MacDonald v MacDonald - [2024] NZHC 1134

IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE

CIV-2023-406-7

[2024] NZHC 1134

UNDER Section 56 of the Senior Courts Act 2016

IN THE MATTER

of an application for leave to appeal a decision on an interlocutory application

BETWEEN

ANDREW PHILLIP MACDONALD AND KATHRYN GISELLE ENOCINO MACDONALD

Applicants

AND

PHILLIP MACDONALD

Respondent

Hearing: 30 April 2024

Appearances:

S R Moon for Applicants M J Radich for Respondent

Judgment:

9 May 2024

JUDGMENT OF McHERRON J

Introduction

[1] A family dispute has arisen over the sale of a large rural property north of Blenheim. The applicants, Andrew MacDonald and Kathryn MacDonald as trustees of the Maka Trust, sold the property on 2 March 2018 to Andrew’s father, the respondent, Phillip MacDonald (Phillip).1

[2] The applicants claim Phillip has failed or refused to pay $500,000 owing under a deed of acknowledgment of debt associated with the sale of the property (the Deed).

1 In this judgment, I refer to Phillip MacDonald as Phillip to avoid any confusion with the other parties whose surnames are also MacDonald. No disrespect is intended.

MACDONALD v MACDONALD [2024] NZHC 1134 [9 May 2024]

The applicants applied for summary judgment against Phillip. On 18 August 2023, Gendall J dismissed the summary judgment application.2 Leave is required to appeal from Gendall J’s judgment.3 I grant leave to appeal (out of time) for the following reasons.

Background

[3] The property compromises around 7.9 hectares at Wairau Bar. On the property there is a house and farmland where grapes are grown commercially. The property has been owned within the MacDonald family since 1969. The property was transferred to Andrew in 1996 (and later to the applicants as trustees of the Maka Trust).

[4] The applicants’ need for cash drove the sale of the property to Phillip in 2018. Phillip agreed to take out a loan for the funds the applicants needed ($650,000). The dispute between the applicants and the respondent is about whether Phillip agreed to pay an additional $500,000, on top of the $650,000 he had borrowed, in return for the property.

[5] Phillip instructed his lawyer, David Dew, to prepare documents to support the transaction. Mr Dew advised the sale price would need to be at market value to avoid gifting issues. The agreement for sale and purchase states that the purchase price was
$1,150,000.4 Mr Dew’s evidence was that:

(a)this price excluded improvements on the property valued at $700,000 that were owned by Montford Corporation Ltd;

(b)the $500,000 gap between the lending Phillip had obtained and the sale price would be covered by the Deed – this was recorded in further terms of sale annexed to the agreement for sale and purchase;

2      MacDonald v MacDonald [2023] NZHC 2255 (Judgment to be appealed).
3      Senior Courts Act 2016, s 56(3).
4      The standard form approved by the Real Estate Institute of New Zealand and the Auckland District Law Society was used.

(c)his recommendation as to the sale price…

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 MacDonald v MacDonald

Details

AGLC: MacDonald v MacDonald [2024] NZHC 1134
Case: [2024] NZHC 1134
Decision Date: 9 May 2024

CaseChat Overview and Summary

In MacDonald v MacDonald, the applicants, Andrew MacDonald and Kathryn Giselle Enociño MacDonald as trustees of the Maka Trust, seek leave to appeal the dismissal of their summary judgment application against Phillip MacDonald, Andrew's father. The applicants argue that Phillip owes them $500,000 under a deed of acknowledgment of debt related to the sale of a rural property in Wairau Bar. The dispute centers on whether Phillip agreed to pay $1,150,000 for the property, with the $500,000 gap between the loan amount and the sale price to be covered by the deed.

The legal issues revolve around the interpretation of the sale agreement, the deed, and the relevance of the rating valuation in determining the purchase price. The applicants contend that the sale price of $1,150,000 was clearly agreed upon and documented, and that Phillip's defense is unfounded. They argue that Gendall J erred in law and fact by not granting summary judgment and instead finding a genuine dispute that requires a substantive hearing. Phillip maintains that he only agreed to pay $650,000 for the property, and there is a genuine dispute regarding the sale price.

The court considered the test for leave to appeal under section 56 of the Senior Courts Act 2016, which requires a high threshold to be met, including identifying an arguable error of law or fact of general or public importance. The court found that the applicants have raised an arguable error in the Court's decision and that the appeal has a reasonable chance of resolving the dispute. The court concluded that the interests of justice support granting leave, as a successful appeal could end the proceedings, while a continued general proceeding would incur substantial cost and delay.

The application for leave to appeal succeeds, and costs are reserved.

Orders