Sandfield Associates Limited v Monnery - [2021] NZHC 1003

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-505

[2021] NZHC 1003

IN THE MATTER OF the liquidation of Convendium Limited

BETWEEN

SANDFIELD ASSOCIATES LIMITED
First Plaintiff

CONVENDIUM LIMITED (in liquidation) Second Plaintiff

AND

PAUL MARK MONNERY, JULIE ANN MONNERY and DAVID GRIFFITHS

Defendants

Cont/…

Hearing: 2 November 2020

Appearances:

CR Carruthers QC for Applicants/Defendants/ Judgment Debtors (Monnerys)

DJ Chisholm QC and JD Ryan for Respondents/Plaintiffs/ Judgment Creditor (Convendium)

Judgment:

6 May 2021

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 6 May 2021 at 2.00 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Oakley Moran, Wellington
Claymore Partners Ltd, Auckland

SANDFIELD ASSOCIATES LIMITED v MONNERY [2021] NZHC 1003 [6 May 2021]

CIV-2019-404-1906

IN THE MATTER OF the bankruptcy of JULIE ANN
MONNERY

BETWEEN CONVENDIUM LIMITED (in
liquidation) Judgment Creditor

AND JULIE ANN MONNERY
Judgment Debtor
CIV-2019-404-1907

IN THE MATTER OF the bankruptcy of PAUL MARK
MONNERY

BETWEEN CONVENDIUM LIMITED (in
liquidation) Judgment Creditor

AND PAUL MARK MONNERY
Judgment Debtor

Introduction

[1] Applications have been made by Mr and Mrs Paul and Julie Monnery in two proceedings:

(a)an application for a stay of execution of the summary judgment granted in the proceedings brought by Sandfield Associates Limited (“Sandfield”) and Convendium Limited (in liquidation) (“Convendium”) against Mr and Mrs Monnery and David Griffiths as the trustees of the P and J Monnery Family Trust (“Monnery Family Trust”) (“Summary Judgment Proceedings”);1 and

(b)applications to refuse or halt the application for adjudication of bankruptcy brought against Mr and Mrs Monnery by Convendium (“Bankruptcy Proceedings”).2

[2] Prior to the commencement of the Summary Judgment Proceedings (and the subsequent Bankruptcy Proceedings), the Monnerys commenced proceedings against the other shareholders in Convendium (“Wellington Proceedings”).

[3] In the Wellington Proceedings, Mr Monnery in his personal capacity and Mr and Mrs Monnery as trustees of the Monnery Family Trust allege a conspiracy to remove Mr Monnery from the management of Convendium and divide up the assets of the company between the other shareholders. The Monnerys allege that as a result of the actions of the other shareholders, income which would have been earned by Convendium was instead redirected, preventing the advances on account of salary, which had been made to Mr Monnery through the shareholder current account of the family trust, from being offset.

[4] The applications made by the Monnerys to stay execution of the summary judgment and to refuse or halt adjudication in the Bankruptcy Proceedings have been brought on two bases:

1 CIV-2019-404-505.
2 CIV-2019-404-1906 and CIV-2019-404-1907.

(a)it would cause the Monnerys’ new business to fail as bankruptcy would leave them unable to comply with the terms of their business loan; and

(b)that allowing execution and adjudication would prevent the Monnerys from continuing their claim in the Wellington Proceedings.

[5] Convendium, the successful plaintiff in the Summary Judgment Proceedings and the judgment creditor in the Bankruptcy Proceedings, opposes the applications on the basis that the Wellington…

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: [2021] NZHC 1003
Decision Date: 6 May 2021

CaseChat Overview and Summary

Sandfield Associates Limited and Convendium Limited (in liquidation) sought to enforce summary judgment against Paul and Julie Monnery and David Griffiths as trustees of the P and J Monnery Family Trust. The Monnerys sought a stay of execution of the summary judgment and to halt the adjudication of bankruptcy. The applications were based on the potential failure of the Monnerys’ new business and the need for them to continue their claim in the Wellington Proceedings. Convendium opposed the applications. The issue was whether the Wellington Proceedings or the potential failure of the Monnerys’ new business provided sufficient grounds for a stay of execution of the summary judgment or a stay of the adjudication process. The Court considered the onus was on the Monnerys to persuade the Court to exercise its discretion. The Court considered it was likely that a substantial miscarriage of justice would result if the judgment were enforced. The Court ordered a stay of execution of the summary judgment and a halt to the Bankruptcy Proceedings. The Court ordered the Monnerys to pay costs.

Orders