MacNamara v Patterson - [2021] NZCA 588

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA583/2021
[2021] NZCA 588

BETWEEN	NOEL JAMES MACNAMARA Appellant
AND	WILLIAM MALCOM PATTERSON AND CHRISTOPHER ROBERT DARLOW AS TRUSTEES OF THE MACNAMARA FAMILY TRUST First Respondent
AND	SHERYL ANN MACNAMARA Second Respondent

Court:	Clifford and Courtney JJ
Counsel:	B O’Callahan for Appellant J P Cundy for First Respondent L J Kearns for Second Respondent
Judgment: (On the papers)	9 November 2021 at 3.30 pm

JUDGMENT OF THE COURT

A The application for a stay is declined.
B The second respondent is entitled to costs for a standard application on a band A basis and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Courtney J)

Noel and Sheryl Macnamara separated in 2019. There were proceedings to resolve issues relating to the Macnamara Family Trust (the Family Trust), of which both (along with Ms Macnamara’s father, Mr Craig) were trustees.[1] One of the issues was whether the Family Trust was liable to repay an advance of $500,000 made to it by a trust associated with Ms Macnamara’s father, the Graham & Julie Craig Family Trust (the Craig Trust). The Craig Trust maintained that it was a loan and made demand for repayment of the advance. Ms Macnamara agreed it was a loan. Mr Macnamara disagreed; he contended that it had been a gift.
[1]Mr and Ms Macnamara and their children are also beneficiaries of the Family Trust and of another trust, the Macnamara Home Trust.
The proceedings were settled by the making of consent orders, which included the replacement of the current trustees with independent trustees, Mr Patterson and Mr Darlow. Order 4.7 required that the independent trustees:
After consulting with Mr and Ms Macnamara either reach a determination on any liability of the Trusts to the Craig Trust for the sum of $500,000 or seek determination of the liability either from the Court or, by way of arbitration.
The independent trustees concluded that the advance was a loan. They relied to a significant extent on a Deed of Acknowledgement of Debt apparently executed on behalf of the Family Trust (the Deed). They considered that there was no tenable defence to the demand by the Craig Trust. Mr Macnamara resisted the trustees’ conclusion. He did not recall signing the Deed and wanted the document examined by a handwriting expert.[2]
[2]High Court Rules 2016, r 9.34.
The trustees applied for directions. Venning J declined to require the Deed to be examined and directed the trustees to pay the $500,000 to the Craig Trust. [3] Mr Macnamara applied for leave to appeal the decision and for a stay of the effect of the direction. Venning J held that Mr Macnamara was entitled to appeal the substantive decision as of right, but declined leave to appeal the refusal to require examination of the Deed and declined the stay.[4]
[3]Macnamara v Macnamara [2021] NZHC 2361 [Substantive decision].
[4]Macnamara v Macnamara [2021] NZHC 2500 [Leave and stay decision].
Mr Macnamara…

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 MacNamara v Patterson

Details

AGLC: MacNamara v Patterson [2021] NZCA 588
Case: [2021] NZCA 588
Decision Date: 9 November 2021 at 3.30 pm

CaseChat Overview and Summary

Noel James Macnamara appeals against the decision of Venning J in the High Court to require the independent trustees of the Macnamara Family Trust to repay $500,000 to the Graham & Julie Craig Family Trust. The appeal concerns whether the $500,000 advanced to the Family Trust by the Craig Trust in 2008 was a gift or a loan. The Court of Appeal must decide whether to grant a stay of the effect of the direction pending determination of the appeal. Mr Macnamara argues that the Court should grant a stay because the appeal would be rendered nugatory if it is not. The Court of Appeal must consider the factors relevant to granting a stay, including whether the appeal will be rendered nugatory, the bona fides of the applicant, whether the successful party will be injuriously affected by the stay, the effect on third parties, the novelty and importance of the questions involved, and the overall balance of convenience. The Court of Appeal found that the appeal would be rendered nugatory if a stay is not granted. However, a stay would not prevent the Craig Trust from taking action to recover the money, and the independent trustees have formed the view that they cannot responsibly resist any claim brought. If they are prevented by a stay from paying the Craig Trust, the Family Trust will be exposed to a costs liability. The Court of Appeal considered that the balance of convenience is against the granting of a stay. The Court of Appeal also considered that the appeal could not be regarded as strong on the material before it. The application for a stay is declined. The second respondent is entitled to costs for a standard application on a band A basis and usual disbursements.

Orders