Private Accounting Trustee Limited v Flavell - [2020] NZHC 2945

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000012

[2020] NZHC 2945

BETWEEN
PRIVATE ACCOUNTING TRUSTEE LIMITED

First Plaintiff

SUSAN CARREL MACKEN and JACK

LEE PORUS in their capacity as executors and trustees of THE ESTATE OF PAMELA ANNE DRAKE GRAVNING

Second Plaintiffs

AND

CHRISTOPHER PHILLIP FLAVELL

Defendant

ARACAPITAL INVESTMENTS PTY LIMITED

Second Defendant

COSY DELL TRUSTEE LIMITED and DUNEDIN INDEPENDENT TRUSTEES

LIMITED in their capacity as trustees of THE COSY DELL TRUST

Third Defendants

FLAVELL FAMILY TRUSTEE LIMITED and HAMLET CAPITAL PTY LIMITED in
their capacity as trustees of THE FLAVELL FAMILY TRUST

Fourth Defendants

Hearing: 11 August 2020

Appearances:

S Russell and D van Hout for the Plaintiffs T Sycamore for the Defendants

Judgment:

12 November 2020

JUDGMENT OF ASSOCIATE JUDGE GARDINER

PRIVATE ACCOUNTING TRUSTEE LTD v FLAVELL [2020] NZHC 2945 [12 November 2020]

This judgment was delivered by me on 12 November 2020 at 1.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Introduction

[1] This is an application by the plaintiffs for summary judgment. The plaintiffs seek orders for the first defendant to pay the first plaintiff (or in the alternative the second plaintiff) an amount said to be owing under a Deed of Acknowledgement of Debt (“the Deed”) signed by the first defendant. The plaintiffs also seek orders that the second defendant return to the first plaintiff certain shares it holds as a nominee shareholder for the first plaintiff. The application is opposed by the defendants, except for the return of shares.

[2] The parties dispute the purpose and effect of the Deed. The plaintiffs contend that the Deed created a standalone legal obligation on the first defendant to pay the debt to the plaintiffs on demand. The defendants say that, viewing the Deed objectively in its factual context, it is so unclear what the parties intended that the Deed is invalid for uncertainty.

Facts

[3] Pamela Gravning and the first defendant, Mr Flavell, were long-term friends and acquaintances. Mr Flavell is an investment advisor and banker.

[4] Between 2010 and 2016, Mrs Gravning advanced to Mr Flavell over $2 million for Mr Flavell to invest in shares, properties and a fishing quota. In their dealings, Mrs Gravning dealt directly with Mr Flavell. The majority of the various investment assets were held by Mr Flavell’s investment entities. The terms of these advances were not formally documented.

[5] Mrs Gravning was diagnosed with a terminal illness in late 2016. Mrs Gravning wanted to formally document the various advances Mrs Gravning had provided to Mr Flavell over the years before she passed away.

[6] The Deed was signed on or around 21 June 2017 between Mrs Gravning and Mr Flavell. Neither side had legal representation or review when drafting or formalising the Deed, although Mr Flavell accepts that he entered it freely.

[7]The key parts of the Deed are:

PARTIES

PAMELA ANNE GRAVNING (“Lender”)

CHRISTOPHER PHILLIP FLAVELL (“Borrower”)

INTRODUCTION

A.The Lender has…

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.

Keep reading for free

Create a free CaseChat account to read Private Accounting Trustee Limited v Flavell and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2020] NZHC 2945
Decision Date: 12 November 2020

CaseChat Overview and Summary

This case involved an application for summary judgment by the plaintiffs, Private Accounting Trustee Limited and the executors and trustees of the Estate of Pamela Anne Drake Gravning, against the defendant Christopher Phillip Flavell and various other defendants. The plaintiffs sought repayment of an amount said to be owing under a Deed of Acknowledgement of Debt signed by Flavell and also sought the return of certain shares held by a second defendant as a nominee shareholder for the first plaintiff. The application was opposed by the defendants, except for the return of shares.

The legal issues the court was required to decide were whether the Deed created a legally binding and enforceable obligation on Flavell to pay the outstanding advances on demand and, if so, what sum was due and owing by Flavell under the Deed. The court also needed to determine the value at which the Ecobiotics shares should be transferred.

The court found that the plaintiffs' demand for repayment under the Deed was not suitable for summary judgment. The court held that the factual matrix was relevant to determining whether the parties intended the Deed to create a new, binding legal obligation, and to its interpretation. The court also found that there were some aspects of the factual matrix which raised doubt about whether Flavell and Gravning intended to create a new, standalone legal obligation on Flavell personally, payable on demand. The court concluded that the issue of liability to repay the advances, any profit share, and questions around ownership of remaining investments should be determined in the round, at a full trial.

Regarding the Ecobiotics shares, the court was unable to make an order that the shares be transferred to the Silver Fern Property Trust and set the value for the transfer, as the claim for the return of the shares was not made under the Deed but rather in the context of the original informal agreement between Gravning, Flavell, and AraCapital. The value attributable to the Ecobiotics shares needed to be determined at the substantive hearing in that broader context.

The court dismissed the plaintiffs' application for summary judgment and reserved the costs and disbursements of the summary judgment application pending the outcome of the substantive proceeding. The court also ordered a case management conference for the proceeding.

Orders