Ryan v Lobb
[2023] NZHC 3595
•8 December 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-001591
[2023] NZHC 3595
BETWEEN VERENA COLLEEN RYAN
First Plaintiff
DIGBY JOHN NOYCE
Second PlaintiffAND
STUART JAMES LOBB
First Defendant
LOCKHART TRUSTEE SERVICES NO. 56 LIMITED
Second DefendantWAG TRUSTEES (2020) LIMITED
Third Defendant
Hearing: 11 October 2023 Appearances:
No appearance by or on behalf of the First Plaintiff H Thompson for Second Plaintiff
R Latton for First Defendant
No appearance by or on behalf of the Second DefendantJudgment:
8 December 2023
JUDGMENT (NO.2) OF POWELL J
[Application that First Defendant is in contempt of court]
This judgment was delivered by me on 8 December 2023 at 4.30 pm pursuant to
r 11.5 of the High Court Rules
…………………..
Registrar/Deputy Registrar
Solicitors/Counsel:
Patterson Hopkins, Auckland
McMahon Butterworth Thompson, Auckland
VERENA COLLEEN RYAN v STUART JAMES LOBB [2023] NZHC 3595 [8 December 2023]
[1] The second plaintiff, Digby Noyce, is the court-appointed receiver of the Lothbury Trust (“the Trust”). In that capacity Mr Noyce has sought the following orders:
(a)A declaration that the behaviour of the first defendant, Stuart Lobb, in interfering with Mr Noyce’s conduct of the receivership of the Lothbury Trust, amounts to contempt of court.
(b)Imposing a penalty of three months’ imprisonment on Mr Lobb, or alternatively such penalty as the Court thinks fit.
[2] In addition, Mr Noyce sought the power to execute all documents and take all steps necessary to transfer the primary asset of the Trust, a property located at 23 Orakei Road, Auckland (“the Orakei Road property”), from the registered proprietors, being the first plaintiff Verena Ryan, Mr Lobb and the second defendant Lockhart Trustee Services No. 56 Ltd (“Lockhart”) to a purchaser of the property upon settlement of Mr Noyce’s intended sale of the property, as receiver. There was no issue with that order as sought. An order is made as sought with leave to apply should further orders be required to effect the sale of the Orakei Road property.
Background
[3] The Trust is a family trust, settled by Ms Ryan and Mr Lobb in June 2005. Ms Ryan and Mr Lobb were married at the time. As well as the Orakei Road property the Trust also held antique furniture, jewellery, and watches.
[4] Since Ms Ryan and Mr Lobb separated in October 2016, they have been in dispute on a wide range of matters including the management and interpretation of the Trust. At the time Ms Ryan and Mr Lobb separated they were, together with Lockhart, the trustees of the trust. From the time of their separation the Trust was deadlocked. This was only eventually resolved through the removal of all three existing trustees and their replacement by Mr Noyce.1 Specifically Mr Noyce was appointed for the primary purpose of preserving the assets of the Trust pending the substantive outcome
1 See Lockhart Trustee Services No 56 Ltd v Ryan (as Trustee of Lothbury Trust) [2020] NZHC 1823.
of the present proceedings following an application by Ms Ryan for a declaration as to the true construction of a clause of the Trust deed relating to the settlement of the Trust’s assets in the event of separation.2 At the time of his appointment, Mr Noyce was given the powers and authorities set out in s 14(2) of the Receiverships Act 1993, and was given leave to seek directions as to the sale of Trust property.3
[5] Little appears to have been done by Mr Noyce prior to the determination of Ms Ryan’s application. In April 2023, Hinton J issued the substantive judgment in these proceedings (“the judgment of Hinton J”).4 Her Honour determined the interpretation and application of the Trust’s deed and made the following orders relevant to the disposal of the Trust assets (“the orders of Hinton J”):
[176] I make orders as follows:
1.Vesting Mr Lobb’s Rolex watch in him and Ms Ryan’s Rolex watch and her jewellery in her.
2.Directing that an amount equal to one-half of the value of the antique furniture be transferred from the assets of the Lothbury Trust to the Verena Ryan Family Trust and the value be set at
$55,200 (the original sale price) or, if Mr Lobb elects (by written notice to the receiver, the value established in a revised valuation by Webbs, the original valuers.
3.Mr Lobb and others occupying 23 Orakei Road, Remuera are to provide vacant possession to the receiver within two months of the date of this judgment.
4.The receiver is directed to sell 23 Orakei Road at such a price and upon such terms as he thinks fit.
