Murren v Schaeffer - [2019] NZCA 34

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA363/2018
[2019] NZCA 34

BETWEEN	JAMES JOSEPH MURREN AS TRUSTEE OF THE JAMES J MURREN SPENDTHRIFT TRUST AND DANIEL LEE Appellants
AND	GLENN SCHAEFFER Respondent

Court:	French, Simon France and Moore JJ
Counsel:	A J Horne and A E Simkiss for Appellants T D Gee for R Schaeffer (non‑party)
Judgment: (On the papers)	6 March 2019 at 3.30 pm

JUDGMENT OF THE COURT

A The appellants’ application for recall is granted.

BWe recall the judgment of this Court in Murren v Schaeffer of 23 August 2018. The judgment is amended and reissued with paragraphs [52](e) and [60], and Order H of that judgment deleted and replaced. In their place we make an award in favour of the non-party, Ms Renee Schaeffer, for a standard appeal on a band A basis, together with the usual disbursements.
CThe appellants are entitled to an award of costs on the application for recall in accordance with the costs for a standard application on a band A basis, together with any reasonable disbursements.
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REASONS OF THE COURT

(Given by Simon France J)

This decision concerns an application by the appellants to recall the judgment and quash an order of indemnity costs in favour of a non‑party.

Introduction

This proceeding involved a successful appeal against the refusal of the High Court to make freezing orders.[1] The freezing order application sought to restrain any proceeds from an anticipated sale pending resolution of the primary claim. The application recognised that security interests registered over the property to be sold would take priority before the freezing order took effect. However, the application sought to exclude from that priority secured debts owed by the defendant, Mr Glenn Schaeffer, to his former wife, Ms Renee Schaeffer. It was argued there was a basis for doubt as to the bona fides of these debts, and the applicants had not had time to resolve the matter.
[1]Murren and Lee v Schaeffer [2018] NZCA 318.
Seemingly alerted to all this late in the piece, Ms Schaeffer filed evidence shortly before the hearing, and Mr Gee appeared. Ultimately at the hearing the appellants modified their position to one of accepting that priority should be accorded the debts, but with leave to return to the Court if information emerged that gave substance to their suspicions.[2] The Court made the freezing orders over any sale proceeds but with priority to all registered interests including those of Ms Schaeffer and excluding any registered interests in favour of Mr Schaeffer.[3]
[2]At [40] and [56].
[3]At [41], [43] and [55].
Concerning costs, the Court noted that r 53 of the Court of Appeal (Civil) Rules 2005 conferred a broad discretion, including awarding costs to non‑parties. Of the present situation, we observed:[4]
… The appellants sought to deal with [Ms Schaeffer’s] registered interests differently from other registered security holders. She was not served with the proceedings or by other means afforded the opportunity to…

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 Murren v Schaeffer

Details

AGLC: Murren v Schaeffer [2019] NZCA 34
Case: [2019] NZCA 34
Decision Date: 6 March 2019 at 3.30 pm

CaseChat Overview and Summary

The appeal in this case was brought by the appellants, James Joseph Murren as trustee of the James J Murren Spendthrift Trust and Daniel Lee, against the respondent, Glenn Schaeffer. The appeal concerned the refusal of the High Court to make freezing orders, which the appellants sought to restrain any proceeds from an anticipated sale pending resolution of the primary claim. The issue before the Court of Appeal was whether the freezing orders should exclude the secured debts owed by Glenn Schaeffer to his former wife, Renee Schaeffer. The Court of Appeal granted the appellants' application for recall of the previous judgment and quashed the order for indemnity costs in favor of Renee Schaeffer. The Court found that the appellants were at fault for not contacting Renee Schaeffer's solicitors to clarify the situation and that there was ample opportunity for her to contact the appellants' lawyers to clarify the situation.

The Court of Appeal found that the appellants had a broad discretion under rule 53 of the Court of Appeal (Civil) Rules to award costs to non-parties. However, the Court found that Renee Schaeffer's conduct since becoming aware of the issue on 16 July was not such as to support an award of indemnity costs. The Court concluded that if appraised of the correct situation, it would not have made the costs order that it did. The Court granted the appellants' application for recall and replaced the previous judgment with a new one that made an award in favor of Renee Schaeffer for a standard appeal on a band A basis, together with the usual disbursements. The appellants were also entitled to an award of costs on the successful recall application.

The final orders of the Court were that the appellants' application for recall was granted. The judgment of this Court in Murren v Schaeffer of 23 August 2018 was recalled and reissued with paragraphs [52](e) and [60], and Order H of that judgment deleted and replaced. In their place, the Court made an award in favor of the non-party, Renee Schaeffer, for a standard appeal on a band A basis, together with the usual disbursements. The appellants were entitled to an award of costs on the application for recall in accordance with the costs for a standard application for leave on a band A basis, together with any reasonable disbursements.

Orders