Francis v Francis - [2018] NZHC 1753

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-571

[2018] NZHC 1753

BETWEEN
JOHN STUART FRANCIS

First Plaintiff

JAMES STANLEY FRANCIS
Second Plaintiff

FBL PROPERTIES LTD
Third Plaintiff

AND

ROBERT WARWICK FRANCIS and DEBORAH MARGARET FRANCIS

Defendants

Hearing: 12 July 2018

Appearances:

J B Murray for the Plaintiffs

G J Kohler QC for the Defendants

Judgment:

27 July 2018

Reissued:

31 July 2018

JUDGMENT OF ASSOCIATE JUDGE R M BELL

This judgment was delivered by me on 27 July 2018 at 4:00pm
pursuant to Rule 11.5 of the High Court Rules.

This judgment was re-issued by me on 31 July 2018 at 11:00am

…………………………………
Deputy Registrar

Solicitors:
Vallant Hooker (J Bruce Murray), Auckland, for the Plaintiffs Jespersen & Associates, Henderson, for the Defendants

Copy for:
G J Kohler QC, Auckland, for the defendants

FRANCIS v FRANCIS and FRANCIS [2018] NZHC 1753 [27 July 2018]

[1] The Francis Brothers Partnership has been in solvent dissolution since 2012. Two of the brothers, John and Jim, have brought this proceeding to speed up the in specie distribution of some of the partnership assets. They sue the other partners, Bob and his wife, Debbie, for specific performance of parts of three agreements:

[a]an agreement dated 6 September 2016 for division of partnership on dissolution, which in part allocates properties at Waimauku among the partners;

[b]an agreement of 4 May 2017 for the sale of a garden centre property in Huapai; and

[c]an agreement of October 2017 for the sale of a bach property at Waihi Beach.

They have applied for summary judgment. They want the garden centre at Huapai to be transferred to them and their nominee, FBL Properties Ltd, a bach at Waihi Beach to be transferred to Bob and Debbie, and properties at Waimauku in all their names to be transferred under an agreed allocation. They also claim interest for late settlement.

[2] In opposition, Bob and Debbie say that they do not oppose the transfer of the garden centre, so long as the ANZ Bank mortgage over the property is not discharged, without the debt to the bank being repaid. Underlying their opposition is their concern at the way the other partners want to run the dissolution. Bob and Debbie want debt to the ANZ Bank cleared as part of the dissolution. They are worried that John and Jim are not addressing this aspect. Their notice of opposition does not address other relief sought by John and Jim.

Background

[3]The three brothers are Jim aged 71, Bob aged 70, and John aged 68. Bob is

married to Debbie. John is married to Heather. The brothers’ market gardening

partnership goes back to 1979.1 They had equal one-third shares. In 1980, Debbie became involved, with Bob and Debbie holding a one-third share jointly. They made a written partnership agreement on 3 September 1980. The firm’s business is “nurserymen and horticulturists”. Under cl 16 the partnership may be terminated at any time by…

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 Francis v Francis

Details

AGLC: Francis v Francis [2018] NZHC 1753
Case: [2018] NZHC 1753
Decision Date: 27 July 2018

CaseChat Overview and Summary

The case involves a dispute between John and Jim Francis, two of the three brothers in the Francis Brothers Partnership, and Bob and Debbie Francis, the other two partners, regarding the in specie distribution of partnership assets. John and Jim have applied for summary judgment to enforce three agreements made between the partners for the sale and division of partnership assets upon dissolution of the partnership. The agreements include the division of properties at Waimauku, the sale of a garden centre property at Huapai, and the sale of a bach property at Waihi Beach. The plaintiffs seek specific performance of these agreements, the transfer of titles for the properties, and interest for late settlement.

The court considered whether the agreement for the sale of the garden centre required the ANZ Bank mortgage to be discharged. The plaintiffs argued that the agreement was enforceable in its own right and did not require the bank mortgage to stay on the title until the debt was repaid. The defendants contended that the mortgage should remain on the title until the bank debt was repaid, as it was necessary to ensure that the partnership's liabilities were addressed. The court found that the agreement did not require the mortgage to stay on the title and that the plaintiffs were entitled to have the mortgage discharged.

The court also considered the claim for transfer of the Waihi bach property. The defendants were unwilling to sign the documents for the transfer as they did not want to be accused of inconsistency in taking title to the Waihi bach while objecting to the transfer of the garden centre. The court found that there was no arguable defence to the claim and that the plaintiffs were entitled to orders for the transfer to be carried out.

The court dismissed the claim for interest for late settlement, as the defendants had arguable defences to the claim and there were uncertainties about when interest started to run. The court also considered the transfer of titles for the Waimauku properties, finding that the plaintiffs were entitled to orders for the transfer, subject to certain conditions being met.

The court made orders for Bob and Debbie to sign the required documents for the transfer of the garden centre, Waihi bach, and Waimauku properties. The application for summary judgment for interest for late settlement was dismissed, and costs were awarded to the plaintiffs. The Registrar was directed to allocate a case management conference for further directions on unresolved matters and the defendants' counterclaim. Leave was reserved to apply for further directions.

Orders