5.50 per cent of the sum reached by deducting from the gross sale price only the costs of sale, the receiver’s costs and the sum of
$1.4m, is to be paid to the Verena Ryan Family Trust.
With regard to the role of Mr Noyce Hinton J directed:
[177]The receiver may seek further directions or orders of the Court, including but not limited to:
(a)Obtaining vacant possession of the property;
2 At [3] and [37].
3 At [41].
4 Ryan v Lobb [2023] NZHC 689.
(b)Obtaining the discharge of the mortgage over the property now vested in WAG Trustees (2020) Limited;
(c)Directions as to issues that might arise regarding GST claims by the IRD, if any;
(d)Making interim distributions, if sought by either Ms Ryan or Mr Lobb.
[178]Upon completion by the receiver of his duties, including any necessary reports to the Court:
(a)To vary the terms of the deed constituting the Lothbury Trust so that Ms Ryan ceases to have any beneficial interest in the trust fund or any powers or other interests in respect of the Trust;
(b)Appointing as trustees of the Lothbury Trust such person or persons as Mr Lobb may nominate;
(c)Discharging the receiver.
[7]Finally, Hinton J noted:
[179]Leave is also reserved to Ms Ryan and/or Mr Lobb to seek further orders or directions if necessary to give effect to the above.
[180]All orders are to be implemented without delay.
[8] Mr Lobb appealed the judgment of Hinton J and sought a stay of the judgment. The application for stay was dismissed,5 and his appeal was subsequently deemed abandoned when the case on appeal was not filed as required.6 Mr Lobb has indicated a desire to reinstate his appeal, but at the date of the present hearing no formal application to reinstate the appeal had been made, still less determined by the Court of Appeal.
[9] In the meantime, Mr Noyce has endeavoured to carry out the orders of Hinton J. The Orakei Road property was put up for sale, and eventually sold for
$3.68m at auction to a company, Pendrell Investments Limited (“Pendrell”) either belonging to or subsequently acquired by Lobb family interests. On the date the
5 Ryan v Lobb [2023] NZHC 1518, at [65]–[92] and [95].
6 Ryan v Lobb [2023] NZHC 2452 at [13].
present application was heard, the settlement was scheduled to take place on 27 October 2023.7
[10] Mr Lobb did not want the auction to go ahead. At the heart of the present application Mr Noyce contends that Mr Lobb has done what he could to obstruct Mr Noyce’s efforts to sell the Orakei Road property. In summary, Mr Noyce alleges:
(a)That having obtained an order for vacant possession of the Orakei Road property, Mr Lobb and his father, Warwick Lobb, refused to leave the property when Mr Noyce and the bailiff arrived at 10.45am on 3 August 2023 in order to obtain physical possession. As a result, Mr Noyce left at 2.20pm.
(b)On 4 August 2023 Mr Noyce and the bailiff returned, this time supported by Police. Mr Lobb and his father initially refused to leave the property claiming that a related company (the third defendant, WAG Trustees (2020) Limited)) was a mortgagee in possession but “after a bit of a delay” they emerged and were served trespass notices. They later left the property after being given the opportunity to remove their personal effects.
(c)After the Police and the bailiff left the Orakei Road property on 4 August 2023, Mr Lobb returned and according to Mr Noyce:
As soon as the bailiff and the Police had gone Stuart approached the locked gate of the Property. He was taking photographs and calling “Noycie”. I was standing just inside the front door of the house and could hear him. I walked out of the house and Stuart photographed me, saying “gotcha”. He told me that I needed to be very careful because I was breaching my ethical obligations as a Chartered Accountant. He said he would be making a formal complaint about me. He referred to me and my lawyer as “dumb and dumber” and said that I should not listen to my lawyer because he is a fool who will get me into trouble. He said that we were both trespassing on the Property and said that WAG was occupier, as mortgagee. He drew our attention to a notice which was attached to a wall at the pedestrian entrance to the property, next to a gate keypad. I attach a photograph of it,
7 The settlement did not take place due to circumstances that are the subject of other applications/proceedings.
marked DJN18. He said that I was facing a possible jail term of 2 years for trespass.
I found Stuart’s behaviour quite extraordinary. I can only liken it to the way a 12 year old bully might behave in a school playground. He was bouncing on the balls of his feet, grinning and gesticulating. He repeatedly gave us a “thumbs up” and said that he had “got us” and that he could not believe our stupidity. He told my lawyer that the Law Society would take a dim view of his behaviour, as a trespasser.
