McDonald v McDonald
[2025] NZCA 115
•14 April 2025 at 11.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA352/2024 |
| BETWEEN | ANDREW PHILLIP MACDONALD AND |
| AND | PHILLIP MACDONALD |
| Hearing: | 27 February 2025 |
Court: | Campbell, Peters and Powell JJ |
Counsel: | M J Logan for Appellants |
Judgment: | 14 April 2025 at 11.00 am |
JUDGMENT OF THE COURT
AThe appeal is dismissed.
BThe appellants must pay the respondent’s costs for a standard appeal on a band A basis with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Peters J)
The appellants, Andrew and Kathryn MacDonald, appeal against a decision of Gendall J declining summary judgment on their claim against the respondent, Phillip MacDonald.[1] Phillip MacDonald is Andrew MacDonald’s father.
[1]MacDonald v MacDonald [2023] NZHC 2255 [judgment under appeal]. For convenience, and with no disrespect intended, we shall refer solely to Andrew from now on, for both himself and Kathryn.
Gendall J declined summary judgment because of a genuine conflict of evidence on the issues which arose on the application, with that conflict only able to be resolved following viva voce evidence.[2]
[2]At [41].
McHerron J granted leave to appeal on 9 May 2024.[3]
Background
[3]MacDonald v MacDonald [2024] NZHC 1134.
Andrew seeks judgment in the sum of $500,000 plus interest. His case is that Phillip is indebted to him in this amount, being the balance of the purchase price due on a sale of land from Andrew to Phillip in 2018. Andrew’s evidence is that he sold the land to Phillip for $1,150,000, pursuant to an agreement for sale and purchase dated 2 March 2018, which he annexes to his affidavit (ASP). Phillip paid $650,000 of the purchase price on settlement on 26 April 2018, with the balance of $500,000 left outstanding as a debt due from Phillip to Andrew. On Andrew’s case, the debt, payable on demand and interest‑free pending demand, is evidenced by a Deed of Acknowledgment of Indebtedness dated 6 April 2018 (Deed). Andrew has made demand but Phillip has not paid. Hence Andrew’s claim for $500,000.
Phillip’s case is that he agreed to pay $650,000 for the land, not $1,150,000, and he does not owe the $500,000 now claimed. Phillip’s evidence is that the sale took place following Andrew contacting him in early 2018 saying that he, Andrew, needed funds. Andrew was unable to borrow in Australia (where he and his family live) or from a New Zealand lender despite having the land available as security. Phillip’s evidence is that, as a result, he agreed to borrow the funds that Andrew required, being $650,000, with the land to be transferred to him but with Andrew to repurchase the land at some future date for the same price. Phillip’s evidence is that he only agreed to purchase the land because Andrew needed money; that he had no wish to purchase the land; and, for reasons set out in the next paragraph, there was no benefit to him in doing so.
To put that last part of Phillip’s evidence in context, he and his brother had previously owned the land, but had transferred it to Andrew in 1996. At the time of that transfer, they had grape vines planted on the land, and those vines remained in 2018 at which time they were owned by a company associated with Phillip and his wife, referred to as Montford. Phillip’s evidence is that there was no advantage to him in purchasing the land in 2018 because Montford already had the benefit of a long‑term lease of the land and owned the improvements, including the vineyard.
Phillip and his wife were overseas between early‑March and 11 April 2018. Phillip’s evidence is that he did not execute an agreement for sale and purchase in the form or with the content annexed to Andrew’s affidavit. Phillip says that, while he was away, he had some communications with Dew & Co (see below) to finalise an agreement for the payment of the $650,000 and to arrange the borrowing of that $650,000 from Heartland Bank (Heartland).
Deed of Acknowledgment of Indebtedness
Phillip acknowledges that another son, Haysley MacDonald, executed the Deed in his absence, pursuant to an enduring power of attorney. However, Phillip otherwise says little about the circumstances of that execution and there is no affidavit from Haysley. Phillip says that he does not believe that the Deed was proffered on settlement.
Agreement for sale and purchase
The ASP was prepared by Mr David Dew of Dew & Co, the MacDonald family’s solicitors for many years. Mr Dew acted for both parties on the transaction and possibly also for Heartland.
Following Phillip’s affidavit, Mr Dew swore an affidavit, the important points of which may be summarised as follows.
First, Phillip executed the ASP before going overseas, and it was complete when he did so.
Secondly, although Phillip had told Mr Dew that Andrew was to buy the land back at some point, Phillip did not wish to include any terms about that in the ASP because he trusted Andrew to honour this part of the agreement.
Thirdly, Andrew was not particularly concerned about the detail and the only instruction he gave Mr Dew was to “get the agreement done” so he could “get the $650,000 as soon as possible”. Andrew did not give Mr Dew specific instructions about other aspects of the transaction, including the purchase price.
