Nielsen v Nielsen HC Auckland CIV 2007-404-5496

[2008] NZHC 2486

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2007-404-5496

BETWEEN  GREGORY CAMPBELL OLIVER NIELSEN

Plaintiff

ANDRODERICK WILLIAM GUTHRIE NIELSEN

Defendant

Hearing:         6 March 2008

Appearances: E J Grove for Plaintiff at hearing of 6 March 2008

C T Patterson by way of written submissions
No appearance of defendant

Judgment:      7 August 2008 at 12 pm

JUDGMENT OF ASSOCIATE JUDGE ROBINSON

This judgment was delivered by me on 7 August 2008 at 12 pm, Pursuant to Rule 540(4) of the High Court Rules

Registrar/Deputy Registrar

Date……

Solicitors:           Farry & co, PO Box 91212, Auckland

Ross & Whitney, PO Box 105270, Auckland

GREGORY CAMPBELL OLIVER NIELSEN V RODERICK WILLIAM GUTHRIE NIELSEN HC AK CIV

2007-404-5496  7 August 2008

[1]      The plaintiff applies by way of summary judgment  for orders enforcing the defendant’s obligations under a deed of settlement executed by the parties on 17

November 2005. No opposition has been filed by the defendant and there is no appearance on behalf of the defendant at the hearing.

[2]      The plaintiff and the defendant settled a dispute arising out of their interest in property developments by entering into a deed of settlement containing the following provisions: -

5.

a.“Clause 5: Rod agrees to purchase Greg’s 50% beneficial interest in the 500 “A” shares (“the Esplanade   Shares”)   held   by   Esplanade   Trust Limited as trustee of the Esplanade Trust in Queenstown Villas (NZ) Limited for $1,800,000.00. Settlement of this transaction to be 30 days after the issue of new unit titles for the 16 units in stage one of the Esplanade Development at 38-54 Brunswick Street and 58-76 Lack Esplanade, Queenstown (the “Esplanade Settlement Date”) or the 30th day of November 2006 whichever is the sooner.

b. “Clause  6:  Upon  execution  of this  Deed  by  both parties Rod shall procure Citation Holdings Limited to pay to Greg a consultant fee of $2,000.00 per week. Such consultancy fee is payable until settlement of the purchase of the Esplanade Shares by Rod”.

c. “Clause 7.1: Upon this Deed being signed by both parties and release of the guarantees referred to in clause  9  being  obtained  Greg  shall forthwith…Resign as a director of all the Nielsen Group of Companies… Consent to and co-operate in being removed as a beneficiary of all the trusts listed  in  the  Second  Schedule  to  this Deed…Transfer his shares in the Companies specified in the Third Schedule to Rod or his nominee…Resign as a trustee of the Fernhill Development Trust”.

d. “Clause 7.1: Upon this Deed being signed by both parties and release of the guarantees specified in clause 9 being obtained Greg shall forthwith: (a)

Resign as a director of all the Nielsen Group of Companies specified in the First Schedule to this Deed except for Queenstown Villas (NZ) Limited, Esplanade Trust Limited and Citation Properties Limited…(c) Transfer his shares in the Companies specified in the Third Schedule to Rod or his nominee…”

e. “Clause 8: On settlement of the purchase of Greg’s beneficial  interest  in  the  Esplanade  Shares  Greg will: (a) Resign as a director of Queenstown Villas (NZ) Limited, Citation Property Holdings Limited and Esplanade Trust Limited”.

f.   “Clause 9. On or before the Esplanade Settlement Date Rod is to have Greg released from personal liability under any guarantees and/or indemnities given by Greg in respect to…Any of the companies listed in the First Schedule…Any Trust listed in the Second  Schedule…The  debt  due  to  Trimac Holdings Limited or any of its subsidiary or associated companies”.