…
Stuart carried on haranguing me as I got into my car and drove away from the Property. With his phone, he took photographs of my number plate and of my registration disk. As I was getting ready to drive away, my lawyer walked up the road to where his car was parked. Stuart followed him and took photographs of him and his car. He unsuccessfully tried to open the passenger door.
[11] After this incident Mr Noyce detailed a range of ongoing difficulties. He noted that he was required to call the locksmith back on three occasions due to damage to the locks, problems caused by Mr Lobb and his father not taking their personal possessions away from the Orakei Road property requiring Mr Noyce to place those items into storage, and indications that there had been forced entry into the property and that somebody, suspected by Mr Noyce to be Mr Lobb, had resumed living there. Furthermore, Mr Noyce noted that while he was attempting to carry out the court order Mr Lobb made a number of allegations accusing him and his lawyer Mr Thompson of misleading the Court and displaying aggressive behaviour, acting ultra vires and with extreme bad faith.
[12] After the application for contempt had been filed Mr Noyce was informed that Mr Lobb had written to at least two of the real estate agents involved in the sale of the Orakei Road property. In his email dated 4 September 2023 Mr Lobb began:
To whom it may concern. – PRIVATE AND CONFIDENTIAL – WITHOUT PREJUDICE
I provide this email as a general update and warning (in good faith) because various lawyers assisting me have suggested that I should share this information because there is a public auction scheduled for this property on 20 September 2023.
[13] After giving his view of what he described as a “complex legal situation” Mr Lobb asserted:
… It appears to me that there is currently a dispute about who is is [sic] legal occupation and possession of the property and that issue is still very much before the courts, and there are various appeals still to be heard and that different High Court judges have different and conflicting views and orders on these matters …
…
Please be aware, the Lobb family intend to buy the property (again) at any auction or any subsequent sales process. The Lobb family have already made formal confidential offers via our lawyers to this end that will certainly impact any low ball offers and/or any pre-auction attempts to buy the property.
(Emphasis in original).
[14] Mr Lobb also set out his own view of entitlements under the Trust and indicated that the Lobb Family intended to purchase the property in any auction or subsequent sales process.
[15] Under the heading “Other relevant disclosure ‘Caveat Emptor’” Mr Lobb then proceeded to outline a litany of issues with regard to the Orakei Road property. The following gives a flavour of these comments:
The property does not have Certificate Code of Compliance for either of the two extension or the original house. There is currently over 350 square metres of house that is not finished and/or granted a completion certificate.
The property was actually built in 1919 not 1940 as the council asserts, the true heritage zoning is very restrictive. The property required 7 different resources consents in 2004-05 and these had complex conditions on them that have not yet been fully complied with, including front yard setback and over height issues.
There are major issues with the windows and waterproofing because heritage methods have been adopted.
There is an unconsented second footpath crossing and related driveway that must be removed. The new garage may be over the front boundary line and the internal steel works and external brick works did not pass council inspections.
There are several long term roof and water leaks that have not been remedied. The storm and sewer lines are not council compliant and have major issues in heavy rain. The pool is old and leaks.
The property is subject to GST, Tax Deprecation (sic) Recovery and various caveats. GST was claimed during the 2004-2007 redevelopment & extensions.
It appears GST will be payable by any purchaser there may be other tax obligations created because of the unusual court orders and use of inherent jurisdiction in unique ways that do not appear to consider the wider accounting and tax implications.
Many of the High Courts current findings about the 2003-2008 period are in conflict with the councils resource and building consent records, as well as the tax/GST records and bank records provided via affidavit, which is very much a matter still before the courts and under appeal.
These issues may have an impact on any 3rd party purchaser when they attempt to obtain a final code of compliance certificate, try and obtain finance or subsequently on sell and/or with their insurance company and bank.
The property does not currently meet the healthy homes standards.
The property has ongoing and serious issues with asbestos that have still not been remedied due to the costs and risks.
The external handrails and balustrades are not safe and have rotted and need replacing.
The property suffers from severe ongoing clay subsidence (ground movement), that resulted in a 100mm slump in the kitchen area in previous years, it has not been possible to remedy that issue in the redevelopment. This is also a visible issue around the pool and back wall. That fact was disclosed in 2003 by Harcourts land agent Denise Pollard via a Tonkin Taylor report dated 17 December 1997 prepared by Structural Engineer Geoff Radley. This issue also explains the visible issues with the ceilings and wall in the red and green rooms.
There is a need for major renovations and external improvements on the property now as so much time and money has been wasted on the courts and lawyers rather than the property and normal family life.
