Round v Thompson - [2021] NZHC 827

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2019-409-000387

[2021] NZHC 827

UNDER the Insolvency Act 2006

IN THE MATTER

of the bankruptcy of Martin Charles Round

BETWEEN

MARTIN CHARLES ROUND

Applicant

AND

GARRY PATRICK FRANCIS THOMPSON and DAVID JOHN ROUND

Respondents

Hearing: 13 April 2021

Appearances:

Applicant in person

G M Brodie for Respondents

Judgment:

20 April 2021

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 20 April 2021 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

ROUND v ROUND [2021] NZHC 827 [20 April 2021]

The application

[1] This judgment concerns an application by Martin Charles Round (Martin) for an order under s 119(2) Insolvency Act 2006 to vest in him certain litigation rights relating to the estate of his late father, Eric Charles Round (Eric) that were disclaimed by the Official Assignee. The application is opposed by the executors of Eric’s last will as well as Martin’s brother, David Round (David), as the sole beneficiary under Eric’s will.

Background to the application

[2] Eric and his wife, Eileen, had four children, three of whom survived to adulthood. Those three children were named David, Gerard and Martin. David and Martin had no children. Gerard had two children, Sarah and Fraser. Both Eileen and Gerard predeceased Eric.

[3] Eric and Eileen purchased a house at 2/126 Main Road, Redcliffs in 2007. Upon Eileen’s death in 2009, Eric became the sole owner of the property.

[4] Eric died on 17 July 2017 leaving a last will dated 26 June 2013. The respondents are the executors and trustees of Eric’s estate. Eric left his entire estate to David.

[5] Martin was living with Eric at the Main Road property from the middle of 2011. In November 2012, Eric transferred ownership of the property to Martin. Eric then lived in a rest home between September 2015 until his death.

[6] In 2015, Eric, through David exercising his power of attorney, commenced proceedings against Martin seeking to recover back Eric’s house.1 In a judgment of 14 March 2017, Palmer J found that the house was transferred to Martin as a result of the exercise by him of undue influence on Eric and was an unconscionable bargain. He set aside the transaction and re-vested the property in Eric.

1 Round v Round [2017] NZHC 428.

[7] Martin was subsequently ordered to pay costs in the proceeding of $60,246 of which only $14,813.09 has been paid.

[8] The flavour of Palmer J’s view of the case can be gleaned from the following extracts from the judgment:

[82] I consider, on the balance of probabilities that Martin’s influence on Eric led to the property transfer and his influence was undue in the sense that the transfer was not the result of the free exercise of Eric’s independent will. It was the result of Eric’s fear that, if the transfer did not proceed, Martin would leave…

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 Round v Thompson

Details

AGLC: Round v Thompson [2021] NZHC 827
Case: [2021] NZHC 827
Decision Date: 20 April 2021

CaseChat Overview and Summary

The application in Round v Thompson was brought by Martin Charles Round who sought an order vesting in him certain litigation rights relating to his late father’s estate. The rights had been disclaimed by the Official Assignee. The application was opposed by the executors of Eric’s last will as well as Martin’s brother, David Round, as the sole beneficiary under Eric’s will. Martin’s application was dismissed. The Court found that the application was not supported by sufficient evidence and that it would be unfair to vest the litigation rights in Martin. The Court found that it was unlikely that Martin could establish that Eric breached a moral duty to provide for his proper maintenance and support. Furthermore, Martin had failed to challenge David’s affidavit evidence which showed that Martin had taken advantage of Eric in several respects. The Court also found that vesting the litigation rights in Martin would be unjust to David, Sarah and Fraser, who had reached an accord to pay them one-third of the registered value of the Main Road property once Martin has ceased to occupy it. The Court further found that it would be unfair for Martin to pursue a claim against Eric’s estate when he had not paid the costs award made against him and had caused substantial losses to the estate. The respondents were entitled to their costs on a 2B basis with reasonable disbursements.

Orders