Fourthly, Mr Dew advised the parties that the sale should be at market value, “otherwise they would run into gifting issues” (although counsel for Andrew, Mr Logan, submits gifting was not an issue at the time), and because Heartland wished to see that the value of the transaction was at least the ratable value of the land. Mr Dew’s recollection is that Dew & Co established the price from the rating valuation for the land, with that price calculated to exclude Montford’s improvements as recorded in clause 19.3 of the ASP referred to below. Although Mr Dew does not identify the rating valuation on which he relied, the evidence is to the effect that the rating valuation at the time was $1,160,000.
Clause 19.3 is one of the additional further terms of sale of the ASP. These provide:
19.0 Purchase price
19.1The purchase price owing to the Vendor shall be partially satisfied by way of a Deed of Acknowledgement of Indebtedness from the Vendor (“Donor”) to the purchaser (“Donee”) in the sum of $500,000.00 (Five Hundred [Thousand] Dollars Only) (“Debt”).
19.2The purchase price will be accordingly satisfied as follows:
Debt 500,000.00
Cash 650,000.00
Total 1,150,000.00
19.3The purchase price has been ascertained on the basis that the vineyard improvements on the property in the sum of $700,000.00 are owned by Montford Corporation Limited.
Lastly, as the purchase price of $1,150,000 was more than the $650,000 Phillip had arranged to borrow from Heartland, Mr Dew recommended the parties execute the Deed to cover the shortfall, which they did.
Judgment under appeal
Having considered all of the evidence, Gendall J acknowledged that, on its face, Andrew’s claim is straightforward.[4] Gendall J also acknowledged the merit in Andrew’s response to Phillip’s evidence that he had only agreed to pay $650,000 for the land. For instance, there is no evidence that Phillip objected immediately after receipt of Andrew’s demand for payment; Phillip has not produced the form of agreement he says that he did execute; and it is unlikely there would be any genuine issue as to the sale price or other terms given that a solicitor was acting on the transaction.[5]
[4]Judgment under appeal, above n 1, at [28].
[5]At [32].
Despite this, Gendall J said he did not consider the matter was in fact straightforward as he was unable to reconcile cl 19.3 with Mr Dew’s evidence that the purchase price should be at market value and as to how the price was established.[6] In short, Gendall J was not clear on whether the $1,150,000 was net of the $700,000 of improvements. If the purchase price was established by reference to the then rating valuation of $1,160,000, an agreement recognising the value of the improvements would mean a purchase price of $460,000.[7]
[6]At [38].
[7]At [39].
It was for this reason Gendall J considered further clarification was required as to what was intended by cl 19.3 and its effect on the purchase price.
Submissions on appeal
Mr Logan submits that Gendall J made several errors in declining summary judgment.
First, Mr Logan submits that Gendall J erred in failing to consider the enforceability of the Deed as a “standalone” document.
Secondly, Mr Logan submits that Gendall J erred by finding that the purchase price and the meaning of cl 19.3 required further clarification.
Thirdly, Mr Logan submits that Gendall J erred in fact and law by finding that there was a genuine conflict of evidence, whether relating to the ASP or the Deed, requiring resolution through further evidence at a substantive hearing.
Discussion
The Court may only grant summary judgment if satisfied the defendant has no defence to the plaintiff’s claim.[8] Summary judgment is not an appropriate procedure to adopt if there is genuine dispute as to factual matters.
[8]High Court Rules 2016, r 12.2(1).
As to Mr Logan’s first submission, we do not accept that the Deed may be considered and enforced as a standalone document. The Deed was executed in the context of a wider transaction. The further terms of sale refer to the Deed, and the Deed itself records that the indebtedness which it evidences derives from the purchase of the land. Accordingly, the Deed and the ASP are connected. If the terms of the ASP are in dispute, as they are, that may well affect the view taken of the Deed.
As to Mr Logan’s second and third submissions, we agree with Gendall J that there is a need for further clarification as to what was agreed regarding the purchase price and the effect of cl 19.3. In addition to that point, Ms Radich identified other matters that are the subject of genuine dispute, one of which is whether the agreement was in its final form when executed by Phillip. As Ms Radich submits, Phillip’s signature appears only on the execution page. In contrast, Andrew has not only signed the execution page, but he has also initialled every other page, including the page that records the further terms of sale.
These matters are critical to the resolution of the dispute. They are not capable of resolution on the evidence that has been filed to date and, as a result, Gendall J was correct to dismiss the application.
Result
The appeal is dismissed.
The appellants must pay the respondent’s costs for a standard appeal on a band A basis with usual disbursements.
Solicitors:
Pitt & Moore, Nelson for Appellants
Radich Law, Blenheim for Respondent
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