g.  “Clause  11.1:  In  the  event  that  Rod  defaults  in respect to any of his obligations under this Deed Greg may give written notice to Rod specifying the default and requiring such default to be remedied within  10  days  from the  date  of  receipt  of  such notice.”

h. “Clause 12: 1 Rod will fully indemnify Greg against any loss, damages, claim, demand, action or costs (including legal fees on solicitor/client basis) incurred or suffered by Greg arising out of:

i.    Any guarantee and/or indemnity given by Greg in respect to any obligation or obligations of the Nielsen Group of Companies”.

i.   “Clause 12.2: For the sale of clarity it is recorded that Rod shall pay all legal and other costs incurred by Greg in respect of any of the matters referred to in clause 12.1”.

j.   “Clause 13: Rod shall diligently continue work on the  Esplanade  Development  and  ensure  that  the stage 1 units are completed and titles for such units obtained as soon as reasonably practicable…”.

k.  “Clause 14: Both parties agree that this Deed shall constitute a full and final settlement of all disputes between them relating to carrying on the business of property developers both through the entities listed in the First and Second Schedules to this agreement

and  through  any  prior  entity  since  liquidated  or wound up…”.

l.   “Clause  17.4:  Both  parties  will  be  released  from their respective obligations in the event of national emergency, war, prohibitive government or if any other clause beyond the reasonable control of the parties or either of them renders the performance of the Deed impossible”.

[3]      The plaintiff claims the defendant to be in breach of his obligations under that

Deed in the following way:

a)       The defendant has not paid the plaintiff $1,800,000 for the plaintiff’s beneficial interest in the Esplanade shares as required by clause 5 of the Deed of Settlement. This payment was due on 30 November 2006.

b)Pursuant to clause 6 of the Deed of Settlement, the plaintiff was paid consultancy fees of $2,000 per week until 26 March 2007 when such payments ceased. Evidence adduced by the plaintiff is to the effect that the cancellation of payment of consultancy fees was at the instructions of the defendant. The defendant advised that as at 1 April

2007 his agreement with the plaintiff was cancelled.

[4]      When the matter came on for hearing before me on 6 March 2008, I required further submissions from counsel for the plaintiff as to: -

a)       The form and conditions of the order relating to the payment by the defendant to the plaintiff of $1,800,000 for the shares in Queenstown Villas Ltd.

b)        The  defendant’s  liability  of  payment  of  the  consultancy  fee  by

Citation Holdings Ltd.

c)       The jurisdiction for an Associate Judge to  grant relief by way of injunction or declaration.

[5]      Counsel for the plaintiff has now submitted a comprehensive memorandum as to the issues raised by me at the hearing on 6 March 2008. I am now satisfied that an Associate Judge has jurisdiction to grant an injunction and declaration as part of the relief in respect of proceedings for summary judgment . In this respect, I adopt and follow the decision of Venning J in Cordova v Wenzel 2006 PRNZ 184.

[6]      Consequently, I now make the following orders: -

a)      The defendant is to complete the purchase of the plaintiff’s 50% beneficial interest in the shares in Queenstown Villas NZ Ltd held by Esplanade Trust Ltd (“the beneficial interest”). To that end the defendant is to pay the sum of $1,800,000 to the plaintiff upon the plaintiff tendering to the defendant an executed Deed of Assignment sufficient in form and contents to transfer the beneficial interest to the defendant. The defendant is to tender that Deed of Assignment to the plaintiff as soon as reasonably practicable after delivery of this judgment.

b)        The  defendant  is  to  pay the  plaintiff  interest  on  the  said  sum  of

$1,800,000 at the rate of 7.5% per annum from 1 December 2006 until the plaintiff completes the purchase of the beneficial interest.

c)       Consultancy fee at $2,000 per week from date of cessation of payment up to date of filing of plaintiff’s affidavit $42,000.

d)       Consultancy  fee  from  date  of  filing  of  plaintiff’s  affidavit  on  4

September 2007 until the date hereof, namely 48 weeks x $2,000 =

$96,000.

