McLaren v McLaren - [2018] NZHC 1668

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY

I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2017-442-000031

[2018] NZHC 1668

UNDER Part 18 of the High Court Rules 2016

BETWEEN

SUSAN MARY MCLAREN

Plaintiff

AND

DAVID MUIR MCLAREN, LENORE MARY MCLAREN and MARK PHILIP

BROWN as Trustees of the MCLAREN FAMILY TRUST
First Defendants

DAVID MUIR MCLAREN and LENORE
MARY MCLAREN as Appointer of the McLaren Family Trust

Second Defendants

Hearing: 3 July 2018 (Determined on the papers)

Counsel:

A R Shaw for Plaintiff

M Phillipps for Defendants

Judgment:

6 July 2018

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

[1] On 28 March 2018 the Court issued a judgment in which it declined an application by the defendants to strike out the plaintiff’s claim.

[2] The defendants have applied for leave to appeal against this judgment to the Court of Appeal. In the application it is simply said that “the Judge erred in law”, but in the accompanying draft notice of appeal there is a summary described as “the gravamen of the plaintiff’s claims and the basis for all the plaintiff’s causes of action”,

MCLAREN v MCLAREN [2018] NZHC 1668 [6 July 2018]

after which more detail is provided of the basis on which the defendants maintain this Court erred in law. It is said:

● The plaintiff’s claims are founded on simple contract and are brought more than six years from the date the cause of action accrued and are therefore time barred under s 4 Limitation Act 1950.

● The losses claimed are “essentially contractual losses” which underscores the contractual nature of the claims. These losses cannot be recovered by the plaintiff as a discretionary beneficiary of the McLaren Family Trust or as a beneficiary of the alleged new trust.

● The first cause of action does not give rise to a breach of fair dealing, nor a breach of a fiduciary duty not to profit by the first defendants putting themselves in a position where the interests and their duty conflict.

● The fifth cause of action is speculative and has no factual basis to support it.

[3]The application is opposed.

[4] In Finewood Upholstery Ltd v Vaughan, Fitzgerald J considered the approach the Court is to take to an application for leave to appeal under s 56 of the Senior Courts Act 2016.1 Her Honour referred to the decision of Dobson J in A v Minister of Internal Affairs, in which the learned Judge had considered an application for leave, found that leave was not in fact required in that case, but nonetheless went on to consider whether he would have granted leave had it been required.2 Fitzgerald J said:3
Dobson J observed that the following considerations would be relevant to any such application:

(a)A high threshold exists for the granting of leave. An allegation of error of law or fact is generally insufficient. An applicant should raise an arguable error.

(b)Leave should only be granted where the circumstances warrant incurring further delay.

1 Finewood…

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: [2018] NZHC 1668
Decision Date: 6 July 2018

CaseChat Overview and Summary

The defendants, David Muir McLaren, Lenore Mary McLaren, and Mark Philip Brown as Trustees of the McLaren Family Trust, along with David Muir McLaren and Lenore Mary McLaren as the Appointer of the McLaren Family Trust, have applied for leave to appeal against the Court's earlier decision declining their application to strike out Susan Mary McLaren's claim. The plaintiff’s claim is founded on equitable rights and seeks equitable remedies. The defendants argue that the claims are actually contractual in nature and therefore barred by the statute of limitations, and that the plaintiff cannot recover losses as a discretionary beneficiary. They also contend that the trustees did not breach any fiduciary duty by taking into account certain contractual arrangements, and that the fifth cause of action is speculative and without factual basis.

The Court considered the principles established in Finewood Upholstery Ltd v Vaughan, Malthouse Ltd v Rangatira Ltd, and Honey v Nottingham, which set out the criteria for granting leave to appeal. The Court found that the defendants had not demonstrated an arguable error of law of sufficient importance to warrant an appeal. The Court noted that the issues raised by the defendants required factual determinations which could only be made at trial. The Court also found that the defendants had not shown that the alleged errors would result in a serious injustice if not addressed through an appeal. Given the lack of general or public importance in the issues raised, and the absence of an imminent trial date, the Court concluded that the high threshold for granting leave to appeal had not been met.

The Court dismissed the application for leave to appeal. The Court indicated that costs should follow the event and be on a 2B basis, unless counsel for the parties agreed otherwise within a specified timeframe.

Orders