Moses v Stark - [2023] NZHC 1955

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2022-419-353

[2023] NZHC 1955

UNDER section 73 of the Partnership Law Act 2019

IN THE MATTER

of the GJ & EM Stark Partnership

BETWEEN

JULIET ANNA MOSES

Plaintiff

AND

EILEEN MARY STARK

First Defendant

AND

KEITH RICHARD STARK

Second Defendant

Hearing: 24 July 2023 (via AVL)

Counsel:

J W A Johnson and S T Dymond for Plaintiff No appearance for the Defendants

Judgment:

25 July 2023

Reissued:

31 July 2023

JUDGMENT OF ISAC J

[Dissolution of partnership]

Introduction and the issues

[1] In 1965, George and Eileen Stark established the GJ & EM Stark Partnership as a vehicle for operating a farm business on their property at Ohinewai. George passed away in 2020, and Eileen is sadly no longer capable of managing her own affairs. Their interests in the partnership are now represented respectively by Juliet Moses, the executor and trustee of George’s estate, and Keith Stark, who acts pursuant to a power

MOSES v STARK [2023] NZHC 1955 [25 July 2023]

of attorney in relation to his mother Eileen’s property. Keith has also taken over the management of the partnership farm.1

[2] The relationship between the partnership’s representatives is dysfunctional, resulting in a state of deadlock and impeding the smooth running of partnership affairs. The partnership has accrued significant outstanding liabilities, and the farm has fallen into disrepair, requiring maintenance. In addition, the deadlock has left George’s estate unable to realise and administer its share of the partnership assets.

[3] Concerns about Keith’s management of the partnership’s assets and finances, and further delay in the administration of George’s estate, led Ms Moses to apply successfully for the appointment of interim receivers to the partnership in 20 April 2023.2

[4] In this proceeding Ms Moses seeks a declaration that the partnership is dissolved, and orders appointing permanent receivers over the partnership’s assets to implement and give effect to the dissolution.

[5]The key issues for determination are:

(a)whether the partnership has been dissolved; and

(b)whether the Court should appoint permanent receivers to the partnership.

[6] The defendants have taken no material steps to defend the proceeding.3 Accordingly, the hearing was conducted by way of formal proof.

1      For ease of reference, in this judgment I will refer to members of the Stark family by their first names. I mean no disrespect in doing so.
2      Moses v Stark [2023] NZHC 844.
3      While Keith attended a teleconference with Associate Judge Brittain on 17 March 2023, he failed to comply with the Court’s subsequent direction to file and serve a statement of defence. Keith also did not file any opposition to the plaintiff’s application for the appointment for interim receivers, and did not attend the hearing of that application.

Background

The partnership

[7] George and Eileen formed the partnership by an agreement of 12 April 1965. They farmed their property at Tahuna Road, Ohinewai, as a dairy farm at first before converting to 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.

Continue reading Moses v Stark

Details

AGLC: Moses v Stark [2023] NZHC 1955
Case: [2023] NZHC 1955
Decision Date: 25 July 2023

CaseChat Overview and Summary

The case of Moses v Stark involves a dispute concerning the dissolution and management of the GJ & EM Stark Partnership, a farming partnership established by George and Eileen Stark. The plaintiff, Juliet Anna Moses, representing George’s estate, seeks a declaration that the partnership is dissolved and for the appointment of permanent receivers to manage the partnership’s assets. Eileen Stark is unable to manage her affairs due to mental incapacity, with her son Keith Stark acting as her attorney. The defendants, Keith Stark and the estate of Eileen Stark, have not defended the proceeding.

The primary legal issues were whether the partnership had been dissolved and whether the court should appoint permanent receivers. The court found that the partnership dissolved upon George’s death in 2020 under section 69 of the Partnership Law Act 2019. Despite the dissolution, the partnership subsists to wind up its affairs. However, the deadlock and dysfunction in managing the partnership necessitated judicial intervention. The court also found that appointing permanent receivers was appropriate due to the deadlock, Keith’s conflict of interest, the poor state of the farm, unresolved tax issues, and the need to administer George’s estate.

The court declared that the partnership was dissolved on 13 July 2020 and appointed Steven Khov and Kieran Jones as receivers to wind up the partnership’s business and recover debts. The court ordered Keith Stark to pay the plaintiff’s costs of $23,048 due to his intransigent conduct.

Orders