Masterton Investments Ltd v Watson - [2023] NZHC 1144

IN THE HIGH COURT OF NEW ZEALAND MASTERTON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKAORIORI ROHE

CIV-2020-435-19

[2023] NZHC 1144

BETWEEN
MASTERTON INVESTMENTS LTD

Plaintiff

AND

DENIS ERIC WATSON

Defendant

Hearing: 10 May 2023

Counsel:

E St John and S P Moloney for Plaintiff (Respondent) K P Sullivan for Defendant (Applicant)

Judgment:

12 May 2023

JUDGMENT OF RADICH J

[1] In a judgment on 25 November 2022, Ellis J awarded the plaintiff (MIL) damages of $484,554.40 for a failure on the part of the defendant (Mr Watson) to settle the sale and purchase of a commercial property in Masterton, plus interest under the agreement for sale and purchase, together with interest on the judgment sum under the Interest on Money Claims Act 2016.

[2]Costs payable by Mr Watson following the judgment amounted to $94,226.

[3] Mr Watson has applied for an order staying further steps to enforce the judgment1 pending the outcome of his appeal to the Court of Appeal. The appeal is set down for hearing in the Court of Appeal on 26 September 2023.

1 MIL has, to date, obtained an order for the examination of Mr Watson, and a charging order over a property in which Mr Watson has an interest in Kumeū and, subsequently, it has obtained a sale order for that property – both under Part 17 of the High Court Rules.

MASTERTON INVESTMENTS LTD v WATSON [2023] NZHC 1144 [12 May 2023]

[4] The stay is sought “subject to Mr Watson procuring ManukaMed Limited Partnership to pay $100,000 per month into his solicitor’s trust account starting in June 2023 and providing a written undertaking from the solicitors that they are irrevocably instructed to pay the moneys out in accordance with the decision of the Court of Appeal or by earlier agreement of the parties”.

[5] Mr Watson says that the stay can safely be granted because he has put sufficient arrangements in place for MIL and for the Court to be confident that the judgment sum will be paid if the appeal is unsuccessful.

[6] MIL says that, without further undertakings or security for the judgment sum, there can be no such confidence and that, as a result, the grounds for a stay cannot be made out.

Legal principles

[7] The application is made pursuant to both r 17.29 of the High Court Rules and r 12(3) of the Court of Appeal (Civil) Rules.

[8] Rule 17.29 of the High Court Rules enables a party who is liable under a judgment to apply to the Court for a stay of enforcement or other relief against the judgment on the ground that “a substantial miscarriage of justice would be likely to result if the judgment were enforced”. The Court may “give relief on just terms”. Rule 12(3) of the Court of Appeal Rule has a broader application. Rather than being confined to a stay of enforcement (or other relief), under r 12(3), the Court appealed from or the Court of Appeal may order a…

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.

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Details

Case: [2023] NZHC 1144
Decision Date: 12 May 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Masterton Registry, the case of Masterton Investments Ltd v Watson involved a dispute over the failure to settle the sale and purchase of a commercial property in Masterton. The plaintiff, Masterton Investments Ltd (MIL), sought damages from the defendant, Denis Eric Watson, who had not settled the sale as agreed. The court awarded MIL damages of $484,554.40 plus interest, and costs of $94,226. Watson applied for a stay of enforcement of the judgment pending his appeal to the Court of Appeal. The appeal was scheduled for September 2023.

The legal issues before the court were whether to grant a stay of enforcement pending the appeal, and if so, on what terms. The court considered the principles guiding such stays, including the need to balance the rights of the judgment creditor against the need to preserve the appellant's position. It also assessed the applicant's bona fides, the strength of the appeal, and the potential for a substantial miscarriage of justice if the judgment were enforced. The court further examined whether there was sufficient assurance or security for the judgment sum.

The court found that while MIL had the right to enforce its judgment debt, the steps it took were available under the High Court Rules. The court weighed the arrangements proposed by Watson, including monthly payments of $100,000 to be made into his solicitors' trust account, supported by ManukaMed Limited Partnership, of which Watson is a director. The court concluded that, with some conditions, the stay should be granted. The orders included staying the judgment pending the outcome of the appeal, subject to Watson making the monthly payments and providing other assurances as outlined in the judgment.

The court reserved costs on the application, with the possibility for costs to be pursued if the payments were made or the Court of Appeal's decision was delivered, whichever came first.

Orders