[16] Mr Lobb went on to blame Ms Ryan for many of the issues identified at the property before explaining that “many of the items at the property are not legally owned by the [trust] and/or part of the land and buildings. This needs to be made very clear to any all [sic] all interested parties in buying the property and during any sale or auction process”.
[17]Mr Lobb concluded his missive with the following comment:
I would also advise extreme caution in any dealings you might have with Mr Digby Noyce and/or his lawyer Mr Howard Thompson based on my past experience.
There is a considerable amount of money and assets that are still not “accounted for” by Mr Noyce and he refuses to prepare any sort of financial statements in spite of long standing court orders (since August 2020) directing him to prepare accounts by Justice Edwards.
There also appears to be money missing from the bank accounts of the Lothbury Trust that neither I or my lawyers can get a straight answer about.
The receiver’s position
[18] On behalf of Mr Noyce, Mr Thompson submitted that Mr Lobb’s conduct amounted to a contempt of court. Mr Thompson did not suggest that there was any specific breach of any particular court order but rather he submitted that Mr Lobb’s conduct was calculated and a deliberate interference with the court-appointed receiver which had led directly to an increase in costs of the receivership. Given that starting point, it was accepted by the parties that the application did not stand to be considered pursuant to the Contempt of Court Act 2019, but rather in terms of the common law, with Mr Thompson relying in particular on the decision of Helmore v Smith (No.2)8 as authority for the type of contempt identified.
[19] Although the application sought Mr Lobb’s imprisonment as the primary remedy identified, at the outset of the hearing Mr Thompson confirmed that Mr Noyce no longer sought to have Mr Lobb imprisoned. The sale of the Orakei Road property had occurred for a good price, and therefore to a certain extent the application had accordingly been overtaken by events.
The position of Mr Lobb
[20] On behalf of Mr Lobb, Mr Latton submitted that there was insufficient evidence to support the allegations made by Mr Noyce, and that in any event, any attempts by Mr Lobb to block the sale of the Orakei Road property were unsuccessful. In particular, Mr Latton submitted that, leaving aside the emails to the real estate agent the other evidence placed before the Court by Mr Noyce did not establish that Mr Lobb was in contempt. Likewise, Mr Latton submitted that imprisonment was inappropriate given that the sale of the Orakei Road property had gone through and that there was
8 Helmore v Smith (No 2) (1886) 35 Ch D 449 (CA).
therefore no coercive purpose to imprisoning Mr Lobb. Moreover, it was inconsistent with the authorities to imprison Mr Lobb as punishment.
Discussion
[21] As noted, there is no dispute that the present application stands to be considered under the common law. The parties agreed that the Contempt of Court Act 2019 did not apply. That Act preserves in s 3(3)(b) “the inherent jurisdiction of the High Court to punish for contempt of court in circumstances where this Act does not apply”. The Act abolished common law contempts in respect of “contempt in the face of the court”. This case, it was submitted, does not fall into that category on the basis that a court order was not directly breached by Mr Lobb.
[22] The alleged interferences concerned the actions of a court-appointed receiver exercising conferred powers. Those interferences did not directly obstruct or impede an express court order. The exercise of the court-appointed powers, and correspondingly any interference, is therefore not “in the face of the court”. Rather, the contempt is that Mr Lobb’s actions have interfered with Mr Noyce’s ability to carry out his duties under the orders of Hinton J. This case therefore is decided pursuant to the common law of contempt.
[23] As noted, Mr Thompson relied on the decision of Helmore (No.2). While Mr Latton challenged the relevance of this decision, noting in particular that it harked back to the days of debtors’ prisons, it is nonetheless instructive as to whether there has been a contempt of the nature alleged in this case. Helmore (No.2) involved a court-appointed receivership of a coal merchant partnership (“the firm”). The receivership had come about after a sale of one of the partners’ (Mr F Helmore) interests in the firm to the other partner had been successfully challenged by Mr F Helmore. The losing partner (Mr Smith) appealed, and sought a stay of the judgment pending appeal. The Court of Appeal in its wisdom appointed Mr Smith as the receiver of the firm pending the hearing of the appeal. The respondent’s son (Mr H W Helmore) had in the meantime set up on his own accord as a coal merchant. Following Mr Smith’s appointment as receiver Mr H W Helmore sent out a circular
soliciting custom from the firm and was found to be in contempt of court for doing so.9
[24] The rationale was that the Court of Appeal, having appointed Mr Smith, clearly wanted “to keep the business as a going concern in the hands of the manager appointed by the Court until the appeal should be determined”.10 As the circular did not mention that the firm was continuing to trade it was an improper interference by H W Helmore that the Court said was “a libel on the business which this court had directed the Defendant to manage and … a contempt of Court”.11 It was “done for the purpose of producing a false impression” and was “a clear wrong done to the owners of the business, and calculated to injure the property under the management of the Court”.12 Ultimately, at both first instance and on appeal the Court found that an order finding Mr H W Helmore in contempt was necessary to prevent undue interference with the administration of justice.13
[25] Turning to the facts in the present case, it is clear that Mr Lobb was reluctant to leave the property when called upon to do so but grudgingly appears to have complied with the order for possession. While Mr Lobb’s subsequent behaviour, name-calling and taking photographs of Mr Noyce from outside the property appears to have been both rude and puerile, it is difficult to see how it could be classified as a contempt of court. Likewise, while I do not doubt Mr Noyce’s reports that there was ongoing damage to the locks at the Orakei Road property and indeed that there may well have been a surreptitious reoccupation of the Orakei Road property after Mr Lobb had vacated it, the evidence is not sufficient to establish that it was Mr Lobb himself who was responsible for those matters, given there appear to be other members of the Lobb family who are equally fixated with the property and who are equally determined to have it retained by Lobb family interests.
