Reid v Castelton-Reid - [2020] NZHC 2313

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-3009

[2020] NZHC 2313

BETWEEN
ROSS RONAYNE REID

Plaintiff

AND

BARRY ROSS LAURENCE CASTELTON- REID

Defendant

Hearing: 23 July 2020

Appearances:

S Abdale for the Plaintiff

M J Matthews for the Defendant

Judgment:

7 September 2020

JUDGMENT OF GORDON J

This judgment was delivered by me
on 7 September 2020 at 12 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Clive Gardner Law, Tauranga
Rennie Cox, Auckland

Counsel: S Abdale, Auckland

REID v CASTELTON-REID [2020] NZHC 2313 [7 September 2020]

TABLE OF CONTENTS

Introduction  [1]
Summary of facts  [5]
Further inquiry  [12]
Court of Appeal findings  [14]
Scope of resulting trust  [19]

Payment of $800,000 to Dee Ann in September 2009 [19]

Payment for Barry’s apartment (first Eclipse apartment) [80] Payment for Ron and Mrs Reid’s apartment (second Eclipse apartment) [94] Allocation of the mixed fund and income earned between the parties [97] First affirmative defence: abuse of process [98] Validity of document and availability of revocation. [100] Second affirmative defence: equitable estoppel [134] Is equitable estoppel available to Barry? [134]

Representation evidence. [150]

Reliance evidence [161]

Detriment evidence [162]
Remedy [163]

Third affirmative defence: change of position [184]

Interest  [211]
Result  [219]
Orders  [220]

Costs [221]

Introduction

[1] Mrs Esme Dede Reid died on 22 November 2008. Her husband, the plaintiff, Ross Ronayne Reid (Ron), and their son, the defendant, Barry Ross Laurence Castleton-Reid (Barry), have been in dispute for some years over matters relating to Mrs Reid’s estate. A large sum of money paid by Ron to Barry is in issue. Efforts at resolution in the earlier part of this decade failed, and have led to an extended period of litigation. The situation has been substantially exacerbated by Ron’s earlier unwillingness to obtain and act on legal advice. The issues which have arisen in this litigation are a direct consequence of mistakes Ron has made about his powers, rights and liabilities in several key transactions in the years since Mrs Reid’s death.

[2] This is the second time this matter has been before me. On the first occasion, I found against Ron on his three causes of action: breach of fiduciary duty; breach of constructive trust; and, restitution. This was on the basis of my finding that Ron had gifted the money in question to Barry. Having regard to my decision I did not consider Barry’s affirmative defences.1

[3] Ron appealed my judgment to the Court of Appeal. The Court of Appeal found Barry held the money on a resulting trust for Ron. The circumstances of the transaction raised a presumption of a resulting trust in Ron’s favour, which was not displaced by evidence of an alternative intention such as a gift or advancement. The Court of Appeal directed this Court to consider the three affirmative defences advanced by Barry and the allocation of the money between the parties given transactions which occurred while…

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.

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Details

Case: [2020] NZHC 2313
Decision Date: 7 September 2020

CaseChat Overview and Summary

In the High Court of New Zealand, Gordon J presided over a complex dispute between Ross Ronayne Reid and Barry Ross Laurence Castelton-Reid regarding the distribution of funds following the death of Esme Dede Reid. The primary issue revolved around a sum of $1.7 million, which Ross had transferred to Barry, and subsequent transactions involving this money. The Court of Appeal had previously ruled that Barry held the money on a resulting trust for Ross. The current inquiry focused on whether Barry could resist Ross's enforcement of his obligations under the resulting trust through three affirmative defences: abuse of process, equitable estoppel, and change of position. The court also needed to determine the allocation of certain payments made by Barry during the period he held the money on the resulting trust.

Gordon J found that Barry was not liable for the $800,000 paid to Dee Ann from the disputed amount as the payment was made based on Ron's misunderstanding of his rights to the funds. Barry's liability for the amounts used to purchase the Eclipse apartments was subject to his second affirmative defence of equitable estoppel, which he successfully established. Consequently, Barry was not required to repay the amounts used for the purchases of the two Eclipse apartments. However, the net income earned on the mixed fund was to be shared equally between Ron and Barry. Barry was ordered to repay Ross the sum of $417,414.58, representing Ross's half share of the net income and a proportion of the interest earned while the funds were deposited in the solicitor's trust account. Interest on $417,023.50 at the rate of 2.5 per cent from 15 December 2015 was also awarded. The court noted that each party had a measure of success and invited the parties to agree on costs or file memoranda if they were unable to reach an agreement.

Orders