Farrand Orchards Limited (Farrand Orchards) and Bradley.
Challenges to the Mediation Agreement
[27] As set out in Kerry’s reply to the defendants’ counterclaim in the substantive proceeding, Kerry’s challenges to the validity of the Mediation Agreement are:
(a)The Mediation Agreement was entered into on the basis of a mutual mistake, or, if the Mediation Agreement was not entered into on the basis of a mutual mistake, then he was influenced by his decision to enter into the Mediation Agreement by a material mistake. The mistake resulted in the Mediation Agreement being impossible to perform and the mistake resulted in a substantially unequal exchange of values. He alleges the mistake is that all the parties, as well as the mediator, believed that the area shaded in orange on the map attached to the Mediation Agreement could be distributed by the Trust to him, in the mistaken belief that the area shaded in orange was on separate titles and could be valued at its current market value. He claims he was not provided with a copy of this map at the mediation.
(b)The Mediation Agreement is impossible to perform or is otherwise frustrated and that the parties should be discharged from further performance of it. The basis of this allegation was that the map of the land attached to the Mediation Agreement was prepared for the purposes of a proposed boundary adjustment which is allowed under the applicable regional Council’s regulations, but performance of the Mediation Agreement in accordance with the map would require the
creation of four or five titles which does not align with the Council approval.
(c)The Trust has minor family beneficiaries who lack capacity, and the Mediation Agreement has not been approved by the Court. He alleges the Court should decline approval of the Mediation Agreement as it was entered into on the basis of a mutual mistake or is impossible to perform and has become frustrated. In addition, he asserts the proposed independent trustee is not independent.
[28] It is Kerry’s assertion that until the challenge to the validity of the Mediation Agreement is resolved, then the specific performance of the distribution of the River Drive properties, 44 River Drive being distributed to Bradley and 78A River Drive being retained by the Trust, should not be implemented.
Development of the River Drive properties
[29] Kerry challenges the basis as put forward by Bradley as grounds for the Trust holding 44 River Drive on a constructive trust for Bradley. He submits:
(a)The purchase of the River Drive properties was more of a joint venture project whereby the proceeds of the development of the River Drive properties are split according to the capital and physical contributions by the parties, rather than the original intent, which was for Bradley to contribute his own capital and borrow funds from the Trust to develop the property and pay it back.
(b)Bradley’s suggestion that the Trust facilitated his development project by taking title to the River Drive block was not his choice but resulted from the bank’s demand for security. The land was bought by the Trust, not Bradley, and developed by the Trust, bankrolled by Farrand Orchards, not Bradley. Bradley is advantaged by taking ownership of
44 River Drive with a QV of $1.8 million having only injected
$278,000 and given very little physical input due to the nature of his
career. On the other hand, the Trust has spent $475,000 on the original block of the River Drive land, $430,000 on the development of 78A River Drive, and $500,000 on the development of 44 River Drive.
[30] At the hearing, Kerry produced a significant volume of evidence in the form of Council documentation and invoices demonstrating that he had effectively supervised the undertaking of the development.
Result
[31] I am of the view that Bradley’s application for summary judgment for an order for specific performance of cl 1.1 of the Mediation Agreement should be dismissed. The reasons for my view are:
(a)Cl 1.1 is part of the Mediation Agreement, the whole of which is subject to challenge by Kerry on several grounds. I do not accept the view that cl 1.1 is a specific and discrete part of the Mediation Agreement and do not accept that it can be separately enforced when the challenge to the validity of the whole Mediation Agreement is extant before the Court.
(b)As to the argument that there is a constructive trust attached to 44 River Drive in favour of Bradley to which the trustees of the Trust are subject, Kerry has produced sufficient evidence to dispute the terms of this constructive trust. He has produced evidence that while Bradley located the River Drive block of land originally, the Trust, Farrand Orchards and Kerry himself played a considerable role in the development including providing security for the external borrowing which was used to finance the development, and supervision by him of the undertaking of the physical work involved in the development. Therefore, the terms of the alleged constructive trust which might apply to 44 River Drive are unclear and cannot be resolved in the context of a summary judgment application for specific performance of a transfer of 44 River Drive to Bradley. While there appears to be acceptance by Kerry that 44 River Drive should be transferred to Bradley and
78A River Drive be retained by the Trust to effectively repay its investment in the development without analysing in detail the physical and financial inputs to the development by the parties, this acceptance is incorporated as part of the totality of agreements reached in the Mediation Agreement. I am not satisfied that this acceptance stands alone outside of the matrix of agreements recorded in the Mediation Agreement.
(c)Mr Henderson submits at paragraph 22 of his written submissions dated 13 May 2025 that -
“Resort is not needed to arguments based on whether or not the transfer [to Bradley] of 44 River Drive has been earned: this application is to enforce an agreement formally reached in expensively conducted mediation after years of disputes between the Farrands senior as parties to their marriage relationship and trustees.”
However, as I have determined that cl 1.1 of the Mediation Agreement should not be enforced by summary judgment for specific performance, the summary judgment application must then fall back on the constructive trust argument which opens up an enquiry into Bradley’s entitlement to 44 River Drive. As I have noted at [31](b) above, the constructive trust is not sufficiently clearly established as to Bradley’s entitlement to 44 River Drive due to Kerry’s evidence of how the development was actually carried out and the respective contributions of Bradley, the Trust, Farrand Orchards and Kerry, which requires further evidence to be provided and tested.
[32] Accordingly, I am not satisfied that Kerry has no defence to the summary judgment application and it should be declined.
Orders
[33]I make the following orders:
(a)Bradley’s summary judgment application for an order for specific performance of the transfer of 44 River Drive to him from the Trust is dismissed.
(b)In accordance with the normal position on a dismissed summary judgment application, costs are reserved.
…………………………….. Associate Judge Taylor
Solicitors:
Henderson Reeves (Stuart M Henderson), Whangarei, for Mr Bradley Farrand Peter J Magee, Whangarei, for the First Defendant, Ms Kristin Farrand
Copy for:
Mr Kerry Farrand
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