Herron v Wallace

[2016] NZHC 1129

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-1806 [2016] NZHC 1129

BETWEEN

STUART WALTON HERRON

Plaintiff

AND

WAYNE ANDREW WALLACE First Defendant

SHADES OF AUTUMN LIMITED Second Defendant

BELMONT LIFESTYLE VILLAGE LIMITED

Third Defendant

Hearing:	25 to 28 May 2015 and 4 to 8 April 2016
Counsel:	CT Patterson and RA Dellow for plaintiff DA Towle for defendants at the 25 to 28 May 2015 hearing JE Hodder QC for defendants at the 4 to 8 April 2016 hearing
Judgment:	27 May 2016

JUDGMENT OF FAIRE J

This judgment was delivered by me on 27 May 2016 at 4:45 pm pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Skeates Law, Auckland (G Skeates) Bruce Dell Law, Auckland

Herron v Wallace [2016] NZHC 1129 [27 May 2016]

Contents

The Claim ...............................................................................................................[1] Background Facts ...................................................................................................[4]

The October 2005 Documents       [26]

The Herron – Bryers Settlement  [32]

Previous Proceedings  [39] Procedural History ...............................................................................................[41] Outline of Issues ..................................................................................................[55]

Assignment/Apartments .......................................................................................[56] The Parties’ Positions  [59] The Queenstown Apartment  [62] Was there an absolute assignment?  [67]

$1.037 Million......................................................................................................[92] Wallace Thesis  [94] Herron Thesis  [94]

SH9 Agreement ..................................................................................................[109] Amount Owing...................................................................................................[129] Oppression Defence ...........................................................................................[138]

Credit Contract and Consumer Finance Act 2003 (“CCCFA”)                   [140]

Contents of the Sidmouth Settlement Deed  [154] Inducement by Oppressive Means  [160] Enforcement  [164]

Conclusion..........................................................................................................[167]

The Claim

[1]      The plaintiff, Mr Stuart Herron sues the first defendant, Mr Wayne Wallace. He alleges:

(a)      That the first defendant owes the sum of $2,555,537.50, being the unpaid balance due pursuant to a deed referred to as the “Sidmouth Settlement Deed” dated 20 October 2005, plus interest of $2,157,852 as at 6 August 2014 and thereafter at the rate of $1,050.22 per day, plus costs on a solicitor/client basis;

(b)That the first defendant owes the sum of $600,000 being the amount due under a deed of acknowledgement of debt dated 20 October 2005 (“SH9”),1  plus interest at the rate of 20 per cent per annum since

20 September 2011 totalling $345,208.50 as at 6 August 2014, and thereafter at the rate of $328.76 per day, plus costs on a solicitor/client basis.

[2]      The plaintiff sues the second and third defendants, who the plaintiff alleges have guaranteed the above debts.  The claim against the second defendant did not proceed for reasons which I set out below.

[3]      I note at the outset that this case serves as a warning on the dangers of poor drafting. Mr Herron, Mr Wallace and their associated entities amassed copious legal documents  regulating  their  affairs.     These  documents,  and  in  particular  the agreements relied on in this proceeding, were frequently poorly drafted, lacking consistency and coherence both internally and with other agreements. The difficulty involved in untangling the morass of documents, conflicting narratives, and other evidence has made what should have been a simple exercise onerous for both the parties and the Court.

Background Facts

[4]      Mr Herron and Mr Wallace met in early 2003.  At that time, Mr Wallace was involved in a property development, in Sidmouth…