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Gardner v Gardner

Gardner v Gardner

Case [2015] NZHC 2018 25 August 2015

Partnership Dissolution

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2015-409-000280 [2015] NZHC 2018

UNDER the Partnership Act 1908

IN THE MATTER OF

an Order for dissolution of the ICT & AI Gardner Partnership and disposition of Partnership assets

BETWEEN

IAN COLIN THOMAS GARDNER Plaintiff

AND

ANDREW IAN GARDNER Defendant

Hearing: 24 August 2015

Appearances:

K L Maclean for Plaintiff
S M Dwight for Defendant

Judgment:

25 August 2015

JUDGMENT OF ASSOCIATE JUDGE OSBORNE
as to summary judgment application

Introduction

[1] Ian Gardner sues his son, Andrew. He says he has dissolved their farming partnership. He seeks summary judgment.

Background: a farming family

[2] The Gardners have for four generations farmed at Waiau on a farm which was originally known as Emu Plains.

[3] This is a dispute between the third generation (in the person of Ian) and the fourth generation (in the person of Andrew).

GARDNER v GARDNER [2015] NZHC 2018 [25 August 2015]

[4] Ian’s great-grandfather, George, acquired Emu Plains during the Great

Depression.

[5] In the third generation, Ian came to own part of the farm, naming his farm

“Avonvale”.

[6] Ian farmed Avonvale with his wife, Cynthia. They raised three children. Ian is now in his 70s and the three children either in their 40s or approaching their 40s. Of the children, only Andrew is a farmer.

[7] Andrew grew up on the farm, working on the farm when not at school. After secondary school he gained experience on a North Island sheep station for 18 months before returning to work full-time at Avonvale from 1995.

[8] The title to the Avonvale land is owned by Avonvale Farms Limited. There is limited evidence before the Court as to the land-owning company. It appears that it was formed in 2002, acquiring Avonvale from Ian and Cynthia. Its shares are held by family trusts. The family trust of Ian and Cynthia holds 75 per cent of the shares. The family trust of Andrew and his wife hold 25 per cent of the shares. Andrew’s trust has a debt back to the company in relation to the purchase price. The evidence filed does not indicate whether any part of that debt has been extinguished whether by gift or otherwise.

[9] The farming operation at Avonvale was conducted by Ian and Cynthia in an informal equal partnership. At present, it is owned by the ICT & AI Gardner Partnership (the partnership). In 1996, Andrew purchased a one-third share of the partnership, with Ian and Cynthia retaining a one-third share each. (The purchase price was gifted back by Ian and Cynthia over time).

[10] For three or four years, Andrew received modest income although he was acting as managing partner of the partnership. In 1999, a contract of service was signed between the partnership and Andrew whereby he was to receive a salary of
$10,000 per annum. It is Andrew’s evidence (which has not been disputed) that in the end he never actually received any payment under the contract of service. The

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 Gardner v Gardner

Details

AGLC: Gardner v Gardner [2015] NZHC 2018
Case: [2015] NZHC 2018
Decision Date: 25 August 2015

CaseChat Overview and Summary

In the High Court of New Zealand, Ian Colin Thomas Gardner sued his son, Andrew Ian Gardner, for the dissolution of their farming partnership, ICT & AI Gardner Partnership, and the disposition of the partnership's assets. Ian claimed that he had dissolved the partnership and sought summary judgment on the matter. The court was tasked with determining whether Ian had the right to dissolve the partnership without Andrew's consent and if Andrew had any equitable claims that could prevent the dissolution. The court also needed to decide on the ownership of a resource consent, which was an asset of the partnership.

The court considered the principles of summary judgment, requiring Ian to demonstrate that Andrew had no defence to any cause of action in the statement of claim. The court found that Andrew had presented arguable defences based on equitable principles such as estoppel and constructive trust, stemming from the long-standing family discussions and expectations about the succession of the farm. The court concluded that Andrew had an arguable claim to an equitable interest in Ian's share of the partnership, which could preclude Ian from unilaterally terminating the partnership. Regarding the resource consent, the court found that it was an asset of the partnership and ordered that Andrew hold it on trust for the partnership. The court dismissed Ian's summary judgment application regarding the dissolution of the partnership but granted his application for a declaration regarding the resource consent. Costs were reserved for the substantive determination of all issues.

Orders