Mackintosh v Thomas

[2020] NZHC 1404

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2016-409-171

[2020] NZHC 1404

BETWEEN

JOHN BOWDEN MACKINTOSH and MATTHEW CHADLOW HALL
Plaintiffs

AND

PHILIP DEAN THOMAS

First Defendant

ALISON MARGARET SYME
Second Defendant

SIMON THOMAS REED and MARK WREFORD REED

Third and Fourth Defendants

ELEANOR MARY MARR

Fifth Defendant

On the papers:

Counsel:

C A McVeigh QC, G M Brodie and R Cooper for Plaintiffs H A Evans D R Weatherley for First Defendant

R J B Fowler QC and B R D Burke for Second Defendant J Johnson for Third and Fourth Defendants

K W Clay for Fifth Defendant

Judgment:

22 June 2020

JUDMENT (NO. 2) OF CHURCHMAN J

Background

[1]                 In its decision in this matter dated 30 April 2020,1 the Court at [443] reserved leave to any party to the litigation, to apply to the Court. The decision was specific on

1      Mackintosh & Anor v Thomas [2020] NZHC 860.

MACKINTOSH & ANOR v THOMAS & ORS [2020] NZHC 1404 [22 June 2020]

the basis as to which leave application needed to be founded. This was where the Court had “omitted to address any issue believing it to have been already settled when that was not the case, and the parties still require a declaration”.

[2]                 By memorandum of counsel dated 14 May 2020, counsel for Alison Syme (Alison) sought declarations on two separate topics.

[3]                 By memorandum dated 21 May 2020, counsel for Philip Thomas (Philip) opposed the granting of leave. The opposition was on two grounds:

(a)that the application fell outside the terms of the reservation of leave because the matters involved were not overlooked or omitted by the Court but were matters that were not before the Court at all; and

(b)that the matters related to specific agreements that had been entered into between the trustees and Philip Thomas and that there was no jurisdiction under the Trustee Act to amend the words of such a commercial bargain.

[4]                 The memorandum also noted that a consequence of the declarations sought by Alison would be that Philip will be required to effectively pay interest twice.

[5]                 None of the other parties to these proceedings have filed a memorandum in relation to Alison’s application.

The declarations

[6]                 The decision of 30 April 2020 at [336], required those respondents in occupation of estate properties to pay rental for them from 31 March 2016, and similar rental to the Partnership where the property in question was owned by the Partnership rather than the estate. At [400] of the decision the parties were required to pay interest at a rate of six per cent per annum on late rental payments.

[7]                 On 21 June 2019, the trustees and Philip had entered into a sale and purchase agreement in relation to three titles to the Steeles property. The agreement also

involved the trustees’ lending approximately half the purchase price to Philip to be secured by a first mortgage.

[8]                 As the submissions on behalf of Philip make clear, the arrangements between Philip and the trustees contained a number of terms including that:

(a)Philip was to fund his share of Partnership interest and bring the Partnership overdraft back within limits;

(b)Philip was entitled to use the CPW shares for his own purposes;

(c)Philip approved the March 2018 tax returns; and

(d)Philip agreed to transfer Halkett to Alison, or the trustees, if subsequently required.

[9]                 Alison submits that the issue of whether or not the trustees were obliged to charge Philip interest on the sum of $1,625,000 (the amount of the mortgage) from 12 July 2019 to the transaction date at six per cent, was not addressed by the Court, and was not subject to a settlement by the parties. She seeks that the Court make a declaration that the trustees are obliged to charge interest at six per cent.

[10] Alison is correct that this matter was not addressed by the Court. The reason for that is that no party involved in the litigation raised it as an issue or made any submissions on it. Neither was it the subject of any declarations sought by the trustees or any other party. Therefore, it clearly falls outside of the reservation of leave set out in [443].

[11]             Quite apart from that fact, it is clear that the terms of the agreement for sale and purchase and loan were the subject of negotiation between the trustees and Philip and conferred a range of benefits and obligations on each party. There is no basis for the Court to adjust those benefits and obligations that the parties have negotiated for.

[12]             The second issue raised by Alison relates to arrangements for the provision of security of $2 million for the trustees’ indemnities.

[13]             Clause 28(d),2 refers to Alison being required to arrange for the Ednorm Trust to guarantee her performance under the indemnity and to provide as security, a registered first mortgage over Halkett.

[14]In her submissions of 14 May 2020, Alison submits:

The issue of whether the trustees may require Alison Syme to arrange a registered first mortgage over Pitts Road instead of Halkett was not addressed by the Court. Alison Syme does not seek to bind the trustees to accept a registered first mortgage over Pitts Road instead of Halkett but wishes the trustees to have the flexibility to choose one or other of the property.

[15]             Alison sought a declaration that it was within the trustees’ powers to require her to arrange for the Ednorm Trust to provide a registered first mortgage over either Halkett or Pitts Road.

[16]             The same situation applies as did in relation to the other declaration that Alison sought. The Court’s failure to refer to the option of Alison meeting her obligations in respect of security for the indemnities, did not arise as an omission or as a result of a failure by the Court to understand whether an issue had been settled when that was not the case. It arose as a result of the fact that the trustees application had specifically referred to the security being over Halkett and no party, during the course of the hearing, had raised any issue about Alison being entitled to choose as between Halkett or Pitts Road.

[17]             It is therefore also beyond the jurisdiction of the reservation for Alison to seek such a declaration.

[18]             Although it is not matter in respect of which leave was reserved, if Alison has a particular proposal that involves Pitts Road as an alternative to Halkett, then there would appear to be no reason why she should not put that to the trustees for their consideration.

2      Not cl 28(c) as referred to in the memorandum on behalf of Alison dated 14 May 2020.

Outcome

[19]             Accordingly, for these reasons, the applications set out in the memorandum of Alison Syme’s counsel dated 14 May 2020, are dismissed.

Churchman J

Solicitors:

Meares Williams, Christchurch for Plaintiffs Young Hunter, Christchurch for First Defendant Harmans, Christchurch for Second Defendant

Wynn Williams, Christchurch for Third and Fourth Defendants RMF Silva Ltd, Ashburton for Fifth Defendant

Barristers:

C A McVeigh QC and G M Brodie, Christchurch for Plaintiffs R J B Fowler QC, Wellington for Second Defendant

K W Clay, Christchurch for Fifth defendant