Ponniah v Palmer - [2012] NZCA 490

IN THE COURT OF APPEAL OF NEW ZEALAND

CA405/2012
[2012] NZCA 490

BETWEEN LAWRENCE PONNIAH AND JOHN PERA KAHUKIWA
Appellants

AND NORMAN PALMER AND NICOLAS VAN DIJK
Respondents

Hearing: 18 October 2012

Court: Stevens, French and Venning JJ

Counsel: P G Revell for Appellants
E J Werry for Respondents

Judgment: 26 October 2012 at 3.30 pm

JUDGMENT OF THE COURT

AThe appeal is dismissed.
BThe appellants must pay the respondents costs for a standard appeal on a band A basis and usual disbursements.

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REASONS OF THE COURT

(Given by Stevens J)

Introduction

The appellants, Messrs Ponniah and Kahukiwa, are partners in a West Auckland law firm. The firm provided legal services to owners of units in an apartment complex that was subject to weather-tightness issues. Three of the units were owned by the Livi Trust. The appellants became concerned about unpaid accounts and requested the Trust to mortgage trust property in order to secure the firm’s position. The settlor of the Trust, Mr Ivil, signed the security documents whilst purporting to act as “manager” of the Trust. The appellants lodged caveats against the titles of the trust property. In the High Court Associate Judge Doogue refused an application under s 145A of the Land Transfer Act 1952 that the caveats not lapse.[1] The appellants now appeal against that decision.
[1]Ponniah v Palmer [2012] NZHC 1574.
The respondents, Messrs Palmer and Van Dijk, were at all material times the trustees of the Livi Trust. They contended that they did not in fact delegate the power to mortgage trust property to Mr Ivil and that the trust deed did not empower the trustees to delegate to Mr Ivil the decision whether to offer the assets of the Trust as security for payment of the appellants’ legal fees. These form the main issues on appeal.

Factual background

The appellants’ legal skills were employed in a dispute concerning weather-tightness issues in an apartment complex at Clearwater Cove, West Park Marina, in Hobsonville. Units 5E, 7I and 8J in the complex were all owned by the Trust, of which Mr Ivil was the settlor and Messrs Van Dijk and Palmer the trustees. The Trust and other claimants, including Clearwater Cove Body Corporate 170989, made allegations that Fletcher Construction Company and Waitakere City Council (among others) caused or contributed to the leaking in the complex. In about 2007 litigation had commenced in the Weathertight Homes Tribunal.
On 7 May 2007 the trustees executed a document entitled “Authority for representative and assessment”. The purpose of that document was to authorise the Weathertight Services assessor under the Weathertight Homes Resolution Services Act 2006 to enter the properties and carry out invasive testing. In the document, the trustees nominated Mr Ivil as their representative “to bring and resolve a claim for the … complex [at Clearwater Cove in Hobsonville]”.
The litigation continued into 2008. On 26 June 2008 the trustees of the Trust, as well as Mr Ivil, signed a document appointing Mr Ponniah of the…

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 Ponniah v Palmer

Details

AGLC: Ponniah v Palmer [2012] NZCA 490
Case: [2012] NZCA 490
Decision Date: 26 October 2012

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, the appellants Lawrence Ponniah and John Pera Kahukiwa, partners in a West Auckland law firm, appealed against the High Court's decision that their caveats against the titles of certain trust property should not be sustained. The law firm had provided legal services to owners of units in an apartment complex with weather-tightness issues, and the appellants sought to secure their unpaid fees by way of mortgage over the trust property. The respondents, the trustees of the Livi Trust, contended that they had not delegated the power to mortgage trust property to the settlor of the Trust, Mr Ivil, who had signed the security documents. The primary issue on appeal was whether the trust deed enabled the trustees to delegate to Mr Ivil the decision to grant a security agreement to the appellants' law firm. A secondary issue was whether the appellants could establish an estoppel.

The Court of Appeal held that the trust deed did not empower the trustees to delegate to Mr Ivil the decision to grant a security agreement to the appellants' law firm. The court noted that while trustees may employ agents to implement decisions properly made by the trustees themselves, they may not delegate to an agent a decision-making authority which is reserved to the trustees. The court found that even if the trust deed had allowed such delegation, no express delegation had taken place. The court also rejected the appellants' argument based on estoppel, stating that it was not lawfully possible for the trustees to delegate their decision-making power. The appeal was dismissed, and the appellants were ordered to pay the respondents' costs for the appeal on a band A basis and usual disbursements.

Orders