Frickleton v Stag Trading Limited - [2014] NZHC 884

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

CIV-2014-485-710 [2014] NZHC 884

BETWEEN
C W FRICKLETON as trustee and

executor of the estate of K W FRICKLETON

Plaintiff

AND

STAG TRADING LIMITED Defendant

Hearing: 1 April 2014

Counsel:

J R Grace for plaintiff
D G Dewar for defendant

Judgment:

1 May 2014

RESERVED JUDGMENT OF ASSOCIATE JUDGE SMITH

[1] The plaintiff applies for summary judgment for an amount said to be outstanding under an alleged oral agreement dated 31 March 2004. The late Kalvyn William Frickleton (Mr Frickleton) is alleged to have lent $213,932.90 to Stag Trading Ltd (the defendant).

[2] Mr Frickleton had four sons. One of them is Carl, who has filed the present proceeding in his capacity as executor and trustee of Mr Frickleton’s estate. One of the other sons (Mark), is a director of, and the main shareholder in, the defendant.

[3] The loan from Mr Frickleton to the defendant is said to have arisen out of the sale of Mr Frickleton’s interest in a motor vehicle dealership known as High Street Cars. Mr Frickleton had been running the business for some years, and was joined by Mark in the business in the 1990s. Mark progressively took a greater role, and by
March 2004 he was operating the dealership substantially single-handed.

C W FRICKLETON as trustee and executor of the estate of K W FRICKLETON v STAG TRADING LIMITED [2014] NZHC 884 [1 May 2014]

[4] By a letter dated 31 March 2004 Mark wrote to Mr Frickleton advising his intention to set up a company with the specific purpose of buying out Mr Frickleton’s share of High Street Car Sales. He proposed to take over the business on the night of 31 March 2004 and suggested that the purchase be based around the accounts prepared by Mr Frickleton’s accountant for the year ended on that date.

[5] Mark incorporated the defendant company to take over the business, and

High Street Cars has been operated by the defendant from 1 April 2004.

[6] Mr Paterson, Mr Frickleton’s accountant, prepared accounts for High Street Cars as at 31 March 2004. Mr Paterson is now deceased, but handwritten financial statements dated 19 August 2004, written on Mr Paterson’s letterhead, were produced in evidence by Mr Colin Chard, a retired financial adviser who had known Mr Frickleton for approximately 30 years and was also close to Mr Paterson.

[7] The financial statements as at 31 March 2004 consisted of two handwritten pages, being a balance sheet and a trading statement. The net assets of the business were shown as represented by a current account owing to Mark of $300,546.56, and a current account owing to Mr Frickleton of $213,932.90. This last figure is said to have been the purchase price at which the defendant bought out Mr Frickleton’s interest in High Street Cars. The sum is claimed to have been left in the business by way of loan from Mr Frickleton to the defendant.

[8] Mr Chard also…

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 Frickleton v Stag Trading Limited

Details

AGLC: Frickleton v Stag Trading Limited [2014] NZHC 884
Case: [2014] NZHC 884
Decision Date: 1 May 2014

CaseChat Overview and Summary

The case of Frickleton v Stag Trading Limited involves a claim by Carl Frickleton, as trustee and executor of his father Kalvyn William Frickleton's estate, against Stag Trading Ltd, a company owned and operated by Mark Frickleton, one of Kalvyn's sons. The plaintiff seeks summary judgment for an outstanding amount under an alleged oral agreement dated 31 March 2004, where Kalvyn is said to have lent $213,932.90 to Stag Trading Ltd. The loan is alleged to have arisen from the sale of Kalvyn's interest in a motor vehicle dealership, High Street Cars, which he had been operating with Mark.

The primary legal issues in this case include whether there was an oral agreement for a loan from Kalvyn to Stag Trading Ltd, whether there was an agreement for interest on the loan, and whether the claim is statute-barred under the Limitation Act 2010. The court had to determine if the defendant had raised an arguable defence to the plaintiff's claim, whether there were disputed issues of fact that could not be resolved based on affidavit evidence alone, and if the plaintiff had satisfied the court that the defendant had no arguable defence to the claim.

The court found that the defendant had not raised an arguable case that no loan was made by Kalvyn to Stag Trading Ltd, as both parties had acted on the basis that such a loan existed. However, the court was not satisfied that the plaintiff had shown that the defendant had no arguable defence to the claim for interest, as the evidence regarding the interest obligation was disputed and the existing documents were not strong enough to reject Mark's evidence as false in a summary procedure. Additionally, the court found that the issue of whether the loan was to be repaid upon demand or within a reasonable time was one that should be left for trial, and thus the plaintiff had failed to show that the defendant had no arguable limitation defence.

Consequently, the application for summary judgment was dismissed. The defendant is entitled to costs on a scale 2B basis plus any disbursements as fixed by the Registrar. A case management conference is to be allocated to set timetable directions for the future conduct of the proceeding.

Orders