[26] The situation is different with the emails sent to the real estate agents. Mr Lobb’s emails can only be categorised as a deliberate attempt by him to obstruct
9 There appeared to be a separate issue relating to H W Helmore’s theft of the customer list of the firm but this issue formed no part of the conclusion that H W Helmore was in contempt.
10 At 451.
11 At 455.
12 At 457.
13 At 455.
the sale of the property. As such it falls squarely within the rationale set out in Helmore (No.2). The fact that the Orakei Road property, ultimately appeared to sell at market value does not diminish the nature of the contempt although it will be relevant to any penalty.14
[27] The orders of Hinton J make it clear that Mr Noyce was required to sell the Orakei Road property as soon as possible. It is implicit that Mr Noyce is required to get the best possible price in carrying out his orders from the Court. Given that context the emails are a deliberate and clear attempt by Mr Lobb to undermine the sale process by putting off prospective purchasers and otherwise attempting to lower the value of the property, presumably so as to enable Lobb family interests to purchase the property at the lowest possible price in the absence of any other purchasers. As Mr Thompson submitted, this Court ordered the sale and tasked the receiver to implement those orders on the terms set out by Hinton J. This Court cannot stand by and allow Mr Lobb to directly interfere with that process with impunity. In the circumstances I am therefore satisfied that Mr Lobb’s efforts to undermine the sale through the emails sent to the real estate agents are most definitely a contempt of court.
[28] Given that conclusion, I now turn to the appropriate penalty. As Mr Latton pointed out, imprisonment in this context is generally only available where there is an ongoing contempt. At the time of the hearing, that was not the case given the sale to Pendrell. Although the primary penalty sought by Mr Noyce was imprisonment, his application left open an unspecified alternative penalty at the discretion of this Court. Given the then successful sale of the Orakei Road property I am therefore satisfied that the immediate penalty for the contempt should be limited to a finding that Mr Lobb was in contempt of court as a result of the emails sent to the real estate agents’ responsible for the sale of the Orakei Road property and that he should be responsible for the repayment of the reasonable costs of the application.
[29] In addition, and noting that Pendrell did not settle the purchase of the Orakei Road property, I reserve leave for Mr Noyce to seek further orders restraining Mr Lobb and/or other members of the Lobb family from interfering with any further
14 While once again noting that Lobb family interests behind the purchase of the Orakei Road property did not, in fact, settle the transaction on 27 October 2023.
steps necessary to effect the sale of the Orakei Road property including a further sale process, should that be necessary.
Decision
[30] The emails sent by Stuart Lobb to real estate agents on 4 September 2023 were a contempt of court.
[31] Mr Lobb is to pay the reasonable costs of the receiver in respect of this application. Mr Noyce will have until 13 December 2023 to file a memorandum setting out the quantities of the costs sought. Mr Lobb will then have until 20 December 2023 to respond, following which I will determine the issue on the papers.
[32] Leave is reserved for Mr Noyce to seek further orders restraining Mr Lobb and/or other members of the Lobb family from interfering with any further aspect of the sale process of the Orakei Road property.
[33] Mr Noyce is granted the power to execute all documents and take all steps necessary to transfer the land in Identifier NA52A/1231, with the street address of 23 Orakei Road, Remuera (“The Property”) from the registered proprietors, being the first plaintiff, the first defendant and the second defendant, to a purchaser of the Property upon settlement of the second plaintiff’s intended sale of the Property, as receiver.
Powell J
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