e)       The defendant is to take all reasonable practicable steps to obtain the release of the plaintiff from all personal guarantees and/or indemnities provided  by the  plaintiff  prior  to  4  April  2007  in  relation  to  the following companies and trusts:

Raceway Property Holdings Limited, Castlerock No. 2 Limited, Castlerock   land   Holdings   Limited,   Maritime   Trustees   Limited, Hauraki Trustees Limited, Mondrian Property Holdings Limited, Greenlane   Trust   Limited,   Ellerslie   Trustees   Limited,   Glenside Property Holdings Limited, The Lodge Trust Company Limited, Hackett Trust Company Limited, 526 Parnell Road Limited, Little Rock Management Company Limited, Queenstown Lifestyle Villas Limited, 226 Greenlane Rental Limited, 35 Ayr Street Limited, Citation Holdings Limited, Lakeview Trust Limited, Lake Wakatipu Land  Housings  Limited,  Esplanade  Trust  Limited,  Thompson  St Villas Limited, Belfast Terrace No. 3 Limited, Manchester Villas Limited, Queenstown Villas (NZ) Limited, Lake Esplanade Management Company Limited, Fernhill Land Holdings Limited, Esplanade Villas Limited, Ayr Street Townhouses Limited, Parnell (Ayr Street) Properties Limited, GC Housing Limited, Castlerock Group Limited, Norwest Group Management Limited, Eyesight Technology   Limited,   Collins   Paper   Haulage   Limited,   Trimac Holdings Limited or any of its subsidiary or associated companies, The Fernhill Development Trust, The Ayr Street Trust, The Ellerslie Property Trust, The Manchester Villas Trust, The Greenlane Development Trust, The Augustus Housing Trust, The Esplanade Trust, The Percival Rental Trust, The Shelly Beach Rental Trust (1), and The Shelly Beach Rental Trust 2.”

[7]      The defendant is contractually obliged to indemnify the plaintiff in respect of any and all liabilities and legal expenses (on a solicitor and own client basis) arising out  of  any  personal  guarantees  and/or  indemnities  provided  by  the  plaintiff  in relation to:

Raceway Property Holdings Limited, Castlerock No. 2 Limited, Castlerock   land   Holdings   Limited,   Maritime   Trustees   Limited, Hauraki Trustees Limited, Mondrian Property Holdings Limited, Greenlane   Trust   Limited,   Ellerslie   Trustees   Limited,   Glenside Property  Holdings  Limited,  The  Lodge  Trust  Company  Limited,

Hackett Trust Company Limited, 526 Parnell Road Limited, Little Rock Management Company Limited, Queenstown Lifestyle Villas Limited, 226 Greenlane Rental Limited, 35 Ayr Street Limited, Citation Holdings Limited, Lakeview Trust Limited, Lake Wakatipu Land  Housings  Limited,  Esplanade  Trust  Limited,  Thompson  St Villas Limited, Belfast Terrace No. 3 Limited, Manchester Villas Limited, Queenstown Villas (NZ) Limited, Lake Esplanade Management Company Limited, Fernhill Land Holdings Limited, Esplanade Villas Limited, Ayr Street Townhouses Limited, Parnell (Ayr Street) Properties Limited, GC Housing Limited, Castlerock Group Limited, Norwest Group Management Limited, Eyesight Technology   Limited,   Collins   Paper   Haulage   Limited,   Trimac Holdings Limited or any of its subsidiary or associated companies, The Fernhill Development Trust, The Ayr Street Trust, The Ellerslie Property Trust, The Manchester Villas Trust, The Greenlane Development Trust, The Augustus Housing Trust, The Esplanade Trust, The Percival Rental Trust, The Shelly Beach Rental Trust (1), and The Shelly Beach Rental Trust 2.”

[8]      The defendant shall pay the plaintiff’s costs on a 2B basis and disbursements as fixed by the registrar.

Associate Judge Robinson