Potter v Duffy - [2016] NZHC 3205

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B TO 11D OF THE FAMILY COURTS ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
THE-FAMILY-COURT/LEGISLATION/RESTRICTION-ON-PUBLISHING- JUDGMENTS.

IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

CIV-2014-470-131 [2016] NZHC 3205

BETWEEN
TERI ANNE POTTER

Plaintiff

AND

MARK FRANCIS DUFFY First Defendant

THE TRUSTEES OF THE DUFFY TRUST - BEING TERI ANNE POTTER, MARK FRANCIS DUFFY AND LE PINE TRUSTEES LIMITED

Second Defendants

Hearing: On the papers

Counsel:

E Eggleston for the Plaintiff
V M Ammundsen for the First Defendant
T Young and T Kirkham for the 3rd named Second Defendant

Judgment:

11 August 2016

JUDGMENT (NO.4) OF MUIR J (RECALL)

This judgment was delivered by me on Thursday 11 August 2016 at 4.00 pm
Pursuant to Rule 11.5 of the High court Rules.
Registrar/Deputy Registrar
Date:…………………………

Counsel: Solicitors:
E Eggleston, Barrister, Tauranga V M Ammundsen, Trust Law Ltd, Auckland
Holland Beckett Lawyers, Tauranga
Le Pine & Co (T Young/T Kirkham), Taupo for the
Trustees

Copy to: The First Defendant

POTTER v DUFFY (No 4) (Recall) [2016] NZHC 3205 [11 August 2016]

Introduction

[1] The plaintiff makes an application for partial recall of my judgment dated 27

November 2015 on the basis that, since delivery of that judgment (and in the context of sale of the Duffy Trust’s assets and payment of the Trust creditors which then occurred), new information has come to light which makes the declaration of the quantum of the first defendant’s current account debt in para [53](b)(ii) of my
judgment incorrect.1

[2] In particular, from the proceeds of sale of the Trust’s lifestyle property in Tauranga, ASB Bank deducted the sum of $27,289.76 for the repayment of what is acknowledged as a personal debt of the first defendant, but which had been guaranteed by the Trust and which I refer to as the “Lady Luck” loan.2

[3] Although the plaintiff had, in her capacity as a Trustee of the Trust, signed an unlimited guarantee of the debt on 10 August 2005, she had, by the date these proceedings came on for hearing in 2015, long forgotten about the contingent liability. Nor, since the loan stood in the first defendant’s name alone, was she able she says to obtain information about it from ASB even if she had asked.

[4] Moreover, in his most recent affidavit of assets and liabilities dated

19 October 2015 the first defendant disclosed the loan only to the extent of his global liability to the ASB Bank of $104,714 (stated in the affidavit to be secured over what was acknowledged as his separate property at National Park). There was nothing therefore in his affidavit to alert the plaintiff to the continuing liability of the Trust under its guarantee.

[5] The problem was compounded in a partial settlement of the parties’ claims reflected in a consent memorandum dated 20 November 2015. That memorandum recorded that, on settlement of the sale of the Trust property, 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 Potter v Duffy

Details

AGLC: Potter v Duffy [2016] NZHC 3205
Case: [2016] NZHC 3205
Decision Date: 11 August 2016

CaseChat Overview and Summary

The plaintiff, Teri Anne Potter, made an application for partial recall of the Court’s judgment of 27 November 2015 in the proceedings against Mark Francis Duffy, the first defendant, and the Trustees of the Duffy Trust, the second defendants. The application arose from the realisation that the quantum of the first defendant’s current account debt had been incorrectly declared. This was due to the first defendant not disclosing the repayment of the “Lady Luck” loan, which had been guaranteed by the Trust. The Trust had been liable to repay this loan, but the first defendant had failed to disclose this liability, which was only revealed when the Trust’s lifestyle property was sold.

The key legal issue was whether the Court had jurisdiction to recall its earlier judgment. The Court considered that the recall was justified because of the first defendant’s failure to disclose relevant information and the obligation of full and frank disclosure in relationship property proceedings. The Court also noted that recall could be appropriate where there had been a plain mistake on the part of the Court, a failure of the parties to draw the Court’s attention to a plainly relevant fact or point of law, or the discovery of new facts subsequent to the judgment. In this case, the first defendant had failed to disclose the contingent liability of the Trust, which had only come to light after the sale of the Trust’s property.

The Court concluded that the first defendant had not demonstrated an adequate level of candour in relation to the disclosure of the Lady Luck loan. The Court held that the first defendant had an obligation to disclose the contingent liability of the Trust, and it was not acceptable for him to benefit from his own wrong. The Court exercised its discretion to recall and amend the earlier judgment, substituting the correct sum of the first defendant’s current account debt.

The Court recalled and amended the earlier judgment to reflect the correct quantum of the first defendant’s current account debt. The Court substituted the sum of $150,569.76 for the sum previously declared, which included the amount of the “Lady Luck” loan that had been repaid from the proceeds of the sale of the Trust’s property. The plaintiff did not seek costs on her application for recall, and none were awarded.

Orders